Document:

EX-10.18 MURABAHA FACILITY AGREEMENT

 

Execution Copy

Exhibit 10.18

 

MURABAHA FACILITY AGREEMENT

dated as of October 31, 2005

among

TCH FUNDING CORP.,

TENSAR HOLDINGS, INC.,

ARCAPITA INVESTMENT FUNDING LIMITED,

as Agent for TCH Funding Corp.

and

AIA LIMITED,

as Agent for Tensar Holdings, Inc.

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	ARTICLE I DEFINITIONS	 	 	1	 
	 
	 	Section 1.1.             Definitions	 	 	1	 
	 
	 	Section 1.2.            Computation of Time Periods	 	 	3	 
	 
	 	Section 1.3.            Accounting Terms	 	 	4	 
	 
	 	Section 1.4.            Code	 	 	 	 
	 
	 	Section 1.5.            Construction	 	 	 	 
	 
	 	Section 1.6.            Schedules, Annexes and Exhibits	 	 	 	 
	ARTICLE II REVOLVING PURCHASING FACILITY	 	 	4	 
	 
	 	Section 2.1.            Revolving Purchasing Facility and Appointment of Agents	 	 	4	 
	 
	 	Section 2.2.            Transactions	 	 	5	 
	 
	 	Section 2.3.            Assignment of Warranties	 	 	6	 
	ARTICLE III OTHER PROVISIONS RELATING TO THE FACILITY	 	 	6	 
	 
	 	Section 3.1.            Payments	 	 	6	 
	 
	 	Section 3.2.            Termination of the Facility	 	 	6	 
	 
	 	Section 3.3.            Taxes	 	 	7	 
	 
	 	Section 3.4.            Evidence of Obligations	 	 	7	 
	 
	 	Section 3.5.            Prepayments	 	 	8	 
	 
	 	Section 3.6.            Unavailability of Funding	 	 	8	 
	 
	 	Section 3.7.            Fees	 	 	9	 
	 
	 	Section 3.8.            Crediting Payments	 	 	9	 
	ARTICLE IV CONDITIONS PRECEDENT	 	 	9	 
	ARTICLE V REPRESENTATIONS, WARRANTIES AND COVENANTS	 	 	9	 
	 
	 	Section 5.1.            Representations and Warranties	 	 	9	 
	 
	 	Section 5.2.            Affirmative Covenants	 	 	10	 
	 
	 	Section 5.3.            Negative Covenants	 	 	10	 
	ARTICLE VI EVENTS OF DEFAULT	 	 	10	 
	ARTICLE VII REMEDIES UPON DEFAULT	 	 	10	 
	ARTICLE VIII MISCELLANEOUS	 	 	10	 
	 
	 	Section 8.1.            Notices	 	 	10	 
	 
	 	Section 8.2. Right of Set-Off; Adjustments	 	 	12	 
	 
	 	Section 8.3.            Benefit of Agreement; Assignments; Registration	 	 	12	 
	 
	 	Section 8.4.            No Waiver; Remedies Cumulative	 	 	13	 
	 
	 	Section 8.5.            Expenses; Indemnification	 	 	13	 
	 
	 	Section 8.6.            Amendments, Waivers and Consents	 	 	14	 
	 
	 	Section 8.7.            Headings	 	 	14	 
	 
	 	Section 8.8.            Survival	 	 	14	 
	 
	 	Section 8.9.             Severability	 	 	14	 
	 
	 	Section 8.10.            Entirety	 	 	14	 
	 
	 	Section 8.11.            Tax Consequences	 	 	15	 
	 
	 	Section 8.12.            Governing Law	 	 	15	 
	 
	 	Section 8.15.            Counterparts	 	 	15	 
	 
	 	Section 8.16.            Conflicts	 	 	15	 

 

 

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	Schedules	 	 	 	 
	 
	 	 	 	 
	Schedule 1

	 	-
	 	Definitions
	Schedule 2

	 	-
	 	Representations and Warranties
	Schedule 3

	 	-
	 	Affirmative Covenants
	Schedule 4

	 	-
	 	Negative Covenants
	Schedule 5

	 	-
	 	Events of Default
	Schedule 6

	 	-
	 	Miscellaneous Provisions
	Schedule 7

	 	-
	 	Supplemental Profit Provisions

	 	 	 
	Exhibits	 	 
	 
	 	 
	Exhibit A

	 	Form of Purchase Request
	Exhibit B

	 	Form of Purchase Confirmation
	Exhibit C

	 	Form of Purchase Offer
	Exhibit D

	 	Form of Purchase Acceptance

 

 
 ‘

MURABAHA FACILITY AGREEMENT

     THIS MURABAHA FACILITY AGREEMENT, dated as of October 31, 2005 (as amended,
modified, restated or supplemented from time to time, the “Agreement”), is among TCH FUNDING
CORP., a Delaware corporation (“TCH”), TENSAR
HOLDINGS, INC., a Delaware corporation (“Tensor Holdings”), ARCAPITA INVESTMENT FUNDING LIMITED, a Cayman Islands limited liability company
(“AIFL”), and AIA LIMITED, a Cayman Islands limited liability company (“AIA”).

PRELIMINARY STATEMENTS

     WHEREAS, Tensar Holdings is seeking financing in the amount of $52,500,000, as
such amount may be adjusted from time to time, in accordance with the terms and subject to the
conditions hereinafter set forth;

     WHEREAS, this financing is being provided to Tensar Holdings by and through TCH on the
terms and subject to the conditions hereinafter set forth;

     WHEREAS, AIFL has agreed to act as the agent of TCH to facilitate the transactions
contemplated hereunder; and

     WHEREAS,
AIA has agreed to act as the agent of Tensar Holdings to facilitate the
transactions contemplated hereunder;

     NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the parties
hereto, intending to be legally bound, hereby agree as follows:

ARTICLE I

DEFINITIONS

     Section 1.1. Definitions. Capitalized terms used in this Agreement (including the
schedules, annexes and exhibits hereto) shall have the meanings assigned to them on
Schedule 1 hereto and, to the extent not defined on Schedule 1, shall have the
meanings set forth below.

     “Agreed Profit” means, for any Transaction, an amount determined by TCH in accordance
with this Agreement to be the sum of (i) the product of the Profit Rate multiplied by the
Purchase Price of the Metals covered by such Transaction multiplied by the actual number of
days from the Value Date for such Transaction to the Transaction Payment Date for such
Transaction and dividing such product by 360, and (ii) the Supplemental Profit for such
Transaction.

     “Agreement” shall have the meaning specified in the preamble hereto.

     “Agreement Date” means the date as of which this Agreement is dated.

     “AIA” shall have the meaning specified in the preamble hereto.

 

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     “AIFL” shall have the meaning specified in the preamble hereto.

     “Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11 U.S.C. § §
101 et seq.

     “Default Rate” shall mean a rate per annum equal to (i) the Profit Rate, plus (ii)
two percent (2%).

     “Event of Default” has the meaning set forth in Schedule 5. 

     “Facility” shall have the meaning specified in Section 2.1(a).

     “Letters of Undertaking” means, collectively, (i) that certain Letter of Understanding
Regarding Commodities Purchases and Sales dated April 20, 2000 by and between Richmond Commodities
Limited, a Cayman Islands limited liability company and AIFL and (ii) that certain Letter of
Understanding Regarding Commodities Purchases and Sales dated February 14, 2002 by and between AIA
and Dawnay, Day & Co., Limited, a company incorporated under the laws of England and Wales.

     “Metals” shall mean such metals as may be purchased by TCH for sale to, and acceptance by,
Tensar Holdings from time to time in accordance with this Agreement.

     “Murabaha Documents” means, collectively, this Agreement and any and all documents or
agreements, including, without limitation, acknowledgements and consents with respect thereto,
assignments thereof and exhibits and schedules thereto, delivered in connection with the
foregoing, each as amended or modified from time to time in accordance with the provisions
thereof.

     “Murabaha Price” means, with respect to a Transaction, (i) the Purchase Price of such Metals,
plus (ii) the Agreed Profit for such Transaction.

     “Obligations” shall mean all payment and performance obligations of Tensar Holdings to TCH
under this Agreement (including, in each case, any Agreed Profit, fees and expenses that, but for
the provisions of the Bankruptcy Code, would have accrued), as they may be amended from time to
time.

     “Payment Account” shall have the meaning assigned to that term in Section 3.1.

     “Profit Rate” means 17.50% per annum.

     “Purchase Acceptance” has the meaning specified in Section 2.2(e).

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

     “Purchase Offer” has the meaning specified in Section 2.2(d).

     “Purchase Price” means, for the Metals covered by a Transaction, the total amount paid by TCH
to the Supplier for such Metals, which total amount (i) shall equal 100% of the spot

 

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market price for such Metals prevailing on the Transaction Date, as reported to TCH by Supplier,
plus an amount to be agreed upon between TCH and the Supplier (which amount shall not
exceed $1,000 per Transaction), and (ii) shall include any value added tax, sales tax, registration
or transfer tax or other similar taxes or duties (where applicable) payable by TCH on or in
relation to such Transaction.

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

     “Purchase Request” shall have the meaning specified in Section 2.2.

     “Sub-Agent” shall have the meaning specified in Section 2.1(c).

     “Supplemental Profit” shall have the meaning specified in Schedule 7.

     “Supplier” means Richmond Commodities Limited, a company formed under the laws of England and
Wales, or such other metals supplier as may be agreed upon by Tensar Holdings and TCH.

     “Taxes” shall have the meaning specified in Section 3.3.

     “TCH” shall have the meaning specified in the preamble hereto.

     “Tensar Holdings” means Tensar Holdings, Inc., a Delaware corporation (f/k/a The Tensar
Corporation (Georgia)).

     “Tensar Parties” means Tensar Holdings, Holdings, Tensar, and their respective Subsidiaries.

     “Termination Date” means October 31, 2013.

     “Transaction” shall have the meaning specified in Section 2.1(a).

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

     “Transaction Date” means, in relation to any Transaction, the date on which Tensar Holdings
and TCH exchange a Purchase Offer and Purchase Acceptance for such Transaction in accordance with
Section 2.2.

     “Transaction Payment Date” has the meaning specified in Section 2.2(a).

     “Value Date” means, in relation to any Transaction, the date, which shall be a Business Day,
on which the Metals covered by such Transaction are delivered by TCH to Tensar Holdings in
accordance with this Agreement; provided, that, for all purposes hereunder, such date for a
Transaction for Metals shall be deemed to be the date that TCH funds the applicable purchase price
for the purchase of such Metals from Supplier pursuant to the terms hereof.

     Section 1.2. Rules of Interpretation. Sections 2, 3 and 4 of Schedule 1 are hereby
incorporated herein by reference in their entirety.

 

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     Section 1.3. Schedules, Annexes and Exhibits. All of the schedules, annexes and exhibits
attached to this Agreement shall be deemed incorporated herein by reference.

ARTICLE II

REVOLVING PURCHASING FACILITY

     Section 2.1. Revolving Purchasing Facility and Appointment of Agents.

     (a) Revolving Purchasing Facility. Subject to the terms and conditions hereof, and in
reliance upon the representations and warranties set forth herein, TCH agrees to make available to
Tensar Holdings financial accommodations consisting of a deferred payment revolving purchasing
facility (the “Facility”) from the Agreement Date to the Termination Date, in an aggregate amount
not to exceed, subject to the following sentence, $52,500,000 (the “Facility Amount”).
Notwithstanding the previous sentence, the Facility Amount for each Transaction executed on each of
the first through the fifth Transaction Payment Dates shall equal the amount of the Murabaha Price
payable on such Transaction Payment Date with respect to the previous Transaction. The Facility
shall only be used for the purchase of Metals by TCH from the Supplier at the request of Tensar
Holdings and the on-sale of such Metals by TCH to Tensar Holdings (each purchase of Metals by TCH
at the request of Tensar Holdings and the on-sale of such Metals by TCH being a “Transaction” and
collectively referred to as “Transactions”).

     (b) Appointment of AIFL as Agent. TCH hereby appoints AIFL as its agent to dealin its name,
place and stead, for the limited purpose of performing such acts as may be reasonably required in
order to enter into Transactions approved by and at the risk of TCH(including without limitation
any transfer of funds from any accounts needed to implement any such Transaction), in each case
subject to such instructions and limitations relating thereto as TCH may provide from time to time.
Subject to the limitations herein, (i) TCH authorizes AIFL to enter into Transactions covered by
this Agreement, including without limitation the purchase of Metals by TCH from the Supplier and
the sale of Metals by TCH to Tensar Holdings, in each case in AIFL’s own name as the agent and for
the benefit of TCH, but for the account and at the sole risk of TCH, and (ii) TCH authorizes AIFL
to enter into Transactions covered by this Agreement through any agent, sub-agent, sub-contractor
or representative (each, a “Sub-Agent”) which may carry out all or part of the services to be
provided by AIFL under this Agreement on such terms as it thinks fit, provided, however that (A)
any such Sub-Agent shall be a subsidiary, associate or affiliate of AIFL; (B) the appointment of
any such Sub-Agent shall not relieve AIFL of its obligations under this Agreement; and (C) the
appointment of and performance by any such Sub-Agent shall be at the sole cost and expense of AIFL
or such Sub-Agent.

     (c) Appointment of AIA as Agent. Tensar Holdings hereby appoints AIA as its agent to deal in
its name, place and stead, for the limited purpose of performing such acts as may be reasonably
required in order to enter into Transactions approved by and at the risk of Tensar Holdings
(including without limitation any transfer of funds from any accounts needed to implement any such
Transaction), in each case subject to such instructions and limitations relating thereto as Tensar
Holdings may provide from time to time. For the purpose of the authority of AIA to act as the agent of Tensar Holdings, a Transaction shall be
approved by Tensar Holdings upon the issuance of the Purchase Request by Tensar Holdings for the
proposed

 

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Transaction, a copy of which will be provided to AIA in accordance with Section 2.2.
Subject to the limitations herein, (i) Tensar Holdings authorizes AIA to enter into Transactions
covered by this Agreement, including without limitation the purchase of Metals by Tensar Holdings
from TCH, and the on-sale of Metals by Tensar Holdings to third parties, in each case in AIA’s own
name as the agent and for the benefit of Tensar Holdings, but for the account and at the sole risk
of Tensar Holdings, and (ii) Tensar Holdings authorizes AIA (and without limiting AIA’s obligations
hereunder) to enter into Transactions covered by this Agreement through any Sub-Agent, which may
carry out all or part of the services to be provided by AIA under this Agreement on such terms as
it thinks fit, provided, however, that (A) any such Sub-Agent shall be a subsidiary, associate or
affiliate of AIA; (B) the appointment of any such Sub-Agent shall not relieve AIA of its
obligations under this Agreement; and (C) the appointment of and performance by any Sub-Agent shall
be at the sole cost and expense of AIA or such Sub-Agent.

     Section 2.2. Transactions.

     (a) Tensar Holdings may from time to time propose that TCH undertake a Transaction by
presenting to TCH prior to 12:00 Noon. (New York time) at least three Business Days prior to the
proposed Value Date of the requested Transaction a written request for TCH’s purchase of Metals
(each a “Purchase Request”) substantially in the form of Exhibit A hereto. By copying AIA
on a Purchase Request, Tensar Holdings authorizes AIA to act as agent of Tensar Holdings in the
execution of the proposed Transaction, including execution of the Purchase Offer for such proposed
Transaction. Each Purchase Request shall include (i) a general description of the Metals to be
purchased, (ii) the total price of the Metals to be paid by TCH to the Supplier, (iii) the Value
Date, which shall be at least three Business Days after the date of the Purchase Request, and (iv)
the date on which the Murabaha Price is to be paid by Tensar Holdings in relation to such
Transaction (the “Transaction Payment Date”). TCH and Tensar Holdings agree that the Transaction
Payment Date for a Transaction shall occur on each October 31st during the term of this Agreement,
commencing on October 31, 2006; provided, however, that if any Transaction Payment Date would occur
on a day that is not a Business Day, such Transaction Payment Date shall be extended to the next
succeeding Business Day.

     (b) On the Value Date for a proposed Transaction and subject, in the case of the initial
Transaction only, to the satisfaction of the conditions specified in Article IV and Section 3.5(b),
TCH will confirm that it has purchased the Metals requested by Tensar Holdings in the relevant
Purchase Request by executing and delivering to Tensar Holdings a purchase request confirmation in
substantially the form of Exhibit B (the “Purchase Confirmation”; a signed Purchase Request
and a signed Purchase Confirmation being referred to collectively as a “Transaction Confirmation”).
In each Purchase Confirmation, TCH shall (i) confirm (A) the terms on which the Metals specified
in the related Purchase Request were purchased and (B) the willingness of TCH to sell such Metals
to Tensar Holdings, (ii) quote the price of the Metals paid by TCH, the quantity of such Metals and
the total Purchase Price for the
same, and (iii) state the Murabaha Price, as computed by TCH, to be paid by Tensar Holdings on
the Transaction Payment Date.

     (c) Tensar Holdings acknowledges and agrees that the obligation of TCH to arrange for the
purchase, and to purchase Metals in accordance with a Transaction Confirmation, is subject to the
satisfaction of all applicable conditions precedent set forth herein.

 

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     (d) After it receives a Purchase Confirmation in accordance with Section 2.2(b), and after TCH
purchases the Metals specified in such Purchase Confirmation, Tensar Holdings covenants and agrees
that it shall submit to TCH an offer, substantially in the form of Exhibit C (a “Purchase
Offer”), in which Tensar Holdings offers to purchase such Metals from TCH on the terms specified in
the Transaction Confirmation of which such Purchase Confirmation forms a part.

     (e) On the Business Day on which TCH completes its purchase of Metals from the Supplier in
accordance with this Section 2.2 and receives the Purchase Offer, TCH covenants and agrees that it
shall issue to Tensar Holdings an acceptance, substantially in the form of Exhibit D (a
“Purchase Acceptance”) in which TCH accepts Tensar Holdings offer to purchase the Metals as set
forth in the Purchase Offer, subject to the satisfaction of all applicable conditions precedent set
forth herein. The Murabaha Price to be paid by Tensar Holdings for such Metals and the Value Date
and Transaction Payment Date specified in the Transaction Confirmation and Purchase Offer shall be
confirmed by TCH in such Metals Purchase Acceptance, and Tensar Holdings hereby agrees to pay such
Murabaha Price to TCH on such Transaction Payment Date.

     Section 2.3. Assignment of Warranties. TCH hereby assigns to Tensar Holdings (to the extent
permitted by applicable law) any and all warranties and indemnities of, and claims against, (i)
the Supplier that TCH may have in relation to any Metals purchased by TCH from the Supplier and
resold to Tensar Holdings hereunder, and (ii) any dealers, manufacturers, vendors, contractors or
subcontractors in relation to such Metals. If TCH is legally or contractually prohibited from
assigning any such warranty, indemnity or claim, TCH hereby grants to Tensar Holdings, to the
extent permitted by applicable law, its entire beneficial interest in such warranty, indemnity or
claim. In consideration of the foregoing assignment of warranties, indemnities and claims, Tensar
Holdings hereby waives any claims it may have against TCH in relation to the quality, quantity or
other condition of any Metals, and acknowledges and agrees that TCH shall not be deemed to have
made any representation or warranty relating to the Metals, whether arising by implication, by
common law or statute or otherwise.

ARTICLE III

OTHER PROVISIONS RELATING TO THE FACILITY

     Section 3.1. Payments. On the Transaction Payment Date applicable to a Transaction,
Tensar Holdings shall pay to TCH the outstanding Murabaha Price (in immediately available funds)
applicable to the Metals that are the subject of such Transaction. Tensar Holdings shall make such
payments to TCH before 12:00 Noon (New York time). Tensar Holdings shall make all payments owing
to TCH hereunder in U.S. dollars and in immediately available funds, by depositing or otherwise
wire transferring such payment into such account or accounts as may be designated from time to
time by TCH for such payments (each such account, a “Payment
Account”) and by the applicable required time of payment. If any amount required to be paid
to TCH hereunder is not paid when due, Tensar Holdings shall pay a late fee on such amount at the
Default Rate, payable on demand, from the due date for such amount to the date it is paid in full.

     Section 3.2. Termination of the Facility. The Facility shall automatically terminate on the
Termination Date, unless terminated sooner in accordance with Article VII. The termination

 

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of the Facility shall not constitute a termination of this Agreement, and such termination or
reduction shall not relieve Tensar Holdings of its obligation to pay all amounts due and payable
hereunder as and when due in accordance with the terms hereof.

     Section 3.3. Taxes

     (a) Any and all payments by Tensar Holdings to or for the account of TCH hereunder or
under any other Murabaha Document shall be made free and clear of and without deduction for any and
all present or future taxes, duties, levies, imposts, deductions, charges or withholdings, and
all liabilities with respect thereto, excluding taxes imposed on TCH’s net income, and franchise
taxes imposed on it, by the jurisdiction under the laws of which TCH is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies, imposts, deductions, charges,
withholdings, and liabilities being hereinafter referred to as “Taxes”). If Tensar Holdings shall
be required by law to deduct or withhold any Taxes from or in respect of any sum payable under this
Agreement or any other Murabaha Document to TCH, (i) the sum payable shall be increased as
necessary so that after making all required deductions and withholdings (including deductions and
withholdings applicable to additional sums payable under this Section 3.3) TCH receives an amount
equal to the sum it would have received had no such deductions been made, (ii) Tensar Holdings
shall make such deductions and withholdings, (iii) Tensar Holdings shall pay the full amount
deducted or withheld to the relevant taxation authority or other authority in accordance with
applicable law, and (iv) Tensar Holdings shall furnish to TCH the original or a certified copy of a
receipt evidencing payment thereof.

     (b) In addition, Tensar Holdings agrees to pay any and all present or future stamp or
documentary taxes and any other excise or property taxes or charges or similar levies that arise
from any payment made under this Agreement or any other Murabaha Document or from the execution or
delivery of, or otherwise with respect to, this Agreement or any other Murabaha Document
(hereinafter referred to as “Other Taxes”).

     (c) Tensar Holdings shall indemnify TCH, within 10 days after written demand therefor, for the
full amount of any Taxes or Other Taxes paid or incurred by TCH, on or with respect to any payment
by or on account of any obligation of Tensar Holdings hereunder or under any other Murabaha
Document (including Taxes or Other Taxes imposed or asserted on or attributable to amounts payable
under this Section) and any penalties, interest and expenses arising therefrom or with respect
thereto, whether or not such Taxes or Other Taxes were correctly or legally imposed or asserted by
the relevant Governmental Authority. A certificate as to the amount of such payment or liability
delivered to Tensar Holdings by TCH shall be conclusive absent manifest error.

     (d) As soon as practicable after any payment of Taxes or Other Taxes pursuant to this Section,
and in any event within 30 days of any such payment being due, Tensar Holdings shall deliver (or
cause to be delivered) to TCH the original or a certified copy of a receipt issued by such
Governmental Authority evidencing such payment, a copy of the return reporting such payment or
other evidence of such payment reasonably satisfactory to TCH.

     Section 3.4. Evidence of Obligations. AIFL shall maintain a record of all material details
of each Transaction. TCH shall maintain an account on its books in the name of Tensar

 

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Holdings in which it shall record all material details of each Transaction. TCH will make
reasonable efforts to maintain the accuracy of such account and to update promptly such account
from time to time. TCH shall render statements regarding such account to Tensar Holdings. The
entries made in such account, and the statements rendered to Tensar Holdings with respect thereto,
shall be prima facie evidence of the existence and amounts of the obligations of Tensar Holdings
therein recorded (and all such statements, absent manifest error, shall be conclusively presumed to
be correct and accurate); provided, however, that the failure of TCH (or AIFL) to maintain such
account or such records, or any error therein, shall not in any manner affect the obligation of
Tensar Holdings to pay each Murabaha Price in accordance with the terms hereof and the applicable
Transaction Confirmation and otherwise to pay all Obligations.

     Section 3.5. Prepayments.

     (a) Tensar Holdings may, at any time after October 31, 2007 and on no less than 30 days
or no more than 90 days prior written notice to TCH, prepay all or any portion of the Murabaha
Price for a Transaction prior to the then-scheduled Transaction Payment Date therefor (and without
reduction in such Murabaha Price as a result of such prepayment). Any prepayment of the Murabaha
Price must be in an amount equal to at least $500,000 or in integral multiples of $500,000 in
excess thereof (or such lesser amount equal to the remaining Murabaha Price).

     (b) Tensar Holdings shall, upon the occurrence of a public offering of any Tensar Party’s
securities (including, without limitation, a Qualified IPO), prepay all of the Murabaha Price for a
Transaction prior to the then-scheduled Transaction Payment Date therefor (and without reduction in
such Murabaha Price as a result of such prepayment).

     (c) Notwithstanding any other provision of this Agreement, in the event that it becomes
unlawful for TCH to enter into Transactions then TCH shall promptly notify Tensar Holdings thereof
and, effective upon such notice, TCH’s obligation to enter into Transactions hereunder shall be
suspended and the Murabaha Price shall become immediately due and payable. Upon the termination
of such situation, if at all, prior to the Termination Date, the obligation of TCH to enter into
Transactions hereunder shall be reinstated.

     Section 3.6. Unavailability of Funding. Tensar Holdings hereby agrees that the obligation of
TCH to provide the Facility shall be subject to the ability of TCH to obtain funding to enable it
to satisfy its obligations hereunder, and that if TCH at any time determines that it is unable to
obtain such funding on terms acceptable to TCH, TCH shall not have any further obligation to enter
into or consummate the initial Transaction hereunder (including if a Metals Transaction
Confirmation or a Metals Purchase Offer has been delivered for such Transaction) until it
subsequently determines that such funding is available to TCH on terms that are acceptable to TCH.
Without limiting the generality of the foregoing, TCH shall expressly have no obligation whatsoever
to seek to obtain any funding other than the funding arrangements that TCH has in place as of the
date hereof, and a lack of availability under such funding arrangements for any reason shall excuse
TCH from either any obligation to Tensar Holdings to consummate the initial Transaction hereunder
following such unavailability, or any other liability
relating to any such Transaction. The parties hereto acknowledge and agree that the provisions
of this Section 3.6 constitute a condition precedent to TCH’s obligation to provide accommodations
under the Facility for the initial Transaction.

 

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     Section 3.7.
Fees. Tensar Holdings agrees to pay an up-front fee in the total amount of
$1,312,500.

     Section 3.8.
Crediting Payments. The receipt of any payment item by TCH shall not be
considered a payment on account unless such payment item is a wire transfer of immediately
available federal funds made to the applicable Payment Account or unless and until such payment
item is honored when presented for payment. Should any payment item not be honored when presented
for payment, then Tensar Holdings shall be deemed not to have made such payment. Anything to the
contrary contained herein notwithstanding, any payment item shall be deemed received by TCH only
if it is received into the applicable Payment Account on a Business Day on or before 1:00 p.m.
(New York time). If any payment item is received into the applicable Payment Account on a
non-Business Day or after 1:00 p.m. (New York time) on a Business Day, it shall be deemed to have
been received by TCH as of the opening of business on the immediately following Business Day.

ARTICLE IV

CONDITIONS PRECEDENT

     Section 4.1. Notwithstanding any other provision of this Agreement, TCH shall have no
obligation to enter into or consummate the initial Transaction unless and until the following
conditions precedent are satisfied:

     (a) executed counterparts to this Agreement;

     (b) TCH shall have received a Purchase Request in accordance with this Agreement; and

     (c) the representations and warranties of Tensar Holdings set forth in this Agreement shall be
true, correct, and complete, in all material respects at and as of the date of the initial
Transaction with the same effect as though made on and as of such date (except to the extent that
such representations and warranties relate solely to an earlier date).

ARTICLE V

REPRESENTATIONS, WARRANTIES AND COVENANTS

     Section 5.1. Representations and Warranties. In order to induce TCH to enter into this
Agreement, Tensar Holdings makes the representations and warranties set forth on Schedule 2
hereto to TCH, which shall be true, correct, and complete, in all material respects, as of the
Agreement Date, and at and as of the date of delivery of the initial Purchase Request, the initial
Purchase Offer, the initial Transaction Date and the initial Value Date, as applicable, as though
made on and as of such date (except to the extent that such representations and warranties relate
solely to an earlier date).

 

10

     Section 5.2. Affirmative Covenants. Tensar Holdings hereby covenants and agrees, that so long
as this Agreement is in effect or any amounts are payable hereunder and until all commitments
hereunder shall have terminated, as follows:

     (a) Tensar Holdings shall and shall cause each of the other Tensar Parties to observe and
comply with the general covenants and agreements set forth in Schedule 3 hereto.

     (b) Tensar Holdings shall, and shall cause Holdings to, allow TCH to designate two observers,
without voting rights, who will be entitled to attend all meetings of such person’s boards of
directors (including committees). Tensar Holdings shall, and shall cause Holdings to, give the
designated observers notice of all meetings of Tensar Holdings’s or Holdings’s, as the case may be,
boards of directors (including committee meetings) and the information provided to its respective
directors. Tensar Holdings shall, and shall cause Holdings to, reimburse its respective
observers for reasonable out-of-pocket expenses incurred by such observers in connection with its
attendance at boards of directors and committee meetings.

     Section 5.3.
Negative Covenants. Tensar Holdings hereby covenants and agrees that so long as
this Agreement is in effect or any amounts are payable hereunder and until all commitments
hereunder shall have terminated, it shall and shall cause each of the other Tensar Parties to
observe and comply with the covenants and agreements set forth in Schedule 4 hereto.

ARTICLE VI

EVENTS OF DEFAULT

     Schedule 5 is hereby incorporated herein by reference in its entirety.

ARTICLE VII

REMEDIES UPON DEFAULT

     Upon the occurrence of any Event of Default and at any time thereafter unless and until such
Event of Default has been cured, TCH may, by written notice to Tensar Holdings, take any or all of
the actions specified on Schedule 5.

ARTICLE VIII

MISCELLANEOUS

     Section 8.1.
Notices. Notices and other communications provided for herein shall be in writing
and shall be delivered by hand or overnight courier service, mailed by certified or registered mail
or sent by fax, as follows:

	 	 	 
	     if to Tensar Holdings:

	 	Tensar Holdings, Inc.
	 

	 	c/o Global Securitization Services, LLC
	 

	 	445 Broad Hollow Road
	 

	 	Suite 239
	 

	 	Melville, New York 11747
	 

	 	Attn: Andrew Stidd

 

11

	 	 	 
	 

	 	Telephone: (631) 930-7203
	 

	 	Facsimile: (212) 302-8767
	 
	 	 
	with copies to:

	 	Arcapita, Inc.
	 

	 	75 Fourteenth Street, 24th Floor
	 

	 	Atlanta, Georgia 30309
	 

	 	Attention: E. Stockton Croft
	 

	 	Telephone: (404) 920-9000
	 

	 	Facsimile: (404) 920-9001
	 
	 	 
	and:

	 	King & Spalding LLP
	 

	 	1185 Avenue of the Americas
	 

	 	New York, New York 10036
	 

	 	Attention: Isam Salah
	 

	 	Telephone: (212) 556-2140
	 

	 	Facsimile: (212) 556-2222
	 
	 	 
	if to TCH:

	 	TCH Funding Corp.
	 

	 	c/o Global Securitization Services, LLC
	 

	 	445 Broad Hollow Road
	 

	 	Suite 239
	 

	 	Melville, New York 11747
	 

	 	Attn: Andrew Stidd
	 

	 	Telephone: (631) 930-7203
	 

	 	Facsimile: (212) 302-8767
	 
	 	 
	and:

	 	King & Spalding LLP
	 

	 	1185 Avenue of the Americas
	 

	 	New York, New York 10036
	 

	 	Attention: Isam Salah
	 

	 	Telephone: (212) 556-2140
	 

	 	Facsimile: (212) 556-2222
	 
	 	 
	if to AIFL:

	 	Arcapita Investment Funding Limited
	 

	 	c/o Paget-Brown & Company
	 

	 	West Wind Building
	 

	 	P.O. Box 1111
	 

	 	Cayman Islands
	 

	 	B.W.I.
	 

	 	Attn: Mr. Sydney Coleman/
	 

	 	Ms. Patricia Tricarico
	 

	 	Telephone: (345) 949-5122
	 

	 	Facsimile: (345) 949-7920
	 
	 	 
	with a copy to:

	 	Arcapita Investment Funding Limited
	 

	 	P.O. Box 1406

 

12

	 	 	 
	 

	 	Manama, Bahrain
	 

	 	Attn: Shahzad Iqbal
	 

	 	Telephone: 973-218-333
	 

	 	Facsimile: 973-218-217
	 
	 	 
	if to AIA:

	 	AIA Limited
	 

	 	c/o Paget-Brown & Company
	 

	 	West Wind Building
	 

	 	P.O. Box 1111
	 

	 	Cayman Islands, B.W.I.
	 

	 	Attn: Mr. Sydney Coleman/
	 

	 	Ms. Patricia Tricarico
	 

	 	Telephone: (345) 949-5122
	 

	 	Facsimile: (345) 949-7920
	 
	 	 
	with a copy to:

	 	AIA Limited
	 

	 	P.O. Box 1406
	 

	 	Manama, Bahrain
	 

	 	Attn: Shahzad Iqbal
	 

	 	Telephone: 973-218-333
	 

	 	Facsimile: 973-218-217

All notices and other communications given to any party hereto in accordance with the
provisions of this Agreement shall be deemed to have been given on the date of receipt if
delivered by hand or overnight courier service or sent by fax or on the date five Business Days
after dispatch by certified or registered mail if mailed, in each case delivered, sent or mailed
(properly addressed) to such party as provided in this Section or in accordance with the latest
unrevoked direction from such party given in accordance with this Section.

     Section 8.2.
Right of Set-Off; Adjustments. Upon the occurrence and during the continuance of
any Event of Default, TCH is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits at any time held and other
indebtedness or obligations at any time owed to Tensar Holdings by TCH against any and all of the
obligations of Tensar Holdings now or hereafter existing under this Agreement or any other Murabaha
Document or otherwise, irrespective of whether TCH shall have made any demand hereunder or
thereunder and although such obligations may be unmatured. TCH agrees promptly to notify Tensar
Holdings after any such set-off and application made by TCH; provided, however, that the failure to
give such notice shall not affect the validity of such set-off and application. The rights of TCH
under this Section 8.2 are in addition to other rights and remedies (including, without limitation,
other rights of set-off) that TCH may have.

     Section 8.3.
Benefit of Agreement; Assignments; Registration. This Agreement shall be binding
upon and inure to the benefit of and be enforceable by the respective successors and permitted
assigns of the parties hereto; provided, that Tensar Holdings may not assign or transfer any of
its interests and obligations hereunder without the prior written consent of TCH and any such
assignment without such consent shall be null and void. TCH shall have the right, without the
consent of Tensar Holdings, to appoint an agent for the exercise of any rights and obligations

 

13

of TCH under this Agreement and to collaterally assign and grant a security interest in its rights
hereunder and under any other documents related hereto in favor of any person. Any such assignee
(and its successors, assigns and agents) shall have the right to foreclose upon any such
collateral assignment or security interest, and exercise all rights and remedies under the
applicable documentation relating thereto, without any requirement for consent from Tensar
Holdings, and Tensar Holdings agrees to fully cooperate with any such exercise of rights or
remedies by any such assignee (and its successors, assigns and agents).

     Section 8.4.
No Waiver; Remedies Cumulative. No failure or delay on the part of TCH in
exercising any right, power or privilege hereunder or under any other Murabaha Document and no
course of dealing between TCH and Tensar Holdings shall operate as a waiver thereof; nor shall any
single or partial exercise of any right, power or privilege hereunder preclude any other or
further exercise thereof or the exercise of any other right, power or privilege hereunder. The
rights and remedies provided herein are cumulative and not exclusive of any rights or remedies
that TCH would otherwise have. No notice to or demand on Tensar Holdings in any case shall entitle
Tensar Holdings to any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of TCH to any other or further action in any circumstances
without notice or demand.

     Section 8.5.
Expenses; Indemnification.

     (a) The provisions of Schedule 6 are hereby incorporated herein by reference in their
entirety.

     (b) Save where AIFL acts in bad faith or with willful or reckless indifference to the
interests of Tensar Holdings, Tensar Holdings hereby agrees to indemnify AIFL against all
losses, claims, actions, proceedings, damages, costs and expenses incurred or sustained by
AIFL (or any Sub-Agent of AIFL) as a result of the performance of its obligations hereunder
or otherwise relating to this Agreement, including without limitation losses, costs or
expenses incurred by AIFL (or any Sub-Agent of AIFL) as a result of Tensar Holdings failure
to comply with Tensar Holdings obligations. For the avoidance of doubt, if AIFL (or any
Sub-Agent of AIFL) is required to make any payment on account of any tax or otherwise on or
in relation to any sum received or receivable by it as a result of the performance of its
obligations hereunder or any liability in respect of any such payment is assumed, imposed,
levied or assessed against AIFL (or any Sub-Agent of AIFL), Tensar Holdings shall, upon the
demand of AIFL, promptly indemnify AIFL against such payment or liability, together with any
other amounts, penalties, and expenses payable or incurred in connection therewith.

