Document:

Exhibit 10.19

[PANAMSAT
CORPORATION]

                                                                                                           August
20, 2004

Michael J. Inglese

252 Rocky Rapids Road

Stanford, CT  06903

 

Dear Mr. Inglese:

 

Reference
is made to that certain PanAmSat Corporation Executive Change in Control
Severance Agreement (the “Agreement”), entered into as of October 15,
2002, between yourself and PanAmSat Corporation (the “Company”).

This
is to confirm our understanding that the Company will continue to provide
severance payments available to you pursuant to the Agreement until its
expiration.  Following the expiration of
the Agreement, if you are terminated by the Company without Cause (as defined
below) or you terminate your employment with the Company for Good Reason (as
defined below), then you shall be entitled to receive the severance payments
and benefits set forth in the Agreement, except that all references to a two
times multiplier shall be changed to a one times multiplier.

For
purposes of this letter agreement, “Cause” shall mean: (i) willful and
continued failure to perform your material duties with respect to the Company
or it subsidiaries which continues beyond 10 days after a written demand for
substantial performance is delivered to you by the Company (the “Cure Period”);
or (ii) the willful or intentional engaging by you in conduct that causes
material and demonstrable injury, monetarily or otherwise, to the Company,
Constellation, LLC and their respective affiliates; or (iii) conviction of, or
a plea of nolo contendere to, a
crime constituting (A) a felony under the laws of the United States or any
state thereof or (B) a misdemeanor involving moral turpitude; or (iv) a
material breach of your management stockholder’s or other agreements, if any,
including, without limitation, engaging in any action in breach of the
restrictive covenants as set forth above, which continues beyond the Cure
Period (to the extent that, in the Board of Directors’ reasonable judgment,
such breach can be cured).  In
connection with any termination for Cause, you shall be given a statement of
the specific reasons constituting the grounds for termination for Cause and
shall have the right to appear before the Board of Directors to respond to
allegations of any actions allegedly constituting “Cause” prior to any
termination by the Board of Directors for Cause is effective.

For
purposes of this letter agreement, “Good Reason” shall mean: (i) a
reduction in your base salary or annual incentive compensation opportunity
(other than a general reduction in base salary that affects all members of
senior management in substantially the same proportions, provided that your
base salary may not be reduced by more than 10%, and in no event shall the base
salary be reduced to an amount less than 10% of the base salary on the date
hereof); or (ii) a substantial reduction in your duties and
responsibilities, or (iii) a transfer of your primary workplace by more than
fifty (50) miles from the current workplace.

 

Except
as expressly provided herein, the Agreement remains in full force and
effect.  This letter agreement may not
be amended or modified except by an instrument in writing signed by each of the
parties hereto. This letter agreement shall be governed by, and construed in
accordance with, the laws of the State of New York.  This letter agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
shall constitute one and the same agreement.

 

[Signature
Page Follows]

 

If
the foregoing reflects your understanding, kindly sign and return a copy of
this letter, whereupon it will constitute a binding agreement between us.

	
   

  	
   

  	
  Sincerely,

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  PANAMSAT CORPORATION.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  /s/

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  AGREED
  AND ACCEPTED

  	
   

  
	
  AS
  OF AUGUST 20, 2004

  	
   

  
	
   

  	
   

  	
   

  
	
  Michael
  J. Inglese

  	
   

  
	
   

  	
   

  	
   

  
	
  By:

  	
  /s/ Michael J. Inglese

  	
   

  
	
  Name: Michael J.
  IngleseExhibit
10.1

 

 

HUNTSMAN
LLC and

 

THE
OTHER BORROWERS NAMED HEREIN

 

$350,000,000

 

REVOLVING
CREDIT AGREEMENT

 

Dated
as of October 14, 2004

 

with

 

DEUTSCHE
BANK TRUST COMPANY AMERICAS,

as
Administrative Agent and Collateral Agent,

 

DEUTSCHE
BANK SECURITIES INC. and

J.P.
MORGAN SECURITIES INC.,

as
Joint Book Runners and Arrangers, 

 

JPMORGAN
CHASE BANK and

BANK
OF AMERICA, N.A.,

as
Co-Syndication Agents, 

 

MERRILL
LYNCH CAPITAL and

CONGRESS
FINANCIAL CORPORATION,

as
Co-Documentation Agents,

 

and

 