     (c) Save where AIA acts in bad faith or with willful or reckless indifference to the
interests of Tensar Holdings, Tensar Holdings hereby agrees to indemnify AIA against all
losses, claims, actions, proceedings, damages, costs and expenses incurred or sustained by
AIA (or any Sub-Agent of AIA) as a result of the performance of its obligations hereunder or
otherwise relating to this Agreement, including without limitation losses, costs or expenses
incurred by AIA (or any Sub-Agent of AIA) as a result of Tensar Holdings failure to comply
with Tensar Holdings obligations. For the avoidance of doubt, if AIA (or any Sub-Agent of AIA) is required to make any payment on
account of

 

14

any tax or otherwise on or in relation to any sum received or receivable by it as a
result of the performance of its obligations hereunder or any liability in respect of any
such payment is assumed, imposed, levied or assessed against AIA (or
any Sub-Agent of AIA),
Tensar Holdings shall, upon the demand of AIA, promptly indemnify AIA against such payment
or liability, together with any other amounts, penalties, and expenses payable or incurred
in connection therewith.

     Section 8.6. Amendments, Waivers and Consents. Neither this Agreement nor any of the terms
hereof may be amended, changed, waived, discharged or terminated unless such amendment, change,
waiver, discharge or termination is in writing entered into by, or approved in writing by, TCH and
Tensar Holdings. No express or implied waiver by TCH of any Default or Event of Default, shall in
any way be, or be construed to be, a waiver of any future or subsequent Default or Event of
Default.

     Section 8.7. Headings. The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of any provision of
this Agreement.

     Section 8.8.
Severability. If any provision of this Agreement is determined to be illegal,
invalid or unenforceable, such provision shall be fully severable and the remaining provisions
shall remain in full force and effect and shall be construed without giving effect to the illegal,
invalid or unenforceable provisions.

     Section 8.9. Entirety. This Agreement represents the entire agreement of the parties hereto,
and supersedes all prior agreements and understandings, oral or written, if any, relating to
transactions contemplated herein.

 

15

     Section 8.10. Tax Consequences. Tensar Holdings and TCH expressly agree that, for all income
tax purposes: (i) the transactions contemplated by this Agreement, together with the transactions
contemplated by the Letters of Undertaking, are intended to accomplish a single transaction that
is characterized as a mere financing by TCH to Tensar Holdings; (ii) the Purchase Price
constitutes the principal amount of such financing; (iii) the amounts described in the definition
of “Agreed Profit” and “Supplemental Profit” constitute interest or fees accrued on such
financing. Tensar Holdings and TCH (and any assignee of TCH’s interest in this Agreement and any
person to which a participation is granted) shall report the tax consequences of the transactions
described in clause (i) of this Section 8.10 on their respective tax returns (to the extent same
are required to be filed) consistently and in accordance with the intended tax treatment described
in this Section 8.10. For purposes of computing original issue discount for U.S. federal income
tax purposes, Tensar Holdings hereby notifies TCH in accordance with U.S. Treasury Regulation
section 1.163-7(d) that Tensar Holdings shall adopt an annual accrual period that ends on each
anniversary of the Agreement Date.

     Section 8.11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NEW
YORK, WITHOUT REGARD TO CONFLICT OF LAWS PRINCIPLES (OTHER THAN SECTIONS 5-1401 AND 5-1402 OF
THE NEW YORK GENERAL OBLIGATION LAW).

     Section 8.12. Counterparts. This Agreement may be executed in any number of counterparts, each
of which when so executed and delivered shall be an original, but all of which shall constitute one
and the same instrument. Delivery by facsimile by any of the parties hereto of an executed
counterpart of this Agreement shall be as effective as an original executed counterpart hereof and
shall be deemed a representation that an original executed counterpart hereof will be delivered.

     Section 8.13. Conflicts. To the extent that there shall exist a conflict between the terms or
provisions of this Agreement, on the one hand, and the terms of any exhibit hereto that is
executed and delivered in connection with a Transaction, the parties hereto expressly acknowledge
and agree that the terms and provisions of this Agreement shall in all events and for all purposes
be controlling.

[Signature Pages Follows]

 

 

     IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart of this
Murabaha Facility Agreement to be duly executed and delivered as of the date first above written.

	 	 	 	 	 
	 	 	TENSAR HOLDINGS, INC.
	 
	 	 	 	 
	 

	 	By
	 	/s/ E. Stockton Croft
	 

	 	 	 	 
	 

	 	 	 	Name: E. Stockton Croft
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	TCH FUNDING CORP.
	 
	 	 	 	 
	 

	 	BY
	 	/s/ Bernard J. Angelo
	 

	 	 	 	 
	 

	 	 	 	Name: Bernard J. Angelo
	 

	 	 	 	Title: President
	 
	 	 	 	 
	 	 	ARCAPITA INVESTMENT FUNDING LIMITED
	 
	 	 	 	 
	 

	 	By
	 	/s/ Henry Thompson
	 

	 	 	 	 
	 

	 	 	 	Name: Henry Thompson
	 

	 	 	 	Title:
	 
	 	 	 	 
	 	 	AIA LIMITED
	 
	 	 	 	 
	 

	 	By
	 	/s/ Henry Thompson
	 

	 	 	 	 
	 

	 	 	 	Name: Henry Thompson
	 

	 	 	 	Title:

[Signature
Page to Murabaha Facility Agreement]

 

 

Execution Copy

TENSAR HOLDINGS MURABAHA RIDERS

Schedule 1 

Definitions

     1. Defined Terms. As used in this Agreement, the following terms shall have the
meanings specified below:

     “Acquired Assets” shall mean the assets acquired by TCO from Tensar pursuant to the
Asset Purchase Agreement.

     “Acquisition” shall mean the acquisition by Tensar Holdings pursuant to the Merger Agreement
of all the Equity Interests in Holdings from the Sellers; the aggregate amount of consideration
for the Acquisition is approximately $201,900,000 (the “Acquisition Consideration”).

     “Acquisition Cost” shall have the meaning assigned to such term in the Lease
Agreement.

     “Acquisition Consideration” shall have the meaning assigned to such term in the
definition of “Acquisition”.

     “Acquisition Documentation” shall mean, collectively, the Merger Agreement and all
schedules, exhibits, annexes and amendments thereto and all side letters and agreements affecting
the terms thereof or entered into in connection therewith.

     “Acquisition Transactions” shall mean, collectively, (a) the Acquisition, including
the payment of the Acquisition Consideration, (b) the Equity Contribution, (c)(i) the consummation
of the transactions contemplated by the Asset Purchase Agreement and (ii) the obtaining by Tensar
of the Lease Agreement, (d) the obtaining by Tensar of the
Commodities Purchase Facility, (e) the
obtaining by Tensar of the Second Lien Commodities Purchase Facility, (f) the obtaining by Tensar
Holdings of this Tensar Holdings Commodities Purchase Facility, (g) the repayment by Holdings and
Tensar of all Existing Obligations, the termination of the Existing Credit Facility and the
release of all Liens and guarantees granted in respect thereof and any other Existing Obligations,
in each case in a manner satisfactory to TCH and the Purchasers and (h) the payment of fees and
expenses incurred in connection with the foregoing.

     “Affiliate” shall mean, when used with respect to a specified person, another person that
directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is
under common Control with the person specified; provided, however, that, for purposes of
Schedule 4, the term “Affiliate” shall also include any person that directly or indirectly owns 5%
or more of any class of Equity Interests of the person specified or that is an officer or director
of the person specified.

     “Affiliate Subordination Agreement” shall mean an Affiliate Subordination Agreement
in the form of Exhibit K pursuant to which intercompany obligations and advances owed by any
Tensar Party are subordinated to the Obligations.

     “Agreement” shall have the meaning assigned to such term in the preamble.

			
	 
	Schedule 1, Defined Terms
	 	 

 

 

     “Asset Purchase Agreement” shall mean the Asset Purchase Agreement, dated as
of October 31, 2005, among TCO and Tensar, as the same may be amended, supplemented or modified
from time to time in accordance with the provisions hereof.

     “Asset Sale” shall mean the sale, lease, sub-lease, license, sub-license, sale and leaseback,
assignment, conveyance, transfer, issuance or other disposition (by way of merger, casualty,
condemnation or otherwise) by any Tensar Party or any of the Subsidiaries to any person (other
than Tensar or any Subsidiary Guarantor) of (a) any Equity Interests of any of the Subsidiaries or
(b) any other assets of any Tensar Party or any of the Subsidiaries, including Equity Interests of
any person that is not a Subsidiary; provided that any asset sale or series of related
asset sales described in clause (b) above having a value not in excess of $250,000 shall be deemed
not to be an “Asset Sale” for purposes of this Agreement.

     “Benefit Plan” shall mean any employee pension benefit plan (other than a Multiemployer Plan)
subject to the provisions of Title IV of ERISA or Section 412 of the Tax Code or Section 307 of
ERISA, and in respect of which Tensar or any ERISA Affiliate is (or, if such plan were terminated,
would under Section 4069 of ERISA be deemed to be) an “employer” as defined in Section 3(5) of
ERISA.

     “Board” shall mean the Board of Governors of the Federal Reserve System of the United States
of America.

     “Business Day” shall mean any day other than a Saturday, Sunday or day on which commercial
banks in New York City, Dallas, Texas, and Atlanta, Georgia are authorized or required by law to
close.

     “Capital Expenditures” shall mean, for any period, with respect to any person, (a)
the additions to property, plant and equipment and other capital expenditures of such person and
its consolidated subsidiaries that are (or should be) set forth in a consolidated statement of
cash flows of such person for such period prepared in accordance with GAAP and (b) Capital Lease
Obligations incurred by such person and its consolidated subsidiaries during such period, provided
that, for purposes of determining compliance with Section 1.10 of Schedule 4, all Capital
Expenditures incurred prior to October 1, 2005, shall be excluded.

     “Capital Lease Obligations” of any person shall mean the obligations of such person
to pay rent or other amounts under any lease of (or other arrangement conveying the right to use)
real or personal property, or a combination thereof, which obligations are required to be
classified and accounted for as capital leases on a balance sheet of such person under GAAP, and
the amount of such obligations at any time shall be the capitalized amount thereof at such time
determined in accordance with GAAP.

     A “Change in Control” shall be deemed to have occurred if (a) at any time prior to a
Qualified IPO, the Permitted Holders shall fail to own directly or indirectly, beneficially and of
record, Equity Interests representing at least 66 2/3 % of the aggregate ordinary voting power and
aggregate equity value represented by the issued and outstanding Equity Interests in Tensar
Holdings; (b) after a Qualified IPO, any “person” or “group” (within the meaning of Rule 13d-5 of
the Securities Exchange Act of 1934 as in effect on the date hereof) other than the Permitted

			
	 
	Schedule 1, Defined Terms
	 	 

2

 

Holders shall own directly or indirectly, beneficially or of record, Equity Interests representing
either (i) more than 30% of either the aggregate ordinary voting power or the aggregate equity
value represented by the issued and outstanding Equity Interests in Tensar Holdings or (ii) a
greater percentage of either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding Equity Interests in Tensar Holdings then held, directly
or indirectly, beneficially and of record, by the Permitted Holders; (c) a majority of the seats
(other than vacant seats) on the board of directors of Tensar Holdings shall at any time be
occupied by persons who are not Continuing Directors; (d) Tensar Holdings shall at any time fail
to own directly or indirectly, beneficially and of record, 100% of each class of issued and
outstanding Equity Interests in Holdings or Holdings shall fail to own directly or indirectly,
beneficially and of record, 100% of each class of issued and outstanding Equity Interests in
Tensar, in each case, free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement); or (e) any change of control (or similar event, however denominated) with
respect to any Tensar Party or any Subsidiary shall occur under and as defined in the Related
Financing Documents.

     “Commodities Purchase Agreement” shall mean the Working Capital Murabaha Facility
Agreement, dated as of the Effective Date, by and between Tensar Holdings, Tensar, TCO Funding
Corp., and Credit Suisse, as administrative agent, as the same may be amended, supplemented or
otherwise modified in accordance with the terms hereof.

     “Commodities Purchase Facility Documents” shall mean the Commodities Purchase
Agreement and all other instruments, agreements and other documents evidencing or governing the
foregoing or providing for any Guarantee, Lien or other right in respect thereof, including the
Reimbursement Letter and the Security Documents, as the same may be amended, supplemented or
otherwise modified in accordance with the terms hereof.

     “Commodities Purchase Facility” shall mean the working capital Murabaha facility
provided for in the Commodities Purchase Agreement.

     “Confidential Information Memorandum” shall mean the Confidential information
Memorandum of Tensar dated October 2005.

     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining such Consolidated Net
income, the sum of (i) Consolidated Financing Expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and amortization for such
period (including but not limited to any amortized obligation discount, amortized administrative
expense and amortized hedging transaction expense), (iv) the adjustments set forth on Annex l(c) to
Schedule 1, (v) management fees paid to the Sponsor for such period to the extent permitted by
Section 1.07 of Schedule 4 not to exceed $1,000,000 per fiscal year, (vi) the amount of the Earnout
Payment to the extent paid in cash and not to exceed $3,000,000, (vii) any reduction to
Consolidated Net income as a result of extraordinary losses, and (viii) any non-cash charges (other
than the write-down of current assets) for such period (provided that to the extent that
all or any portion of the income of any person is excluded from Consolidated Net Income pursuant to
the definition thereof for all or any portion of such period any amounts set forth in the preceding
clauses (i) through (viii) that are attributable to such

			
	 
	Schedule 1, Defined Terms
	 	 

3

 

person shall not be included for purposes of this definition for such period or portion thereof),
and minus (b) without duplication (i) all cash payments made during such period on account of
reserves, restructuring charges and other non-cash charges added to Consolidated Net Income
pursuant to clause (a)(viii) above in a previous period and (ii) to the extent included in
determining such Consolidated Net Income, any extraordinary gains and all non-cash items of income
for such period, all determined on a consolidated basis in accordance with GAAP; provided
that for purposes of calculating Consolidated EBITDA for any period to determine the Leverage
Ratio or the First Lien Leverage Ratio, (A) the Consolidated EBITDA of any Acquired Entity
acquired by Tensar or any Subsidiary during such period pursuant to a Permitted Acquisition which
has Consolidated EBITDA in excess of $500,000 for such period, shall
be included on a pro forma basis for such period (assuming the consummation of such acquisition and the incurrence
or assumption of any Financing Obligations in connection therewith occurred as of the first day of
such period) and (B) the Consolidated EBITDA of any person or line of business sold or otherwise
disposed of during such period by Tensar or any Subsidiary which has Consolidated EBITDA in excess
of $500,000 for such period for shall be excluded for such period (assuming the consummation of
such sale or other disposition and the repayment of any Financing Obligations in connection
therewith occurred as of the first day of such period).

     “Consolidated Financing Expense” shall mean, for any period, the sum of (a) rent or
profit expense or the Rental Rate portion of rent of Tensar Holdings and its Subsidiaries for such
period (including all Agreed Profit, Supplemental Profit and the Rental Rate portion of Rent
payable, agreed profit under the Second Lien Commodities Purchase Agreement and all commissions,
discounts and other fees and charges owed by Tensar and the Subsidiaries with respect to Guarantee
Obligations under the Reimbursement Letter, letters of credit and bankers’ acceptance financing),
in each case determined on a consolidated basis in accordance with GAAP, plus (b) any profit
expense or the rental rate portion of any rent of Tensar or any Subsidiary that is required to be
capitalized rather than expensed for such period in accordance with GAAP, plus (c) any other
similar expense under GAAP.

     “Consolidated Fixed Charges” shall mean, for any period, without duplication, the sum
of (a) Consolidated Financing Expense for such period paid in cash, (b) the aggregate amount of
scheduled Acquisition Cost payments in respect of the Leased Assets or scheduled payments (whether
or not made) during such period to reduce the unpaid stated amount in respect of long term
Financing Obligations (including Capital Lease Obligations and Synthetic Lease Obligations, but
excluding payments applied to Purchase Price under the Commodities Purchase Facility) of Tensar
and its Subsidiaries (other than payments made by Tensar or any of its Subsidiaries to Tensar or
another Subsidiary), (c) Capital Expenditures for such period, less Capital Expenditures incurred
in connection with the new BX geogrid manufacturing line in Morrow, Georgia, and (d) the aggregate
amount of Taxes paid in cash (net of refunds received with respect to such Taxes) payable by
Holdings and its Subsidiaries during such period in accordance with Section 1.06(iii)(y) of
Schedule 4.

     “Consolidated Net Income” shall mean, for any period, the net income or loss of Tensar
Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded (a) the income of any Subsidiary of Tensar to
the extent that the declaration or payment of dividends or similar distributions by such Subsidiary
of that income is not at the time permitted by operation of the terms of any

			
	 
	Schedule 1, Defined Terms
	 	 

4

 

agreement, instrument, or Requirement of Law applicable to such Subsidiary, (b) the income or loss
of any person accrued prior to the date it becomes a Subsidiary of Tensar or is merged into or
consolidated with Tensar or any of its Subsidiaries or the date that such person’s assets are
acquired by Tensar or any of its Subsidiaries, (c) the income of any person (other than a
Subsidiary of Tensar) in which any other person (other than Tensar or a wholly owned Subsidiary of
Tensar or any director holding qualifying shares in accordance with applicable law) has an
interest, except to the extent of the amount of dividends or other distributions actually paid to
Tensar or a wholly owned Subsidiary thereof by such person during such period, (d) any gains
attributable to sales of assets out of the ordinary course of business and (e) the Consolidated
Net Income of the Merex Companies shall be excluded.

     “Contech Agreement” shall mean the Amended and Restated National Sales and Marketing
Agreement, dated as of January 1, 2002, between Contech Construction Products Inc. and Tensar.

     “Continuing Directors” shall mean, at any time, any member of the board of directors
of Tensar Holdings who (a) was a member of such board of directors on the Effective Date, after
giving effect to the Acquisition, or (b) was nominated for election or elected to such board of
directors with the approval of a majority of the Continuing Directors who were members of such
board of directors at the time of such nomination or election.

     “Control” shall mean the possession, directly or indirectly, of the power to direct or cause
the direction of the management or policies of a person, whether through the ownership of voting
securities, by contract or otherwise, and the terms “Controlling” and “Controlled” shall have
meanings correlative thereto.

     “Current Assets” shall mean, at any time, the consolidated current assets (other than cash
and Permitted Investments) of Tensar and its Subsidiaries.

     “Current Liabilities” shall mean, at any time, the consolidated current liabilities
of Tensar and its Subsidiaries at such time, but excluding, without duplication, (a) the current
portion of any long-term Financing Obligations and (b) outstanding obligations with respect to
Murabaha Price under the Commodities Purchase Agreement.

     “Default” shall mean any event or condition which constitutes an Event of Default or which
upon notice, lapse of time or both would constitute an Event of Default.

     “dollars” or “$” shall mean lawful money of the United States of America.

     “Domestic Subsidiaries” shall mean all Subsidiaries incorporated, formed or organized
under the laws of the United States of America, any State thereof or the District of Columbia.

     “Earnout Payment” shall mean any additional payment required to be made to Dr.
Nathaniel Fox pursuant to the Stock Purchase Agreement, dated as of July 31, 2002, between
Nathaniel Fox and Michael Fox, as sellers, and Tensar and Holdings, as buyers, pertaining to the
purchase of the stock and business of Geopier Foundation, Inc. and Geotechnical Reinforcement
Company, Inc. (the “Geopier Agreement”) in an amount equal to 50% of the amount by which the
combined “EBITDA” (as defined in the Geopier Agreement) of Geopier Foundation

			
	 
	Schedule 1, Defined Terms
	 	 

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Company, Inc., a Georgia corporation, and Geotechnical Reinforcement Company, Inc., a Georgia
corporation, for the fiscal year 2005 exceeds $3,498,012.50.

     “Effective Date” shall mean the date of this Agreement.

     “Environmental Laws” shall mean all former, current and future Federal, state, local
and foreign laws (including common law), treaties, regulations, rules, ordinances, codes, decrees,
judgments, directives, orders (including consent orders), and agreements in each case relating to
protection of the environment, natural resources, human health and safety or the presence, Release
of, threatened Release, or exposure to, Hazardous Materials, or the generation, manufacture,
processing, distribution, use, treatment, storage, transport, recycling or handling of, or the
arrangement for such activities with respect to, Hazardous Materials.

     “Environmental Liability” shall mean all liabilities, obligations, damages, losses,
claims, actions, suits, judgments, orders, fines, penalties, fees, expenses and costs (including
administrative oversight costs, natural resource damages remediation costs, legal fees and
consulting costs), whether contingent or otherwise, arising out of or relating to (a) compliance
or non-compliance with any Environmental Law, (b) the generation, use, handling, transportation,
storage, treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the Release or threatened Release of any Hazardous Materials or (e) any contract,
agreement or other consensual arrangement pursuant to which liability is assumed or imposed with
respect to any of the foregoing.

     “Environmental Permit” shall mean any Permit under Environmental Law.

     “Equity Contribution” shall mean, collectively, (a) the contribution by the Sponsor
and certain other investors acceptable to Tensar Holdings and the Administrative Agent of at least
$121,300,000, other than up to $7,700,000 of such contribution which may be in the form of rollover
equity of management, to Tensar Holdings as common equity, preferred equity and/or subordinated
shareholder loans having terms reasonably satisfactory to Tensar Holdings and the Administrative
Agent and (b) the contribution by Tensar Holdings of the amount so received in clause (a) to
Holdings in cash in exchange for the issuance to Tensar Holdings of all the common stock of
Holdings and (c) the contribution by Holdings of the amount so received in clause (b) to Tensar in
cash in exchange for the issuance to Holdings of all the membership interests of Tensar.

     “Equity Interests” shall mean shares of capital stock, partnership interests,
membership interests in a limited liability company, beneficial interests in a trust or other
equity interests in any person, or any obligations convertible into or exchangeable for, or giving
any person a right, option or warrant to acquire, such equity interests or such convertible or
exchangeable obligations.

     “Equity Issuance” shall mean any issuance or sale by Tensar Holdings of any Equity
Interests of Tensar Holdings, or the receipt by Tensar Holdings of any capital contribution, except
in each case for (a) any issuance of directors’ qualifying shares and (b) sales or issuances of
common stock of Tensar Holdings to management or employees of Tensar Holdings, Tensar

			
	 
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or any Subsidiary under any employee stock option or stock purchase plan or employee benefit plan
in existcnce from time to time in the ordinary course of business.

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

     “ERISA Affiliate” shall mean any trade or business (whether or not incorporated) that,
together with Tensar, is treated as a single employer under Section 414(b) or (c) of the Tax Code,
or solely for purposes of Section 302 of ERISA and Section 412 of the Tax Code, is treated as a
single employer under Section 414 of the Tax Code.

     “ERISA Event” shall mean (a) any “reportable event”, as defined in Section 4043 of ERISA or
the regulations issued thereunder, with respect to a Benefit Plan (other than an event for which
the 30-day notice period is waived); (b) the existence with respect to any Benefit Plan of an
“accumulated funding deficiency” (as defined in Section 412 of the Tax Code or Section 302 of
ERISA), whether or not waived; (c) the filing pursuant to Section 412(d) of the Tax Code or
Section 303(d) of ERISA of an application for a waiver of the minimum funding standard with
respect to any Benefit Plan; (d) the incurrence by Tensar or any of its ERISA Affiliates of any
liability under Title IV of ERISA with respect to the termination of any Benefit Plan or the
withdrawal or partial withdrawal of Tensar or any of its ERISA Affiliates from any Benefit Plan or
Multiemployer Plan; (e) the receipt by Tensar or any of its ERISA Affiliates from the PBGC or a
plan administrator of any notice relating to the intention to terminate any Benefit Plan or Plans
or to appoint a trustee to administer any Benefit Plan; (f) the adoption of any amendment to a
Benefit Plan that would require the provision of security pursuant to Section 401(a)(29) of the
Tax Code or Section 307 of ERISA; (g) the receipt by Tensar or any of its ERISA Affiliates of any
notice, or the receipt by any Multiemployer Plan from Tensar or any of its ERISA Affiliates of any
notice, concerning the imposition of Withdrawal Liability or a determination that a Multiemployer
Plan is, or is expected to be, insolvent or in reorganization, within the meaning of Title IV of
ERISA; (h) the occurrence of a “prohibited transaction” with respect to which Tensar or any of its
Subsidiaries is a “disqualified person” (within the meaning of Section 4975 of the Tax Code) or
with respect to which Tensar or any such Subsidiary could otherwise be liable; or (i) any other
event or condition with respect to a Benefit Plan or Multiemployer Plan that could result in
liability of Tensar or any Subsidiary.

     “Event of Default” shall have the meaning assigned to such term in Schedule 5.

     “Excess Cash Flow” shall mean, for any fiscal year of Tensar Holdings, the excess of
(a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal year and (ii) the
decrease, if any, in Current Assets minus Current Liabilities from the beginning to the end of such
fiscal year over (b) the sum, without duplication, of (i) the amount of any Taxes payable (net of
refunds received with respect to such Taxes in such fiscal year) in cash by Tensar and its
Subsidiaries with respect to such fiscal year, (ii) Consolidated Financing Expense for such fiscal
year payable in cash, (iii) Capital Expenditures made in cash in accordance with Section 1.10 of
Schedule 4 during such fiscal year, except to the extent financed with the proceeds of Financing
Obligations, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that
would not be included in Consolidated EBITDA, (iv) permanent repayments of Financing Obligations
(other than mandatory prepayments of Acquisition Cost pursuant to the terms

			
	 
	Schedule 1, Defined Terms
	 	 

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hereof) permitted hereunder made by Tensar and its Subsidiaries during such fiscal year, but only
to the extent that such prepayments by their terms cannot be redrawn and do not occur in connection
with a refinancing of all or any portion of such Financing Obligations and (v) the increase, if
any, in Current Assets minus Current Liabilities from the beginning to the end of such fiscal year.

     “Excluded Foreign Subsidiaries” shall mean, at any time, any Foreign Subsidiary that
is (or is treated as) for United States federal income tax purposes either (a) a corporation or
(b) a pass-through entity owned directly or indirectly by another Foreign Subsidiary that is (or
is treated as) a corporation.

     “Existing Credit Facility” shall mean the credit facility of Holdings under the
Second Amended and Restated Credit Agreement dated as of December 22, 2004, among Holdings,
certain subsidiaries of Tensar, General Electric Capital Corporation, as a lender and as agent for
all lenders, and the other lenders party thereto.

     “Existing Obligations” shall mean the (i) the Existing Credit Facility, (ii) the
Mezzanine Credit Agreement, dated as of December 22, 2004, among Tensar, certain subsidiaries of
Tensar and the lenders named therein and (iii) the PIK Notes issued pursuant to the PIK Note
Purchase Agreement, dated as of December 22, 2004, as amended, among Tensar, Tensar Sub-Holdings,
Inc., Merrill Lynch PCG, Inc., American Capital Strategies, Ltd. and Stark Event Trading Ltd.

     “Event of Loss” shall have the meaning assigned to such term in the Lease Agreement.

     “Financial Officer” of any person shall mean the chief financial officer, principal
accounting officer, treasurer or controller of such person.

     “Financing Coverage Ratio” shall mean, on any date, the ratio of (a) Consolidated
EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such
date, taken as one accounting period, to (b) Consolidated Financing Expense for the period of four
consecutive fiscal quarters ended on or prior to such date, taken as one accounting period.

     “Financing Obligations” of any person shall mean, without duplication, (a) all
obligations of such person in respect of any financing, including for borrowed money (including
Acquisition Cost, any Purchase Price and any Unpaid Reimbursement Obligations) or with respect to
deposits or advances of any kind or under any other Murabaha arrangements or Ijara arrangements,
(b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such person under conditional sale or other title retention agreements
relating to property or assets acquired by such person, (d) all obligations of such person in
respect of the deferred purchase price of property or services (other than current trade accounts
payable incurred in the ordinary course of business), (e) all obligations of such person,
contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Equity
Interests in such person, (f) all Financing Obligations of others secured by (or for which the
holder of such Financing Obligations has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such person, whether or not the Financing Obligations
secured thereby has been assumed, (g) all Guarantees by such person of Financing Obligations of
others, (h) all Capital Lease Obligations or Synthetic Lease Obligations of such

			
	 
	Schedule 1, Defined Terms
	 	 

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person, (i) all obligations, contingent or otherwise, of such person as an account party in
respect of letters of credit and letters of guaranty and (j) all obligations, contingent or
otherwise, of such person in respect of bankers’ acceptances. The Financing Obligations of any
person shall include the Financing Obligations of any other person (including any partnership in
which such person is a general partner) to the extent such person is liable therefor as a result
of such person’s ownership interest in, or other relationship with, such other person, except to
the extent the terms of such Financing Obligations provide that such person is not liable
therefor. For the avoidance of doubt, it is the intention of the Tensar Parties to incur only
financing obligations acceptable under Islamic Shari’ah principles.

     “First Lien Leverage Ratio” shall mean, on any date, the ratio of (a) Total
Obligations with respect to this Agreement and the Lease Agreement on such date to (b)
Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on or
prior to such date, taken as one accounting period.

     “Fixed Charge Coverage Ratio” shall mean, on any date, the ratio of (a) Consolidated
EBITDA for the period of four consecutive fiscal quarters most recently ended on or prior to such
date, taken as one accounting period, to (b) Consolidated Fixed Charges for such period, taken as
one accounting period.

     “Foreign Subsidiary” shall mean any Subsidiary that is not a Domestic
Subsidiary.

     “GAAP” shall mean generally accepted accounting principles in the United
States.

     “Governmental Authority” shall mean the government of the United States of America or
any other nation, any political subdivision thereof, whether state or local, and any agency,
authority, instrumentality, regulatory body, court, central bank or other entity exercising
executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or
pertaining to government.

     “Guarantee” of or by any person (the “guarantor”) shall mean any obligation, contingent or
otherwise, of (a) the guarantor or (b) another person (including any bank under a letter of credit)
to induce the creation of which the guarantor has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or having the economic effect of guaranteeing any
Financing Obligations or other obligation of any other person (the “primary obligor”) in any
manner, whether directly or indirectly, and including any obligation, contingent or otherwise, of
the guarantor, direct or indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Financing Obligations or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of such Financing
Obligations or other obligation, (ii) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Financing Obligations or other obligation of the payment of
such Financing Obligations or other obligation, (iii) to maintain working capital, equity capital
or any other financial statement condition or liquidity of the primary obligor so as to enable the
primary obligor to pay such Financing Obligations or other obligation, (iv) as an account party in
respect of any letter of credit or letter of guaranty issued to support such Financing Obligations
or obligation or (v) to otherwise assure or hold harmless the owner of such Financing Obligations
or other obligation against loss in respect thereof; provided,

			
	 
	Schedule 1, Defined Terms
	 	 

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however, that the term “Guarantee” shall not include endorsements for collection or
deposit in the ordinary course of business.

     “Guarantee and Collateral Agreement” shall mean, collectively the First Lien
Guarantee and Collateral Agreement and the Second Lien Guarantee and Collateral Agreement, each to
be executed and delivered by Tensar Holdings, Holdings, Tensar and each Subsidiary which .
provides a guarantee in respect of the “Obligations” or the “Lease Obligations” under the
Lease/Purchase Facilities Documents or the “Obligations” pursuant to the Second Lien Commodities
Purchase Facility Documents.

     “Guarantors” shall mean Tensar Holdings, Holdings and the Subsidiary Guarantors.

     “Hazardous Materials” shall mean any pollutant, contaminant, chemical, compound,
constituent, or hazardous, toxic or other substances, materials or wastes defined, or regulated
as such by, or pursuant to, any Environmental Law, or requires removal, remediation or reporting
under any Environmental Law, including petroleum (including crude oil or fraction thereof),
petroleum products or byproducts asbestos, or asbestos containing material, radon or other
radioactive material, polychlorinated biphenyls and urea formaldehyde insulation.

     “Hedging Agreement” shall mean any agreement with respect to any swap, forward,
future or derivative transaction, futures or option or similar agreement involving, or settled by
reference to, one or more rates, currencies, fuel or other commodities, equity or instruments or
securities, or economic, financial or pricing indices or measures of economic, financial or
pricing risk or value or any similar transaction or any combination of these transactions;
provided, however, that no phantom stock or similar plan providing for payments and on
account of services provided by current or former directors, officers, employees or consultants
of any Tensar Party or any Subsidiary shall be a Hedging Agreement. For the avoidance of doubt,
it is the intention of the Tensar Parties to incur only such Hedging Agreements as are acceptable
under Islamic Shari’ah principles.

     “Holdings” shall mean The Tensar Corporation, a Delaware corporation.

     “Indemnitee” shall have the meaning assigned to such term in Section 2(b) of Schedule 6.

     “Intercreditor
Agreement” shall mean the Tensar Intercreditor Agreement
substantially in the form of Exhibit J.

     “Investments” shall have the meaning assigned to such term in Section 1.04 of
Schedule 4.

     “Lease Agreement” shall mean the Lease and License Financing and Purchase Option
Agreement dated as of the Effective Date by and among Tensar Holdings, Tensar, TCO and Credit
Suisse, as administrative agent, as the same may be amended, supplemented, or modified from time
to time in accordance with the provisions thereof.

     “Lease Documents” shall mean the Lease Agreement, the Asset Purchase Agreement, the
Call Option Letter, the Put Option Letter, the Tax Matters Agreement, the Supplemental Agreement
and the Security Documents and all other instruments, agreements and other

			
	 
	Schedule 1, Defined Terms
	 	 

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documents evidencing or governing the foregoing or providing for any Guarantee, Lien or other
right in respect thereof, as the same may be amended, supplemented or otherwise modified from time
to time.

     “Lease/Purchase Facilities Documents” shall mean, collectively, the Lease Documents
and the Commodities Purchase Facility Documents.

     “Lease Obligations” shall have the meaning assigned to such term in the Guarantee and
Collateral Agreement and the other Security Documents.

     “Leverage Ratio” shall mean, on any date, the ratio of (a) Total Obligations on such date to
(b) Consolidated EBITDA for the period of four consecutive fiscal quarters most recently ended on
or prior to such date, taken as one accounting period.

     “Lien” shall mean, with respect to any asset, (a) any mortgage, deed of trust, lien
(statutory or otherwise), pledge, hypothecation, encumbrance, collateral assignment, charge or
security interest in, on or of such asset, (b) the interest of a vendor or a lessor under any
conditional sale agreement, capital lease or title retention agreement (or any financing lease
having substantially the same economic effect as any of the foregoing) relating to such asset and
(c) in the case of securities, any purchase option, call or similar right of a third party with
respect to such securities.

     “Margin Stock” shall have the meaning assigned to such term in Regulation U.

     “Material Adverse Effect” shall mean a material adverse condition or material adverse
change in or materially affecting (a) the business, assets, liabilities, operations or condition
(financial or otherwise) or operating results of the Tensar Parties and the Subsidiaries, taken as
a whole, or (b) the validity or enforceability of any of the Tensar Holdings Commodities Purchase
Facility Documents or the rights and remedies of TCH or the Purchasers thereunder; provided
that for purposes of any representation or warranty provided by any Tensar Party on the
Effective Date, a Material Adverse Effect shall not include (A) a downturn in general economic,
business or regulatory conditions or other changes therein,
(B) effects or changes that are
generally applicable to the industries and markets in which the Tensar Parties or the Subsidiaries
operate, provided that such changes do not disproportionately affect the Tensar Parties or the
Subsidiaries or their business, (C) changes in the United States or world financial markets, (D)
effects arising from war or terrorism or (E) effects directly or primarily arising out of the
execution or delivery of the Merger Agreement or the transactions contemplated thereby or the
public announcement thereof.

     “Material Obligations” shall mean (i) all Financing Obligations of Tensar with respect
to any Lease Document, any Second Lien Commodities Purchase Facility Document or any Commodities
Purchase Facility Document and (ii) all Financing Obligations (other than the Financing Obligations
described in clause (i) and the obligations of the Tensar Parties under the Tensar Holdings
Commodities Purchase Facility Documents, or obligations in respect of one or more Hedging
Agreements, of any one or more of the Tensar Parties or the Subsidiaries in an aggregate principal
amount exceeding, in the case of clause (ii), $2,500,000. For purposes of determining Material
Obligations, the “principal amount” of the obligations of the Tensar Parties

			
	 
	Schedule 1, Defined Terms
	 	 

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or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) such Tensar Party or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.

     “Material Subsidiary” shall mean any Subsidiary which meets any of the following
conditions: (i) Tensar Holdings’ and its other Subsidiaries’ investments in and advances to such
Subsidiary exceed five percent of the total assets of Tensar Holdings and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; (ii) the total assets of
such Subsidiary exceed five percent of the total assets of Tensar Holdings and its Subsidiaries
consolidated as of the end of the most recently completed fiscal year; or (iii) such Subsidiary’s
income from continuing operations before income taxes, extraordinary items and cumulative effect
of a change in accounting principles of such Subsidiary exceeds five percent of such income of
Tensar Holdings and its Subsidiaries consolidated for the most recently completed fiscal year.

     “Merex Companies” shall mean Merex E.A. Company Limited, a Taiwan company limited by
shares, and Merex Limited, a United Kingdom company.

     “Merger Agreement” shall mean the Agreement and Plan of Merger, dated as of September
13, 2005, by and between Tensar Holdings and Holdings.

     “Metals Transaction” shall have the meaning assigned to such term in the Commodities
Purchase Agreement or the Tensar Holdings Commodities Purchase Agreement, as applicable.

     “Moody’s”
shall mean Moody’s Investors Service, Inc.

     “Mortgaged Properties” shall mean, initially, each parcel of real property and the
improvements thereto owned or leased by a Tensar Party and specified on Annex l(d) to this
Schedule 1, and shall include each other parcel of real property and improvements thereto with
respect to which a Mortgage is granted pursuant to Section 1.09 or 1.10 of Schedule 3 of the
Commodities Purchase Agreement and of the Second Lien Commodities Purchase Agreement.

     “Mortgages” shall mean the fee or leasehold mortgages or deeds of trust, assignments of leases
and rents and other security documents granting a Lien on any Mortgaged Property to secure the
Obligations (as defined in the Lease/Commodities Purchase Documents and the Second Lien Commodities
Facility Documents), as the same may be amended, supplemented, replaced or otherwise modified from
time to time in accordance with this Agreement.

     “Multiemployer Plan” shall mean a multiemployer plan as defined in Section 4001(a)(3) of ERISA.

     “NAG” shall mean North American Green, Inc., an Indiana corporation.

     “NAG Sale-Leaseback” shall mean the substantially concurrent purchase by NAG of the
manufacturing facility and land located at 5315 Cynthiana Road, St. Wendell, Posey County, Indiana
(the “NAG Facility”) pursuant to the terms of the lease agreement entered into by and between Dan
Koester Properties, Inc., an Indiana corporation, and NAG dated as of September

			
	 
	Schedule 1, Defined Terms
	 	 

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24, 2004, and the sale of such NAG Facility to a non-Affiliate third party and the subsequent (and
substantially concurrent) lease back from such non-Affiliate third party.

     “Net Cash Proceeds” shall mean (a) with respect to any Asset Sale or Recovery Event,
the proceeds thereof in the form of cash and Permitted Investments (including any such proceeds
subsequently received (as and when received) in respect of noncash consideration initially
received), net of (i) selling expenses (including reasonable and customary broker’s fees or
commissions, legal fees, transfer and similar taxes incurred by the Tensar Parties and the
Subsidiaries in connection therewith and Tensar’s good faith estimate of income taxes paid or
payable in connection with such sale, after taking into account any available tax credits or
deductions and any tax sharing arrangements), (ii) amounts provided as a reserve, in accordance
with GAAP, against any liabilities under any indemnification obligations or purchase price
adjustment associated with such Asset Sale (provided that, to the extent and at the time
any such amounts are released from such reserve, such amounts shall constitute Net Cash Proceeds)
and (iii) all payment obligations on any Financing Obligation which is secured by the asset sold in
such Asset Sale and which is required to be repaid with such proceeds (other than any such
Financing Obligations assumed by the purchaser of such asset; provided, however, that, if
(x) Tensar delivers a certificate of a Financial Officer of Tensar to TCH and the Purchasers at the
time of receipt thereof setting forth Tensar’s intent to reinvest such proceeds in productive
assets of a kind then used or usable in the business of Tensar and the Subsidiaries within 180 days
of receipt of such proceeds and (y) no Default or Event of Default shall have occurred and shall be
continuing at the time of such certificate or at the proposed time of the application of such
proceeds, such proceeds shall not constitute Net Cash Proceeds except to the extent not so used at
the end of such 180-day period, at which time such proceeds shall be deemed to be Net Cash
Proceeds; and (b) with respect to any issuance or incurrence of Financing Obligations or any Equity
Issuance, the cash proceeds thereof, net of all taxes and reasonable and customary fees,
commissions, costs and other expenses incurred by the Tensar Parties and the Subsidiaries in
connection therewith.

     “Netlon License” shall mean the Consolidated Tensar License Agreement, dated June 24, 1999,
by and between the Netlon Group Limited and Tensar, relating to the manufacture, sale and use of
integral polymeric grid materials or integral polymeric mesh materials in Canada, the United
States, Central and South America, and all of the islands of the Caribbean Sea, as amended.

     “Obligations” shall have the meaning assigned to such term in the Guarantee and Collateral
Agreement.

     “PBGC” shall mean the Pension Benefit Guaranty Corporation referred to and defined in ERISA
and any successor entity performing similar functions.

     “Patriot Act” shall mean Uniting and Strengthening America by Providing Appropriate
Tools Required to Intercept and Obstruct Terrorism (USA Patriot Act of 2001, Title III of Pub. L.
107-56 (signed into law October 26, 2001)).

     “Permits” shall mean any and all franchises, licenses, leases, permits, approvals,
notifications, certifications, registrations, authorizations, exemptions, qualifications,
easements,

			
	 
	Schedule 1, Defined Terms
	 	 

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rights of way, Liens and other rights, privileges and approvals required under any Requirement of
Law.

     “Permitted Acquisition” shall mean the acquisition by Tensar or any of its
Subsidiaries of all or substantially all the assets of a person or line of business of such
person, or all of the Equity Interests of a person (referred to herein as the “Acquired Entity”):
provided that (i) the Acquired Entity shall be a going concern; (ii) at the time of such
transaction (A) both before and after giving effect thereto, no Event of Default or Default shall
have occurred and be continuing; and (B) Tensar would be in compliance with the covenants set
forth in Sections 1.11 and 1.13 of Schedule 4 and the Leverage Ratio would be at least 0.25 to 1.0
less than the maximum Leverage Ratio then permitted under Section 1.12 of Section 4 at such time,
in each case as of the most recently completed period ending prior to such transaction for which
the financial statements and certificates required by Sections 1.04(a) and (b) of Schedule 3 were
required to be delivered, after giving pro forma effect to such transaction and to any
other event occurring after such period as to which pro forma recalculation is appropriate
(including any other transaction described in this definition occurring after such period) as if
such transaction (and the occurrence or assumption of any Financing Obligations in connection
therewith) had occurred as of the first day of such period; and (C) after giving effect to such
acquisition, Tensar would be able to enter into a Metals Transaction pursuant to the Commodities
Purchase Agreement for not less than $10,000,000; (iii) none of the Tensar Parties or the
Subsidiaries shall incur or assume any Financing Obligations in connection with such acquisition,
except as permitted by Section 1.01 of Schedule 4, and (iv) Tensar shall comply, and shall cause
the Acquired Entity to comply, with the applicable provisions of Sections 1.09 and 1.10 of
Schedule 3, the Security Documents.

     “Permitted Holders” shall mean the Sponsor and each of the persons identified on
Annex 1(a) to this Schedule 1.

     “Permitted Investments” shall mean:

     (a) direct obligations of, or obligations the principal of and interest on which
are unconditionally guaranteed by, the United States of America (or by any agency
thereof to the extent such obligations are backed by the full faith and credit of the
United States of America), in each case maturing within one year from the date of acquisition
thereof;

     (b) investments in commercial paper maturing within 270 days from the date
of acquisition thereof and having, at such date of acquisition, the highest credit
rating obtainable from S&P or from Moody’s;

     (c) investments in certificates of deposit, banker’s acceptances and time
deposits maturing within 180 days from the date of acquisition thereof issued or
guaranteed by or placed with, and money market deposit accounts issued or offered by
any domestic office of Credit Suisse or any commercial bank organized under the laws of
the United States of America or any State thereof that has a combined capital and
surplus and undivided profits of not less than $500,000,000;

			
	 
	Schedule 1, Defined Terms
	 	 

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     (d) fully collateralized repurchase agreements with a term of not more than 30
days for securities described in clause (a) above and entered into with a financial
institution satisfying the criteria of clause (c) above;

     (e) investments in “money market funds” within the meaning of Rule 2a-7 of
the Investment Company Act of 1940, as amended, substantially all of whose assets are
invested in investments of the type described in clauses (a) through (d) above;

     (f) other short-term investments utilized by Foreign Subsidiaries in
accordance with normal investment practices for cash management in investments of a
type analogous to the foregoing; and

     (g) short-term shari’ah compliant investments of a type analogous to the
foregoing and reasonably acceptable to the Purchasers.

     “Permitted Refinancing Obligations” shall mean Financing Obligations issued or
incurred (including by means of the extension or renewal of existing Financing Obligations) to
refinance, refund, extend, renew or replace existing Financing Obligations (“Refinanced
Obligations”); provided that (a) the stated amount of such refinancing, refunding,
extending, renewing or replacing Financing Obligations is not greater than the stated amount of
such Refinanced Obligations plus the amount of any rent, profit, premiums or penalties and accrued
and unpaid amounts paid thereon and reasonable fees and expenses, in each case associated with
such refinancing, refunding, extension, renewal or replacement, (b) such refinancing, refunding,
extending, renewing or replacing Financing Obligations has a final maturity that is no sooner
than, and a weighted average life to maturity that is no shorter than, such Refinanced
Obligations, (c) if such Refinanced Obligations or any Guarantees thereof are subordinated to the
Obligations, such refinancing, refunding, extending, renewing or replacing Financing Obligations
and any Guarantees thereof remain so subordinated on terms no less favorable to TCH or any
Purchaser, (d) the obligors in respect of such Refinanced Obligations immediately prior to such
refinancing, refunding, extending, renewing or replacing are the only obligors on such
refinancing, refunding extending, renewing or replacing Financing Obligations and (e) such
refinancing, refunding, extending, renewing or replacing Financing Obligations contains covenants
and events of default and is benefited by Guarantees, if any, which, taken as a whole, are
determined in good faith by a Financial Officer of Tensar to be no less favorable to Tensar, the
applicable Subsidiary, TCH or any Purchaser in any material respect than the covenants and events
of default or Guarantees, if any, in respect of such Refinanced Obligations.

     “person” shall mean any natural person, corporation, trust, business trust, joint venture,
joint stock company, association, company, limited liability company, partnership, Governmental
Authority or other entity.

     “Purchasers” shall mean, collectively, the Purchasers from time to time pursuant to that
certain PIK Note Agreement dated as of the Effective Date, by and among TCH and such Purchasers.

     “Qualified IPO” shall mean an underwritten initial public offering of common stock of (and by)
Tensar Holdings pursuant to an effective registration statement filed with the Securities

			
	 
	Schedule 1, Defined Terms
	 	 

15

 

and Exchange Commission in accordance with the Securities Act of 1933, as amended, which initial
public offering results in gross cash proceeds to Tensar Holdings of $100,000,000 or more.

     “Real Property” shall mean all Mortgaged Property and all other real property owned or leased
from time to time by the Tensar Parties and the Subsidiaries.

     “Recovery Event” shall mean any settlement of or payment in respect of any property
or casualty insurance claim or any taking under power of eminent domain or by condemnation or
similar proceeding of or relating to any property or asset of any Tensar Party or any Subsidiary;
provided that any such settlement or payment having a value not in excess of $250,000 and
anything constituting an Event of Loss shall be deemed not to be a “Recovery Event” for
purposes of this Agreement.

     “Regulation T” shall mean Regulation T of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     “Regulation U” shall mean Regulation U of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     “Regulation X” shall mean Regulation X of the Board as from time to time in effect and all
official rulings and interpretations thereunder or thereof.

     “Related Financing Documents” shall mean the Lease Documents, the Commodities
Purchase Facility Documents and the Tensar Holdings Commodities Purchase Facility Documents.

     “Related Parties” shall mean, with respect to any specified person, such person’s Affiliates
and the respective directors, officers, employees, agents and advisors of such person and such
person’s Affiliates.

     “Release” shall mean any release, spill, seepage, emission, leaking, pumping, injection,
pouring, emptying, deposit, disposal, discharge, dispersal, dumping, escaping, leaching, or
migration into, onto or through the environment or within or upon any building, structure, facility
or fixture.

     “Rent”
shall have the meaning assigned to such term in the Lease
Agreement.
      “Rental
Rate” shall have the meaning assigned to such term in the Lease Agreement.

     “Requirement of Law” shall mean as to any person, the governing documents of such
person, and any law, treaty, rule or regulation or determination of an arbitrator or a court or
other Governmental Authority, in each case applicable to or binding upon such person or any of its
Real Property or personal property or to which such person or any of its property of any nature is
subject.

			
	 
	Schedule 1, Defined Terms
	 	 

16

 

     “Responsible Officer” of any person shall mean any executive officer or
Financial Officer of such person and any other officer or similar official thereof responsible for
the administration of the obligations of such person in respect of this Agreement.

     “Restricted Obligations” shall mean Financing Obligations of any Tensar Party or any
Subsidiary, the payment, prepayment, repurchase or defeasance of which is restricted under Section
1.09(b) of Schedule 4.

     “Restricted Payment” shall mean any dividend or other distribution (whether in cash,
securities or other property) with respect to any Equity Interests in any Tensar Party or any
Subsidiary, or any payment (whether in cash, securities or other property), including any sinking
fund or similar deposit, on account of the purchase, redemption, defeasance, retirement,
acquisition, cancellation or termination of any Equity Interests in any Tensar Party or any
Subsidiary or any option, warrant or other right to acquire any such Equity Interests in any
Tensar Party or any Subsidiary.

     “Restricted Stock Purchase Program” shall mean the Tensar Holdings, Inc. 2005 Stock
Incentive Plan, and any successor plan thereto containing substantially similar terms and
provisions.

     “S&P” shall mean Standard & Poor’s Ratings Group, Inc., a division of McGraw Hill, Inc.

     “Second Lien Commodities Purchase Agreement” shall mean the Murabaha Facility
Agreement, dated as of the Effective Date, by and between Tensar and TCO Funding Corp., as the
same may be amended, supplemented or otherwise modified in accordance with the terms thereof.

     “Second Lien Commodities Purchase Facility” shall mean the second lien Murabaha
facility, provided for in the Second Lien Commodities Purchase Agreement.

     “Second Lien Commodities Purchase Facility Documents” shall mean the Second Lien
Commodities Purchase Agreement and all other instruments, agreements and other documents
evidencing or governing the Second Lien Commodities Purchase Facility or providing for any
Guarantee or other right in respect thereof, as the same may be amended, supplemented or otherwise
modified in accordance with the terms hereof.

     “Security Documents” shall mean the Guarantee and Collateral Agreement, the
Mortgages, the Intellectual Property Security Agreements and each of the other security
agreements, pledges, mortgages, consents and other instruments and documents executed and
delivered pursuant to any of the foregoing or pursuant to the Lease/Commodities Purchase Facility
Documents or the Second Lien Commodities Purchase Facility Documents.

      “Sellers” shall mean KRG Capital Partners and the other shareholders, warrant holders and
holders of stock options of Holdings immediately prior to the consummation of the Transactions.

			
	 
	Schedule 1, Defined Terms
	 	 

17

 

     “Split Dollar Insurance Documents” shall mean each of the three Split Dollar
Termination Agreements, dated as of December 30, 2003, between Tensar Earth Technologies, Inc. and
Holdings, and each of Phillip D. Egan, Gale D. Sanders and Robert F. Vevoda, respectively, as in
effect on the Effective Date.

     “Sponsor” shall mean Arcapita Inc.

     “subsidiary” shall mean, with respect to any person (herein referred to as the “parent”), any
corporation, partnership, limited liability company, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or more than 50% of the general partnership interests are, at the
time any determination is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, in either case, by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

     “Subsidiary” shall mean any subsidiary of Tensar Holdings unless otherwise specified.

     “Subsidiary Guarantor” shall mean, initially, each Subsidiary of Tensar specified on
Annex l(b) of this Schedule 1 and, at any time thereafter, shall include each other Subsidiary of
Tensar that is not an Excluded Foreign Subsidiary.

     “Synthetic Lease Obligations” shall mean all monetary obligations of a person under
(a) a so-called synthetic, off-balance sheet or tax retention lease or (b) an agreement for the use
or possession of any property (whether real, personal or mixed) creating obligations which do not
appear on the balance sheet of such person, but which, upon the insolvency or bankruptcy of such
person, would be characterized as Financing Obligations of such person (without regard to
accounting treatment).

     “Synthetic Purchase Agreement” shall mean any swap, derivative or other agreement or
combination of agreements pursuant to which any Tensar Party or any Subsidiary is or may become
obligated to make (a) any payment in connection with a purchase by any third party from a person
other than any Tensar Party or any Subsidiary of any Equity Interest or Restricted Obligations or
(b) any payment (other than on account of a purchase by it permitted hereunder of any Equity
Interest or Restricted Obligations) the amount of which is determined by reference to the price or
value at any time of any Equity Interest or Restricted Obligations; provided that no
phantom stock or similar plan providing for payments only to current or former directors, officers
or employees of any Tensar Party or the Subsidiaries (or to their heirs or estates) shall be deemed
to be a Synthetic Purchase Agreement.

     “Tax Code” shall mean the Internal Revenue Code of 1986, as amended from time to time.

     “Taxes” shall mean any and all present or future taxes, levies, imposts, duties, deductions,
charges, liabilities or withholdings (including interest, fines, penalties or additions to tax)
imposed by any Governmental Authority.

     “TCH” shall mean TCH Funding Corp., a Delaware corporation.

			
	 
	Schedule 1, Defined Terms
	 	 

18

 

     
“TCO” shall mean TCO Funding Corp., a Delaware corporation.

     “Tensar” shall mean The Tensar Corporation, LLC, a Georgia limited liability company.

     “Tensar Holdings” shall mean Tensar Holdings, Inc. a Delaware corporation.

     “Tensar Holdings Commodities Purchase Agreement” shall mean this Agreement, dated as
of the Effective Date, by and between Tensar Holdings and TCH Funding Corp., as the same may be
amended, supplemented or otherwise modified in accordance with the terms hereof.

     “Tensar Holdings Commodities Purchase Facility” shall mean the commodities purchase
facility available to Tensar Holdings pursuant to this Agreement.

     “Tensar Holdings Commodities Purchase Facility Documents” shall mean this Agreement
and all other instruments, agreements and other documents evidencing or governing the Tensar
Holdings Commodities Purchase Facility or providing any right in respect thereof, as the same may
be amended, supplemented or otherwise modified in accordance with the terms hereof.

     “Tensar Holdings Subordination Agreement” shall mean the Tensar Holdings
Subordination and Intercreditor Agreement to be executed by Tensar Holdings, TCH, TCO and the
other persons party thereto, on the Effective Date, substantially in the form attached hereto as
Exhibit L.

     “Tensar Parties” shall mean Tensar Holdings, Holdings, Tensar and each Subsidiary that is or
becomes a party to a Lease/Purchase Facilities Document, a Second Lien Commodities Purchase
Facility Document, or a Tensar Holding Commodities Purchase Facility Document.

     “Total Obligations” shall mean, at any time, the aggregate amount of Financing
Obligations of Tensar Holdings and its Subsidiaries outstanding at such time, in the amount that
would be reflected on a balance sheet prepared at such time on a consolidated basis in accordance
with GAAP and, without duplication and regardless of GAAP, the aggregate amount of Financing
Obligations consisting of Acquisition Cost under the Lease Documents and Murabaha Price or Unpaid
Reimbursement Obligations (in each case, excluding Agreed Profit) under the Commodities Purchase
Facility Documents and the Second Lien Commodities Purchase Facility Documents, but excluding
Financing Obligations of Tensar Holdings under this Agreement.

     “Transactions” shall mean, collectively, (a) the execution, delivery and performance by
Tensar Holdings of the Tensar Holdings Commodities Purchase Facility Documents and the Related
Financing Documents to which it is a party and (b) any other transactions related to or entered
into in connection with any of the foregoing.

     “UCC” shall mean the Uniform Commercial Code.

     “Unpaid Reimbursement Obligations” shall have the meaning assigned to such term in the
Commodities Purchase Agreement.

19

 

     “wholly owned subsidiary” of any person shall mean a subsidiary of such person of
which securities (except for directors’ qualifying shares) or other ownership interests
representing 100% of the Equity Interests are, at the time any determination is being made, owned,
controlled or held by such person or one or more wholly owned subsidiaries of such person or by
such person and one or more wholly owned subsidiaries of such person; a “wholly owned
Subsidiary” shall mean any wholly owned subsidiary of Tensar, unless otherwise noted.

     “Withdrawal Liability” shall mean liability to a Multiemployer Plan as a result of a
complete or partial withdrawal from such Multiemployer Plan, as such terms are defined in Part I
of Subtitle E of Title IV of ERISA.

     2. Terms Generally. The definitions in Section 1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including”, and words of similar import, shall not be limiting and shall be deemed
to be followed by the phrase “without limitation”. The word “will” shall be construed to have the
same meaning and effect as the word “shall”. The words “asset” and “property” shall be construed
as having the same meaning and effect and to refer to any and all rights and interests in tangible
and intangible assets and properties of any kind whatsoever, whether real, personal or mixed,
including cash, securities, Equity Interests, accounts and contract rights. The words “herein”,
“hereof and “hereunder”, and words of similar import, shall be construed to refer to this
Agreement in its entirety and not to any particular provision of this Agreement unless the context
shall otherwise require. All references herein to Articles, Sections, Exhibits and Schedules
shall be deemed references to Articles and Sections of, and Exhibits and Schedules to, this
Agreement unless the context shall otherwise require. Except as otherwise expressly provided
herein, (a) any definition of, or reference to, any Tensar Holdings Commodities Purchase
Facility Document or any other agreement, instrument or document in this Agreement shall mean such
Tensar Holdings Commodities Purchase Facility Document or other agreement, instrument or document
as amended, restated, supplemented or otherwise modified from time to time (subject to any
restrictions on such amendments, restatements, supplements or modifications set forth herein) and
(b) all terms of an accounting or financial nature shall be construed in accordance with GAAP, as
in effect from time to time; provided, however, that if Tensar Holdings notifies TCH and
the Purchasers that Tensar Holdings wishes to amend any covenant in Schedule 4 or any related
definition to eliminate the effect of any change in GAAP occurring after the date of this
Agreement on the operation of such covenant (or if TCH or the Purchasers notify Tensar Holdings
that it wishes to amend Schedule 4 or any related definition for such purpose), then Tensar
Holding’s compliance with such covenant shall be determined on the basis of GAAP without giving
effect to the relevant change in GAAP, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to Tensar Holdings, TCH and the Purchasers. For purposes of GAAP,
references herein to “Rental Rate”, “Agreed Profit” or “Financing Expense” shall be treated as
interest and “Acquisition Cost” and “Purchase Price” shall be treated as indebtedness.

     3. Pro Forma Calculations. All pro forma calculations permitted or required
to be made by Tensar or any Subsidiary pursuant to this Agreement shall include only those
adjustments that would be permitted or required by Regulation S-X under the Securities Act of
1933, as amended, together with those adjustments that (a) have been certified by a Financial

20

 

Officer of Tcnsar as having been prepared in good faith based upon reasonable assumptions and (b)
are based on reasonably detailed written assumptions reasonably acceptable to TCH and the
Purchasers.

     4. Shari’ah Principles. For the avoidance of doubt, although it is the intention of
the Tensar Parties not to enter into any Hedging Agreement or incur any indebtedness, or enter into
other financing transaction that is not acceptable under Islamic Shari’ah principles, all defined
terms hereunder shall include all relevant transactions of the Tensar Parties, whether or not such
transactions are found to be Shari’ah compliant.

21

 

Execution Copy

Schedule 2

Representations and Warranties

     Tensar Holdings represents and warrants to TCH and the Purchasers that:

     SECTION 1.01.
Organization; Powers. Each of Tensar Holdings and Tensar (a) is duly organized
or formed, validly existing and in good standing under the laws of the jurisdiction of its
organization or formation, (b) has all requisite power and authority, and the legal right, to own
and operate its property and assets, to lease the property it operates as lessee and to carry on
its business as now conducted and as proposed to be conducted, (c) is qualified to do business in,
and is in good standing in, every jurisdiction where such qualification is required, except where
the failure to so qualify has not had and could not reasonably be expected to have a Material
Adverse Effect, and (d) has the power and authority, and the legal right, to execute, deliver and
perform its obligations under this Agreement, each of the other Tensar Holdings Commodities
Purchase Facility Documents, the Related. Financing Documents the Acquisition Documentation and
each other agreement or instrument contemplated hereby or thereby to which it is or will be a
party, including, to enter into this Agreement and to buy and sell metals.

     SECTION
1.02. Authorization; No Conflicts. The Transactions (a) have been duly
authorized by all requisite corporate, partnership or limited liability company and, if required,
stockholder, partner or member action and (b) do not (i) violate (A) any provision of law,
statute, rule or regulation, or of the certificate or articles of incorporation or other
constitutive documents or by-laws of any Tensar Party or any Subsidiary, (B) any order of any
Governmental Authority or arbitrator or (C) any provision of any indenture, agreement or other
instrument to which any Tensar Party or any Subsidiary is a party or by which any of them or any
of their property is or may be bound, (ii) conflict with, result in a breach of or constitute
(alone or with notice or lapse of time or both) a default under, or give rise to any right to
accelerate or to require the prepayment, repurchase or redemption of any obligation under any such
indenture, agreement or other instrument or (iii) result in the creation or imposition of any Lien
upon or with respect to any property or assets now owned of hereafter acquired by any Tensar Party
(other than Liens created under the Security Documents or the security documents with respect to
the Lease Agreement and the Second Lien Commodities Purchase Facility).

     SECTION 1.03. Enforceability. This Agreement has been duly executed and delivered by
Tensar Holdings and constitutes, and each other Tensar Holdings Commodities Purchase Facility
Document when executed and delivered by Tensar Holdings will constitute, a legal, valid and
binding obligation of such Tensar Party enforceable against such Tensar Party in accordance with
its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws
affecting creditors’ rights generally and subject to general principles of equity, regardless of
whether considered in a proceeding in equity or at law.

Schedule 1, Defined Terms

 

 

     SECTION 1.04. Governmental Approvals. No action, consent or approval of,
registration or filing with, Permit from, notice to, or any other action by, any Governmental
Authority is or will be required in connection with the Transactions, except for (a) the filing of
UCC financing statements and filings with the United States Patent and Trademark Office and the
United States Copyright Office, (b) recordation of the Mortgages and (c) such as have been made or
obtained and are in full force and effect.

     SECTION
1.05. Financial Statements Holdings has heretofore furnished to TCH and the Purchasers
its consolidated balance sheets and statements of income, stockholder’s equity and cash flows as
of and for the fiscal years ended December 31, 2004, December 31, 2003 and December 31,2002, in
each case audited by and accompanied by the opinion of Pricewaterhouse Coopers LLP, independent
public accountants. Such financial statements present fairly in all material respects the
financial condition and results of operations and cash flows of Holdings and its consolidated
Subsidiaries as of such dates and for such periods. Such balance sheets and the notes thereto
disclose all material liabilities, direct or contingent, of Holdings and its consolidated
Subsidiaries as of the dates thereof. Such financial statements were prepared in accordance with
GAAP applied on a consistent basis.

     (b) Tensar Holdings has heretofore delivered to TCH and the Purchasers its unaudited
pro forma consolidated balance sheet as of September 30, 2005, prepared giving effect to the
Transactions as if they had occurred, with respect to such balance sheet, on such date. Such
pro forma financial statements (i) have been prepared in good faith by Tensar Holdings, based on
the assumptions used to prepare the pro forma financial information contained in the Confidential
Information Memorandum (which assumptions are believed by Tensar Holdings and Tensar on
the Effective Date to be reasonable), (ii) are based on the best information available to
Tensar Holdings and Tensar after due inquiry as of the date of delivery thereof, (iii) accurately
reflect all adjustments required to be made to give effect to the Transactions and (iv) present fairly in
all material respects on a pro forma, basis the estimated consolidated financial position of
Tensar Holdings and its consolidated Subsidiaries as of such date, assuming that the Transactions had
actually occurred at such date.

     (c) The projections delivered on the date hereof and attached as Annex 5 to this
Schedule 2 have been prepared by Tensar Holdings in light of the past operation of its business
and the business of its subsidiaries, but including future payments of known contingent
liabilities, and reflect projections for the four-year period beginning on September 1, 2005
on a month-by-month basis. Such projections are based upon estimates and assumptions stated
therein, all of which Tensar Holdings believes to be reasonable and fair in light of current
conditions and current facts known to it and, as of the Effective Date, reflect Tensar
Holdings’ good faith and reasonable estimates of the future financial performance of the Tensar Parties
and of the other information projected therein for the period set
forth therein.

     SECTION 1.06. No Material Adverse Change. No event, change or condition has occurred
since December 31, 2004, that has caused, or could reasonably be expected to cause, a Material
Adverse Effect.

     SECTION
1.07. Title to Properties; Possession Under Leases. (a) Each of the Tensar
Parties and the Subsidiaries has good and marketable title to, or valid leasehold interests in,
all its

Schedule 2, Representations and Warranties

2

 

material properties and assets (including all Real Property), except for defects in title that, in
the aggregate, are not substantial in amount and do not materially detract from the value of the
property subject thereto or materially interfere with its ability to conduct its business as
currently conducted or to utilize such properties and assets for their intended purposes. Each
parcel of Real Property is free from material structural defects and all building systems
contained therein are in good working order and condition, ordinary wear and tear excepted,
suitable for the purposes for which they are currently being used. No material portion of the Real
Property has suffered any material damage by fire or other casualty loss that has not heretofore
been materially repaired and restored to its original condition. Each material parcel of Real
Property and the current use thereof complies in all material respects with all applicable laws
(including building and zoning ordinances and codes) and with all insurance requirements.

     (b) Each of the Tensar Parties and the Subsidiaries, and, to the knowledge of Tensar
Holdings and Tensar, each other party thereto, has complied with all material obligations
under
all material leases to which it is a party and all such leases are legal, valid, binding and
in full
force and effect and are enforceable in accordance with their terms. Each of the Tensar
Parties
and the Subsidiaries enjoys peaceful and undisturbed possession under all such material
leases.
To the knowledge of Tensar Holdings and Tensar, no landlord Lien has been filed and no
material claim is being asserted, with respect to any lease payment under any material lease.
No
material portion of the Real Property is subject to any lease, sublease, license or other
agreement
granting to any person (other than the Tensar Parties and their Affiliates) any right to the
use,
occupancy, possession or enjoyment of such Real Property or any portion thereof, Tensar
Holdings has delivered to TCH and the Purchasers true, complete and correct copies of all
leases
(whether as landlord or tenant) of Real Property.

     (c) None of the Tensar Parties or any of the Subsidiaries has received any notice of,
nor has any knowledge of, any pending or contemplated condemnation proceeding affecting the
Real Properties or any sale or disposition thereof in lieu of condemnation.

     (d) None of the Tensar Parties or any of the Subsidiaries is obligated under any right
of first refusal, option or other contractual right to sell, assign or otherwise dispose of
any Real
Property or any interest therein.

     (e) There are no pending or, to the knowledge of Tensar Holdings or Tensar,
proposed material special or other assessments for public improvements or otherwise affecting
any material portion of the owned Real Property, nor are there any contemplated material
improvements to such owned Real Property that may result in such special or other assessments.
No Tensar Party has suffered, permitted or initiated the joint assessment of any owned Real
Property with any other real property constituting a separate tax lot. Each owned parcel of
Real Property is comprised of one or more parcels, each of which constitutes a separate tax lot and
none of which constitutes a portion of any other tax lot.

     (f) Each Tensar Party has obtained all material permits, licenses, variances and
certificates required by applicable law to be obtained and necessary to the use and operation
of each parcel of Real Property, except where the failure to have such permit, license,
certificate or variance Would not prohibit the use of such parcel of Real Property as it is currently being
used. The use being made of each parcel of Real Property materially conforms with the certificate of

Schedule 2, Representations and Warranties

3

 

occupancy and/or such other material permits, licenses, variances and certificates for such
Real Property and any other material restrictions, covenants or conditions affecting such Real
Property, except for any such nonconformity that could not reasonably be expected to be enjoined
or to result in material fines.

     (g) (i) Each parcel of Real Property has adequate rights of access to public ways to permit
the Real Property to be used for its intended purpose, and is served by installed, operating and
adequate water, electric, gas, telephone, sewer, sanitary sewer and storm drain facilities; (ii)
all public utilities necessary to the continued use and enjoyment of each parcel of Real Property
as used and enjoyed on the Effective Date are located in the public right-of-way abutting the
premises, and to the knowledge of Tensar Holdings and Tensar, all such utilities are connected so
as to serve such Real Property without passing over other property except for land of the utility
company providing such utility service or, in the case of leased Real Property, contiguous land
owned by the lessor of such leased Real Property; (iii) each parcel of Real Property, including
each leased parcel, has adequate available parking to meet legal and operating requirements; (iv)
all roads necessary for the full utilization of each parcel of Real Property for its current
purpose have been completed and dedicated to public use and accepted by all governmental
authorities or are the subject of access easements for the benefit of such Real Property; (v) no
building or structure constituting Real Property or any appurtenance thereto or equipment thereon,
or the use, operation or maintenance thereof, violates any restrictive covenant or encroaches on
any easement or on any property owned by others, which violation or encroachment interferes with
the use or could materially adversely affect the value of such building, structure or appurtenance
or which encroachment is necessary for the operation of the business at any Real Property; and
(vi) all buildings, structures, appurtenances and equipment necessary for the use of each parcel
of Real Property for the purpose for which it is currently being used are located on such real
property.

     SECTION 1.08. Subsidiaries. Annex 8 to this Schedule 2 sets forth as of the Effective
Date a list of all Subsidiaries, joint ventures and partnerships in which any Tensar Party has an
ownership interest, in each case after giving effect to the Acquisition, including each Subsidiary,
joint venture or partnership’s exact legal name (if applicable, and as reflected in such
Subsidiary, joint venture or partnership’s certificate or articles of incorporation or other
constitutive documents) and jurisdiction of incorporation or formation and the percentage ownership
interest of each Tensar Party (direct or indirect) therein, and identifies each Subsidiary that is
a Tensar Party. The shares of capital stock or other Equity Interests so indicated on Annex 8 to
this Schedule 2 are fully paid and non-assessable and are owned by the Tensar Parties, directly or
indirectly, free and clear of all Liens (other than Liens created under the Security Documents).
Except as set forth on Annex 8 to this Schedule 2, there are no outstanding rights to purchase,
options, warrants or similar rights or agreements pursuant to which any Tensar Party may be
required to issue, sell, repurchase or redeem any of its Equity Interests or the Equity Interests
of any of its subsidiaries. Holdings is a wholly owned subsidiary of Tensar Holdings and Tensar is
a wholly-owned subsidiary of Holdings.

     SECTION 1.09.
Litigation; Compliance with Laws There are no actions, suits or proceedings at
law or in equity or by or before any arbitrator or Governmental Authority now pending or, to the
knowledge of Tensar Holdings or Tensar threatened against or affecting any Tensar Party or any
Subsidiary or any business, property or rights of any such person (i) that

Schedule 2, Representations and Warranties

4

 

involve any Tensar Holdings Commodities Purchase Facility Document or the Transactions or
(ii) except as set forth on Annex 9 to this Schedule 2, as to which there is a reasonable
possibility of an adverse determination and that, if adversely determined, could reasonably be
expected, individually or in the aggregate, to result in a Material Adverse Effect.

     (b) Since the date of this Agreement, there has been no change in the status of the
matters disclosed on Annex 9 to this Schedule 2 that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse Effect.

     (c) Neither Tensar Holdings, Tensar nor any of the Subsidiaries or any of their
respective material properties or assets is in violation of, nor will the continued operation
of their
material properties and assets as currently conducted violate, any law, rule or regulation
(including any zoning, building, Environmental Law, ordinance, code or approval or any
building permits) or any restrictions of record or agreements affecting the Mortgaged
Property,
or is in default with respect to any judgment, writ, injunction, decree or order of any
Governmental Authority, where such violation or default, individually or in the aggregate,
could reasonably be expected to result in a Material Adverse Effect.

     SECTION
1.10. Agreements. (a) Neither Tensar Holdings, Tensar nor any of the
Subsidiaries is a party to any agreement or instrument, or subject to any corporate restriction,
that, individually or in the aggregate, has resulted or could reasonably be expected to result in
a Material Adverse Effect.

     (b) Neither Tensar Holdings, Tensar nor any of the Subsidiaries is in material default in any
manner under any provision of any material indenture or other material agreement or instrument
evidencing Material Obligations, or any other material agreement or material instrument to which
it is a party or by which it or any of its properties or assets are or may be bound. No Default
has occurred and is continuing.

     SECTION
1.11. Federal Reserve Regulations. (a) Neither Tensar Holdings, Tensar nor
any of the Subsidiaries is engaged principally, or as one of its important activities, in the
business of extending credit for the purpose of buying or carrying Margin Stock.