THE
FINANCIAL INSTITUTIONS SIGNATORY HERETO

 

WINSTON
& STRAWN LLP

35 West
Wacker Drive

Chicago,
Illinois  60601

 

 

 

TABLE OF
CONTENTS

 

	
  ARTICLE
  I DEFINITIONS AND ACCOUNTING TERMS

  	
   

  
	
  1.1 Definitions

  	
   

  
	
  1.2 Accounting Terms; Financial
  Statements.

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  II AMOUNT AND TERMS OF CREDIT

  	
   

  
	
  2.1 Revolving Credit
  Borrowing.

  	
   

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

  	
   

  
	
  2.3 Issuance of Letters
  of Credit.

  	
   

  
	
  2.4 Master Collection
  Account.

  	
   

  
	
   

  	
   

  
	
  ARTICLE III INTEREST AND FEES

  	
   

  
	
  3.1
  Interest.

  	
   

  
	
  3.2 Fees.

  	
   

  
	
  3.3 Computation of
  Interest and Fees

  	
   

  
	
  3.4 Compensation For
  Funding Losses

  	
   

  
	
  3.5 Increased Costs, Illegality, Etc.

  	
   

  
	
  3.6 Replacement of Lenders.

  	
   

  
	
  3.7 Change of Lending Office

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  IV REPAYMENTS; REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS

  	
   

  
	
  4.1
  Repayment

  	
   

  
	
  4.2 Voluntary
  Reduction of Commitments

  	
   

  
	
  4.3 Mandatory
  Reductions of Commitments.

  	
   

  
	
  4.4 Voluntary Prepayments

  	
   

  
	
  4.5 Mandatory Prepayments.

  	
   

  
	
  4.6
  Payments.

  	
   

  
	
  4.7 Method and
  Place of Payment by Borrowers.

  	
   

  
	
  4.8 Net Payments.

  	
   

  
	
  4.9
  Payments by the Lenders to Administrative Agent.

  	
   

  
	
  4.10 Sharing of Payments; etc.

  	
   

  
	
  4.11 Maintenance of Account

  	
   

  
	
  4.12 Statement of Account

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  V CONDITIONS OF CREDIT

  	
   

  
	
  5.1
  Conditions Precedent to the effectiveness of the Agreement

  	
   

  
	
  5.2
  Conditions Precedent to All Credit Events

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  VI REPRESENTATIONS AND WARRANTIES

  	
   

  
	
  6.1 Corporate Status

  	
   

  
	
  6.2 Corporate Power and
  Authority

  	
   

  
	
  6.3 No Violation

  	
   

  
	
  6.4 Governmental and
  Other Approvals

  	
   

  

 

i

 

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

  	
   

  
	
  6.6 Litigation

  	
   

  
	
  6.7 True and Complete
  Disclosure

  	
   

  
	
  6.8 Margin Regulations

  	
   

  
	
  6.9 Tax Returns and Payments

  	
   

  
	
  6.10 Compliance With ERISA.

  	
   

  
	
  6.11 Ownership of Property

  	
   

  
	
  6.12 Capitalization of
  the Company

  	
   

  
	
  6.13 Subsidiaries.

  	
   

  
	
  6.14 Compliance With Law, etc

  	
   

  
	
  6.15 Investment Company Act

  	
   

  
	
  6.16 Public Utility
  Holding Company Act

  	
   

  
	
  6.17 Environmental Matters

  	
   

  
	
  6.18 Labor Relations

  	
   

  
	
  6.19 Intellectual Property

  	
   

  
	
  6.20 Certain Fees

  	
   

  
	
  6.21 Security Documents.

  	
   

  
	
  6.22 Asbestos Matters

  	
   

  
	
  6.23 Use of Proceeds

  	
   

  
	
  6.24 Anti-Terrorism Law.

  	
   

  
	
   

  	
   

  
	
  ARTICLE VII AFFIRMATIVE COVENANTS

  	
   

  
	
  7.1 Financial Statements

  	
   

  
	
  7.2 Certificates; Other
  Information

  	
   

  
	
  7.3
  Notices

  	
   

  
	
  7.4 Maintenance of Existence

  	
   

  
	
  7.5 Payment of Obligations

  	
   

  
	