     (b) No part of the proceeds of the Asset Purchase Agreement will be used, whether directly or
indirectly, and whether immediately, incidentally or ultimately, for purchasing or carrying Margin
Stock or for the purpose of purchasing, carrying or trading in any securities under such
circumstances as to involve Tensar in a violation of Regulation X or to involve any broker or
dealer in a violation of Regulation T. No Financing Obligations being reduced or retired out of the
proceeds of the Asset Purchase Agreement was incurred for the purpose of purchasing or carrying any
Margin Stock. Following the application of the proceeds of the Asset Purchase Agreement, Margin
Stock will not constitute more than 25% of the value of the assets of the Tensar Parties and the
Subsidiaries. None of the transactions contemplated by this Agreement will violate or result in the
violation of any of the provisions of the Regulations of the Board, including Regulation T, U or X.
If requested by TCH or any Purchaser, Tensar will furnish to TCH and each Purchaser a statement to
the foregoing effect in conformity with the requirements of FR Form G-3 or FR Form U-l referred to
in Regulation U.

Schedule 2, Representations and Warranties

5

 

     SECTION
1.12. Investment Company Act; Public Utility Holding Company Act; Other
Restrictions. Neither Tensar Holdings, Tensar nor any of the Subsidiaries is (a) an
“investment company” as defined in, or subject to regulation under, the Investment Company Act of
1940, as amended, (b) a “holding company”, as defined in, or subject to regulation under, the
Public Utility Holding Company Act of 1935, as amended, and (c) subject to any other federal or
state statute that restricts or limits Tensar Holdings ability in any material respect to enter
into the Tensar Holdings Commodities Purchase Facility Documents, or to perform its obligations
thereunder.

     SECTION 1.13. Use of Proceeds. Tensar will use the proceeds of the Asset Purchase
Agreement solely to pay the Acquisition Consideration, repay the Existing Obligations and to pay
fees and expenses related to the Transactions.

     SECTION 1.14. Tax Returns. Each of the Tensar Parties and each of the Subsidiaries has
timely filed or timely caused to be filed all Federal, state, local and foreign tax returns or
materials required to have been filed by it and all such tax returns are correct and complete in
all material respects. Each of the Tensar Parties arid each of the Subsidiaries has timely paid or
timely caused to be paid all Taxes due and payable by it and all assessments received by it, except
Taxes that are being contested in good faith by appropriate proceedings and for which such Tensar
Party or such Subsidiary, as applicable, shall have set aside on its books adequate reserves in
accordance with GAAP. Each of the Tensar Parties and each of the Subsidiaries has made adequate
provision in accordance with GAAP for all Taxes not yet due and payable. No Tax Lien has been
filed, and to the knowledge of Tensar Holdings or Tensar, no claim is being asserted, with respect
to any Tax. None of the Tensar Parties or any of the Subsidiaries is aware of any facts or events
that would result in the Asset Purchase Agreement or any of the Transactions as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4). Except as set forth in
Annex 14 to this Schedule 2, no Tensar Party has executed or filed with the Internal Revenue
Service or any other Governmental Authority any agreement or other document extending, or having
the effect of extending, the period for assessment or collection of any Taxes. None of the Tensar
Parties and their respective predecessors are liable for any Taxes: (i) under any agreement
(including any tax sharing agreements) or (ii) to the knowledge of Tensar or Tensar Holdings, as a
transferee. As of the Effective Date, no Tensar Party has agreed or been requested to make any
adjustment under Code Section 481 (a), by reason of a change in accounting method or otherwise,
which would have a Material Adverse Effect.

     SECTION
1.15. No Material Misstatements; Acquisition Documentarion Each of the Tensar
Parties has disclosed to TCH and the Purchasers all agreements, instruments and corporate or other
restrictions to which any Tensar Party or any of the Subsidiaries is subject, and all other
matters known to any of them, that, individually or hi the aggregate, could reasonably be expected
to result in a Material Adverse Effect. None of (i) the Confidential Information Memorandum or
(ii) any other information, report, financial statement, exhibit or schedule furnished by or on
behalf of any Tensar Party or any Subsidiary to TCH or the Purchasers for use in connection with
the transactions contemplated by the Tensar Holdings Commodities Purchase Facility Documents
(including any for use in connection with the financing obtained by TCH) or in connection with the
negotiation of any Tensar Holdings Commodities Purchase Facility Document or included therein or
delivered pursuant thereto

Schedule 2, Representations and Warranties

6

 

contained, contains or will contain any material misstatement of fact or omitted, omits or
will omit to state any material fact necessary to make the statements therein, in the light of the
circumstances under which they were, are or will be made, not misleading; provided that to
the extent any such information, report, financial statement, exhibit or schedule was based upon
or constitutes a forecast or projection, Tensar Holdings represents only that it acted in good
faith and utilized reasonable assumptions and due care in the preparation of such information,
report, financial statement, exhibit or schedule.

     (b) As of the Effective Date, the representations and warranties of the applicable Tensar
Parties and their Affiliates set forth in the Acquisition Documentation are true and correct in
all material respects.

     SECTION 1.16. Employee Benefit Plans. Tensar and each of its ERISA Affiliates is in
compliance in all material respects with the applicable provisions of ERISA and the Tax Code and
the regulations and published interpretations thereunder. No ERISA Event has occurred or is
reasonably expected to occur that, when taken together with all other such ERISA Events, could
reasonably be expected to result in material liability of Tensar or any of its ERISA Affiliates.
The present value of all benefit liabilities under each Benefit Plan (based on the assumptions used
for purposes of Statement of Financial Accounting Standards No. 87) did not, as of the last annual
valuation date applicable thereto, exceed by more than $500,000 the fair market value of the assets
of such Benefit Plan, and the present value of all benefit liabilities of all underfunded Benefit
Plans (based on the assumptions used for purposes of Statement of Financial Accounting Standards
No. 87) did not, as of the last annual valuation dates applicable thereto, exceed by more than
$500,000 the fair market value of the assets of all such underfunded Benefit Plans.

     SECTION
1.17. Environmental Matters. (a) Except as set forth in Annex 17 to this
Schedule 2, none of the Tensar Parties or any of the Subsidiaries, individually or in the
aggregate:

     (i) has failed to comply with any Environmental Law or to take, in a timely manner,
all actions necessary to obtain, maintain, renew and comply with any Environmental Permit,
and all such Environmental Permits are in full force and effect and not subject to any
administrative or judicial proceeding seeking to terminate, rescind, or modify any such
Permit except as could not that could reasonably be expected to result in a liability in
excess of $500,000 under any Environmental Law;

     (ii) has become a party to any governmental, administrative or judicial proceeding
that could reasonably be expected to result in a liability in excess of $500,000 under any
Environmental Law or has received written notice of any such proceeding that has been
threatened under Environmental Law;

     (iii) has received written notice of, become subject to, or is aware of any facts or
circumstances that could form the basis for, any Environmental Liability that could
reasonably be expected to result in a liability in excess of $500,000 other than those
which have been fully and finally resolved and for which no obligations remain outstanding;

Schedule 2, Representations and Warranties

7

 

     (iv) possesses knowledge that any Mortgaged Property (A) is subject to any Lien
or restriction on ownership, occupancy, use or transferability imposed pursuant to
Environmental Law or (B) contains or previously contained Hazardous Materials of a form or
type or in a quantity or location that could reasonably be expected to result in any
Environmental Liability in excess of $500,000;

     (v) possess knowledge that there has been a Release or threat of Release of Hazardous
Materials at or from the Mortgaged Properties (or from any facilities or other properties
formerly owned, leased or operated by any Tensar Party or any of the Subsidiaries) in
violation of, or in amounts or in a manner that could give rise to liability that could
reasonably be expected to result in a liability in excess of $500,000 under any
Environmental Law;

     (vi) has generated, treated, stored, transported, or Released Hazardous Materials from
the Mortgaged Properties (or from any other facilities or other properties currently or
formerly owned, leased or operated by any Tensar Party or any of the Subsidiaries) in
violation of, or in a manner or to a location that could give rise to liability that could
reasonably be expected to result in a liability in excess, of $500,000 under any
Environmental Law;

     (vii) is aware of any facts, circumstances, conditions or occurrences in respect of
any of the facilities and properties owned, leased or operated that could reasonably be
expected to (A) form the basis of any action, suit, claim or other judicial or
administrative proceeding relating to liability in excess of $500,000 under or
noncompliance with Environmental Law on the part of any Tensar Party or any of the
Subsidiaries or (B) or interfere with or prevent continued compliance with Environmental
Laws by the Tensar Parties or the Subsidiaries; or

     (viii) has pursuant to any order, decree, judgment or agreement by which it is bound
become subject to any Environmental Liability that could reasonably be expected to result in
a liability in excess of $500,000, or has assumed any Environmental Liability for any person
that could reasonably be expected to result in a liability in excess of $500,000.

     (b) Since the date of this Agreement, there has been no change in the status of the matters
disclosed on Annex 17 to this Schedule 2 that, individually or in the aggregate, has resulted in,
or materially increased the likelihood of, a Material Adverse Effect.

     SECTION 1.18. Insurance. Annex 18 of this Schedule 2 sets forth a true, complete and
correct description of all insurance maintained by or on behalf of the Tensar Parties and the
Subsidiaries as of the Effective Date. As of the Effective Date, such insurance is in full force
and effect and all premiums have been duly paid. The Tensar Parties and the Subsidiaries are
insured by financially sound and reputable insurers and such insurance is in such amounts and
covering such risks and liabilities (and with such deductibles, retentions and exclusions) as are
in accordance with normal and prudent industry practice. None of the Tensar Parties nor any of the
Subsidiaries (a) has received written notice from any insurer (or any agent thereof) that
substantial capital improvements or other substantial expenditures
will have to be made in order

Schedule 2, Representations and Warranties

8

 

to continue such insurance or (b) has any reason to believe that it will not be able to
renew its existing coverage as and when such coverage expires or to obtain similar coverage from
similar insurers at a substantially similar cost.

     SECTION
1.19. [Reserved]

     SECTION 1.20. Location of Real Property. Annex 20 to this Schedule 2 lists completely
and correctly as of the Effective Date all Real Property and the addresses thereof, indicating for
each parcel whether it is owned or leased, including in the case of leased Real Property, the
landlord name, lease date and lease expiration date. The Tensar Parties and the Subsidiaries own
in fee or have valid leasehold interests in, as the case may be, all the real property set forth
on Annex 20 to this Schedule 2.

     SECTION 1.21. Labor Matters. As of the Effective Date, there are no strikes, lockouts
or slowdowns against any Tensar Party or any Subsidiary pending or, to the knowledge of Tensar
Holdings or Tensar threatened in writing. The hours worked by and payments made to employees of the
Tensar Parties and the Subsidiaries have not been in violation of the Fair Labor Standards Act or
any other applicable Federal, state, local or foreign law dealing with such matters. All payments
due from any Tensar Party or any Subsidiary, or for which any claim may be made against any Tensar
Party or any Subsidiary, on account of wages and employee health and welfare insurance and other
benefits, have been paid or accrued as a liability on the books of such Tensar Party or such
Subsidiary. The consummation of the Transactions will not give rise to any right of termination or
right of renegotiation on the part of any union under any collective bargaining agreement to which
any Tensar Party or any Subsidiary is bound.

     SECTION 1.22. Liens. There are no Liens of any nature whatsoever on any of the
properties or assets of any Tensar Party or any of the Subsidiaries (except for Liens permitted by
Section 1.02 of Schedule 4).

     SECTION 1.23. Intellectual Property. Each of the Tensar Parties and each of the
Subsidiaries owns, or is licensed to use, all trademarks, tradenames, copyrights, patents and
other intellectual property material to its business, and the use thereof by the Tensar Parties
and the Subsidiaries does not infringe upon the rights of any other person, except for any such
infringements that, individually or in the aggregate, could not reasonably be expected to result
in a Material Adverse Effect.

     SECTION 1.24. Solvency. Immediately after the consummation of the Transactions to
occur on the Effective Date and immediately following the effectiveness of this Agreement and the
other Related Financing Documents and after giving effect to the application of the proceeds of
the Asset Purchase Agreement, (a) the fair value of the assets of each Tensar Party, at a fair
valuation, will exceed its obligations and liabilities, subordinated, contingent or otherwise; (b)
the present fair saleable value of the property of each Tensar Party will be greater than the
amount that will be required to pay the probable liability of its obligations and other
liabilities, subordinated, contingent or otherwise, as such obligations and other liabilities
become absolute and matured; (c) each Tensar Party will be able to pay its obligations and
liabilities, subordinated, contingent or otherwise, as such obligations and liabilities become
absolute and matured; and (d) no Tensar Party will have unreasonably small capital with which to
conduct the

Schedule 2, Representations and Warranties

9

 

business in which it is engaged as such business is now conducted and is proposed to be
conducted following the Effective Date.

     SECTION 1.25. Acquisition Documentation. The Acquisition Documentation listed on
Annex 25 to this Schedule 2 constitutes all of the material agreements, instruments and
undertakings to which any of the Tensar Parties or any of the Subsidiaries is bound or by which
any of their respective property or assets is bound or affected relating to, or arising out of,
the Acquisition. None of such material agreements, instruments or undertakings has been amended,
supplemented or otherwise modified, and all such material agreements, instruments and undertakings
are in full force and effect. No party to any of the Acquisition Documentation is in default
thereunder of a material provision as of the Effective Date and no party thereto has the right to
terminate any of the material Acquisition Documentation.

     SECTION
1.26. Permits. (a) Each Tensar Party has obtained and holds all material
Permits required in respect of all Real Property and for any other property otherwise operated by
or on behalf of, or for the benefit of, such person and for the operation of each of its businesses
as presently conducted and as proposed to be conducted, (b) all such Permits are in full force and
effect, and each Tensar Party has performed and observed all material requirements of such Permits,
(c) no event has occurred that allows or results in, or after notice or lapse of time would allow
or result in, revocation or termination by the issuer thereof or in any other impairment of the
rights of the holder of any such Permit which revocation, termination or impairment could
reasonably be expected to have a Material Adverse Effect, (d) no such Permits contain any
restrictions, either individually or in the aggregate, that are materially burdensome to any Tensar
Party, or to the operation of any of its businesses or any property owned, leased or otherwise
operated by such person, (e) each Tensar Party reasonably believes that each of its material
Permits will be timely renewed and complied with, without material expense, and that any additional
material Permits that may be required of such person will be timely obtained and complied with,
without material expense and (f) Tensar has no knowledge or reason to believe that any Governmental
Authority is considering limiting, suspending, revoking or renewing on materially burdensome terms
any such Permit.

     SECTION 1.27. Material Contracts. The Netlon License is in full force and effect
(other than after its maturity in accordance with its terms) and, as of the Effective Date, the
Contech Agreement is in full force and effect, and the Tensar Parties are not in material breach
of their obligations under the Netlon License and, as of the
Effective Date, the Contech Agreement.

     SECTION 1.28. Status of Holdings. As of the Effective Date, Holdings has no
liabilities other than those permitted by Sections 1.01 and 1.08 of Schedule 4 to this Agreement.

     SECTION 1.29. Status of Tensar Holdings. All contracts, agreements and intellectual
property owned by Tensar Holdings as of the Effective Date are set forth on Annex 29 to this
Schedule 2. As of the Effective Date, Tensar Holdings has no liabilities other than those
permitted by Section 1.08 of Schedule 4 to this Agreement.

     SECTION 1.30. Customer Relations. Except as set forth in Annex 30 to this Schedule 2,
as of the Effective Date, there exists no actual or, to the knowledge of Tensar Holdings or

Schedule 2, Representations and Warranties

10

 

Tensar, threatened termination or cancellation of, or any material adverse modification or
change in, the business relationship of any Tensar Party with (i) any customer whose purchases
during the preceding 12 months caused them to be ranked among the five largest customers of the
Tensar Parties, taken as a whole or (ii) the counterparties to the Contech Agreement.

     SECTION 1.31. Broker’s or Finder’s Commissions. Except as set forth on Annex
31 to this Schedule 2, no broker or finder brought about the transactions contemplated by this
Agreement, the Lease Agreement, the Commodities Purchase Agreement, the Second Lien Purchase
Facility Documents, or the Acquisition Transactions, and none of Tensar Holdings, any other Tensar
Party or Affiliate thereof has any obligation to any person in respect of any finder’s or
brokerage fees in connection therewith.

     SECTION
1.32. Patriot Act, Etc.

     To the extent applicable, each Tensar Party is in compliance, in all material respects, with
the (i) Trading with the Enemy Act, as amended, and each of the foreign assets control regulations
of the Untied States Treasury Department (31 CFR, Subtitle B, Chapter V, as amended) and any other enabling legislation or executive order relating
thereto, and (ii) the Patriot Act.

Schedule 2, Representations and Warranties

11

 

Execution
Copy

Schedule 3

 Affirmative Covenants

     Tensar Holdings covenants and agrees with Purchasers and the Administrative Agent that so
long as this Agreement shall remain in effect and until all Obligations shall have been paid in
full and this Agreement has been terminated, Tensar Holdings will, and will cause each of the
Subsidiaries to:

     SECTION
1.01.Existence; Businesses and Properties. (a) Do or cause to be done all
things necessary to preserve, renew and keep in full force and effect its legal existence, except
as otherwise expressly permitted under Section 1.05 of Schedule 4.

     (b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep
in full force and effect the rights, licenses, permits, franchises, authorizations, patents
copyrights, trademarks and trade names material to the conduct of its business; maintain and
operate such business in substantially the manner in which it is presently conducted and
operated; comply in all material respects with all applicable laws, rules, regulations and
decrees and orders of any Governmental Authority, whether now in effect or hereafter enacted;
comply with the terms of, and enforce its rights under, each material lease of real property and
each other material agreement so as to not permit any material uncured default on its part to
exist thereunder, except as otherwise expressly permitted under Section 1.05 of Schedule 4; and
at all times maintain and preserve all property material to the conduct of such business and keep
such property in good repair, working order and condition and from time to time make, or cause to
be made, all needful and proper repairs, renewals, additions, improvements and replacements
thereto necessary in order that the business carried on in connection therewith may be properly
conducted at all times.

     SECTION 1.02. Insurance. Keep its insurable properties adequately insured at all
times by financially sound and reputable insurers; maintain such other insurance, to such extent
and against such risks (and with such deductibles, retentions and exclusions), including fire and
other risks insured against .by extended coverage, as is customary for companies in the same or
similar businesses operating in the same or similar locations, including public liability
insurance against claims for personal injury or death or property damage occurring upon, in,
about or in connection with the use of any properties owned, occupied or controlled by it;
maintain such other insurance as may be required by law.

     SECTION 1.03. Obligations and Taxes. Pay its Financing Obligations and other
obligations promptly and in accordance with their terms and pay and discharge promptly when due
all Taxes imposed upon it or upon its income or profits or in respect of its property, before the
same shall become delinquent or in default, as well as all lawful claims for labor, materials and
supplies or otherwise that, if unpaid, might give rise to a Lien upon such properties or any part
thereof; provided, however, that such payment and discharge shall not be required
with respect to any such Tax so long as the validity or amount thereof shall be contested in good
faith by appropriate proceedings and Tensar Holdings, Tensar or the applicable Subsidiary shall
have set aside on its books adequate reserves with respect thereto in accordance with GAAP and
such

Schedule 3, Affirmative Covenants

 

 

contest operates to suspend collection of the contested obligation, tax, assessment or
charge and enforcement of a Lien and, in the case of a Mortgaged Property, there is no risk of
forfeiture of such property. In addition, none of the Tensar Parties or any of the Subsidiaries
shall treat the Asset Purchase Agreement or any of the Transactions as being a “reportable
transaction” (within the meaning of Treasury Regulation Section 1.6011-4).

     SECTION
1.04. Financial Statements, Reports, etc Furnish to TCH and the Purchasers:

     (a) within 90 days after the end of each fiscal year, its consolidated balance sheet
and related statements of income, stockholders’ equity and cash flows showing the
financial condition of Tensar Holdings and its consolidated subsidiaries as of the close
of such fiscal year and the results of its operations and the operations of such
subsidiaries during such year, together with comparative figures for the immediately
preceding fiscal year all audited by Pricewaterhouse Coopers LLP or other independent
public accountants of recognized national standing and accompanied by
an opinion of such
accountants (which shall not be qualified in any material respect) to the effect that
such consolidated financial statements fairly present in all material respects the
financial condition and results of operations of Tensar Holdings and its consolidated
Subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
together with all information for the final month of such fiscal year set forth in
Section 1.04(c) of this Schedule 3;

     (b) within 45 days after the end of each of the first three fiscal quarters of each
fiscal year, its consolidated balance sheet and related statements of income,
stockholders’ equity and cash flows showing the financial condition of Tensar Holdings
and its consolidated subsidiaries as of the close of such fiscal quarter and the results
of its operations and the operations of such subsidiaries during such fiscal quarter and
the then elapsed portion of the fiscal year, and comparative figures for the same periods
in the immediately preceding fiscal year, all certified by one of its Financial Officers
as fairly presenting in all material respects the financial condition and results of
operations of Tensar Holdings and its consolidated subsidiaries on a consolidated basis
in accordance with GAAP consistently applied, subject to normal year-end audit
adjustments and the absence of footnotes, together with all information for the final
month of such fiscal quarter set forth in Section 1.04(c) of this Schedule 3;

     (c) within 30 days after the end of the first two fiscal months of each fiscal
quarter, its consolidated balance sheet and related statements of income and cash flows
showing the financial condition of Tensar Holdings and its consolidated subsidiaries
during such fiscal month and the then elapsed portion of the fiscal year, all certified
by one of its Financial Officers as fairly presenting in all material
respects,the
financial condition and results of operations of Tensar Holdings and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently applied,
subject to normal year-end audit adjustments and the absence of footnotes, together with
management’s discussion and analysis with respect to such financial statements;

     (d) concurrently with any delivery of financial statements under clause (a) or
(b) above, a certificate of the accounting firm (in the case of clause (a)) or Financial

Schedule 3, Affirmative Covenants

2

 

Officer (in the case of clause (b)) opining on or certifying such statements (which
certificate, when furnished by an accounting firm, may be limited to accounting matters
and disclaim responsibility for legal interpretations) (i) certifying that no Event of
Default or Default has occurred and is continuing or, if such an Event of Default or
Default has occurred and is continuing, specifying the nature and extent thereof and any
corrective action taken or proposed to be taken with respect thereto and (ii) setting
forth computations in reasonable detail satisfactory to TCH and the Purchasers
demonstrating compliance with the covenants contained in Sections 1.11, 1.12. 1.13 and
1.14 of Schedule 4 and, in the case of a certificate delivered with the financial
statements required by clause (a) above, setting forth Tensar Holdings’ calculation of
Excess Cash Flow;

     (e) Not more than 30 days after the end of each fiscal year of Tensar Holdings, a
detailed consolidated budget for the current fiscal year (including a projected
consolidated balance sheet and related statements of projected operations and cash flows
as of the end of and for such following fiscal year and setting forth the assumptions used
for purposes of preparing such budget) and, promptly when available, any significant
revisions of such budget;

     (f) promptly after the same become publicly available, copies of all periodic and
other reports, proxy statements and other materials filed by Tensar Holdings, Tensar or
any Subsidiary with the Securities and Exchange Commission, or any Governmental Authority
succeeding to any or all of the functions of said Commission, or with any national
securities exchange, or distributed to its shareholders, as the case may be;

     (g) promptly after the receipt thereof by Tensar Holdings, Tensar or any of the
Subsidiaries, a copy of any “management letter” (whether in final or draft form) received
by any such person from its certified public accountants and the management’s response
thereto; and

     (h) promptly, from time to time, such other information regarding the operations,
business affairs and financial condition of Tensar Holdings, Tensar or any Subsidiary, or
compliance with the terms of any Tensar Holdings Commodities Purchase Facility Document,
as TCH or any Purchaser may reasonably request.

     SECTION 1.05. Litigation and Other Notices. Furnish to TCH and the Purchasers
prompt written notice of the following:

     (a) any Event of Default or Default, specifying the nature and extent thereof and the
corrective action (if any) taken or proposed to be taken with respect thereto;

     (b) the filing or commencement of, or any written threat or written notice of
intention of any person to file or commence, any action, suit or proceeding, whether at
law or in equity or by or before any arbitrator or Governmental Authority, against any
Tensar Party or any Subsidiary that could reasonably be expected to result in a Material
Adverse Effect;

Schedule 3, Affirmative Covenants

3

 

     (c) the occurrence of any ERISA Event described in clause (b) of the definition
thereof or any other ERISA Event that, alone or together with any other ERISA Events that
have occurred, could reasonably be expected to result in liability of the Tensar Parties
and the Subsidiaries in an aggregate amount exceeding $500,000;

     (d) any of the following environmental matters, specifying the nature and extent
thereof and the proposed response thereto, (1) any violation of
Environmental Law, or
Release or threatened Release of Hazardous Materials, that could reasonably be expected to
require remedial action or give rise to Environmental Liability
excess of $500,000, (2)any
remedial action taken by any Tensar Party or its Subsidiaries or any other person in
response to any Release or threatened Release of Hazardous Materials that could reasonably
be expected to result in Environmental Liability in excess of $500,000, (3) any actions or
proceedings relating to any Environmental Liability (including any requests for
information by a Governmental Authority) that could reasonably be expected to be in excess
of $500,000, and (4) any Tensar Party’s or any Subsidiaries’ discovery of any occurrence
or condition at any Mortgaged Property, or on any adjoining or proximate real property,
that could cause such Mortgaged Property or any part thereof to be subject to any material
restrictions on the ownership, occupancy, transferability or use thereof under any
Environmental Law;

     (e) any Asset Sale, Equity Issuance or incurrence of Financing Obligations
not otherwise permitted by Section 1.01 of Schedule 4; and

     (f) any development that has resulted in, or could reasonably be expected to result
in, a Material Adverse Effect.

     SECTION
1.06.[Reserved] Maintaining Records; Access to Properties and Inspections;
Environmental Assessments. (a) Keep proper books of record
and account in which full, true  and correct entries in
conformity with GAAP and all requirements of law are made of all dealings and transactions in
relation to its business and activities. Each of Tensar Holdings and
Tensar will, and will cause
each of its subsidiaries to, permit any representatives designated by TCH or the Purchasers to
visit and inspect the financial records and the properties of Tensar Holdings or Tensar, as the
case may be, or any of its subsidiaries at reasonable times and as often as reasonably requested
and to make extracts from and copies of such financial records, and permit any such
representatives designated by TCH or the Purchasers to discuss the affairs, finances and
condition of the Tensar Parties, as the case may be, or any of its subsidiaries with the officers
thereof and independent accountants therefor.

     (b) At its election, TCH or the Purchasers may, at its own cost and expense, retain an
independent engineer or environmental consultant to conduct an environmental assessment of the
condition of any Mortgaged Property or facility of any Tensar Party or of any Tensar Party’s
compliance with Environmental Law. Each of Tensar Holdings and Tensar shall, and shall cause each
of the Subsidiaries to, cooperate in the performance of any such environmental assessment and
permit any such engineer or consultant designated by TCH or the Purchasers to have full access to
each property or facility at reasonable times and after reasonable notice to Tensar Holdings and
Tensar of the plans to conduct such an environmental assessment. Environmental assessments
conducted under this clause (b) shall be limited to visual inspections of the

Schedule 3, Affirmative Covenants

4

 

Mortgaged Property or facility, interviews with representatives of the Tensar Parties or
facility personnel, and review of applicable records and documents pertaining to the property or
facility, its compliance with Environmental Law and any potential Environmental Liabilities.

     (c) In the event that TCH or the Purchasers reasonably believe that (i) Hazardous Materials
have been Released or are threatened to be Released on or from any Mortgaged Property or other
facility of Tensar Holdings, Tensar or the Subsidiaries or (ii) that any such property or facility
is not being operated in material compliance with applicable Environmental Law; TCH may or the
Purchasers, at its election and after reasonable notice to Tensar, retain an independent engineer
or other qualified environmental consultant to evaluate whether Hazardous Materials are present in
the soil, groundwater, or surface water at such Mortgaged Property or facility or whether the
facilities or properties are being operated and maintained in material compliance with applicable
Environmental Laws. Such environmental assessments may include detailed visual inspections of the
Mortgaged Property or facility, including any and all storage areas, storage tanks, drains, dry
wells and leaching areas, and the taking of soil samples, surface water samples and groundwater
samples as well as such other reasonable investigations or analyses as are necessary. The scope of
any such environmental assessments under this Section 1.07(c) of this Schedule 3 shall be
determined in the commercially reasonable discretion of TCH and the Purchasers. Each of Tensar
Holdings and Tensar shall, and shall cause each of the Subsidiaries to, cooperate in the
performance of any such environmental assessment and permit any such engineer or consultant
designated by TCH or the Purchasers to have full access to each property or facility at reasonable
times and after reasonable notice to Tensar of the plans to conduct such an environmental
assessment. All environmental assessments conducted pursuant to this Section 1.07(c) of this
Schedule 3 shall be at Tensar’s sole cost and expense.

     SECTION 1.08. Use of Proceeds. Use the proceeds of the Asset Purchase Agreement only
for the purposes set forth in Section 1.13 of Schedule 2.

     SECTION 1.09. [Reserved] Further Assurances. From time to time duly authorize,
execute and deliver, or cause to be duly authorized, executed and delivered, such additional
instruments, certificates, agreements or documents, and take all such actions, as TCH or the
Purchasers may reasonably request, for the purposes of implementing or effectuating the provisions
of this Agreement and the other Tensar Holdings Commodities Facility Purchase Documents. Upon the
exercise by TCH or the Purchasers of any power, right, privilege or remedy pursuant to this
Agreement or the other Tensar Holdings Commodities Purchase Facility Documents which requires any
consent, approval, recording, qualification or authorization of any Governmental Authority, Tensar
Holdings will execute and deliver, or will cause the execution and delivery of, all applications,
certifications, instruments and other documents and papers that TCH or the Purchasers may be
required to obtain from either Tensar Holdings, Tensar or any of the Subsidiaries for such
governmental consent, approval, recording, qualification or authorization.

     SECTION 1.11. Rent and Profit Limitation. Tensar Holdings shall ensure that, within
90 days following the Effective Date, and for at least three years following the Effective Date,
no less than 50% of Tensar’s Financing Obligations set forth in the Lease, the Commodities
Purchase Agreement and the Second Lien Commodities Purchase Agreement effectively bears a fixed
rental or profit rate.

Schedule 3, Affirmative Covenants

5

 

     SECTION 1.12. Landlord and Storage Agreements. Provide TCH with copies of all
agreements not previously provided or made available to TCH between each Tensar Party and any
landlord or warehouseman which owns any premises at which any inventory may, from time to time,
be kept.

     SECTION 1.13. Compliance with Laws. Comply with all federal, state, local and foreign
laws and regulations applicable to it, including Executive Order No. 13224 and the Patriot Act
and those laws and regulations relating to ERISA and labor matters and Environmental Laws and
Environmental Permits, except to the extent that the failure to comply, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect.

     SECTION 1.14. Netlon License. Maintain at all times the Netlon License in full force
and effect.

     SECTION
1.15. Patriot Act, Etc. Provide all documentation and other information
required by TCH to satisfy its obligations with respect under “know your customer” and anti-money
laundering rules and regulations, including without limitation the Patriot Act and any other
similar law, rule or regulation of any relevant jurisdiction to the extent requested by TCH or the
Purchasers. No part of the proceeds from the Asset Purchase Agreement or any proceeds from the
sale of Metals or Goods will be used, directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political party, candidate for political
office, or anyone else acting in an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

     SECTION 1.16. Post Closing Obligations. Take the actions required to be taken on
Annex 16 of this Schedule 3 within
the time frames set forth, including any extensions permitted thereunder.

Schedule 3, Affirmative Covenants

6

 

Annex 16 of Schedule 3

Post-Closing Covenant

Tensar shall deliver within the time period specified below or such additional period of time as
may be agreed by the Agent:

     1.
within fourteen (14) days following the Effective Date (or such
additional fourteen (14) days
as may be agreed to by the Agent) Tensar shall cause to be delivered with respect to the
leased real estate assets Landlord Consent and Waivers in form and substance satisfactory to
the Agent for the property located at 5883 Glenridge Drive, Suite 200 Atlanta, GA 30328 with
CEP Plaza Partners, LLC, as lessor and Tensar Earth Technologies, Inc. as lessee;

     2. within fourteen (14) days following the Effective Date (or such additional fourteen (14) days
as may be agreed to by the Agent) Tensar shall deliver an executed deposit account control
agreement in a form reasonably satisfactory to the Agent with respect to the bank accounts at
Wachovia, N.A;

     3.
within fourteen (14) day following the Effective date (or such additional fourteen (14) days as
may be agreed to by the Agent) Tensar shall cause to be delivered insurance endorsements
corresponding to the insurance certificates delivered on the
Effective Date; provided,
however, with respect to insurance endorsements required for North American Green, Inc., Tensar
shall cause such endorsements to be delivered within forty
(40) days following the Effective Date
(or such additional fourteen (14) days as may be agreed to by the Agent);

     4.
within thirty (30) days following the Effective Date (or such additional thirty (30) days as may
be agreed to by the Agent) Tensar shall deliver executed intellectual property releases and
assignments as previously disclosed in writing by the Agent; and

     5. within fourteen (14) days following the Effective Date (or such additional fourteen (14) days as
may be agreed to by the Agent) Tensar shall deliver evidence that it has filed a name change form
with the U.S. Patent Trademark Office and the U.S. Copyright Office.

 

 

Execution
Copy

Schedule 4

Negative Covenants

     Tensar Holdings covenants and agrees with TCH and the Purchasers that, so long as this
Agreement shall remain in effect and until all Obligations have been paid in full and this
Agreement has been terminated, Tensar Holdings will not, nor will it cause or permit any of the
Subsidiaries to:

     SECTION 1.01. Financing Obligations. Incur, create, assume or permit to exist any
Financing Obligations, or make or permit any amounts to be invested or held in financing
transactions, except:

     (a) Financing Obligations existing on the date hereof and set forth in Annex 1 to this
Schedule 4 and any Permitted Refinancing Obligations in respect of any such Financing
Obligations;

     (b) Financing Obligations created hereunder and under the other Tensar Holdings
Commodities Purchase Facility Documents;

     (c) unsecured intercompany Financing Obligations (i) of Tensar and its Subsidiaries to
the extent permitted by Section 1.04(a) of this Schedule 4 and (ii) of Tensar Holdings and
its Subsidiaries to the extent permitted by Section 1.04(1) of this Schedule 4, so long, in
each case, as such Financing Obligations are subordinated to the Obligations pursuant to an
Affiliate Subordination Agreement;

     (d) Financing Obligations secured by Liens permitted by Section 1.02(i) of this
Schedule 4 (including Capital Lease Obligations and Synthetic Lease Obligations) in an
aggregate stated amount not exceeding $2,500,000 at any time outstanding;

     (e) Financing Obligations of Tensar under (i) the Lease Agreement and the Commodities
Purchase Facility in an aggregate stated amount (excluding profit amount) not to exceed
$182,000,000 less the amount of any permanent reductions in the amount of the Lease or
Commodities Purchase Facility and Financing Obligations of the Guarantors under any
Guarantees in respect of such Financing Obligations and any Permitted Refinancing
Obligations in respect of any such Financing Obligations, (ii) the Second Lien Commodities
Purchase Facility in aggregate stated amount (excluding profit amount) not to exceed
$84,000,000 less the amount of any permanent reductions in the amount of the Second Lien
Commodities Purchase Facility and Financing Obligations of the Guarantors under any
Guarantees in respect of such Financing Obligations and any Permitted Refinancing
Obligations in respect of any such Financing Obligations;

     (f) Financing Obligations of any person that becomes a Subsidiary of Tensar after the
date hereof; provided that (i) such Financing Obligations exist at the time such
person becomes a Subsidiary and is not created in contemplation of or in connection with
such person becoming a Subsidiary, (ii) immediately before and after such person becomes a
Subsidiary, no Default or Event of Default shall have occurred and be

Schedule 4, Negative Covenants

 

 

continuing and (iii) the aggregate principal amount of Financing Obligations
permitted by this Section 1.01(f) shall not exceed $2,500,000 at any time outstanding;

     (g) Financing Obligations under performance bonds or with respect to workers’
compensation claims, in each case incurred in the ordinary course of business;

     (h)
Financing  Obligations arising from the honoring by a bank or other
financial institution of a check, draft or similar instrument inadvertently drawn
against insufficient funds in the ordinary course of business;
provided that such
Financing Obligations are promptly covered by Tensar Holdings or any Subsidiary;

     (i) [reserved];

     (i) Guarantees made in the ordinary course of business by any Subsidiary Guarantor
of Financing Obligations otherwise permitted to be incurred by Tensar or any other
Subsidiary Guarantor under this Section 1.01; and

     (k) other unsecured Financing Obligations of Tensar Holdings or its Subsidiaries in
an aggregate principal amount not exceeding $2,500,000 at any time outstanding.

     SECTION
1.02. Liens. Create, incur, assume or permit to exist any Lien on any property or
assets (including Equity Interests or other securities of any person, including any Subsidiary)
now owned or hereafter acquired by it or on any income or revenues or rights in respect of any
thereof, except:

     (a) Liens on property or assets of Tensar and its Subsidiaries existing on the date
hereof and set forth in Annex 2 of this Schedule 4; provided that such Liens shall secure
only those obligations which they secure on the date hereof and refinancings, extensions,
renewals and replacements thereof permitted hereunder;

     (b) any Lien created under the Lease/Purchase Facilities Documents;

     (c) any Lien securing Financing Obligations permitted by Section 1.01(f) of this
Schedule 4 existing on any property or asset prior to the acquisition thereof by Tensar or
any Subsidiary; provided that (i) such Lien is not created in contemplation of or
in connection with such acquisition, (ii) such Lien does not apply to any other Property
 or  assets of Tensar or any of its Subsidiaries and (iii) in the case of Mortgaged Property,
such Lien does not (A) materially interfere with the use,
occupancy and operation of any
Mortgaged Property, (B) materially reduce the fair market value of such Mortgaged Property
but for such Lien or (C) result in any material increase in the cost of operating,
occupying or owning or leasing such Mortgaged Property;

     (d) Liens for taxes not yet due or which are being contested in compliance with
Section 1.03 of Schedule 3;

     (e) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like
Liens arising in the ordinary course of business and securing obligations that

Schedule 4, Negative Covenants

2

 

are not due and payable or which are being contested in compliance with Section 1.03 of
Schedule 3;

     (f) pledges and deposits made in the ordinary course of business in compliance with
workmen’s compensation, unemployment insurance and other social security laws or
regulations;

     
(g)deposits to secure the performance of bids, trade contracts (other than for
Financing Obligations), leases (other than Capital Lease Obligations), statutory
obligations, surety and appeal bonds, performance bonds and other obligations of a like
nature incurred in the ordinary course of business;

     (h) zoning restrictions, easements, rights-of-way, restrictions on use of real
property and other similar encumbrances incurred in the ordinary course of business which,
in the aggregate, are not substantial in amount and do not materially detract from the
value of the property subject thereto or interfere with the ordinary conduct of the
business of Tensar or any of its Subsidiaries or the ability of any of Tensar or any
of its Subsidiaries to utilize such property for its intended purpose;

     (i) Liens securing Financing Obligations, in an amount not to exceed $2,500,000 at
anytime outstanding, incurred to finance the acquisition (or construction) of fixed or
capital assets by Tensar or any of its Subsidiaries; provided that (i) such security
interests are incurred, and the Financing Obligations secured thereby is created, within 90
days after such acquisition (or construction), (ii) such Liens do not at any time encumber
any property other than the property financed by such Financing Obligations and (iii) the
amount of Financing Obligations secured thereby is not increased;

     (j) judgment Liens securing judgments not constituting an Event of Default;

     (k) any interest or title of a lessor or sublessor under any lease entered into by
Tensar or any of its Subsidiaries in the ordinary course of business and covering only the
assets so leased;

     (1) Liens on the collateral securing obligations under the Second Lien Commodities
Purchase Facility; and

     (m) Liens on cash deposits and other funds maintained with a depositary institution,
in each case arising in the ordinary course of business by virtue of any statutory or
common law provision relating to banker’s liens; provided that (i) the applicable deposit
account is not a dedicated cash collateral account and is not subject to restrictions
against access by Tensar Holdings or any of its Subsidiaries in excess of those set forth
in regulations promulgated by the Board and (ii) the applicable deposit account is not
intended by Tensar Holdings or any of its Subsidiaries to provide collateral or security to
the applicable depositary institution or any other person.

     SECTION
1.03. Sale and Lease-Back Transactions. Enter into any arrangement, other than
the transactions contemplated by the Lease Documents and the NAG Sale-Leaseback, directly or
indirectly, with any person whereby it shall sell or transfer any property, real or

Schedule 4, Negative Covenants

3

 

personal or mixed, used or useful in its business, whether now owned or hereafter acquired,
and thereafter rent or lease such property or other property which it intends to use for
substantially the same purpose or purposes as the property being sold or transferred unless (a) the
sale of such property is permitted by Section 1.05 of this Schedule 4 and (b) (i) the aggregate
amount of any obligations of Tensar Holdings and its Subsidiaries with respect to operating or
capital leases entered into in connection therewith does not exceed the amount which Tensar
Holdings and its Subsidiaries would be permitted to incur as Capital Lease Obligations under
Section 1.01 of this Schedule 4 and (ii) the Liens arising in connection therewith are permitted by
Section 1.02 of this Schedule 4.

     SECTION
1.04. Investments, Loans and Advances. Purchase, hold or acquire any Equity
Interests, evidences of obligations or other securities of, make or permit to exist any loans or
advances or capital contributions to, or make or permit any amounts to be invested or held in
financing transactions, or make or permit to exist any investment or any other interest in, any
other person (all of the foregoing, “Investments”), except:

     (a) (i) Investments by Tensar Holdings, Holding, Tensar and the Subsidiaries existing
on the date hereof in the Equity Interests of Tensar and the Subsidiaries and (ii)
additional Investments by Tensar Holdings, Holdings, Tensar and the Subsidiaries in the
Equity Interests of Tensar and its Subsidiaries; provided that if such Investment
shall be in the form of a loan or advance, such loan or advance shall be unsecured and
subordinated to the Obligations pursuant to an Affiliate Subordination Agreement;

     (b) Permitted Investments;

     (c) Investments received in connection with the bankruptcy or reorganization
of, or settlement of delinquent accounts and disputes with, customers and suppliers,
in each case in the ordinary course of business;

     (d) Tensar Holdings and its Subsidiaries may make loans and advances in the ordinary
course of business to their respective employees so long as the aggregate principal amount
thereof at any time outstanding (determined without regard to any write-downs or write-offs
of such loans and advances) shall not exceed $750,000;

     (e) advances made to Phillip D. Egan, Robert F. Vevoda and Gale D. Sanders pursuant to
the Split Dollar Insurance Documents;

     (f) advances not to exceed $150,000 in the aggregate to NAG employees for the purpose
of funding payments by such employees of tax liabilities incurred by them with respect to
up to 65,000 shares of restricted common stock of Tensar Holdings in the aggregate issued
to them under the stock option and restricted stock agreements entered into pursuant to the
Tensar Holdings 2000 Incentive Plan;

     (g) Tensar Holdings may hold promissory notes of employees of Tensar Holdings and its
Subsidiaries made by such employees in exchange for the purchase by such employees of
Tensar Holdings stock pursuant to the Restricted Stock Purchase Program;

Schedule 4, Negative Covenants

4

 

     (h) the Acquisition and Permitted Acquisitions; provided that the aggregate
purchase price for all Permitted Acquisitions shall not exceed (i) $40,000,000 over the
term of this Agreement or (ii) $25,000,000 for any single Permitted Acquisition;

     (i) Investments, loans and advances existing on the date hereof and set forth on
Annex 4 to this Schedule 4;

     (j) extensions of trade credit in the ordinary course of business;

     (k) Investments made as a result of the receipt of non-cash consideration from a
sale, transfer or other disposition of any asset in compliance with Section 1.05 of this
Schedule 4;

     (l) intercompany loans and advances (i) to Tensar Holdings or to Holdings to the
extent that Tensar may pay dividends to Holdings and Holdings may pay dividends to Tensar
Holdings pursuant to Section 1.06 of this Schedule 4 (and in lieu of paying such dividends)
and (ii) to Holdings in an amount not to exceed $11,000,000 per annum to pay certain
operating expenses of Holdings and its Subsidiaries incurred in the ordinary course of
business and consistent with past practice, provided that the amount of such loans shall
not exceed the amount that is required to pay such expenses and the proceeds of such
intercompany loans are used to pay such expenses within 20 days of receipt thereof;
provided further that any such intercompany loans and advances described in clause
(i) or (ii) shall be made for the purposes, and shall be subject to all the applicable
limitations set forth in, Section 1.06 of this Schedule 4 and shall be unsecured and
subordinated to the Obligations pursuant to an Affiliate Subordination Agreement; and

     (m) in addition to Investments permitted by clauses (a) through (1) above, additional
Investments by Tensar and its Subsidiaries so long as the aggregate amount invested, loaned
or advanced pursuant to this clause (j) (determined without regard to any
write-downs or write-offs of such investments, loans and advances) does not exceed
$2,500,000 in the aggregate.

     SECTION
1.05. Mergers, Consolidations, Sales of Assets and Acquisitions. Enter into
any transaction of merger or consolidation or liquidate, wind-up or dissolve itself (or suffer any
liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), license
or sub-license (as licensor or sub-licensor), exchange, transfer or otherwise dispose of (in one
transaction or in a series of transactions) all or any part of its business, assets or property of
any kind whatsoever, including the Equity Interests of a Subsidiary, whether real, personal or
mixed and whether tangible or intangible (whether now owned or hereafter acquired) or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all or any substantial
part of the assets of any other person, except for:

     (a) the sale by Tensar and its Subsidiaries of inventory in the ordinary course of business;

     (b) the sale or discount by Tensar or any of its Subsidiaries in each case without recourse
and in the ordinary course of business of overdue accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection thereof

Schedule 4, Negative Covenants

5

 

consistent with customary industry practice (and not as part of any bulk sale or financing
transaction);

     (c) the disposition of obsolete or worn out assets, scrap and Permitted Investments in the
ordinary course of business;

     (d) the NAG Sale-Leaseback provided that the proceeds of such sale are used to pay in full
the purchase price for the NAG Facility;

     (e) the sale of assets on the Effective Date under the Asset Purchase Agreement;

     (f) the purchase and sale of commodities by Tensar Holdings under this Agreement;

     (g) the purchase and sale of commodities by Tensar pursuant to the Second Lien Commodities
Purchase Agreement and the Commodities Purchase Facility Agreement; and

     (h) if at the time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing, (w) the merger or consolidation of any wholly owned
Subsidiary into or with Tensar in a transaction in which Tensar is the surviving corporation, (x)
the merger or consolidation of any wholly owned Subsidiary into or with any other wholly owned
Subsidiary in a transaction in which the surviving entity is a wholly owned Subsidiary and no
person other than Tensar or a wholly owned Subsidiary receives any consideration,
(provided that if any party to any such transaction is (A) a Tensar Party, the surviving
entity of such transaction shall be a Tensar Party and (B) a Domestic Subsidiary, the surviving
entity of such transaction shall be a Domestic Subsidiary), (y) Permitted Acquisitions by Tensar
or any of its Subsidiaries (otherwise permitted by Section 1.04(h) of this Schedule 4), and (z)
the sale, lease, sub-lease, license, sub-license or other disposition of any part of its business,
assets or property (except any Equity Interests of Tensar) so long as (i) such Asset Sale is for
consideration at least 80% of which is cash (and no portion of the remaining consideration shall
be in the form of Financing Obligations of Tensar Holdings or any of its Subsidiaries), (ii) such
consideration is at least equal to the fair market value of the assets being sold, transferred,
leased, licensed or disposed of and (iii) the fair market value of all assets sold, transferred,
leased, licensed or disposed of pursuant to this clause (z) shall not exceed $40,000,000 in the
aggregate.

     SECTION
1.06. Restricted Payments; Restrictive Agreements. (a) Declare or make, or
agree to declare or make, directly or indirectly, any Restricted Payment (including pursuant to any
Synthetic Purchase Agreement), or incur any obligation (contingent or otherwise) to do so;
provided, however, that (i) any wholly-owned Subsidiary may declare and pay
dividends or make other distributions to its equity holders, (ii) so long as no Event of Default or
Default shall
have occurred and be continuing, or would result therefrom, Tensar may, or may make
distributions to Holdings, and Holdings may make distributions to Tensar Holdings so that Tensar
Holdings may, repurchase its Equity Interests owned by employees of Tensar Holdings or the
Subsidiaries or make payments to employees of Tensar Holdings or the Subsidiaries upon termination
of employment in connection with the exercise of stock options, stock appreciation rights or
similar equity incentives or equity based incentives pursuant to management incentive plans or in
connection with the death or disability of such employees in an aggregate amount not

Schedule 4, Negative Covenants

6

 

to exceed $2,000,000 in any fiscal year, (iii) Tensar may make Restricted Payments to Holdings
and Holdings may make Restricted Payments to Tensar Holdings (x) in an amount not to exceed, when
taken together with the aggregate amount of all loans or advances made pursuant to Section 1.04(1)
of this Schedule 4 for such purpose, $350,000 in any fiscal year to the extent necessary to pay
general corporate and overhead expenses incurred by Tensar Holdings in the ordinary course of
business and (y) in an amount necessary to pay the Tax liabilities of Tensar Holdings directly
attributable to (or arising as a result of) the operations of Tensar and its Subsidiaries;
provided that (A) the amount of such dividends pursuant to clause (iii)(y) shall not exceed
the amount that Tensar and its Subsidiaries would be required to pay in respect of Federal, State
and local Taxes were Tensar and its Subsidiaries to pay such Taxes as stand-alone taxpayers and (B)
all Restricted Payments made to Tensar Holdings pursuant to clause (iii) shall be used by Tensar
Holdings for the purpose specified herein within 20 days of the receipt thereof and (iv) Tensar may
make Restricted Payments to Holdings and Holdings may make Restricted Payments to Tensar Holdings
in any amount provided Tensar Holdings immediately pays such amounts to TCH pursuant to the terms
of this Agreement.

     (b) Enter into, incur or permit to exist any agreement or other arrangement that prohibits,
restricts or imposes any condition upon (i) the ability of Tensar Holdings, Tensar or any
Subsidiary to create, incur or permit to exist any Lien upon any of its property or assets, or
(ii) the ability of any Subsidiary to pay dividends or other distributions with respect to any
of its Equity Interests or to make or repay loans or advances to Tensar or any other Subsidiary
or to Guarantee Financing Obligations of Tensar or any other Subsidiary; provided that
(A) the foregoing shall not apply to restrictions and conditions imposed by law, any Second Lien
Commodities Purchase Facility Document, any Lease/Purchase Facilities Document or this
Agreement, (B) the foregoing shall not apply to customary restrictions and conditions contained
in agreements relating to the sale of a Subsidiary pending such sale, provided such
restrictions and conditions apply only to the Subsidiary that is to be sold and such sale is
permitted hereunder, (C) the foregoing shall not apply to restrictions and conditions imposed on
any Subsidiary that is not a Tensar Party by the terms of any Financing Obligations of such
Subsidiary permitted to be incurred hereunder, (D) clause (i) of the foregoing shall not apply
to restrictions or conditions imposed by any agreement relating to secured Financing Obligations
permitted by this Agreement if such restrictions or conditions apply only to the property or
assets securing such Financing Obligations and (E) clause (i) of the foregoing shall not apply
to customary provisions in leases, licenses and other contracts restricting the assignment
thereof.

     SECTION 1.07. Transactions with Affiliates. Except for transactions by or among Tensar
Parties and except as set forth on Annex 7 to this Schedule 4, sell or transfer any property or
assets to, or purchase or acquire any property or assets from, or otherwise engage in any other
transactions with, any of its Affiliates, except that (a) Tensar and any of its Subsidiaries may
engage in any of the foregoing transactions in the ordinary course of business at prices and on
terms and conditions not less favorable to Tensar or such Subsidiary than could be obtained on an
arm’s-length basis from unrelated third parties, (b) Restricted Payments may be made to the extent
provided in Section 1.06 of this Section 4 and (c) if no Default or Event of Default has occurred
and is continuing, Tensar may pay to the Sponsor or its Affiliates (i) an annual management fee in
an amount not to exceed $1,000,000 per year and (ii) deferred merger and
acquisition fees earned in connection with the Acquisition, in an amount not to exceed
$5,775,000 in the aggregate.

Schedule 4, Negative Covenants

7

 

     SECTION 1.08. Business of Tensar Holdings, Holdings,
Tensar and Subsidiaries; Limitation on Hedging Agreements. (a) (i) With respect to Tensar Holdings, engage in any
business activities or have any assets or liabilities other than (A) its ownership of the Equity
Interests in Holdings, liabilities incidental thereto, including its liabilities pursuant to the
Lease/Purchase Facilities Documents, the Second Lien Commodities Purchase Facility Documents and
liabilities under the Tensar Holdings Commodities Purchase Facility Documents and (B) advances
made to employees of Holdings or its Subsidiaries to enable them to participate in the
Restricted Stock Purchase Program, provided that Tensar Holdings may also issue or sell shares of its Equity Interests for cash so long as (x) the proceeds thereof are applied in
prepayment in accordance with this Agreement, and (y) no Change of Control occurs after giving
effect thereto, and (ii) with respect to Holdings, engage in any business activities, other than
the business conducted by it as of the date hereof, or have any assets or liabilities other than
its ownership of the Equity Interest in Tensar and liabilities incidental thereto, including its
liabilities pursuant to the Lease/Purchase Facilities Documents and the Second Lien Commodities
Purchase Facility Documents and liabilities consisting of administrative expenses of Tensar and
its Subsidiaries.

     (b) With respect to Tensar and its Subsidiaries, engage at any time in any business or
business activity other than the business conducted by it as of the date hereof and business
activities reasonably incidental thereto. Except as permitted under this Agreement, no Tensar
Party shall (i) make any changes in any of its business objective, purposes or operations that
could reasonably be expected to have or result in a Material Adverse Effect, (ii) make any change
in its capital structure as described in Annex 8 to this Schedule 4 (other than as permitted or
contemplated by Section 1.08(a)(i) of this Schedule 4) including the issuance or sale of any
shares of Equity Interests, warrants or other securities convertible into Equity Interests or any
revision of the terms of its outstanding Equity Interests; or (iii) amend its charter or bylaws in
a manner that would adversely affect TCH or such Tensar Party’s duty or ability to pay the
Obligations.

     (c) Enter into any Hedging Agreement other than (a) any such agreement or arrangement entered
into in the ordinary course of business and consistent with prudent business practice to hedge or
mitigate risks to which Tensar or any of its Subsidiaries is exposed in the conduct of its business
or the management of its liabilities or (b) any such agreement entered into to hedge against
fluctuations in interest rates or currency incurred in the ordinary course of business and
consistent with prudent business practice; provided that in each case such agreements or
arrangements shall not have been entered into for speculative purposes.

     SECTION 1.09. Other Financing Obligations and Agreements; Amendments to Acquisition
Documentation. (a) (i) Permit any waiver, supplement, modification, amendment, termination or
release of any indenture, instrument or agreement pursuant to which any Material Obligations
(other than any of the Lease/Purchase Facilities Documents or the Second Lien Commodities Purchase
Documents) of Tensar Holdings, Tensar or any of the Subsidiaries is outstanding if the effect of
such waiver, supplement, modification, amendment, termination or release would materially increase
the obligations of the obligor or confer additional material rights on the holder of such
Financing Obligations in a manner adverse to Tensar Holdings, Tensar, any of the Subsidiaries, TCH
or any Purchaser, or (ii) permit any waiver, supplement, supply modification, amendment,
termination or release of any Second Lien Commodities

Schedule 4, Negative Covenants

8

 

Purchase Document except in accordance with the Intercreditor Agreement or of any Tensar
Holdings Commodities Purchase Facility Documents except in accordance with the Tensar Holdings
Subordination Agreement.

     (b) (i) Make any distribution, payment or prepayment whether in cash, property, securities or
a combination thereof, in respect of, or pay, or offer or commit to pay, or directly or indirectly
(including pursuant to any Synthetic Purchase Agreement) redeem, repurchase, retire or otherwise
acquire for consideration, or set apart any sum for the aforesaid purposes, any Financing
Obligations (other than any Financing Obligations under the Lease/Purchase Facilities Documents,
the Second Lien Commodities Facility Documents or the Commodities Purchase Facility Documents),
except (A) regular scheduled payments thereunder as and when due (to the extent not prohibited by
applicable subordination provisions), (B) refinancings of Financing Obligations permitted by
Section 1.01 of this Schedule 4, (C) the payment of secured Financing Obligations that becomes due
as a result of the voluntary sale or transfer of the property or assets securing such Financing
Obligations, or (D) so long as no Event of Default or Default shall have occurred and be continuing
or would result therefrom, the payment of intercompany Financing Obligations or (ii) pay in cash
any amount in respect of any Financing Obligations or preferred Equity Interests (including any
obligations with respect to the Tensar Holdings Commodities Purchase Facility) that may at the
obligor’s option be paid in kind or in other securities.

     (c) (i) Permit any waiver, supplement, modification, amendment, termination or release of,
or fail to enforce in a commercially reasonable manner the terms and conditions of, any of the
indemnities and licenses furnished to Tensar Holdings, Tensar or the Subsidiaries pursuant to
the Acquisition Documentation such that after giving effect thereto such indemnities or licenses
shall be materially less favorable to the interests of the Tensar Parties with respect thereto
or (ii) otherwise permit any waiver, supplement, modification, amendment, termination or release
of, or fail to enforce in a commercially reasonable manner the terms and conditions of, any of
the Acquisition Documentation except to the extent that such waiver, supplement, modification,
amendment, termination or release or failure to enforce could not reasonably be expected to have
a Material Adverse Effect.

     SECTION 1.10. Capital Expenditures. Permit the aggregate amount of Capital
Expenditures made by Tensar and its Subsidiaries in any period set forth below to exceed the
amount set forth below for such period:

	 	 	 	 	 
	Fiscal Year	 	Amount
	2005
	 	$	5,000,000	 
	2006
	 	$	20,000,000	 
	2007
	 	$	5,000,000	 
	2008 and each fiscal year
thereafter until 2012
	 	$	5,000,000	 

The amount of permitted Capital Expenditures set forth above in respect of any fiscal year
commencing with the fiscal year ending on December 31, 2006, shall be increased (but not
decreased) by 50% of (a) the amount of unused permitted Capital Expenditures for the

Schedule 4, Negative Covenants

9

 

immediately preceding fiscal year less (b) an amount equal to unused Capital Expenditures
carried forward to such preceding fiscal year.

     SECTION 1.11. Financing Coverage Ratio. Permit the Financing Coverage
Ratio during any period set forth below to be less than the ratio set forth opposite such period
below:

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005

	 	1.35:1.00
	March 31, 2006

	 	1.35:1.00
	June 30, 2006

	 	1.35:1.00
	September 30, 2006

	 	1.35:1.00
	December 31, 2006

	 	1.575:1.00
	March 31, 2007

	 	1.575:1.00
	June 30, 2007

	 	1.575:1.00
	September 30, 2007

	 	1.575:1.00
	December 31, 2007

	 	1.80:1.00
	March 31, 2008

	 	1.80:1.00
	June 30, 2008

	 	1.80:1.00
	September 30, 2008

	 	1.80:1.00
	December 31, 2008

	 	2.025:1.00
	March 31, 2009

	 	2.025:1.00
	June 30, 2009

	 	2.025:1.00
	September 30, 2009

	 	2.025:1.00
	December 31, 2009

	 	2.25:1.00
	March 31, 2010

	 	2.25:1.00
	June 30, 2010

	 	2.25:1.00
	September 30, 2010

	 	2.25:1.00
	December 31, 2010 and each fiscal
quarter thereafter until 2012

	 	2.70:1.00

     SECTION 1.12. Leverage Ratio. Permit the Leverage Ratio during any period set
forth below to be greater than the ratio set forth opposite such period below:

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005
	 	7.425:1.00
	March 31, 2006
	 	7.425:1.00
	June 30, 2006
	 	7.425:1.00
	September 30, 2006
	 	7.15:1.00
	December 31, 2006
	 	6.875:1.00

Schedule 4, Negative Covenants

10

 

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	March 31, 2007

	 	6.875:1.00
	June 30, 2007

	 	6.325:1.00
	September 30, 2007

	 	6.05:1.00
	December 31, 2007

	 	5.775:1.00
	March 31, 2008

	 	5.775:1.00
	June 30, 2008

	 	5.775:1.00
	September 30, 2008

	 	5.775:1.00
	December 31, 2008

	 	5.225:1.00
	March 31, 2009

	 	5.225:1.00
	June 30, 2009

	 	5.225:1.00
	September 30, 2009

	 	5.225:1.00
	December 31, 2009

	 	4.675:1.00
	March 31, 2010

	 	4.675:1.00
	June 30, 2010

	 	4.675:1.00
	September 30, 2010

	 	4.675:1.00
	December 31, 2010

	 	4.125:1.00
	March 31, 2011

	 	4.125:1.00
	June 30, 2011

	 	4.125:1.00
	September 30, 2011

	 	4.125:1.00
	December 31, 2011

	 	3.575:1.00
	March 31, 2012

	 	3.575:1.00
	June 30, 2012

	 	3.575:1.00
	September 30, 2012

	 	3.575:1.00
	December 31, 2012

	 	3.025:1.00

     SECTION 1.13. Fixed Charge Coverage Ratio. Permit the Fixed Charge Coverage
Ratio during any period set forth below to be less than the ratio set forth opposite such period
below:

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005

	 	1.125:1.00
	March 31, 2006

	 	1.125:1.00
	June 30, 2006

	 	1.125:1.00
	September 30, 2006

	 	1.125:1.00
	December 31, 2006

	 	1.125:1.00
	March 31, 2007

	 	1.125:1.00
	June 30, 2007

	 	1.125:1.00
	September 30, 2007

	 	1.125:1.00

Schedule 4, Negative Covenants

11

 

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2007

	 	1.215:1.00
	March 31, 2008

	 	1.215:1.00
	June 30, 2008

	 	1.215:1.00
	September 30, 2008

	 	1.215:1.00
	December 31, 2008

	 	1.26:1.00
	March 31, 2009

	 	1.26:1.00
	June 30, 2009

	 	1.26:1.00
	September 30, 2009

	 	1.26:1.00
	December 31, 2009 and each fiscal quarter thereafter
through 2012

	 	1.35:1.00

     SECTION 1.14. First Lien Leverage Ratio. Permit the First Lien Leverage Ratio during
any period set forth below to be greater than the ratio set forth opposite such period below:

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005

	 	4.95:1.00
	March 31, 2006

	 	4.95:1.00
	June 30, 2006

	 	4.95:1.00
	September 30, 2006

	 	4.95:1.00
	December 31, 2006

	 	4.40:1.00
	March 31, 2007

	 	4.40:1.00
	June 30, 2007

	 	4.125:1.00
	September 30, 2007

	 	3.85:1.00
	December 31, 2007

	 	3.575:1.00
	March 31, 2008

	 	3.575:1.00
	June 30, 2008

	 	3.30:1.00
	September 30, 2008

	 	3.30:1.00
	December 31, 2008

	 	3.025:1.00
	March 31, 2009

	 	3.025:1.00
	June 30, 2009

	 	3.025:1.00
	September 30, 2009

	 	3.025:1.00
	December 31, 2009

	 	2.75:1.00
	March 31, 2010

	 	2.75:1.00
	June 30, 2010

	 	2.75:1.00
	September 30, 2010

	 	2.75:1.00

Schedule 4, Negative Covenants

12

 

	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2010

	 	2.475:1.00
	March 31, 2011

	 	2.475:1.00
	June 30, 2011

	 	2.475:1.00
	September 30, 2011

	 	2.475:1.00
	December 31, 2011

	 	2.20:1.00
	March 31, 2012

	 	2.20:1.00
	June 30, 2012

	 	2.20:1.00
	September 30, 2012

	 	2.20:1.00
	December 31, 2012

	 	1.925:1.00

     SECTION 1.15. Fiscal Year. With respect to Tensar Holdings or Tensar, change its
fiscal year-end to a date other than December 31.

     SECTION 1.16. Limitation on Accounting Changes. Make or permit any material change in
accounting policies or reporting practices without advising TCH, unless such changes are required
by GAAP or applicable law; provided, that (a) compliance with the covenants set forth on this
Schedule 4 shall be determined on the basis of GAAP without giving effect to the relevant change
and (b) in connection with any such change Tensar Holdings will provide TCH with guidance
regarding how to reconcile financial statements prepared after the implementation of such material
change with financial statements provided to TCH and prepared before the implementation of such
material change.

     SECTION 1.17. Leases. No Tensar Party shall enter into any operating leases after the
Effective Date for equipment or real property if the aggregate of all such operating lease payments
payable in any year for all Tensar Parties on a consolidated basis would exceed the sum of (i)
$1,000,000 and (ii) the aggregate of lease payments for the leases set forth in Annex 17 to this
Schedule 4.

Schedule 4, Negative Covenants

13

 

Execution Copy

Schedule 5
Events of Default

     Upon the occurrence of any of the following events (each, an “Event of Default”):

     (a) any representation or warranty made or deemed made in or in connection with any Tensar
Holdings Commodities Purchase Facility Document, or any representation, warranty, statement or
information contained in any report, certificate, financial statement or other instrument furnished
in connection with or pursuant to any Tensar Holdings Commodities Purchase Facility Document, shall
prove to have been false or misleading in any material respect when so made, deemed made or
furnished;

     (b) default shall be made in the payment of any portion of Purchase Price when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed for prepayment
thereof or by acceleration thereof or otherwise;

     (c) default shall be made in the payment of any Agreed Profit or any other Obligations (other
than an amount referred to in clause (b) above) when and as the same shall become due and payable,
and such default shall continue unremedied for a period of three Business Days;

     (d) default shall be made in the due observance or performance by Tensar Holdings of any
covenant, condition or agreement contained in Sections 1.01(a), 1.02, 1.05(a) and (e), 1.08 or 1.16
of Schedule 3 or in Schedule 4;

     (e) default shall be made in the due observance or performance by Tensar Holdings of any
covenant, condition or agreement contained in any Tensar Holdings Commodities Purchase Facility
Document (other than those specified in clauses (b), (c) or (d) above) and such default shall
continue unremedied for a period of 30 days after the earlier of (i) the date on which Tensar
Holdings, Tensar or any Subsidiary has, or should have had, knowledge thereof and (ii) the date of
which TCH or any Purchaser notifies Tensar Holdings of any such default;

     (f) (i) Tensar Holdings shall (i) fail to pay any amount or profit or rent due with respect
thereto, regardless of amount, due in respect of any Material Obligation, when and as the same
shall become due and payable, or (ii) any other event or condition occurs that results in any
Material Obligation becoming due prior to its scheduled maturity or that enables or permits (with
or without the giving of notice, the lapse of time or both) the holder or holders of any Material
Obligation or any trustee or agent on its or their behalf to cause any Material Obligation to
become due, or to require the prepayment, repurchase, redemption or defeasance thereof, prior to
its scheduled maturity; provided that this clause (ii) shall not apply to any secured
Financing Obligations that become due as a result of the voluntary sale or transfer of the property
or assets securing such Financing Obligations;

     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be filed in a
court of competent jurisdiction seeking (i) relief in respect of Tensar Holdings, Holdings, Tensar
or any Material Subsidiary, or of a substantial part of the property or assets of

Schedule 5 Events of Default

 

 

Tensar Holdings, Holdings, Tensar or such Material Subsidiary, under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Tensar Holdings, Holdings, Tensar or any Material
Subsidiary or for a substantial part of the property or assets of Tensar Holdings, Holdings, Tensar
or such Material Subsidiary or (iii) the winding-up or liquidation of Tensar Holdings, Holdings,
Tensar or any Material Subsidiary and such proceeding or petition shall continue undismissed for 60
days or an order or decree approving or ordering any of the foregoing shall be entered;

     (h) any of Tensar Holdings, Holdings, Tensar or any Material Subsidiary shall (i) voluntarily
commence any proceeding or file any petition seeking relief under Title 11 of the United States
Code, as now constituted or hereafter amended, or any other Federal, state or foreign bankruptcy,
insolvency, receivership or similar law, (ii) consent to the institution of, or fail to contest in
a timely and appropriate manner, any proceeding or the filing of any petition described in (g)
above, (iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for Tensar Holdings, Holdings, Tensar or any Material
Subsidiary or for a substantial part of the property or assets of Tensar Holdings, Holdings, Tensar
or any Material Subsidiary, (iv)file an answer admitting the material allegations of a petition
filed against it in any such proceeding, (v) make a general assignment for the benefit of
creditors, (vi) become unable, admit in writing its inability or fail generally to pay its
obligations as they become due or (vii) take any action for the purpose of effecting any of the
foregoing;

     (i) one or more judgments for the payment of money in an aggregate amount in excess of
$2,500,000 (to the extent not adequately covered by insurance as to which a solvent and
unaffiliated insurance company has acknowledged coverage) or other judgments that, individually or
in the aggregate, could reasonably be expected to result in a Material Adverse Effect shall be
rendered against Tensar Holdings, Tensar, any Subsidiary or any combination thereof and the same
shall remain undischarged for a period of 30 consecutive days during which execution shall not be
effectively stayed, or any action shall be legally taken by a judgment creditor to levy upon assets
or properties of Tensar Holdings, Tensar or any Subsidiary to enforce any such judgment;

     (j) an ERISA Event described in clause (b) of the definition thereof shall have occurred or
any other ERISA Event shall have occurred that, when taken together with all other such ERISA
Events, could reasonably be expected to result in liability of Tensar and its ERISA Affiliates in
an aggregate amount exceeding $2,500,000;

     (k) any Guarantee under the Guarantee and Collateral Agreement or otherwise constituting
Obligations for any reason shall cease to be in full force and effect (other than in accordance
with its terms), or any Guarantor, Tensar Holdings or Tensar shall deny that it has any further
liability under such Guarantee (other than as a result of the discharge of such Guarantor, or
Tensar, as the case may be, in accordance with the terms of the Tensar Holdings Commodities
Purchase Facility Documents);

     (1) [reserved];

Schedule 5, Events of Default

2

 

     (m) there shall have occurred a Change in Control;

     (n) a default under or breach of the Netlon License shall have occurred and be continuing
that would permit the licensor to terminate the Netlon License; or

     (o) the Netlon License shall terminate for any reason, other than at maturity in
accordance with its terms;

then, and in every such event (other than an event with respect to Tensar Holdings or Tensar
described in clause (g) or (h) above), and at any time thereafter during the continuance of such
event TCH or the Purchasers may declare its obligation to make the Tensar Holdings Commodities
Purchase Facility available to Tensar Holdings, or to enter into Transactions at the request of
Tensar Holdings, to be terminated, whereupon such obligations shall immediately terminate; or may
declare all Obligations payable by Tensar Holdings under this Agreement, including, but not limited
to, the Aggregate Murabaha Price, to be forthwith due and payable, whereupon all such Obligations
shall become forthwith due and payable, without presentment, demand, protest or any other notice of
any kind, all of which are hereby expressly waived by Tensar Holdings, anything contained herein or
in any other Tensar Holdings Commodities Purchase Facility Document to the contrary
notwithstanding, and TCH and the Purchasers shall have the right to take all or any actions and
exercise any remedies available under applicable law or in equity; and in any event with respect to
Tensar Holdings described in clause (g) or (h) above, TCH’s obligation to make the Tensar Holdings
Commodities Purchase Facility available to Tensar Holdings, or to enter into Transactions at the
request of Tensar Holdings, shall automatically terminate and all Obligations payable by Tensar
Holdings under this Agreement, including, but not limited to, the Aggregate Murabaha Price, and all
other liabilities of Tensar Holdings accrued hereunder and under any other Tensar Holdings
Commodities Purchase Facility Document shall automatically become due and payable, without
presentment, demand, protest or any other notice of any kind, all of which are hereby expressly
waived by Tensar Holdings, anything contained herein or in any other Tensar Holdings Commodities
Purchase Facility Document to the contrary notwithstanding, and TCH and the Purchasers shall have
the right to take all or any actions and exercise any remedies available under applicable law or in
equity.

Schedule 5, Events of Default

3

 

Execution Copy

Schedule 6
Miscellaneous Provisions

     1. Survival of Agreement. All covenants, agreements, representations and warranties
made by Tensar Holdings herein and in the certificates or other instruments prepared or delivered
in connection with or pursuant to this Agreement or any other Tensar Holdings Commodity Purchase
Facility Document shall be considered to have been relied upon by TCH and the Purchasers and shall
survive the consummation of the Transactions, regardless of any investigation made by TCH, the
Purchasers or any other person and shall continue in full force and effect as long as any Murabaha
Price or any other amount payable under this Agreement or any other Tensar Holdings Commodity
Purchase Facility Document is outstanding and unpaid. The provisions of Section 2 of this Schedule
6 shall remain operative and in full force and effect regardless of the expiration of the term of
this Agreement, the consummation of the transactions contemplated hereby, the invalidity or
unenforceability of any term or provision of this Agreement or any other Tensar Holdings Commodity
Purchase Facility Document or any investigation made by or on behalf of TCH, the Purchasers or any
other person.