  7.6 Inspection of Property,
  Books and Records

  	
   

  
	
  7.7
  ERISA.

  	
   

  
	
  7.8 Maintenance of Property;
  Insurance

  	
   

  
	
  7.9 Environmental Laws.

  	
   

  
	
  7.10 Additional Security;
  Further Assurances.

  	
   

  
	
  7.11 End of Fiscal Years; Fiscal
  Quarters

  	
   

  
	
  7.12 Cash Management System

  	
   

  
	
  7.13
  Maintenance of Corporation Separateness

  	
   

  
	
  7.14 Certain Fees Indemnity

  	
   

  
	
  7.15 Compliance with Laws

  	
   

  
	
  7.16
  Furnishing of Information and Inspection of Records

  	
   

  
	
  7.17 Keeping of Records
  and Books

  	
   

  
	
  7.18 Conduct of Business

  	
   

  
	
  7.19 Letters of Credit

  	
   

  
	
  7.20
  Inventory

  	
   

  
	
  7.21 Lender Meeting

  	
   

  
	
  7.22 Senior Subordinated
  Notes

  	
   

  
	
   

  	
   

  
	
  ARTICLE VIII NEGATIVE COVENANTS

  	
   

  
	
  8.1
  Liens

  	
   

  

 

ii

 

	
  8.2 Indebtedness

  	
   

  
	
  8.3 Fundamental Changes

  	
   

  
	
  8.4 Dividends or Other
  Distributions

  	
   

  
	
  8.5 Issuance of Stock.

  	
   

  
	
  8.6 Disposition of Assets

  	
   

  
	
  8.7 Loans and Investments

  	
   

  
	
  8.8 Transactions with
  Affiliates

  	
   

  
	
  8.9 Lines of Business

  	
   

  
	
  8.10 Fiscal Year

  	
   

  
	
  8.11 Amendments to
  Organizational and Other Documents

  	
   

  
	
  8.12 Limitation on
  Certain Restrictions on Subsidiaries

  	
   

  
	
  8.13 Accounting Changes

  	
   

  
	
  8.14 Restrictions
  on Certain Unrestricted Subsidiaries.

  	
   

  
	
  8.15 Collateral Account
  Agreements

  	
   

  
	
  8.16 Extension or
  Amendment of Receivables

  	
   

  
	
  8.17
  Accounts

  	
   

  
	
  8.18
  Use of Proceeds

  	
   

  
	
  8.19
  No Excess Cash

  	
   

  
	
  8.20 Amendments or
  Modifications to Senior Secured Notes

  	
   

  
	
  8.21 Anti-Terrorism Law; Anti-Money
  Laundering

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  IX FINANCIAL COVENANTS

  	
   

  
	
  9.1 Capital Expenditures

  	
   

  
	
  9.2 Fixed Charge Coverage
  Ratio

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  X EVENTS OF DEFAULT

  	
   

  
	
  10.1 Events of Default

  	
   

  
	
  10.2 Rights Not Exclusive

  	
   

  
	
   

  	
   

  
	
  ARTICLE
  XI COLLATERAL ADMINISTRATION

  	
   

  
	
  11.1 Lock-Box and Master
  Collection Account Arrangements

  	
   

  
	
  11.2 Enforcement Rights.

  	
   

  
	
  11.3 Responsibilities of
  Borrowers

  	
   

  
	
   

  	
   

  
	
  ARTICLE XII ADMINISTRATIVE AGENT

  	
   

  
	
  12.1 Appointment

  	
   

  
	
  12.2 Nature of Duties

  	
   

  
	
  12.3
  Rights, Exculpation, Etc

  	
   

  
	
  12.4
  Reliance

  	
   

  
	
  12.5 Indemnification

  	
   

  
	
  12.6 Administrative Agent in its
  Individual Capacity

  	
   

  
	
  12.7 Notice of Defaults

  	
   

  
	
  12.8 Holders of Obligations

  	
   

  
	
  12.9 Actions with Respect to
  Defaults

  	
   

  
	
  12.10 Resignation.

  	
   

  
	
   

  	
   

  
	
  ARTICLE XIII MISCELLANEOUS

  	
   

  

 

iii

 

	
  13.1
  No Waiver; Modifications in Writing

  	
   

  
	
  13.2 Further Assurances

  	
   