     2. Expenses; Indemnity (a) Tensar Holdings agrees to pay any and all out-of-pocket
costs and expenses incurred by TCH or any Purchaser in connection with the preparation and
administration of this Agreement, the other Tensar Holdings Commodity Purchase Facility Documents
or in connection with the maintenance, consummation, performance or fulfillment of TCH’s
obligations hereunder, any amendments, modifications or waivers of the provisions hereof or thereof
(whether or not the transactions hereby or thereby contemplated shall be consummated) or incurred
or suffered by or imposed on TCH or a Purchaser in connection with the enforcement or protection of
its rights in connection with this Agreement and the other Tensar Holdings Commodity Purchase
Facility Documents or in connection with the Transactions, including in each case the fees,
disbursements and other charges of Patton Boggs LLP, counsel for the Purchasers, and in connection
with any such enforcement or protection, the fees, disbursements and other charges of any counsel
for TCH and the Purchasers.

     (b) Tensar Holdings agrees to indemnify TCH, the Purchasers and each Related Party thereof (each
such person being called an “Indemnitee”) against, and to hold each Indemnitee harmless
from, any and all losses, claims, damages, liabilities and related costs and expenses, including
reasonable counsel fees (including such legal fees and expenses incurred in connection with the
enforcement of the Tensar Holdings Commodity Purchase Facility Documents and any document or
agreement directly or indirectly relating to the foregoing), disbursements and other charges,
incurred or suffered by or imposed on or asserted against any Indemnitee arising out of, in any way
connected with, or as a result of (i) the execution or delivery of this Agreement or any other
Tensar Holdings Commodity Purchase Facility Document or any agreement or instrument contemplated
thereby, the performance, maintenance, consummation or fulfillment by the parties thereto of their
respective obligations thereunder or the consummation of the Transactions and the other
transactions contemplated thereby, including losses, claims, damages, liabilities and related costs
and expenses incurred or suffered by or imposed on TCH, (ii) any claim, litigation, investigation
or proceeding relating to any of the foregoing, whether or not any Indemnitee is a party thereto,
or (iv) any actual or alleged presence or Release of Hazardous Materials on any property owned or
operated by Tensar Holdings, Tensar or any of the Subsidiaries, or any Environmental Liability
related in any way to Tensar Holdings, Tensar or

Schedule 6, Miscellaneous

 

 

any of the Subsidiaries; provided that such indemnity shall not, as to any Indemnitee, be
available to the extent that such losses, claims, damages, liabilities or related costs and
expenses are determined by a court of competent jurisdiction by final and nonappealable judgment to
have resulted primarily from the gross negligence or willful misconduct of such Indemnitee (and,
upon any such determination, any indemnification payments with respect to such losses, claims,
damages, liabilities or related costs and expenses previously received by such Indemnitee shall be
subject to reimbursement by such Indemnitee).

     (c) To the extent permitted by applicable law, Tensar Holdings shall not assert, and each
hereby waives, any claim against any Indemnitee, on any theory of liability, for special, indirect,
consequential or punitive damages (as opposed to direct or actual damages) arising out of, in
connection with, or as a result of, this Agreement or any agreement or instrument contemplated
hereby, the Transactions or the use of the proceeds of the Asset Purchase Agreement or any
financing therefor.

     (d) The provisions of this Section 2 to Schedule 6 shall remain operative and in full force
and effect regardless of the expiration of the term of this Agreement, the consummation of the
Transactions or the other transactions contemplated hereby, the payment in full of any and all
Aggregate Murabaha Price, the invalidity or unenforceability of any term or provision of this
Agreement or any other Tensar Holdings Commodities Purchase Facility Document, or any investigation
made by or on behalf of TCH, the Purchasers or any other person. All amounts due under this Section
2 to Schedule 6 shall be payable on written demand therefor.

     3. WAIVER OF JURY TRIAL. EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION
DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS AGREEMENT OR ANY OF THE
OTHER TENSAR HOLDINGS COMMODITIES PURCHASE FACILITY DOCUMENTS. EACH PARTY HERETO (A) CERTIFIES THAT
NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE,
THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER
AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER TENSAR HOLDINGS COMMODITIES PURCHASE FACILITY DOCUMENTS, AS APPLICABLE, BY,
AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 3 OF SCHEDULE 6.

     4. Jurisdiction; Consent to Service of Process (a) Tensar Holdings hereby irrevocably and
unconditionally submits, for itself and its property, to the exclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New York City, and any
appellate court from any thereof, in any action or proceeding arising out of or relating to this
Agreement or the other Tensar Holdings Commodities Purchase Facility Documents, or for recognition
or enforcement of any judgment, and each of the parties hereto hereby irrevocably and
unconditionally agrees that all claims in respect of any such action or proceeding may be heard and
determined in such New York State or, to the extent permitted by law, in such Federal court. Each
of the parties hereto agrees that a final judgment in any such

Schedule 6, Miscellaneous

2

 

action or proceeding shall be conclusive and may be enforced in other jurisdictions by suit on the
judgment or in any other manner provided by law. Nothing in this Agreement shall affect any right
that TCH or any Purchaser may otherwise have to bring any action or proceeding relating to this
Agreement or the other Tensar Holdings Commodities Purchase Facility Documents against Tensar
Holdings or their properties in the courts of any jurisdiction.

     (b) Tensar Holdings hereby irrevocably and unconditionally waives, to the fullest extent it
may legally and effectively do so, any objection which it may now or hereafter have to the laying
of venue of any suit, action or proceeding arising out of or relating to this Agreement or the
other Tensar Holdings Commodities Purchase Facility Documents in any New York State or Federal
court. Each of the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or proceeding in any
such court.

     (c) Each party to this Agreement irrevocably consents to service of process in the manner provided
for notices in Section 4 to this Scedule. Nothing in this Agreement will affect the right of any
party to this Agreement to serve process in any other manner permitted by law.

Schedule 6, Miscellaneous

3

 

SCHEDULE 7

SUPPLEMENTAL PROFIT PROVISIONS

     “Assumed
Profit” means, with respect to the Purchase Price Amount of any Transaction, 0.75%
over the yield to maturity implied by (a) the yields reported as
of 10:00 a.m. (New York City time)
on the second Business Day preceding the Calculation Date with respect to such Purchase Price
Amount, on the display designated as “Page PX1” (or such other display as may replace Page PX1 on
Bloomberg Financial Markets (“Bloomberg”) or,
if Page PX1 (or its successor screen on Bloomberg) is
unavailable, the Telerate Access Service screen which corresponds
most closely to Page PX1 for the
most recently issued actively traded U.S. Treasury securities having a maturity equal to the
Remaining Average Life of such Purchase Price Amount as of such Calculation Date, or (b) if such
yields are not reported as of such time or the yields reported as of such time are not
ascertainable (including by way of interpolation), the Treasury Constant Maturity Series Yields
reported, for the latest day for which such yields have been so reported as of the second Business
Day preceding the Calculation Date with respect to such Purchase Price Amount, in Federal Reserve
Statistical Release H.15 (519) (or any comparable successor publication) for actively traded U.S.
Treasury securities having a constant maturity equal to the Remaining Average Life of such Purchase
Price Amount as of such Calculation Date. Such implied yield will be determined, if necessary, by
(i) converting U.S. Treasury bill quotations to bond equivalent yields in accordance with accepted
financial practice and (ii) interpolating linearly between (1) the actively traded U.S. Treasury
security with the maturity closest to and greater than such Remaining Average Life and (2) the
actively traded U.S. Treasury security with the maturity closest to and less than such Remaining
Average Life. The Assumed Profit shall be rounded to the number of decimal places as appears in the
Profit Rate.

     “Calculation
Date” means, with respect to any Transaction, the Value Date for such
Transaction.

     “Discounted
Value” means, with respect to any Purchase Price Amount on any Calculation Date,
the amount obtained by discounting the Remaining Scheduled Payments for such Purchase Price Amount
from the relevant Transaction Payment Dates for such payments to such Calculation Date, in
accordance with accepted financial practice and at a discount factor (applied on the same periodic
basis as that on which Profit Amount under the Agreement is calculated) equal to the Assumed Profit
with respect to such Purchase Price Amount.

     “Purchase
Price Amount” means, from time to time, the amount of the Purchase Price component
of the Murabaha Price.

     “Remaining
Average Life” means, with respect to any Purchase Price Amount, the number of years
(calculated to the nearest one-twelfth year) obtained by dividing (a) such Purchase Price Amount
into (b) the sum of the products obtained by multiplying (i) the Purchase Price component of each
Remaining Scheduled Payment by (ii) the number of years (calculated to the nearest one-twelfth
year) that will elapse between the Calculation Date with respect to such Purchase Price Amount and
the scheduled Transaction Payment Date for such Remaining Scheduled Payment.

 

 

 2

     “Remaining
Scheduled Payments” means, for any Transaction as of any Calculation Date, all
payments of the Murabaha Price that would be due after such Calculation Date under the Agreement,
assuming for purposes of this definition that Tensar Holdings continues to enter into Transactions
for so long as and in the maximum amount permitted under Section 2.1 of the Agreement.

     “Supplemental
Profit” means (i) for any payment of Murabaha Price made before October 31,
2007, an amount equal to the excess, if any, of the Discounted Value of the Remaining Scheduled
Payments for the Purchase Price Amount over the amount of such Purchase Price Amount, provided that
the Supplemental Profit may in no event be less than zero; and (ii) for any payment of Murabaha
Price made after October 31, 2007, the Purchase Price Amount multiplied by the Supplemental Profit
Factor.

     “Supplemental
Profit Factor” means: (i) during the 12-month period occurring after October 31,
2007 to and including October 31, 2008, 5%; (ii) during the 12-month period occurring after October
31, 2008 to and including October 31, 2009, 4%; (iii) during the 12-month period occurring after
October 31, 2009 to and including October 31, 2010, 3%; (iv) during the 12-month period occurring
after October 31, 2010 to and including October 31, 2011, 2%; (v) during the 12-month period
occurring after October 31, 2011 to and including
October 31, 2012, 1%; and (vi) during the period
occurring after October 31, 2012, 0%.

 

 

EXHIBIT A

PURCHASE REQUEST

	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	To:

	 	TCH Funding Corp.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	From:

	 	Tensar Holdings, Inc.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:

	 	AIA Limited
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:	 	Arcapita Investment Funding Limited
Telefax:	 	 
	 
	 	 	 	 	 	 
	Re:	 	Murabaha Facility Agreement dated as of October 31, 2005	 	 

             We refer to the above-referenced agreement (the capitalized terms used in this
notification having the meanings specified in such agreement) and hereby request that you purchase,
for on-sale to us, the Metals specified below in accordance with the terms set forth below:

	 	 	 	 	 	 	 
	 

	 	Purchase Terms	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Our Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Supplier:
	 	[Richmond Commodities Limited]
	 	 
	 
	 	 	 	 	 	 
	 

	 	Metals:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Purchase Price for TCH:	 	 
	 
	 	 	 	 	 	 
	 	 	Murabaha Price to Tensar Holdings:  	[Purchase Price plus Agreed Profit]	 	 
	 
	 	 	 	 	 	 
	 

	 	Transaction Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Value Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Transaction Payment Date:	 	 	 	 

 

 

 2

            We hereby commit to purchase the Metals described above in accordance with the
terms described above should you arrange the purchase of such Metals in accordance with such terms.
The Transaction described above shall be subject to the terms of above-referenced agreement.

	 	 	 	 	 	 	 
	 	 	 	TENSAR HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	By	 	 	 
	 

	 	
	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

 

EXHIBIT B

PURCHASE CONFIRMATION

	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	To:

	 	Tensar Holdings, Inc.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	From:

	 	TCH Funding Corp.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:

	 	AIA Limited
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:	 	Arcapita Investment Funding Limited
Telefax:	 	 
	 
	 	 	 	 	 	 
	Re:	 	Murabaha Facility Agreement dated as of October 31, 2005	 	 

            We refer to the above-referenced agreement (the capitalized terms used in this
acceptance having the meanings specified in such agreement) and the
Purchase Request, dated         ,
        , from you to us (“Purchase Request”), and hereby confirm that we have purchased for on-
sale to you the Metals described in the Purchase Request on the terms specified therein, which
terms are set forth below:

	 	 	 	 	 	 	 
	 

	 	Purchase Terms	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Our Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Your Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Supplier:
	 	[Richmond Commodities Limited]
	 	 
	 
	 	 	 	 	 	 
	 

	 	Metal:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Quantity:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Location:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Delivery:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Purchase Price for TCH:	 	 
	 
	 	 	 	 	 	 
	 	 	Murabaha Price to Tensar Holdings:	 	 

 

 

B-2

	 	 	 	 	 	 	 
	 

	 	Transaction Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Value Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Transaction Payment Date:	 	 	 	 

            The Transaction described above shall be subject to the terms of above-referenced agreement.

	 	 	 	 	 	 	 
	 	 	 	TCH FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	By	 	 	 
	 

	 	
	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

EXHIBIT C

PURCHASE OFFER

	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	To:

	 	TCH Funding Corp.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	From:

	 	Tensar Holdings, Inc.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:

	 	AIA Limited
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:	 	Arcapita Investment Funding Limited
Telefax:	 	 
	 
	 	 	 	 	 	 
	Re:	 	Murabaha Facility Agreement dated as of October
31, 2005	 	 

             We refer to the above-referenced agreement (the capitalized terms used in this offer
having the meanings specified in such agreement), the Purchase
Request, dated         ,
        , and the
Purchase Confirmation, dated
        ,         , from you to us, and hereby
offer to purchase from you the Metals described in the Purchase Confirmation on the terms specified
therein, which terms are set forth below:

	 	 	 	 	 	 	 
	 

	 	Purchase Terms	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Our Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Your Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Supplier:
	 	[Richmond Commodities Limited]
	 	 
	 
	 	 	 	 	 	 
	 

	 	Metal:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Quantity:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Location:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Delivery:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Purchase Price for TCH:	 	 
	 
	 	 	 	 	 	 
	 	 	Murabaha Price to Tensar Holdings:	 	 

 

 

C-2

	 	 	 	 	 	 	 
	 

	 	Transaction Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Value Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Transaction Payment Date:	 	 	 	 

            The Transaction described above shall be subject to the terms of above-referenced agreement.

	 	 	 	 	 	 	 
	 	 	 	TENSAR HOLDINGS, INC.	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	By	 	 	 
	 

	 	
	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:	 	 

 

EXHIBIT D

PURCHASE ACCEPTANCE

	 	 	 	 	 	 	 
	Date:
	 	 	 	 	 	 
	 

	 	 

	 	 
	 	 
	 
	 	 	 	 	 	 
	To:

	 	Tensar Holdings, Inc.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	From:

	 	TCH Funding Corp.
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:

	 	AIA Limited
Telefax:	 	 	 	 
	 
	 	 	 	 	 	 
	Copy:	 	Arcapita Investment Funding Limited
Telefax:	 	 
	 
	 	 	 	 	 	 
	Re:	 	Murabaha Facility Agreement dated as of October
31, 2005	 	 

             We refer to the above-referenced agreement (the capitalized terms used in this
acceptance
having the meanings specified in such agreement), the Purchase Request, dated                     , ___, the Purchase
Confirmation, dated                     , ___, and the Purchase Offer, dated                     , ___, from you to us. We hereby confirm that we have purchased
the Metals
described in the Purchase Offer, and hereby accept your offer to purchase from us such Metals on
the terms specified in such Purchase Offer, which terms are set forth below:

	 	 	 	 	 	 	 
	 

	 	Purchase Terms	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Our Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Your Reference:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Supplier:
	 	[Richmond Commodities Limited]
	 	 
	 
	 	 	 	 	 	 
	 

	 	Metal:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Quantity:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Location:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Delivery:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Purchase Price for TCH:	 	 	 	 
	 
	 	 	 	 	 	 
	 	 	Murabaha Price to Tensar Holdings:	 	 

 

 

2

	 	 	 	 	 	 	 
	 

	 	Transaction Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Value Date:	 	 	 	 
	 
	 	 	 	 	 	 
	 

	 	Transaction Payment Date:	 	 	 	 

            The
Transaction described above shall be subject to the terms of
above-referenced agreement.

	 	 	 	 	 	 	 
	 	 	 	TCH FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 
	 

	 	 	By	 	 	 
	 

	 	
	 	 

	 	 
	 

	 	 	 	Name:	 	 
	 

	 	 	 	Title:EX-10.19 TENSAR INTERCREDITOR AGREEMENT

 

Exhibit
10.19

EXECUTION COPY

TENSAR INTERCREDITOR AGREEMENT

     This TENSAR INTERCREDITOR AGREEMENT, is dated as of October 31, 2005, and entered into by and
among Tensar Holdings, Inc., a Delaware corporation (“Tensar Holdings”), The Tensar Corporation,
LLC, a Delaware limited liability company (“Tensar”), TCO FUNDING CORP., a Delaware corporation
(“TCO”), CREDIT SUISSE, in its capacity as agent under the First Lien Lease/Purchase Facilities
Documents (as defined below), including its successors and assigns from time to time (the “First
Lien Agent”), and AMERICAN CAPITAL FINANCIAL SERVICES, INC., in its capacity as agent under the
Second Lien Commodities Purchase Documents (as defined below), including its successors and assigns
from time to time (the “Second Lien Agent”). Capitalized terms used herein but not otherwise
defined herein have the meanings set forth in Section 1 below.

R
E C I T A L S

     WHEREAS, Tensar Holdings, Tensar, certain of their Subsidiaries, TCO and the First Lien Agent
have entered into the Lease Agreement and the Commodities Purchase Agreement, in each case, dated
as of the date hereof (as amended, restated, supplemented, modified or Refinanced from time to
time, the “First Lien Lease/Purchase Agreements”);

     WHEREAS, Tensar Holdings, Tensar, certain of their Subsidiaries, TCO and the Second Lien
Agent have entered into the Second Lien Commodities Purchase Agreement, dated as of the date
hereof (as amended, restated, supplemented, modified or Refinanced from time to time in accordance
with terms of this Agreement, the “Second Lien Commodities Purchase Agreement”);

     WHEREAS, pursuant to (i) the First Lien Guarantee and Collateral Agreement, Tensar Holdings
has guaranteed the First Lien Obligations (the “First Lien Holdings Guaranty”); (ii) the First
Lien Lease/Purchase Agreements, Tensar Holdings and Tensar have agreed to cause certain current
and future Subsidiaries to guaranty the First Lien Obligations (the “First Lien Subsidiary
Guaranty”) pursuant to the First Lien Guarantee and Collateral Agreement; (iii) the Second Lien
Guarantee and Collateral Agreement, Tensar Holdings has guaranteed the Second Lien Obligations
(the “Second Lien Holdings Guaranty”), and (iv) the Second Lien Commodities Purchase Agreement,
Tensar Holdings and Tensar have agreed to cause certain current and future Subsidiaries to
guaranty the Second Lien Obligations (the “Second Lien Subsidiary Guaranty”) pursuant to the
Second Lien Guarantee and Collateral Agreement;

     WHEREAS, the obligations of Tensar and certain of its Subsidiaries under the First Lien
Lease/Purchase Agreements and the obligations of Tensar Holdings and of the Subsidiary guarantors
under the First Lien Guarantee and Collateral Agreement will be secured on a first priority basis
by liens on substantially all the assets

 

 

of Tensar, Tensar Holdings and the Subsidiary guarantors (such current and future Subsidiaries of
Tensar providing such a guaranty, the “Guarantor Subsidiaries”), pursuant to the terms of the
First Lien Security Documents;

     WHEREAS, the obligations of Tensar and certain of its Subsidiaries under the Second Lien
Commodities Purchase Agreement, the obligations of Tensar Holdings and of the Guarantor
Subsidiaries under the Second Lien Guarantee and Collateral Agreement will be secured on a second
priority basis by liens on substantially all the assets of Tensar, Tensar Holdings and the
Guarantor Subsidiaries, pursuant to the terms of the Second Lien Security Documents;

     WHEREAS, the First Lien Lease/Purchase Agreements and the Second Lien Commodities Purchase
Agreement provide, among other things, that the parties thereto shall set forth in this Agreement
their respective rights and remedies with respect to the Collateral; and

     WHEREAS, in order to induce the First Lien Secured Party to enter into the First Lien
Lease/Purchase Facilities Documents and to consent to the Grantors incurring the Second Lien
Obligations and to induce the First Lien Secured Party and the other First Lien Claimholders to
make financial accommodations to or for the benefit of Tensar or any other Grantor, the Second Lien
Secured Party on behalf of the Second Lien Agent and each other the Second Lien Claimholder has
agreed to the intercreditor and other provisions set forth in this Agreement.

     NOW, THEREFORE, in consideration of the foregoing, the mutual covenants and obligations
herein set forth and for other good and valuable consideration, the sufficiency and receipt of
which are hereby acknowledged, the parties hereto, intending to be legally bound, hereby agree as
follows:

     SECTION 1. Definitions.

     1.1 Defined Terms. As used in this Agreement, the following terms shall have the
following meanings:

     “Affiliate” means, with respect to a specified Person, another Person that directly or
indirectly through one or more intermediaries, controls or is controlled by, or is under common
control with the Person specified.

     “Agreed Profit” has the meaning set forth in the Commodities Purchase Agreement and the
Second Lien Commodities Purchase Agreement, as applicable.

     “Agreement” means this Agreement, as amended, renewed, extended, supplemented or otherwise
modified from time to time in accordance with the terms hereof.

     “Bankruptcy Code” means Title 11 of the United States Code entitled “Bankruptcy,” as now and
hereafter in effect, or any successor statute.

2

 

     “Bankruptcy Law” means the Bankruptcy Code and any similar federal, state or foreign law for
the relief of debtors.

     “Business Day” means any day that is not a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close.

     “Cap Amount” has the meaning set forth in Section 5.3(a)(ii).

     “Collateral” means all of the assets and property of any Grantor, whether real, personal or
mixed, whether now owned or hereafter acquired, constituting both First Lien Collateral and Second
Lien Collateral.

     “Commodities Purchase Agreement” means the Working Capital Murabaha Facility Agreement, dated
as of Effective Date, by and between the Tensar Parties party thereto, the First Lien Secured
Party and the First Lien Agent, as the same may be amended, supplemented or modified, renewed,
extended or Refinanced from time to time in accordance with the terms thereof and hereof.

     “Comparable Second Lien Security Document” means, in relation to any Collateral subject to
any Lien created under any First Lien Security Document, that Second Lien Security Document which
creates a Lien on the same Collateral, granted by the same Grantor.

     “Control” means the possession, directly or indirectly, of the power to direct or cause the
direction of the management or policies of a Person, whether through the ability to exercise
voting power, by contract or otherwise. The terms “Controlling” and “Controlled” have meanings
correlative thereto.

     “DIP Financing” has the meaning assigned to that term in Section 6.1.

     “Discharge of First Lien Obligations” means, except to the extent otherwise provided in
Section 5.5, (a) payment in full in cash of all Acquisition Cost, Murabaha Price, the Rental Rate
portion of Rent and Agreed Profit (including Rental Rate or Agreed Profit accruing on or after the
commencement of any Insolvency or Liquidation Proceeding, whether or not such charges would be
allowed in such Insolvency or Liquidation Proceeding) and premium, if any, on all Financing
Obligations outstanding under the First Lien Lease/Purchase Facilities Documents and constituting
First Lien Obligations; (b) payment in full in cash of all other First Lien Obligations that are
due and payable or otherwise accrued and owing at or prior to the time such Acquisition Cost,
Murabaha Price, Rental Rate or Agreed Profit are paid (other than any indemnification obligations
for which no claim or demand for payment, whether oral or written, has been made at such time) and
(c) termination or expiration of all commitments to engage in commodities transactions and all
other obligations under the First Lien Lease/Purchase Facilities Documents.

     “Disposition” has the meaning assigned to that term in Section 5.1(a).

3

 

     “Effective Date” means October 31, 2005.

     “Financing Obligations” means and includes all Obligations that constitute “Financing
Obligations” within the meaning of the First Lien Lease/Purchase Agreements or the Second Lien
Commodities Purchase Agreement, as applicable.

     “First Lien Claimholders” means, at any relevant time, the holders of First Lien Obligations
at such time, including the First Lien Secured Party and the First Lien Agent.

     “First Lien Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, and whether now owned or hereafter acquired, with respect to which a Lien is
granted as security for any First Lien Obligations.

     “First Lien Guarantee and Collateral Agreement” means the First Lien Guarantee and Collateral
Agreement, dated as of the Effective Date, by and among Tensar Holdings, Tensar, each other
Grantor, the First Lien Secured Party, and the First Lien Agent, as amended, restated,
supplemented, modified, renewed, extended or Refinanced from time to time in accordance with the
provisions of this Agreement.

     “First Lien Holdings Guaranty” has the meaning set forth in the Recitals to this Agreement.

     “First Lien Lease/Purchase Agreements” has the meaning set forth in the Recitals to this
Agreement.

     “First Lien Lease/Purchase Facilities Documents” means the Lease Agreement, the Commodities
Purchase Agreement and the Lease/Purchase Facilities Documents (as defined in the First Lien
Guarantee and Collateral Agreement), including the First Lien Security Documents and each of the
other agreements, documents and instruments providing for or evidencing any other First Lien
Obligation, and any other document or instrument executed or delivered at any time in connection
with any First Lien Obligations, including any intercreditor or joinder agreement among holders of
First Lien Obligations, to the extent such are effective at the relevant time, in each case, as
each may be amended, restated, supplemented, modified, renewed, extended or Refinanced from time
to time in accordance with the provisions of this Agreement.

     “First Lien Obligations” means, subject to clause (c) hereof, the following:

     (a) (i) all Acquisition Cost, the Rental Rate portion of Rent, Agreed Profit and Murabaha
Price (including any Post-Petition Charges) and premium (if any) on all financial accommodations
made pursuant to the First Lien Lease/Purchase Agreements and (ii) all guarantee obligations,
fees, expenses and other all other Obligations under the First Lien Lease/Purchase Agreements and
the other First Lien Lease/Purchase Facilities Documents, in each case whether or not allowed or
allowable in an Insolvency or Liquidation Proceeding.

4

 

     (b) To the extent any payment with respect to any First Lien Obligation (whether by or on
behalf of any Grantor, as proceeds of security, enforcement of any right of setoff or otherwise)
is declared to be a fraudulent conveyance or a preference in any respect, set aside or required to
he paid to a debtor in possession, any Second Lien Claimholders, receiver or similar Person, then
the obligation or part thereof originally intended to be satisfied shall, for the purposes of this
Agreement and the rights and obligations of the First Lien Claimholders and the Second Lien
Claimholders, be deemed to be reinstated and outstanding as if such payment had not occurred. To
the extent that any Rental Rate portion of Rent, Agreed Profit, interest, fees, expenses or other
charges (including Post-Petition Charges) to be paid pursuant to the First Lien Lease/Purchase
Facilities Documents are disallowed by order of any court, including by order of a Bankruptcy
Court in any Insolvency or Liquidation Proceeding, such Rental Rate portion of Rent, Agreed
Profit, interest, fees, expenses and charges (including Post-Petition Charges) shall, as
between the First Lien Claimholders and the Second Lien Claimholders, be deemed to
continue to accrue and be added to the amount to be calculated as the “First Lien Obligations”.

     (c) Notwithstanding the foregoing, if the aggregate stated amount of Acquisition Cost and
Purchase Price outstanding under the First Lien Lease/Purchase Agreements and the other First Lien
Lease/Purchase Facilities Documents is in excess of the Cap Amount, then only that portion of such
Acquisition Cost and Purchase Price equal to the Cap Amount shall be included in First Lien
Obligations and Rental Rate and Agreed Profit with respect to such Acquisition Cost and Purchase
Price shall only constitute First Lien Obligations to the extent related to Financing Obligations
included in the First Lien Obligations.

     “First Lien Secured Party” means TCO in its capacities as a party under the First Lien
Lease/Purchase Facilities Documents, together with any successors or assigns in such capacity.

     “First Lien Security Documents” means the First Lien Guarantee and Collateral Agreement and
all other agreements, documents and instruments pursuant to which a Lien is granted securing any
First Lien Obligations or under which rights or remedies with respect to such Liens are governed.

     “Grantors” means Tensar, Tensar Holdings, each of the Guarantor Subsidiaries and each other
Person that has or may from time to time hereafter execute and deliver a First Lien Security
Document or a Second Lien Security Document as a “grantor”
or “pledgor” (or the equivalent
thereof).

     “Guarantor Subsidiaries” has the meaning set forth in the Recitals to this Agreement.

     “Insolvency
or Liquidation Proceeding” means (a) any voluntary or involuntary case or
proceeding under the Bankruptcy Code with respect to any Grantor, (b) any other voluntary or
involuntary insolvency, reorganization or bankruptcy case or proceeding, or any receivership,
liquidation, reorganization or other similar case or

5

 

proceeding with respect to any Grantor or with respect to a material portion of their assets, (c)
any liquidation, dissolution, reorganization or winding up of any Grantor whether voluntary or
involuntary and whether or not involving insolvency or bankruptcy or (d) any assignment for the
benefit of creditors or any other marshalling of assets and liabilities of any Grantor.

     “Lease Agreement” means the Lease and License Financing and Purchase Option Agreement, dated
as of the Effective Date, by and among the Tensar Parties party thereto, the First Lien Secured
Party and the First Lien Agent as the same may be amended, supplemented, modified, renewed,
extended or Refinanced from time to time from time to time in accordance with the provisions of
this Agreement.

     “Lien” means any lien (including judgment liens and liens arising by operation of law),
mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any
agreement to give any of the foregoing, any conditional sale or other title retention agreement,
and any lease in the nature thereof) and any option, call, trust, UCC financing statement or other
preferential arrangement having the practical effect of any of the foregoing.

     “Murabaha Price” has the meaning set forth in the Commodities Purchase Agreement and the
Second Lien Commodities Purchase Agreement, as applicable.

     “Obligations” means any and all obligations of every nature of each Grantor from time to time
owed to any First Lien Claimholder, Second Lien Claimholder or any of them or their respective
Affiliates under the First Lien Lease/Purchase Facilities Documents, or the Second Lien Commodities
Purchase Facility Documents, including obligations with respect to the payment of (a) any
Acquisition Cost, Murabaha Price, the Rental Rate portion of Rent, Agreed Profit, or premium on any
Financing Obligations, or any other liability, including the Rental Rate portion of Rent, Agreed
Profit or interest accruing after the filing of a petition initiating any proceeding under the
Bankruptcy Code, (b) any fees, indemnification obligations, expense reimbursement obligations or
other liabilities payable under the documentation governing any Financing Obligations, or (c) any
obligation to post cash collateral in respect of any other obligations.

     “Outstanding Amount” has the meaning set forth in Section 6.1.

     “Person”
or “Persons” means any natural person, corporation, limited liability company,
trust, joint venture, association, company, partnership, governmental authority or other entity.

     “Pledged Collateral” has the meaning set forth in Section 5.4.

     “Post-Petition Charges” means the Rental Rate portion of Rent, Agreed Profit, interest, fees,
expenses and other charges that pursuant to the First Lien Lease/Purchase Agreements or the Second
Lien Commodities Purchase Agreement, continue to accrue after the commencement of any Insolvency
or Liquidation Proceeding, whether or not such Rental Rate portion of Rent, Agreed Profit,
interest, fees, expenses

6

 

and other charges are allowed or allowable under the Bankruptcy Law or in any such Insolvency or
Liquidation Proceeding.

     “Purchase Price” has the meaning set forth in the Commodities Purchase Agreement and the
Second Lien Commodities Purchase Agreement, as applicable.

     “Recovery” has the meaning set forth in Section 6.5.

     “Refinance” means, in respect of any Financing Obligations, to refinance, extend, renew,
defease, amend, modify, supplement, restructure, replace, refund or repay, or to issue other
Financing Obligations, in exchange or replacement for, such Financing Obligations in whole or in
part. “Refinanced” and “Refinancing”
shall have correlative meanings.

     “Rent” has the meaning set forth in the Lease Agreement.

     “Rental Rate” has the meaning set forth in the Lease Agreement.

     “Second Lien Claimholders” means, at any relevant time, the holders of Second Lien Obligations
at such time, including the Second Lien Secured Party and the Second Lien Agent.

     “Second Lien Collateral” means all of the assets and property of any Grantor, whether real,
personal or mixed, and whether now owned or hereafter acquired, with respect to which a Lien is
granted as security for any Second Lien Obligations.

     “Second Lien Commodities Purchase Agreement” has the meaning set forth in the Recitals.

     “Second Lien Commodities Purchase Facility Documents” means the Second Lien Commodities
Purchase Agreement and each of the other security and other agreements, documents, and instruments
providing for or evidencing any obligation of the Tensar Parties in respect thereof and any
security granted therefor, and any other document or instrument executed or delivered at any time
in connection with the obligations of the Tensar Parties thereunder, as each may be amended,
restated, supplemented, modified, renewed, extended or Refinanced, from time to time in accordance
with the provisions of this Agreement.

     “Second Lien Guarantee and Collateral Agreement” means the Second Lien Guarantee and
Collateral Agreement, dated as of the Effective Date, by and among Tensar Holdings, Tensar, each
other Grantor, the Second Lien Agent and the Second Lien Secured Party, as amended, restated,
supplemented, modified, renewed, extended or Refinanced from time to time in accordance with the
provisions of this Agreement.

     “Second Lien Holdings Guaranty” has the meaning assigned to that term in the Recitals to this
Agreement.

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     “Second Lien Obligations” means all Obligations outstanding under the Second Lien Commodities
Purchase Agreement and the other Second Lien Commodities Purchase Facility Documents. “Second Lien
Obligations” shall include all Agreed Profit or interest accrued or accruing (or which would,
absent commencement of an Insolvency or Liquidation Proceeding, accrue) after commencement of an
Insolvency or Liquidation Proceeding in accordance with the rate specified in the relevant Second
Lien Commodities Purchase Facility Document whether or not the claim for such Agreed Profit or
interest is allowed as a claim in such Insolvency or Liquidation Proceeding.

     “Second Lien Secured Party” means TCO in its capacities as a party under the Second Lien
Commodities Purchase Facilities Documents, together with any successors or assigns in such
capacity.

     “Second Lien Security Documents” means the Second Lien Guarantee and Collateral Agreement and
all other agreements, documents and instruments pursuant to which a Lien is granted securing any
Second Lien Obligations or under which rights or remedies with respect to such Liens are governed.

     “Standstill Period” has the meaning set forth in Section 3.1 hereof.

     “Subsidiary” means, with respect to any Person (herein referred to as the “parent”), any
corporation, partnership, limited liability company, association or other entity (a) of which
securities or other ownership interests representing more than 50% of the equity or more than 50%
of the ordinary voting power or more than 50% of the general partnership interests are, at the time
any determination is being made, owned, controlled or held, or (b) that is, at the time any
determination is made, otherwise Controlled, in either case by the parent or one or more
subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.

     “TCO” has the meaning set forth in the Recitals to this Agreement.

     “Tensar” has the meaning set forth in the Recitals to this Agreement.

     “Tensar Holdings” has the meaning set forth in the Recitals to this Agreement.

     “Tensar Parties” shall mean Tensar Holdings and each of its Subsidiaries.

     “Uniform
Commercial Code” or “UCC” means the Uniform Commercial Code (or any similar or
equivalent legislation) as in effect in any applicable jurisdiction.

     1.2 Terms Generally. The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun
shall include the corresponding masculine, feminine and neuter forms. The words “include”,
“includes” and “including” shall be deemed to be followed by the phrase “without limitation.” The
word “will” shall be construed to have the same meaning and

8

 

effect as the word “shall”. Unless the context requires otherwise (a) any definition of or
reference to any agreement, instrument or other document herein shall be construed as referring to
such agreement, instrument or other document as from time to time amended, supplemented or
otherwise modified, (b) any reference herein to any Person shall be construed to include such
Person’s successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and words of
similar import, shall be construed to refer to this Agreement in its entirety and not to any
particular provision hereof, (d) all references herein to Exhibits or Sections shall be construed
to refer to Exhibits or Sections of this Agreement and (e) the words “asset” and “property” shall
be construed to have the same meaning and effect and to refer to any and all tangible and
intangible assets and properties, including cash, securities, accounts and contract rights.

     SECTION 2. Lien Priorities.

     2.1
Relative Priorities. Notwithstanding the date, time, method, manner or order of
grant, attachment or perfection of any Liens securing the Second Lien Obligations granted on the
Collateral or of any Liens securing the First Lien Obligations granted on the Collateral and
notwithstanding any provision of the UCC, or any other applicable law or the Second Lien
Commodities Purchase Facility Documents (other than this Agreement) or any defect or deficiencies
in, or failure to perfect or lapse in perfection of, the Liens securing the First Lien Obligations
or any other circumstance whatsoever, the Second Lien Secured Party, on behalf of itself and the
Second Lien Claimholders, hereby agrees that: (a) any Lien on the Collateral securing any First
Lien Obligations now or hereafter held by or on behalf of the First Lien Secured Party or any
First Lien Claimholders or any agent or trustee therefor, regardless of how acquired, whether by
grant, possession, statute, operation of law, subrogation or otherwise, shall be senior in all
respects and prior to any Lien on the Collateral securing any of the Second Lien Obligations; and
(b) any Lien on the Collateral securing any Second Lien Obligations now or hereafter held by or
on behalf of the Second Lien Secured Party, any Second Lien Claimholders or any agent or trustee
therefor regardless of how acquired, whether by grant, possession, statute, operation of law,
subrogation or otherwise, shall be junior and subordinate in all respects to all Liens on the
Collateral securing any First Lien Obligations. All Liens on the Collateral securing any First
Lien Obligations shall be and remain senior in all respects and prior to all Liens on the
Collateral securing any Second Lien Obligations for all purposes, whether or not such Liens
securing any First Lien Obligations are subordinated to any Lien securing any other obligation of
Tensar, any other Grantor or any other Person.

     2.2 Prohibition on Contesting Liens. Each of the Second Lien Secured Party, for
itself and on behalf of each Second Lien Claimholdcr, and the First Lien Secured Party, for itself
and on behalf of each First Lien Claimholder, agrees that it will not (and hereby waives any right
to) contest or support any other Person in contesting, in any proceeding (including any Insolvency
or Liquidation Proceeding), the priority, validity, perfection or enforceability of any Lien held
by or on behalf of any of the First Lien Claimholders in the First Lien Collateral or by or on
behalf of any of the Second Lien Claimholders in the Second Lien Collateral, as the case may be,
or the provisions of this Agreement; provided that nothing in this Agreement shall be
construed to prevent or

9

 

impair the rights of the First Lien Secured Party or any First Lien Claimholder to enforce
this Agreement, including the provisions of this Agreement relating to the priority of the Liens
securing the First Lien Obligations as provided in Sections 2.1 and 3.1.

     2.3 No New Liens. So long as the Discharge of First Lien Obligations has not
occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against
Tensar or any other Grantor, the parties hereto agree that Tensar Holdings and Tensar shall not,
and shall not permit any other Grantor to (a) grant or permit any additional Liens on any asset or
property to secure any Second Lien Obligation unless it has granted or concurrently grants a Lien
on such asset or property to secure the First Lien Obligations or (b) grant or permit any
additional Liens on any asset or property to secure any First Lien Obligations unless it has
granted or concurrently grants a Lien on such asset or property to secure the Second Lien
Obligations. To the extent that the foregoing provisions are not complied with for any reason,
without limiting any other rights and remedies available to the First Lien Secured Party and/or
the First Lien Claimholders, the Second Lien Secured Party, on behalf of Second Lien
Claimholders, agrees that any amounts received by or distributed to any of them pursuant to or as
a result of Liens granted in contravention of this Section 2.3 shall be subject to Section 4.2.

     2.4 Similar Liens and Agreements. The parties hereto agree that it is their intention
that the First Lien Collateral and the Second Lien Collateral be identical. In furtherance of the
foregoing and of Section 8.9, the parties hereto agree, subject to the other provisions of this
Agreement:

          (a) upon request by the First Lien Secured Party or the Second Lien Secured Party, to
cooperate in good faith (and to direct their counsel to cooperate in good faith) from time to time
in order to determine the specific items included in the First Lien Collateral and the Second Lien
Collateral and the steps taken to perfect their respective Liens thereon and the identity of the
respective parties obligated under the First Lien Lease/Purchase Facilities Documents and the
Second Lien Commodities Purchase Facility Documents; and

          (b) that the documents and agreements creating or evidencing the First Lien Collateral and
the Second Lien Collateral and guarantees for the First Lien Obligations and the Second Lien
Obligations shall be in all material respects the same forms of documents other than with respect
to the first lien and the second lien nature of the Obligations thereunder.

     SECTION
3. Enforcement.

     3.1 Exercise of Rights and Remedies.

          (a) Until the Discharge of First Lien Obligations has occurred, whether or not any
Insolvency or Liquidation Proceeding has been commenced by or against Tensar or any other Grantor,
the Second Lien Secured Party and the Second Lien Claimholders:

10

 

          (i) will not exercise or seek to exercise any rights or remedies (including
setoff, the right to credit bid their debt and any actions as agent or in connection with
the exercise of rights pursuant to a power of attorney or otherwise) with respect to any
Collateral or institute any action or proceeding with respect to such rights or remedies
(including any action of foreclosure); provided that if an Event of Default (as
defined in the Second Lien Commodities Purchase Agreement (as in effect on the date
hereof)) has occurred and for so long as such Event of Default is continuing, subject at
all times to the provisions of Sections 2.1 and 4, after expiration of a 120-day period
(the “Standstill Period”) which shall commence on the date of receipt by the First Lien
Secured Party of the written declaration of the Second Lien Secured Party of such Event of
Default and written demand by the Second Lien Secured Party to Tensar for the accelerated
payment of all Second Lien Obligations (unless Tensar or any other Grantor is subject to
an Insolvency or Liquidation Proceeding by reason of which such declaration and the making
of such demand is stayed, in which case, commencing on the date of the commencement of
such Insolvency or Liquidation Proceeding), the Second Lien Secured Party may take action
to enforce its Liens on the Second Lien Collateral (including the institution of any
action or proceeding with respect to its rights or remedies with respect to any Second
Lien Collateral) upon prior written notice to Tensar and the First Lien Secured Party, but
only so long as the First Lien Secured Party is not diligently pursuing in good faith the
exercise of its enforcement rights or remedies against, or diligently attempting to vacate
any stay or enforcement of its Liens on, all or any material portion of the Collateral;

          (ii) will not contest, protest or object to any foreclosure proceeding or action
brought by the First Lien Secured Party or any First Lien Claimholder or any other
exercise by the First Lien Secured Party or any First Lien Claimholder of any rights and
remedies relating to the First Lien Collateral or otherwise; or

          (iii) subject to their rights under clause (a)(i) above, will not object to the
forbearance by the First Lien Secured Party or the First Lien Claimholders from bringing
or pursuing any foreclosure proceeding or action or any other exercise of any rights or
remedies relating to the First Lien Collateral.

          (b) Until the Discharge of First Lien Obligations has occurred, whether or not any Insolvency
or Liquidation Proceeding has been commenced by or against Tensar or any other Grantor, subject to
Section 3.1(a)(i), the First Lien Secured Party and the First Lien Claimholders shall have the
exclusive right to enforce rights, exercise remedies (including set-off and the right to credit bid
their debt) and make determinations regarding the release, disposition, or restrictions with
respect to the Collateral without any consultation with or the consent of the Second Lien Secured
Party or any Second Lien Claimholder. In exercising rights and remedies with respect to the
Collateral, the First Lien Secured Party and the First Lien Claimholders may enforce the provisions
of the First Lien Lease/Purchase Facilities Documents and exercise remedies thereunder, all in such
order and in such manner as they may determine in the exercise of

11

 

their sole discretion. Such exercise and enforcement shall include the rights of an agent
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 creditor under the UCC and of a secured creditor under Bankruptcy Laws of any applicable
jurisdiction.

          (c) Notwithstanding the foregoing, the Second Lien Secured Party and any Second Lien
Claimholder may:

          (i) file a claim or statement of interest with respect to
the Second Lien Obligations; provided that an Insolvency or Liquidation
Proceeding has been commenced by or against Tensar or any other Grantor;

          (ii) take any action (not adverse to the priority status of the Liens on the
Collateral securing the First Lien Obligations, or the rights of any First Lien Secured
Party or the First Lien Claimholders to exercise remedies in respect thereof) in order to
create, perfect, preserve or protect its Lien on the Collateral;

          (iii) file any necessary responsive or defensive pleadings in opposition to any
motion, claim, adversary proceeding or other pleading made by any Person objecting to or
otherwise seeking the disallowance of the claims of the Second Lien Claimholders, including
any claims secured by the Collateral, if any, in each case in accordance with the terms of
this Agreement;

          (iv) vote on any plan of reorganization, file any proof of claim, make other filings
and make any arguments and motions that are, in each case, in accordance with the terms of
this Agreement, with respect to the Second Lien Obligations and the Collateral;

          (v) (i) may impose a late payment at the Default Rate, as described in Section 3.1 of
the Second Commodities Purchase Agreement and (ii) may demand accelerated payment of any
and all of the Second Lien Obligations and may file and pursue any lawsuit to collect the
Second Lien Obligations to the extent that such demand, filing, and pursuit would be
remedies available to any unsecured creditor of Tensar;

          (vi) exercise any of its rights or remedies with respect to the Collateral after the
termination of the Standstill Period to the extent permitted by Section 3.l(a)(i); and

          (vii) present a cash bid at any Section 363 hearing or with respect to any other
Collateral disposition.

         The Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders, agrees
that it will not take or receive any Collateral or any proceeds of Collateral in connection with
the exercise of any right or remedy (including set-off) with respect to any Collateral in its
capacity as a creditor, unless and until the Discharge of

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First Lien Obligations has occurred, except as expressly provided in Section 3.1(a)(i). Without
limiting the generality of the foregoing, unless and until the Discharge of First Lien Obligations
has occurred, except as expressly provided in Section 3.1(a), Section 6.3(b) and this Section
3.1(c), the sole right of the Second Lien Secured Party and the Second Lien Claimholders with
respect to the Collateral is to hold a Lien on the Collateral pursuant to the Second Lien Security
Documents for the period and to the extent granted therein and to receive a share of the proceeds
thereof, if any, after the Discharge of First Lien Obligations has occurred as set forth herein.

          (d) Subject to Sections 3.1(a) and (c) and Section 6.3(b):

          (i) the Second Lien Secured Party, for itself and on behalf of the Second Lien
Claimholders, agrees that the Second Lien Secured Party and the Second Lien Claimholders
will not take any action that would hinder any exercise of remedies under the First Lien
Lease/Purchase Facilities Documents or is otherwise prohibited hereunder, including any
sale, lease, exchange, transfer or other disposition of the Collateral, whether by
foreclosure or otherwise;

          (ii) the Second Lien Secured Party, for itself and on behalf of the Second Lien
Claimholders, hereby waives any and all rights it or the Second Lien Claimholders may have
as a junior lien creditor or otherwise to object to the manner in which the First Lien
Secured Party or the First Lien Claimholders seek to enforce or collect the First Lien
Obligations or the Liens securing the First Lien Obligations granted in any of the First
Lien Collateral undertaken in accordance with this Agreement, regardless of whether any
action or failure to act by or on behalf of the First Lien Secured Party or First Lien
Claimholders is adverse to the interest of the Second Lien Claimholders; and

          (iii) the Second Lien Secured Party hereby acknowledges and agrees that no covenant,
agreement or restriction contained in the Second Lien Security Documents or any other
Second Lien Commodities Purchase Facility Document (other than this Agreement) shall be
deemed to restrict in any way the rights and remedies of the First Lien Secured Party or
the First Lien Claimholders with respect to the Collateral as set forth in this Agreement
and the First Lien Lease/Purchase Facilities Documents.

          (e) Except as otherwise specifically set forth in Sections 3.1(a) and (d), the Second Lien
Secured Party and the Second Lien Claimholders may exercise rights and remedies as unsecured
creditors against Tensar or any other Grantor that has guaranteed or granted Liens to secure the
Second Lien Obligations in accordance with the terms of the Second Lien Commodities Purchase
Facility Documents and applicable law (including, without limitation, filing any pleadings,
objections, motions or agreements in connection therewith); provided that in the event
that any Second Lien Claimholder becomes a judgment Lien creditor in respect of any Collateral as
a result of its enforcement of its rights as an unsecured creditor with respect to the Second Lien
Obligations, such judgment Lien shall be subject to the terms of this Agreement for all

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purposes (including in relation to the First Lien Obligations) as the other Liens securing the
Second Lien Obligations are subject to this Agreement.

          (f) Except as specifically set forth in Sections 3.1(a) and (d) and Section 4, nothing in
this Agreement shall prohibit the receipt by the Second Lien Secured Party or any Second Lien
Claimholders of the required payments of Murabaha Price, Agreed Profit and other amounts owed in
respect of the Second Lien Obligations so long as such receipt is not the direct or indirect
result of the exercise by the Second Lien Secured Party or any Second Lien Claimholders of rights
or remedies as a secured creditor (including set-off) or enforcement in contravention of this
Agreement of any Lien held by any of them. Nothing in this Agreement impairs or otherwise
adversely affects any rights or remedies the First Lien Secured Party or the First Lien
Claimholders may have with respect to the First Lien Collateral.

     3.2
Actions Upon Breach. If any Second Lien Claimholder, in contravention of the
terms of this Agreement, in any way takes, attempts to or threatens to take any action with
respect to the Collateral (including any attempt to realize upon or enforce any remedy with
respect to this Agreement), or fails to take any action required by this Agreement, this Agreement
shall create an irrebutable presumption and admission by such Second Lien Claimholder that relief
against such Second Lien Claimholder by injunction, specific performance and/or other appropriate
equitable relief is necessary to prevent irreparable harm to the First Lien Claimholders, it being
understood and agreed by the Second Lien Secured Party on behalf of each Second Lien Claimholder
that (i) the First Lien Claimholders’ damages from its actions may at that time be difficult to
ascertain and may be irreparable, and (ii) each Second Lien Claimholder waives any defense that
the First Lien Claimholders cannot demonstrate damage and/or be made whole by the awarding of
damages.

     SECTION
4. Payments.

     4.1
Application of Proceeds. So long as the Discharge of First Lien
Obligations has not occurred, whether or not any Insolvency or Liquidation Proceeding has been
commenced by or against Tensar or any other Grantor, any Collateral or proceeds thereof received
in connection with the sale or other disposition of, or collection on, such Collateral upon the
exercise of remedies shall be applied by the First Lien Secured Party to the First Lien
Obligations then due and owing in such order as specified in the relevant First Lien
Lease/Purchase Facilities Documents. Upon the Discharge of the First Lien Obligations, the First
Lien Secured Party shall deliver to the Second Lien Secured Party any Collateral and proceeds of
Collateral held by it in the same form as received, with any necessary endorsements or as a court
of competent jurisdiction may otherwise direct to be applied by the Second Lien Secured Party to
the Second Lien Obligations.

     4.2
Payments Over. So long as the Discharge of First Lien Obligations has not
occurred, whether or not any Insolvency or Liquidation Proceeding has been commenced by or against
Tensar or any other Grantor, any Collateral or proceeds thereof (together with assets or proceeds
subject to Liens referred to in the final sentence of

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Section 2.3) received by the Second Lien Secured Party or any Second Lien Claimholders in
connection with the exercise of any right or remedy (including set-off or recoupment) relating to
the Collateral in contravention of this Agreement shall be segregated and held in trust and
forthwith paid over to the First Lien Secured Party for the benefit of the First Lien Claimholders
in the same form as received, with any necessary endorsements or as a court of competent
jurisdiction may otherwise direct. The First Lien Secured Party is hereby authorized to make any
such endorsements as agent for the Second Lien Secured Party or any such Second Lien Claimholders.
This authorization is coupled with an interest and is irrevocable until the Discharge of First
Lien Obligations. So long as the Discharge of First Lien Obligations has not occurred, if in any
Insolvency or Liquidation Proceeding the Second Lien Secured Party or any Second Lien Claimholders
shall receive any distribution of money or other property in respect of the Collateral, such money
or other property shall be segregated and held in trust and forthwith paid over to the First Lien
Secured Party for the benefit of the First Lien Claimholders in the same form as received, with
any necessary endorsements. Any Lien received by the Second Lien Secured Party or any Second Lien
Claimholders in any Insolvency or Liquidation Proceeding shall be subject to the terms of this
Agreement.

     4.3
Certain Agreements with respect to Unenforceable Collateral. In addition to the
rights and obligations of the First Lien Secured Party, the Second Lien Secured Party, the First
Lien Claimholders and Second Lien Claimholders set forth herein, in the event that in any
Insolvency or Liquidation Proceeding a determination is made that Liens encumbering any Collateral
are not enforceable for any reason, then the Second Lien Secured Party and the Second Lien
Claimholders agree that any distribution or recovery they may receive with respect to, or
allocable to, the value of such Collateral or any proceeds thereof shall (for so long as the
Discharge of the First Lien Obligations has not occurred) be segregated and held in trust and
forthwith paid over to the First Lien Secured Party for the benefit of the First Lien Claimholders
in the same form as received without recourse, representation or warranty (other than a
representation of the Second Lien Secured Party that it has not otherwise sold, assigned,
transferred or pledged any right, title or interest in and to such distribution or recovery) but
with any necessary endorsements or as a court of competent jurisdiction may otherwise direct until
such time as the Discharge of First Lien Obligations has occurred. The First Lien Secured Party is
hereby authorized to make any such endorsements as agent for the Second Lien Secured Party and any
such Second Lien Claimholders. This authorization is coupled with an interest and is irrevocable.

     SECTION
5. Other Agreements.

     5.1
Releases.

          (a) If in connection with any sale, lease, exchange, transfer or other disposition of any
Collateral (collectively, a “Disposition”) occurring in connection with the exercise of the First
Lien Secured Party’s rights and remedies in respect of the Collateral, the First Lien Secured
Party, for itself or on behalf of any of the First Lien Claimholders, releases any of its Liens on
any part of the Collateral, then the Liens, if any, of the Second Lien Secured Party, for itself or
for the benefit of the Second Lien

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Claimholders, on such Collateral shall be automatically, unconditionally and simultaneously
released; provided that such exercise is taken in good faith and the Liens of the Second Lien
Claimholders attach to the proceeds thereof, subject to the provisions of Section 2 and 4 hereof.
The Second Lien Secured Party for itself or on behalf of any such Second Lien Claimholders,
promptly shall execute and deliver to the First Lien Agent or such Guarantor Subsidiary such
termination statements, releases and other documents as the First Lien Secured Party or such
Guarantor Subsidiary may request to effectively confirm such release.

          (b) Subject to Section 5.1(e), if in connection with any Disposition
permitted under the terms of both the First Lien Lease/Purchase Facilities Documents and the
Second Lien Commodities Purchase Facility Documents (other than in connection with the exercise of
the First Lien Secured Party’s rights and remedies in respect of the Collateral provided for in
Section 3.1), the First Lien Secured Party, for itself or on behalf of any of the First Lien
Claimholders, releases any of its Liens on any part of the Collateral, other than (A) in
connection with the Discharge of First Lien Obligations and (B) after the occurrence and during
the continuance of any Event of Default under the Second Lien Commodities Purchase Agreement, then
the Liens, if any, of the Second Lien Secured Party, for itself or for the benefit of the Second
Lien Claimholders, on such Collateral shall be released simultaneously upon notice of such
Disposition to the Second Lien Secured Party and the Second Lien Agent. The Second Lien Secured
Party, for itself or on behalf of any such Second Lien Claimholders, promptly shall execute and
deliver to the First Lien Secured Party or such Guarantor Subsidiary such termination statements,
releases and other documents as the First Lien Secured Party or such Grantor may request to
effectively confirm such release; provided, however, that any such release shall not
be effective until such Disposition is consummated and shall not extend to the proceeds
thereof. For avoidance of doubt, the exercise of the First Lien Secured Party’s remedies in
respect of the Collateral shall not constitute a Disposition but instead shall be governed by
Section 5.1(a) above.

          (c) Until the Discharge of First Lien Obligations occurs, the Second Lien Secured Party, for
itself and on behalf of the Second Lien Claimholders, hereby irrevocably constitutes and appoints
the First Lien Secured Party and any officer or agent of the First Lien Secured Party, 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 Lien Secured Party or such holder or in the First
Lien Secured Party’s own name, from time to time in the First Lien Secured Party’s discretion, for
the purpose of carrying out the terms of this Section 5.1, to take any and all appropriate action
and to execute any and all documents and instruments which may be necessary to accomplish the
purposes of this Section 5.1, including any endorsements or other instruments of transfer or
release.

          (d) Until the Discharge of First Lien Obligations occurs, to the extent that the First Lien
Secured Party or the First Lien Claimholders (i) have released any Lien on Collateral or any
Guarantor Subsidiary from its obligation under its guaranty and any such Liens or guaranty are
later reinstated or (ii) obtain any new liens or additional guarantees from any Guarantor
Subsidiary, then the Second Lien Secured

16

 

Party, for itself and for the Second Lien Claimholders, shall be granted a Lien on any such
Collateral, subject to the lien subordination provisions of this Agreement, and an additional
guaranty, as the case may be.

          (e) In the event that the stated amount of funded First Lien Obligations plus the
aggregate stated amount of unused commitments under the Commodities Purchase Agreement
(collectively, the “First Lien Obligations Amount”), at any date of determination no longer
constitute at least 25% of the sum of (i) the First Lien Obligations Amount and (ii) the stated
amount of funded Second Lien Obligations (collectively, the “Second Lien Obligations Amount”), then
any release provided for in Section 5.1(b) above (except for releases given in connection with a
Disposition permitted under the First Lien Lease/Purchase Facilities Documents and the Second Lien
Commodities Purchase Facility Documents) shall require the consent of (i) First Lien Claimholders
representing in the aggregate more than 50% of the First Lien Obligations Amount and (ii) the
Second Lien Agent.

     5.2 Insurance. Unless and until the Discharge of First Lien Obligations has
occurred, the First Lien Secured Party and the First Lien Claimholders shall have the sole and
exclusive right, subject to the rights of the Grantor under the First Lien Lease/Purchase
Facilities Documents, to adjust settlement for any insurance policy covering the Collateral in the
event of any loss thereunder and to approve any award granted in any condemnation or similar
proceeding (or any deed in lieu of condemnation) affecting the Collateral. Unless and until the
Discharge of First Lien Obligations has occurred, and subject to the rights of the Grantors under
the First Lien Lease/Purchase Facilities Documents, all proceeds of any such policy and any such
award (or any payments with respect to a deed in lieu of condemnation) if in respect of the
Collateral shall be paid to the First Lien Secured Party for the benefit of the First Lien
Claimholders pursuant to the terms of the First Lien Lease/Purchase Facilities Documents
(including for purposes of cash collateralization of letters of credit) and thereafter, to the
extent no First Lien Obligations are outstanding, and subject to the rights of the Grantors under
the Second Lien Commodities Purchase Facility Documents, to the Second Lien Secured Party for the
benefit of the Second Lien Claimholders to the extent required under the Second Lien Security
Documents and then, to the extent no Second Lien Obligations are outstanding, to the owner of the
subject property, such other Person as may be entitled thereto or as a court of competent
jurisdiction may otherwise direct. Until the Discharge of First Lien Obligations has occurred, if
the Second Lien Secured Party or any Second Lien Claimholders shall, at any time, receive any
proceeds of any such insurance policy or any such award or payment in contravention of this
Agreement, it shall pay such proceeds over to the First Lien Secured Party in accordance with the
terms of Section 4.2.

     5.3 Amendments to First Lien Lease/Purchase Facilities Documents and Second Lien
Commodities Purchase Facility Documents.

          (a) The First Lien Lease/Purchase Facilities Documents may be amended, supplemented or
otherwise modified in accordance with their terms and the First Lien Lease/Purchase Agreements may
be Refinanced, in each case, without notice to, or the consent of, the Second Lien Secured Party or
the Second Lien Claimholders, all

17

 

without
affecting the lien subordination or other provisions of this
Agreement; provided,
however, that (x) the holders of such Refinancing debt bind themselves to the terms of this
Agreement in a writing addressed to the Second Lien Secured Party and the Second Lien Claimholders
and (y) any such amendment, supplement, modification or Refinancing shall not:

          (i) contravene the provisions of this Agreement;

          (ii) increase the sum of the then outstanding aggregate stated amount of Acquisition
Cost and Purchase Price under the First Lien Lease/Purchase Agreements plus any
unused portion of commitments under the Commodities Purchase Agreement in excess of $
182,000,000 less any payments in respect of Acquisition Cost and/or permanent reductions
in commitment with respect to the Commodities Purchase Agreement, in  each case, under the
First Lien Lease/Purchase Agreements (the “Cap Amount”);

          (iii) increase the “Rental Rate”, “Agreed Profit” or similar component of rent or
profit by more than 3.00% per annum (excluding increases resulting from the accrual of
rent or profit at the default rate);

          (iv) permit the release of liens on Collateral in a manner not contemplated by the
First Lien Lease/Purchase Facilities Documents;

          (v) extend the scheduled maturity of the Lease Agreement, the Commodities Purchase
Agreement or any Refinancing thereof beyond the scheduled maturity of the Second Lien
Commodities Purchase Agreement or any permitted Refinancing thereof;

          (vi) modify (or have the effect of a modification of) the mandatory prepayment
provisions of the Lease Agreement or the Commodities Purchase Agreement in a manner
adverse to the holders of Second Lien Obligations; or

          (vii) result in the First Lien Secured Party being a different Person than the Second
Lien Secured Party.

          (b) The Second Lien Commodities Purchase Facility Documents may be amended, supplemented or
otherwise modified in accordance with their terms and the Second Lien Commodities Purchase
Agreement may be Refinanced, in each case, without notice to, or the consent of, the First Lien
Agent or the First Lien Claimholders, all without affecting the lien subordination or other
provisions of this Agreement; provided, however, that (x) the holders of such Refinancing debt
bind themselves to the terms of this Agreement in a writing addressed to the First Lien Agent and
the First Lien Claimholders and (y) any such amendment, supplement, modification or Refinancing
shall not:

          (i) contravene the provisions of this Agreement;

18

 

          (ii) increase the then outstanding stated amount of the aggregate outstanding Purchase
Price under the Second Lien Commodities Purchase Facility;

          (iii) increase the “Agreed Profit” or similar component of profit under the Second Lien
Commodities Purchase Facility by more than 3.00% per annum (excluding increases resulting from the
accrual of rent or profit at the default rate);

          (iv) change (to earlier dates) any dates upon which payments of Purchase Price or Agreed
Profit, each case, under the Second Lien Commodities Purchase Facility are due thereon;

          (v) change any default or Event of Default thereunder in a manner adverse to the Tensar
Parties thereunder;

          (vi) change the redemption, prepayment or defeasance provisions thereof (except in order to
duplicate any amendments, supplements or other modifications to the First Lien Lease/Purchase
Facilities Documents);

          (vii) change any collateral therefor (other than to release such collateral and to duplicate
any amendments, supplements or other modifications to the First Lien :Lease/Purchase Facilities
Documents); or

          (viii) result in the First Lien Secured Party being a different Person than the
Second Lien Secured Party.

          (ix) increase the obligations of the Tensar Parties thereunder or confer any additional
rights on the holders of Second Lien Obligations which would be adverse to the holders of First
Lien Obligations.

           The Second Lien Obligations may only be Refinanced

               (1) if the terms and conditions of such
Refinancing are no less favorable in the aggregate to the Tensar Parties and to the First
Lien Claimholders than the terms and conditions of the Second Lien Commodities Purchase
Agreement (as determined in the reasonable opinion of the First Lien Secured Party, acting
on behalf of itself and the other First Lien Claimholders),

               (2) if the outstanding aggregate stated
amount of the aggregate outstanding Purchase Price thereunder is not increased and the
average life to maturity thereof is greater than or equal to that of the Purchase Price under
the Second Lien Commodities Purchase Agreement, and

               (3) if all other terms and provisions of such Refinancing are reasonably acceptable to
the First Lien Secured

19

 

Party, the Second Lien Secured Party is the same Person as the First Lien Secured
Party and any other holder of Second Lien Obligations binds themselves in a
writing addressed to the First Lien Secured Party and the First Lien Claimholders
to the terms of this Agreement.

          (c) Each of Tensar Holdings and Tensar agree that each Second Lien Security Document shall
include the following language (or language to similar effect approved by the First Lien Secured
Party):

“Notwithstanding anything herein to the contrary, the lien and security interest
granted to the Second Lien Secured Party pursuant to this Agreement and the
exercise of any right or remedy by the Second Lien Secured Party hereunder are
subject to the provisions of the Tensar Intercreditor Agreement, dated as of
October 31, 2005 (as amended, restated, supplemented or otherwise modified from
time to time, the “Intercreditor Agreement”), among Tensar Holdings, Inc., The
Tensar Corporation LLC, TCO Funding Corp., Credit Suisse, as First Lien Agent, and
American Capital Financial Services, Inc., as Second Lien Agent, and certain other
Persons party or that may become party thereto from time to time. In the event of
any conflict between the terms of the Intercreditor Agreement and this Agreement,
the terms of the Intercreditor Agreement shall govern and control.”

          (d) In the event that the First Lien Secured Party or any First Lien Claimholders and the
relevant Grantor enter into any amendment, waiver or consent in respect of any of the First Lien
Security Documents for the purpose of adding to, or deleting from, or waiving or consenting to any
departures from any provisions of, any First Lien Security Document or changing in any manner the
rights of the First Lien Secured Party, such First Lien Claimholders, Tensar or any other Grantor
thereunder, then such amendment, waiver or consent shall apply automatically to any comparable
provision of the Comparable Second Lien Security Document without the consent of the Second Lien
Secured Party or the Second Lien Claimholders and without any action by the Second Lien
Secured Party, Tensar or any other Grantor, provided that:

          (i) no such amendment, waiver or consent shall have the
effect of: (A) removing or releasing assets subject to the Lien of the Second Lien Security
Documents, except to the extent that a release of such Lien is permitted or required by
Section 5.1 and provided that there is a corresponding release of such Lien
securing the First Lien Obligations; (B) imposing duties on the Second Lien Secured Party
without its consent; (C) permitting other Liens on the Collateral not permitted under the
terms of the Second Lien Commodities Purchase Facilities Documents or Section 6; or (D)
being prejudicial to the interests of the Second Lien Claimholders to a greater extent than
the First Lien Claimholders; and

          (ii) notice of such amendment, waiver or consent shall have been given to the Second
Lien Claimholders and the Second Lien Secured

20

 

Party within ten Business Days after the Effective Date of such amendment, waiver or
consent.

          (e) Notwithstanding the foregoing provisions of this Section 5.3, amendments, waivers,
consents, supplements and other modifications to or in respect of this Agreement shall be governed
by Section 8.3.

     5.4 Bailee for Perfection.

          (a) The First Lien Secured Party agrees to hold that part of the Collateral that is in its
possession or control (or in the possession or control of its agents or bailees) to the extent
that possession or control thereof is taken to perfect a Lien thereon under the UCC (such
Collateral being the “Pledged Collateral”) as collateral agent for the First Lien Claimholders and
as bailee on behalf of or for the benefit of the Second Lien Secured Party (such bailment being
intended, among other things, to satisfy the requirements of
Sections 8-106(d)(3), 8-301(a)(2) and 9-313(c) of the UCC) and any assignee solely for the purpose of perfecting by possession or
delivery the security interest granted under the First Lien Lease/Purchase Facilities Documents
and the Second Lien Commodities Purchase Facilities Documents, respectively, subject to the terms
and conditions of this Section 5.4.

          (b) The First Lien Secured Party shall have no obligation whatsoever to the First Lien
Claimholders, the Second Lien Secured Party or any Second Lien Claimholder to ensure that the
Pledged Collateral is genuine or owned by any of the Grantors or to preserve rights or benefits of
any Person except as expressly set forth in this Section 5.4. The duties or responsibilities of
the First Lien Secured Party under this Section 5.4 shall be limited solely to holding the Pledged
Collateral as bailee in accordance with this Section 5.4 and delivering the Pledged Collateral
upon a Discharge of First Lien Obligations as provided in paragraph (d) below.

          (c) The First Lien Secured Party acting pursuant to this Section 5.4 shall not have by reason
of the First Lien Security Documents, the Second Lien Security Documents, this Agreement or any
other document a fiduciary relationship in respect of any Tensar Party, the First Lien
Claimholders, the Second Lien Secured Party or any Second Lien Claimholder.

          (d) Upon the Discharge of First Lien Obligations, the First Lien Secured Party shall deliver
the remaining Pledged Collateral (if any) together with any necessary endorsements, first,
to the Second Lien Secured Party to the extent Second Lien Obligations remain outstanding, and
second, to Tensar or any other applicable Grantor to the extent no First Lien Obligations
or Second Lien Obligations remain outstanding (in each case, so as to allow such Person to obtain
possession or control of such Pledged Collateral). The First Lien Secured Party further
agrees in such circumstances to take all other action reasonably requested by the Second Lien
Secured Party in connection with the Second Lien Secured Party obtaining a first-priority interest
in the Collateral or as a court of competent jurisdiction may otherwise direct.

21

 

     5.5 When Discharge of First Lien Obligations Deemed to Not Have Occurred. If, at any
time after the Discharge of First Lien Obligations has occurred, but prior to the expiration of 10
Business Days after the consummation of such discharge, Tensar or any Grantor enters into any
Refinancing of any First Lien Lease/Purchase Facilities Document evidencing a First Lien
Obligation which Refinancing is permitted pursuant to Section 5.3(a)(ii) and 5.3(a)(v), then such
Discharge of First Lien Obligations shall automatically be deemed not to have occurred for all
purposes of this Agreement (other than with respect to any actions taken as a result of the
occurrence of such first Discharge of First Lien Obligations), and, from and after the date on
which written notice thereof is delivered to the Second Lien Secured Party in, the obligations
under such Refinancing of the First Lien Lease/Purchase Facilities Document shall automatically be
treated as First Lien Obligations for all purposes of this Agreement, including for purposes of
the Lien priorities and rights in respect of Collateral set forth herein. If the new First Lien
Obligations under the new First Lien Lease/Purchase Facilities Documents are secured by assets of
any Tensar Party that do not also secure the Second Lien Obligations, then the Second Lien
Obligations shall be secured at such time by a second priority Lien on such assets to the same
extent provided in the Second Lien Security Documents and this Agreement.

     SECTION 6. Insolvency or Liquidation Proceedings.

     6.1 Finance and Sale Issues. Until the Discharge of First Lien Obligations has
occurred, if Tensar or any other Grantor shall be subject to any Insolvency or Liquidation
Proceeding and the First Lien Secured Party shall desire to permit the use of “Cash Collateral” (as
such term is defined in Section 363(a) of the Bankruptcy Code), on which the First Lien Secured
Party or any other creditor has a Lien or to permit Tensar or any other Grantor to obtain
financing, whether from the First Lien Claimholders or any other Person under Section 364 of the
Bankruptcy Code or any similar Bankruptcy Law (“DIP Financing”), then the Second Lien Secured
Party, on behalf of itself and the Second Lien Claimholders, agrees that it will raise no objection
to such Cash Collateral use or DIP Financing on commercially reasonable terms and to the extent the
Liens securing the First Lien Obligations are subordinated to or pari passu with such DIP
Financing, the Second Lien Secured Party will subordinate its Liens in the Collateral to the Liens
securing such DIP Financing (and all Obligations relating thereto) and will not request adequate
protection or any other relief in connection therewith (except, as expressly agreed by the First
Lien Secured Party or to the extent permitted by Section 6.3); provided that the sum of the
aggregate principal amount of such DIP Financing plus the aggregate outstanding stated
amount of Acquisition Cost and Purchase Price outstanding under the First Lien Lease/Purchase
Agreements and the other First Lien Lease/Purchase Facilities Documents (the “Outstanding Amount”)
does not exceed the sum of $15.0 million plus the lesser of (x) the Cap Amount and (y) the
Outstanding Amount; and provided  further that the Second Lien Secured Party and the Second
Lien Claimholders retain the right to object to any ancillary agreements or arrangements regarding
Cash Collateral use or the DIP Financing that are materially prejudicial to their interests. The
Second Lien Secured Party, on behalf of the Second Lien Claimholders,
agrees that it will not raise
any objection or oppose a motion to sell or otherwise dispose of any Collateral free and clear of
its Liens or other claims under

22

 

Section 363 of the Bankruptcy Code if the requisite First Lien Claimholders have consented to such
sale or disposition of such assets, such motion does not impair the rights of the Second Lien
Claimholders under Section 363(k) of the Bankruptcy Code, and the proceeds thereof are applied in
accordance with Sections 2 and 4.

     6.2 Relief from the Automatic Stay. Until the Discharge of First Lien Obligations has
occurred, the Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders,
agrees that none of them shall seek (or support any other Person seeking) relief from the
automatic stay or any other stay in any Insolvency or Liquidation Proceeding in respect of the
Collateral without the prior written consent of the First Lien Secured Party, unless a motion for
adequate protection permitted under Section 6.3 has been denied by the Bankruptcy Court.

     6.3 Adequate Protection.

          (a) The Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders,
agrees that none of them shall contest (or support any other Person contesting):

          (i) any request by the First Lien Secured Party or the First Lien Claimholders for
adequate protection; or

          (ii) any objection by the First Lien Secured Party or the First Lien Claimholders to
any motion, relief, action or proceeding based on the First Lien Secured Party or the First
Lien Claimholders claiming a lack of adequate protection.

          (b) Notwithstanding the foregoing provisions in this Section 6.3, in any Insolvency or
Liquidation Proceeding:

          (i) if the First Lien Claimholders (or any subset thereof)
are granted adequate protection in the form of additional collateral in connection with
any Cash Collateral use or DIP Financing, then the Second Lien Secured Party, on behalf of
itself or any of the Second Lien Claimholders, may seek or request adequate protection
solely in the form of a Lien on such additional collateral or in the form of a
superpriority claim, which Lien and claim will be subordinated to the Liens securing the
First Lien Obligations and such Cash Collateral use or DIP Financing (and all Obligations
relating thereto) on the same basis as the other Liens securing the Second Lien
Obligations are so subordinated to the Liens securing the First Lien Obligations under
this Agreement; and

          (ii) in the event the Second Lien Secured Party, on behalf of itself or any of the
Second Lien Claimholders, seeks or requests adequate protection in respect of the Second
Lien Obligations and such adequate protection is granted in the form of additional
collateral, then the Second Lien Secured Party, on behalf of itself or any of the Second
Lien Claimholders, agrees that the First Lien Secured Party shall also be granted a senior
Lien on such additional collateral as security for the First Lien Obligations and for any
Cash

23

 

Collateral
use or DIP Financing provided by the First Lien Claimholders and that any Lien
on such additional collateral securing the Second Lien Obligations shall be subordinated
to the Lien on such collateral securing the First Lien Obligations and any such DIP
Financing provided by the First Lien Claimholders (and all Obligations relating thereto)
and to any other Liens granted to the First Lien Claimholders as adequate protection on
the same basis as the other Liens securing the Second Lien Obligations are so subordinated
to such First Lien Obligations under this Agreement. Except as otherwise expressly set
forth in Section 6.1 or in connection with the exercise of remedies with respect to the
Collateral, nothing herein shall limit the rights of the Second Lien Secured Party or the
Second Lien Claimholders from seeking adequate protection with respect to their rights in
the Collateral in any Insolvency or Liquidation Proceeding (including adequate protection
in the form of a cash payment, periodic cash payments, cash payments of interest or
otherwise). Neither the First Lien Secured Party nor any First Lien Claimholder shall
contest or object to any request by the Second Lien Secured Party on behalf of the Second
Lien Claimholders for adequate protection or any objection by the Second Lien Secured
Party on behalf of the Second Lien Claimholders to any motion or action in a proceeding
claiming a lack of adequate protection so long as the requested adequate protection is in
compliance with the terms set forth above.

     6.4 No Waiver. Subject to Sections 3.1(a) and (d) and the last sentence of Section
6.3(b)(ii), nothing contained herein shall prohibit or in any way limit the First Lien Secured
Party or any First Lien Claimholder from objecting in any Insolvency or Liquidation Proceeding or
otherwise to any action taken by the Second Lien Secured Party or any of the Second Lien
Claimholders, including the seeking by the Second Lien Secured Party or any Second Lien
Claimholders of adequate protection or the asserting by the Second Lien Secured Party or any
Second Lien Claimholders of any of its rights and remedies under the Second Lien Commodities
Purchase Facility Documents or otherwise. Except as expressly set forth in this Agreement neither
the Second Lien Agent nor any Second Lien Claimholder shall be prohibited or limited from
objecting in any Insolvency or Liquidation Proceeding or otherwise to any action taken by the
First Lien Administrative Agent or any of the First Lien Claimholders.

     6.5 Avoidance Issues. If any First Lien Claimholder is required in any Insolvency
or Liquidation Proceeding or otherwise to turn over or otherwise pay to the estate of any Tensar
Party any amount paid in respect of First Lien Obligations (a
“Recovery”), then such First Lien
Claimholders shall be entitled to a reinstatement of First Lien Obligations with respect to all
such recovered amounts. If this Agreement shall have been terminated prior to such Recovery,
this Agreement shall be reinstated in full force and effect, and such prior termination shall not
diminish, release, discharge, impair or otherwise affect the obligations of the parties hereto
from such date of reinstatement.

     6.6 Reorganization Securities. If, in any Insolvency or Liquidation Proceeding,
debt obligations of the reorganized debtor secured by Liens upon any property of the reorganized
debtor are distributed pursuant to a plan of reorganization or

24

 

similar dispositive restructuring plan, both on account of First Lien Obligations and on account
of Second Lien Obligations, then, to the extent the debt obligations distributed on account of the
First Lien Obligations and on account of the Second Lien Obligations are secured by Liens upon the
same property, the provisions of this Agreement will survive the distribution of such debt
obligations pursuant to such plan and will apply with like effect to the Liens securing such debt
obligations.

     6.7 Post-Petition Charges.

          (a) Neither the Second Lien Secured Party nor any Second Lien Claimholder shall oppose or
seek to challenge any claim by the First Lien Secured Party or any First Lien Claimholder for
allowance in any Insolvency or Liquidation Proceeding of First Lien Obligations consisting of
Post-Petition Charges to the extent of the value of any First Lien Claimholder’s Lien, without
regard to the existence of the Lien of the Second Lien Secured Party on behalf of the Second Lien
Claimholders on the Collateral.

          (b) Neither the First Lien Secured Party nor any other First Lien Claimholder shall oppose or
seek to challenge any claim by the Second Lien Secured Party or any Second Lien Claimholder for
allowance in any Insolvency or Liquidation Proceeding of Second Lien Obligations consisting of
Post-Petition Charges to the extent of the value of the Lien of the Second Lien Secured Party on
behalf of the Second Lien Claimholders on the Collateral (after taking into account the First Lien
Collateral).

     6.8 Waiver. The Second Lien Secured Party, for itself and on behalf of the Second
Lien Claimholders, waives any claim it may hereafter have against any First Lien Claimholder
arising out of the election of any First Lien Claimholder of the application of Section 1111(b)(2)
of the Bankruptcy Code, and/or out of any cash collateral or financing arrangement or out of any
grant of a security interest in connection with the Collateral in any Insolvency or Liquidation
Proceeding. The First Lien Agent, for itself and on behalf of the First Lien Claimholders, waives
any claim it may hereafter have against any Second Lien Claimholder arising out of the election of
any Second Lien Claimholder of the application of Section 1111(b)(2) of the Bankruptcy Code,
and/or out of any cash collateral or financing arrangement or out of any grant of a security
interest in connection with the Collateral in any Insolvency or Liquidation Proceeding.

     6.9 Separate Grants of Security and Separate Classification. The Second Lien Secured
Party, for itself and on behalf of the Second Lien Claimholders, and the First Lien Secured Party,
for itself and on behalf of the First Lien Claimholders, acknowledge and agree that:

          (a) the grants of Liens pursuant to the First Lien Security Documents and the Second Lien
Security Documents constitute two separate and distinct grants of Liens; and

          (b) because of, among other things, their differing rights in the Collateral, the Second Lien
Obligations are fundamentally different from the First Lien

25

 

Obligations and must be separately classified in any plan of reorganization proposed or
adopted in an Insolvency or Liquidation Proceeding.

To further effectuate the intent of the parties as provided in the immediately preceding sentence,
if it is held that the claims of the First Lien Claimholders and the Second Lien Claimholders in
respect of the Collateral constitute only one secured claim (rather than separate classes of senior
and junior secured claims), then each of the parties hereto hereby acknowledges and agrees that,
(x) subject to Sections 2.1 and 4.1, all distributions shall be made as if there were separate
classes of senior and junior secured claims against the Grantors in respect of the Collateral (with
the effect being that, to the extent that the aggregate value of the Collateral exceeds the First
Lien Obligations (for this purpose ignoring all claims held by the Second Lien Claimholders), the
First Lien Claimholders shall be entitled to receive, in addition to amounts distributed to them in
respect of Acquisition Cost, Purchase Price, principal, pre-petition interest and other claims, all
amounts owing in respect of Post-Petition Charges, including any additional interest payable
pursuant to the First Lien Credit Agreement, arising from or related to a default, which is
disallowed as a claim in any Insolvency or Liquidation Proceeding) before any distribution is made
in respect of the claims held by the Second Lien Claimholders with the Second Lien Secured Party,
for itself and on behalf of the Second Lien Claimholders, and (y) the Second Lien Agent and the
Second Lien Claimholders shall turn over to the First Lien Secured Party, for itself and on behalf
of the First Lien Claimholders, amounts otherwise received or receivable by them to the extent
necessary to effectuate the intent of this sentence, even if such turnover has the effect of
reducing the claim or recovery of the Second Lien Claimholders).

     6.10 Voting. Subject to the other provisions of this Agreement, the Second Lien
Claimholders or the Second Lien Secured Party on their behalf shall retain the right to vote their
claim in an Insolvency or Liquidation Proceeding.

     SECTION 7. Reliance; Waivers; Etc.

     7.1 Reliance. Other than any reliance on the terms of this Agreement, the First Lien
Secured Party, on behalf of itself and the First Lien Claimholders under its First Lien
Lease/Purchase Facilities Documents, acknowledges that it and such First Lien Claimholders have,
independently and without reliance on the Second Lien Secured Party or any Second Lien
Claimholders, and based on documents and information deemed by them appropriate, made their own
credit analysis and decision to enter into such First Lien Lease/Purchase Facilities Documents and
be bound by the terms of this Agreement and they will continue to make their own credit decision
in taking or not taking any action under the First Lien Credit Agreement or this Agreement. Other
than any reliance on the terms of this Agreement, the Second Lien Secured Party, on behalf of
itself and the Second Lien Claimholders, acknowledges that it and the Second Lien Claimholders
have, independently and without reliance on the First Lien Secured Party or any First Lien
Claimholder, and based on documents and information deemed by them appropriate, made their own
credit analysis and decision to enter into each of the Second Lien Commodities Purchase Facility
Documents and be bound by the terms of this Agreement and they will continue to make their own
credit decision in taking or not taking any

26

 

action under the Second Lien Commodities Purchase Facility Documents or this Agreement.

     7.2 No Warranties or Liability. The First Lien Secured Party, on behalf of itself and
the First Lien Claimholders under the First Lien Lease/Purchase Facilities Documents, acknowledges
and agrees that each of the Second Lien Secured Party and the Second Lien Claimholders have made
no express or implied representation or warranty, including with respect to the execution,
validity, legality, completeness, collectibility or enforceability of any of the Second Lien
Commodities Purchase Facility Documents, the ownership of any Collateral or the perfection or
priority of any Liens thereon. Except as otherwise provided herein, the Second Lien Claimholders
will be entitled to manage and supervise their respective extensions of credit under the Second
Lien Commodities Purchase Facility Documents in accordance with law and as they may otherwise, in
their sole discretion, deem appropriate. The Second Lien Secured Party, on behalf of itself and
the Second Lien Claimholders, acknowledges and agrees that the First Lien Secured Party and the
First Lien Claimholders have made no express or implied representation or warranty, including
with respect to the execution, validity, legality, completeness, collectibility or enforceability
of any of the First Lien Lease/Purchase Facilities Documents, the ownership of any Collateral or
the perfection or priority of any Liens thereon. Except as otherwise provided herein, the First
Lien Claimholders will be entitled to manage and supervise their respective loans and extensions
of credit under their respective First Lien Lease/Purchase Facilities Documents in accordance with
law and as they may otherwise, in their sole discretion, deem appropriate. The Second Lien
Secured Party and the Second Lien Claimholders shall have no duty to the First Lien Secured Party
or any of the First Lien Claimholders, and the First Lien Secured Party and the First Lien
Claimholders shall have no duty to the Second Lien Secured Party or any of the Second Lien
Claimholders, to act or refrain from acting in a manner which allows, or results in, the
occurrence or continuance of an event of default or default under any agreements with Tensar or
any other Grantor (including the First Lien Lease/Purchase Facilities Documents and the Second
Lien Commodities Purchase Facility Documents), regardless of any knowledge thereof which they may
have or be charged with.

     7.3 No Waiver of Lien Priorities.

          (a) No right of the First Lien Claimholders, the First Lien Secured Party or any of them to
enforce any provision of this Agreement or any First Lien Lease/Purchase Facilities Document shall
at any time in any way be prejudiced or impaired by any act or failure to act on the part of
Tensar or any other Grantor or by any act or failure to act by any First Lien Claimholder or the
First Lien Secured Party, or by any noncompliance by any Person with the terms, provisions and
covenants of this Agreement, any of the First Lien Lease/Purchase Facilities Documents or any of
the Second Lien Commodities Purchase Facility Documents, regardless of any knowledge thereof
which the First Lien Secured Party or the First Lien Claimholders, or any of them, may have or be
otherwise charged with.

          (b) Without in any way limiting the generality of the foregoing paragraph (but subject to the
rights of Tensar and the other Grantors under the First Lien

27

 

Lease/Purchase Facilities Documents and subject to the provisions of Section 5.3(a)), the First
Lien Claimholders, the First Lien Secured Party and any of them may at any time and from time to
time in accordance with the First Lien Lease/Purchase Facilities Documents and/or applicable law,
without the consent of, or notice to, the Second Lien Secured Party or any Second Lien
Claimholders, without incurring any liabilities to the Second Lien Secured Party or any Second
Lien Claimholders and without impairing or releasing the Lien priorities and other benefits
provided in this Agreement (even if any right of subrogation or other right or remedy of the
Second Lien Secured Party or any Second Lien Claimholders is affected, impaired or extinguished
thereby) do any one or more of the following:

          (i) change the manner, place or terms of payment or change or extend the time of
payment of, or amend, renew, exchange, Increase or alter, the terms of any of the First
Lien Obligations or any Lien on any First Lien Collateral or guaranty thereof or any
liability of Tensar or any other Grantor or any liability incurred directly or indirectly
in respect thereof (including any increase in or extension of the First Lien Obligations,
without any restriction as to the amount, tenor or terms of any such increase or
extension) or otherwise amend, renew, exchange, extend, modify or supplement in any manner
any Liens held by the First Lien Secured Party or any of the First Lien Claimholders, the
First Lien Obligations or any of the First Lien Lease/Purchase Facilities Documents;
provided that any such increase in the First Lien Obligations shall not increase the sum
of the Financing Obligations under the First Lien Lease/Purchase Facilities Documents to
an amount in excess of the Cap Amount;

          (ii) sell, exchange, release, surrender, realize upon,
enforce or otherwise deal with in any manner and in any order any part of the First Lien
Collateral or any liability of Tensar or any other Grantor to the First Lien Claimholders
or the First Lien Secured Party, or any liability incurred directly or indirectly in
respect thereof;

          (iii) settle or compromise any First Lien Obligation or any other liability of Tensar
or any other Grantor or any security therefor or any liability incurred directly or
indirectly in respect thereof and apply any sums by whomsoever paid and however realized
to any liability (including the First Lien Obligations) in any manner or order; and

          (iv) exercise or delay in or refrain from exercising any right or remedy against
Tensar or any other Grantor or any security or any other Person, elect any remedy and
otherwise deal freely with Tensar, any other Grantor or any First Lien Collateral and any
security and any guarantor or any liability of Tensar or any other Grantor to the First
Lien Claimholders or any liability incurred directly or indirectly in respect thereof.

          (c) The Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders, also
agrees that the First Lien Claimholders and the First Lien Secured Party shall have no liability
to the Second Lien Secured Party or any Second

28

 

Lien Claimholders, and the Second Lien Secured Party, on behalf of itself and the Second Lien
Claimholders, hereby waives any claim (other than a claim for breach of contract) against any
First Lien Claimholder or the First Lien Secured Party, arising out of any and all actions which
the First Lien Claimholders or the First Lien Secured Party may take with respect to: (i) the
First Lien Lease/Purchase Facilities Documents, (ii) the collection of the First Lien Obligations
or (iii) the foreclosure upon, or sale, liquidation or other disposition of, any First Lien
Collateral. The Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders,
agrees that the First Lien Claimholders and the First Lien Secured Party have no duty to them in
respect of the maintenance or preservation of the First Lien Collateral, the First Lien
Obligations or otherwise.

          (d) Until the Discharge of First Lien Obligations, the Second Lien Secured Party, on behalf
of itself and the Second Lien Claimholders, agrees not to assert and hereby waives, to the fullest
extent permitted by law, any right to demand, request, plead or otherwise assert or otherwise
claim the benefit of, any marshalling, appraisal, valuation or other similar right (other than a
claim for breach of contract) that may otherwise be available under applicable law with respect to
the Collateral or any other similar rights a junior secured creditor may have under applicable
law.

     7.4 Obligations Unconditional. All rights, interests, agreements and obligations of
the First Lien Secured Party and the First Lien Claimholders and the Second Lien Secured Party and
the Second Lien Claimholders, respectively, hereunder shall remain in full force and effect
irrespective of:

          (a) any lack of validity or enforceability of any First Lien Lease/Purchase Facilities
Documents or any Second Lien Commodities Purchase Facility Documents;

          (b) except
as otherwise expressly set forth in this Agreement, any change in the time, manner
or place of payment of, or in any other terms of, all or any of the First Lien Obligations or
Second Lien Obligations, or any amendment or waiver or other modification, including any increase
in the amount thereof, whether by course of conduct or otherwise, of the terms of any First Lien
Lease/Purchase Facilities Document or any Second Lien Commodities Purchase Facility Document;

          (c) except as otherwise expressly set forth in this Agreement, any exchange of any security
interest in any Collateral or any other collateral, or any amendment, waiver or other
modification, whether in writing or by course of conduct or otherwise, of all or any of the First
Lien Obligations or Second Lien Obligations or any guarantee thereof;

          (d) the commencement of any Insolvency or Liquidation Proceeding in respect of
Tensar or any other Grantor; or

          (e) any other circumstances which otherwise might constitute a defense available to, or a
discharge of, Tensar or any other Grantor in respect of the First Lien Secured Party, the First
Lien Obligations, any First Lien Claimholder, the Second

29

 

Lien Secured Party, the Second Lien Obligations or any Second Lien Claimholder in respect of this
Agreement.

     SECTIONS
8. Miscellaneous.

     8.1 Conflicts. In the event of any conflict between the provisions of this Agreement
and the provisions of the First Lien Lease/Purchase Facilities Documents or the Second Lien
Commodities Purchase Facility Documents, the provisions of this Agreement shall govern and
control.

     8.2 Effectiveness; Continuing Nature of this Agreement; Severabilitv. This Agreement
shall become effective when executed and delivered by the parties hereto. This is a continuing
agreement of lien subordination and the First Lien Claimholders may continue, at any time and
without notice to the Second Lien Secured Party or any Second Lien Claimholder, to extend credit
and make other financial accommodations to or for the benefit of any Tensar Party constituting
First Lien Obligations in reliance hereof. The Second Lien Secured Party, on behalf of itself and
the Second Lien Claimholders, hereby waives any right it may have under applicable law to revoke
this Agreement or any of the provisions of this Agreement. The terms of this Agreement shall
survive, and shall continue in full force and effect, in any Insolvency or Liquidation
Proceeding. Any provision of this Agreement that is prohibited or unenforceable in any
jurisdiction shall not invalidate the remaining provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render unenforceable such provision
in any other jurisdiction. All references to any Tensar Party shall include such Tensar Party as
debtor and debtor-in-possession, any receiver or trustee for such Tensar Party in any Insolvency
or Liquidation Proceeding. This Agreement shall terminate and be of no further force and
effect, (i) with respect to the Second Lien Secured Party, the Second Lien Claimholders and the
Second Lien Obligations, upon the later of (1) the date upon which the obligations under the
Second Lien Commodities Purchase Agreement terminate if there are no other Second Lien
Obligations outstanding on such date and (2) if there are other Second Lien Obligations
outstanding on such date, the date upon which such Second Lien Obligations terminate and (ii) with
respect to the First Lien Secured Party, the First Lien Claimholders and the First Lien
Obligations, the date of Discharge of First Lien Obligations, subject to the rights of the First
Lien Claimholders under Section 5.5 and Section 6.5.

     8.3 Amendments: Waivers. No amendment, modification or waiver of any of the
provisions of this Agreement by the Second Lien Secured Party or the First Lien Secured Party
shall be deemed to be made unless the same shall be in writing signed on behalf of each party
hereto or its authorized agent 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 the parties making such waiver
or the obligations of the other parties to such party in any other respect or at any other time.
Notwithstanding the foregoing, no Grantor shall have any right to consent to or approve any
amendment, modification or waiver of any provision of this Agreement except to the extent its
rights are directly affected (which includes, but is not limited to, any amendment to Grantors’
ability to

30

 

cause additional obligations to constitute First Lien Obligations or Second Lien
Obligations as Tensar may designate).

     8.4 Information Concerning Financial Condition of the Tensar Parties. The First Lien
Secured Party and the First Lien Claimholders, on the one hand, and the Second Lien Claimholders
and the Second Lien Secured Party, on the other hand, shall each be responsible for keeping
themselves informed of (a) the financial condition of the Tensar Parties and all endorsers and/or
guarantors of the First Lien Obligations or the Second Lien Obligations and (b) all other
circumstances bearing upon the risk of nonpayment of the First Lien Obligations or the Second Lien
Obligations. The First Lien Secured Party and the First Lien Claimholders shall have no duty to
advise the Second Lien Secured Party or any Second Lien Claimholder of information known to it or
them regarding such condition or any such circumstances or otherwise. In the event the First Lien
Secured Party or any of the First Lien Claimholders in its or their sole discretion undertakes at
any time or from time to time to provide any such information to the Second Lien Secured Party or
any Second Lien Claimholder, it or they shall be under no obligation (i) to make, and the First
Lien Secured Party and the First Lien Claimholders shall not make, any express or implied
representation or warranty, including with respect to the accuracy, completeness, truthfulness or
validity of any such information so provided, (ii) to provide any additional information or to
provide any such information on any subsequent occasion, (iii) to undertake any investigation or
(iv) to disclose any information which, pursuant to accepted or reasonable commercial finance
practices, such party wishes to maintain confidential or is otherwise required to maintain
confidential. The Second Lien Secured Party and the Second Lien Claimholders shall have no duty
to advise the First Lien Secured Party or any First Lien Claimholder of information known to it or
them regarding such condition or any such circumstances or otherwise. In the event the Second
Lien Secured Party or any of the Second Lien Claimholders in its or their sole discretion
undertakes at any time or from time to time to provide any such information to the First Lien
Secured Party or any First Lien Claimholder, it or they shall be under no obligation (i) to make,
and the Second Lien Secured Party and the Second Lien Claimholders shall not make, any express or
implied representation or warranty, including with respect to the accuracy, completeness,
truthfulness or validity of any such information so provided, (ii) to provide any additional
information or to provide any such information on any subsequent occasion, (iii) to undertake any
investigation or (iv) to disclose any information which, pursuant to accepted or reasonable
commercial finance practices, such party wishes to maintain confidential or is otherwise required
to maintain confidential.

     8.5 Subrogation. With respect to the value of any payments or
distributions in cash, property or other assets that any of the Second Lien Claimholders or the
Second Lien Secured Party pays over to the First Lien Secured Party or the First Lien Claimholders
under the terms of this Agreement, the Second Lien Claimholders and the Second Lien Secured Party
shall be subrogatcd to the rights of the First Lien Secured Party and the First Lien Claimholders;
provided that, the Second Lien Secured Party, on behalf of itself and the Second Lien
Claimholders, hereby agrees not to assert or enforce any or all such rights of subrogation it may
acquire as a result of any payment hereunder until the Discharge of First Lien Obligations has
occurred. Tensar Holdings and Tensar

31

 

acknowledge and agree that the value of any payments or distributions in cash, property or other
assets received by the Second Lien Secured Party or the Second Lien Claimholders that are paid
over to the First Lien Secured Party or the First Lien Claimholders pursuant to this Agreement
shall not reduce any of the Second Lien Obligations.

     8.6 Application of Payments. All payments received by the First Lien Secured Party
or the First Lien Claimholders may be applied, reversed and reapplied, in whole or in part, to
such part of the First Lien Obligations provided for in the First Lien Lease/Purchase Facilities
Documents. The Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders,
assents to any extension or postponement of the time of payment, subject to Section 5.3(a)(v), of
the First Lien Obligations or any part thereof and to any other indulgence with respect thereto,
to any substitution, exchange or release of any security which may at any time secure any part of
the First Lien Obligations and to the addition or release of any other Person primarily or
secondarily liable therefor.

     8.7
SUBMISSION TO JURISDICTION; WAIVERS. (a) ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST ANY PARTY ARISING OUT OF OR RELATING HERETO MAY BE
BROUGHT IN ANY STATE OR
FEDERAL COURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.
BY EXECUTING AND DELIVERING THIS AGREEMENT, EACH PARTY, FOR ITSELF AND IN CONNECTION WITH ITS
PROPERTIES, IRREVOCABLY (a) ACCEPTS GENERALLY AND UNCONDITIONALLY THE EXCLUSIVE JURISDICTION AND
VENUE OF SUCH COURTS; (b) WAIVES ANY DEFENSE
OF FORUM NON CONVENIENS; (c) AGREES THAT SERVICE OF
ALL PROCESS IN ANY SUCH PROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,
RETURN RECEIPT REQUESTED, TO THE APPLICABLE PARTY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITH
SECTION 8.8; AND (d) AGREES THAT SERVICE AS PROVIDED IN CLAUSE
(c) ABOVE IS
SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER THE APPLICABLE PARTY IN ANY SUCH
PROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDING SERVICE IN EVERY
RESPECT.

     (b) EACH OF THE PARTIES HERETO HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTS TO A JURY TRIAL
OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING HEREUNDER. 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 HEREOF, INCLUDING CONTRACT CLAIMS, TORT CLAIMS, BREACH OF DUTY
CLAIMS AND ALL OTHER COMMON LAW AND STATUTORY CLAIMS. EACH PARTY HERETO ACKNOWLEDGES
THAT THIS WAIVER IS A MATERIAL INDUCEMENT TO ENTER INTO A
BUSINESS RELATIONSHIP, THAT
EACH HAS ALREADY RELIED ON THIS WAIVER IN ENTERING INTO THIS AGREEMENT, AND THAT EACH WILL
CONTINUE TO RELY ON THIS WAIVER IN ITS

32

 

RELATED FUTURE DEALINGS. EACH PARTY HERETO FURTHER WARRANTS AND REPRESENTS THAT IT HAS REVIEWED
THIS WAIVER WITH ITS LEGAL COUNSEL AND THAT IT 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 (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY
REFERRING TO THIS SECTION 8.7(b) AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVER
SHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS OR
MODIFICATIONS HERETO. IN THE
EVENT OF LITIGATION, THIS AGREEMENT MAY BE FILED AS A WRITTEN CONSENT TO A TRIAL BY THE COURT.

     8.8 Notices. All notices to the Second Lien Claimholders and the First Lien
Claimholders permitted or required under this Agreement shall also be sent to the Second Lien
Secured Party and the First Lien Secured Party, respectively. Unless otherwise specifically
provided herein, any notice hereunder shall be in writing and may be personally served, telexed or
sent by telefacsimile or United States mail or courier service and shall be deemed to have been
given when delivered in person or by courier service and signed for against receipt thereof, upon
receipt of telefacsimile or telex, or three Business Days after depositing it in the United States
mail with postage prepaid and properly addressed. For the purposes hereof, the addresses of the
parties hereto shall be as set forth below each party’s name on the signature pages hereto, or, as
to each party, at such other address as may be designated by such party in a written notice to all
of the other parties.

     8.9 Further Assurances. The First Lien Secured Party, on behalf of itself and the
First Lien Claimholders under the First Lien Lease/Purchase Facilities Documents, and the
Second Lien Secured Party, on behalf of itself and the Second Lien Claimholders under the Second
Lien Commodities Purchase Facility Documents, and each Grantor agree that each of them shall take
such further action and shall execute and deliver such additional documents and instruments (in
recordable form, if requested) as the First Lien Secured Party or the Second Lien Secured Party
may reasonably request to effectuate the terms of and the lien priorities contemplated by this
Agreement.

     8.10 APPLICABLE LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.

     8.11 Binding on Successors and Assigns. This Agreement shall be binding upon the
First Lien Secured Party, the First Lien Claimholders, the Second Lien Secured Party, the Second
Lien Claimholders and their respective successors and assigns.

     8.12 Specific Performance. Each of the First Lien Secured Party and the Second Lien
Secured Party may demand specific performance of this Agreement. The First Lien Secured Party,
on behalf of itself and the First Lien Claimholders under the First
Lien Lease/Purchase Facilities
Documents, and the Second Lien Secured Party, on

33

 

behalf of itself and the Second Lien Claimholders, hereby irrevocably waives any defense
based on the adequacy of a remedy at law and any other defense which might be asserted to bar the
remedy of specific performance in any action which may be brought by the First Lien Secured Party
or any First Lien Claimholder or the Second Lien Secured Party or any Second Lien Claimholder, as
the case may be.

     8.13 Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement for any other
purpose or be given any substantive effect.

     8.14 Counterparts. This Agreement may be executed in counterparts (and by
different parties hereto in different counterparts), each of which shall constitute an original,
but all of which when taken together shall constitute a single contract. Delivery of an executed
counterpart of a signature page of this Agreement or any document or instrument delivered in
connection herewith by telecopy shall be effective as delivery of a manually executed counterpart
of this Agreement or such other document or instrument, as applicable.

     8.15 Authorization. By its signature, each Person executing this
Agreement on behalf of a party hereto represents and warrants to the other parties hereto that it
is duly authorized to execute this Agreement.

     8.16 No Third Party Beneficiaries. This Agreement and the rights and benefits
hereof shall inure to the benefit of each of the parties hereto and its respective successors and
assigns and shall inure only to the benefit of each of the First Lien Claimholders and the Second
Lien Claimholders. Nothing in this Agreement shall impair, as between Tensar and the other
Grantors and the First Lien Secured Party and the First Lien Claimholders, or as between Tensar
and the other Grantors and the Second Lien Secured Party and the Second Lien Claimholders, the
obligations of Tensar and the other Grantors to pay Murabaha Price, Agreed Profit, Acquisition
Cost and the Rental Rate portion of Rent, fees and other amounts as provided in the First Lien
Lease/Purchase Facilities Documents and the Second Lien Commodities Purchase Facility Documents,
respectively.

     8.17 Provisions Solely to Define Relative Rights. The provisions of this Agreement
are and are intended solely for the purpose of defining the relative rights of the First Lien
Secured Party and First Lien Claimholders on the one hand and the Second Lien Secured Party and
the Second Lien Claimholders on the other hand. Neither Tensar Holdings, Tensar, or any other
Grantor nor any other creditor thereof nor any other Person shall have any rights hereunder and
neither Tensar nor any Grantor may rely on the terms hereof. Nothing in this Agreement is intended
to or shall impair the obligations of Tensar or any other Grantor, which are absolute and
unconditional, to pay the First Lien Obligations and the Second Lien Obligations as and when the
same shall become due and payable in accordance with their terms.

     8.18 New Subsidiaries. Concurrently with the formation of any new Subsidiary
Guarantor, Tensar Holdings and Tensar shall cause such new Subsidiary

34

 

Guarantor to execute and deliver to each of the First Lien Secured Party, the First Lien
Agent, the Second Lien Secured Party and the Second Lien Agent, a joinder agreement in the form of
Exhibit A attached hereto.

     8.19 Issuance of Public Securities. The parties hereto hereby acknowledge and agree
that in the event of any public offering of any securities of any Tensar Party, Tensar Holdings and
Tensar shall pay, or shall cause such other Tensar Party to pay, the Net Cash Proceeds with respect
to such offering first to satisfy the obligations of the Tensar Parties under the Lease/Purchase
Facilities Documents, until such Lease/Purchase Facilities Documents are terminated and all
obligations thereunder are paid in full and the commitments of the First Lien Secured Party
thereunder are terminated, and second to satisfy the obligations of the Tensar Parties under the
Second Lien Commodities Purchase Facility.

35

 

     IN WITNESS WHEREOF, the parties hereto have executed this Intercreditor
Agreement as of the date first written above.

	 	 	 	 	 
	 	TCO FUNDING CORP.,

as First Lien Secured Party

 	 
	 	By:  	/s/ Bernard J. Angelo
 	 
	 	 	Name:  	Bernard J. Angelo 	 
	 	 	Title:  	President 	 
	 
	 	Notice Address:

c/o Global Securitization Services

445 Broad Hollow Road

Suite 239

Melville, NY 11747

Telecopy: (212) 302-8767

TCO FUNDING CORP.,

as Second Lien Secured Party

 	 
	 	By:  	/s/ Bernard J. Angelo
 	 
	 	 	Name:  	Bernard J. Angelo 	 
	 	 	Title:  	President 	 
	 
	 	Notice Address:

c/o Global Securitization Services

445 Broad Hollow Road

Suite 239

Melville, NY 11747

Telecopy: (212) 302-8767

 	 
	 	 	 
	 	 	 
	 	 	 
	 

[Signature Page to Tensar Intercreditor Agreement]

 

 

	 	 	 	 	 
	 	CREDIT SUISSE, Cayman Islands Branch, 

as First Lien Agent

 	 
	 	By:  	/s/ William O’Daly
 	 
	 	 	Name:  	William O’Daly 	 
	 	 	Title:  	Director 	 
	 
	 	 	 
	 	By:  	                         /s/ Rianka Mohan
 	 
	 	 	Name:  	Rianka Mohan 	 
	 	 	Title:  	Associate 	 
	 
	 	Notice Address:

11 Madison Avenue

New York, NY 10010

 	 
	 	 	 
	 	 	 
	 	 	 
	 

[TENSAR INTERCREDITOR AGREEMENT]

 

 

	 	 	 	 	 	 	 
	 	 	AMERICAN CAPITAL FINANCIAL 

SERVICES, INC.,

as Second Lien Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By:
	 	/s/ Jeffrey N. MacDowell
 

Name: Jeffrey N. MacDowell
	 	 
	 

	 	 	 	Title: Vice President	 	 
	 
	 	 	 	 	 	 
	 	 	Notice Address:

2 Bethesda Metro Center, 14th Floor

Bethesda, Maryland 20814

Attn: Compliance Officer

Telecopier: (301) 654-6714	 	 

[TENSAR INTERCREDITOR AGREEMENT]

 

 

	 	 	 	 	 
	 	Acknowledged and agreed by: 

THE TENSAR CORPORATION 

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	TENSAR HOLDINGS, INC.

 	 
	 	By:  	
/s/ E. Stockton Croft	 
	 	 	Name:  	E. Stockton Croft	 
	 	 	Title:  	President	 
	 
	 	THE TENSAR CORPORATION, LLC

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	TENSAR EARTH TECHNOLOGIES, INC.

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	TENSAR POLYTECHNOLOGIES, INC.

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 

[Signature
Page to Tensar Intercreditor Agreement]

 

 

	 	 	 	 	 
	 	GEOPIER FOUNDATION COMPANY, INC. 

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	GEOTECHNICAL REINFORCEMENT

COMPANY, INC.

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	NORTH AMERICAN GREEN, INC.

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	ATLANTECH ALABAMA INC.

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	ADVANCED EARTH TECHNOLOGY, INC.

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 
	 	MERITEX PRODUCTS CORPORATION

 	 
	 	By:  	
/s/ Katherine Spear	 
	 	 	Name:  	Katherine Spear	 
	 	 	Title:  	Chief Financial Officer	 
	 

[Signature Page to Tensar Intercreditor Agreement]

 

 

EXHIBIT A 

FORM OF JOINDER AGREEMENT

JOINDER AGREEMENT NO. _____ TO TENSAR INTERCREDITOR AGREEMENT

     This Joinder Agreement is made as of [                    ], by
[                    ] (“Additional Grantor”) pursuant to Section 8.18 of the Tensar
Intercreditor Agreement, dated as of October [            ], 2005, by and among TCO Funding
Corp., as First Lien Secured Party, TCO Funding Corp. as Second Lien Secured Party, Credit Suisse,
as First Lien Agent, American Capital Financial Services Inc., as Second Lien Agent, Tensar
Holdings, Inc., and each of its subsidiaries signatory thereto (as amended, supplemented or
otherwise modified from time to time, the “Intercreditor Agreement”) for the benefit of the First
Lien Secured Party, the First Lien Secured Party, the Second Lien Secured Party and the Second Lien
Agent. Capitalized terms used but not otherwise defined in this Joinder Agreement have the meanings
ascribed to such terms in the Intercreditor Agreement.

     WHEREAS, each Grantor (other than the Additional Grantor) has acknowledged and agreed to the
terms of the Intercreditor Agreement;

     WHEREAS, the Intercreditor Agreement requires that the Additional Grantor execute this
Joinder Agreement to evidence is acknowledgment and agreement to the terms thereof and to become a
party to thereto; and

     WHEREAS, the Additional Grantor has agreed to execute and deliver this Joinder Agreement in
order to become a party to the Intercreditor Agreement;

     NOW, THEREFORE IT IS AGREED:

     1. Intercreditor Agreement. By executing and delivering this Joinder Agreement, the
Additional Grantor, as provided in Section 8.19 of the Intercreditor Agreement, hereby become a
party to the Intercreditor Agreement, as a Grantor thereunder, with the same force and effect as
if originally named therein as a Grantor and acknowledges and agrees to the terms of the
Intercreditor Agreement and expressly assumes all the obligations of a Grantor thereunder.

     2. Governing Law. THIS JOINDER AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED AND INTERPRETED
IN ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK.

7

 

     IN WITNESS WHEREOF, the undersigned has caused this Joinder Agreement to be duly executed and
delivered as of the date first above written.

	 	 	 	 	 
	 	[ADDITIONAL GRANTOR]

 	 
	 	By:  	 	 
	 	Name:  	 	 
	 	Title:  	 	 
	 

8

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