  
	
  13.3
  Notices, Etc.

  	
   

  
	
  13.4
  Costs, Expenses and Taxes.

  	
   

  
	
  13.5 Defaulting Lender.

  	
   

  
	
  13.6 Confirmations

  	
   

  
	
  13.7
  Setoff; Recoupment.

  	
   

  
	
  13.8 Execution in
  Counterparts

  	
   

  
	
  13.9 Binding Effect; Assignment;
  Addition and Substitution of Lenders.

  	
   

  
	
  13.10 CONSENT TO JURISDICTION;
  MUTUAL WAIVER OF JURY TRIAL.

  	
   

  
	
  13.11 GOVERNING LAW

  	
   

  
	
  13.12 Severability of
  Provisions

  	
   

  
	
  13.13 Transfers of Notes

  	
   

  
	
  13.14
  Registry

  	
   

  
	
  13.15
  Headings

  	
   

  
	
  13.16 Termination of Agreement

  	
   

  
	
  13.17 Confidentiality

  	
   

  
	
  13.18 Concerning the
  Collateral and the Loan Documents.

  	
   

  
	
  13.19 Joint and Several
  Liability of Borrowers.

  	
   

  
	
  13.20 Appointment and
  Authorization of Funds Administrator.

  	
   

  
	
  13.21
  Termination of Revolving Credit Commitments under the Existing Revolving
  Credit Agreement

  	
   

  

 

iv

 

INDEX OF EXHIBITS AND SCHEDULES

EXHIBITS

	
  Exhibit 1.1(a)

  	
   

  	
  Credit and Collection
  Policy

  
	
  Exhibit 1.1(b)

  	
   

  	
  Lock-Boxes and Lock-Box
  Banks

  
	
  Exhibit 1.1(c)

  	
   

  	
  Form of Lock-Box Letter

  
	
  Exhibit 1.1(d)

  	
   

  	
  Form of Collateral
  Account Agreement

  
	
  Exhibit 1.1(e)

  	
   

  	
  Form of Joinder
  Agreement

  
	
  Exhibit 2.1(c)

  	
   

  	
  Form of Note

  
	
  Exhibit 2.1(d)

  	
   

  	
  Form of Notice of
  Borrowing

  
	
  Exhibit 2.2(b)

  	
   

  	
  Form of Notice of
  Conversion or Continuation

  
	
  Exhibit 2.3(c)(i)

  	
   

  	
  Form of Letter of
  Credit Request

  
	
  Exhibit 4.8(d)

  	
   

  	
  Form of Section 4.8(d)
  Certificate

  
	
  Exhibit 5.1(a)(ii)

  	
   

  	
  Form of Security
  Agreement

  
	
  Exhibit 5.1(a)(iii)(A)

  	
   

  	
  Form of Restricted
  Subsidiary Guarantee Agreement

  
	
  Exhibit
  5.1(a)(iii)(B)-1

  	
   

  	
  Form of Headquarters
  Subsidiary Guarantee Agreement

  
	
  Exhibit
  5.1(a)(iii)(B)-2

  	
   

  	
  Form of HSCC Subsidiary
  Guarantee Agreement

  
	
  Exhibit 5.1(a)(vi)

  	
   

  	
  Form of Perfection
  Certificates

  
	
  Exhibit 5.1(e)(i)

  	
   

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

  
	
  Exhibit 5.1(e)(ii)-1

  	
   

  	
  Form of Opinion of
  Vinson & Elkins L.L.P.

  
	
  Exhibit 5.1(e)(ii)-2

  	
   

  	
  Form of Opinion of
  Stoel Rives LLP

  
	
  Exhibit 5.1(e)(iii)

  	
   

  	
  Form of Solvency
  Certificate

  
	
  Exhibit 7.1(d)

  	
   

  	
  Form of Borrowing Base
  Report

  
	
  Exhibit 7.2(b)

  	
   

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

  
	
  Exhibit 11.1

  	
   

  	
  Form of Master
  Collection Account Agreement

  
	
  Exhibit 13.9(c)

  	
   

  	
  Form of Assignment and
  Assumption Agreement

  

 

SCHEDULES TO REVOLVING CREDIT AGREEMENT

	
  Schedule 1.1(a)

  	
   

  	
  Commitments

  
	
  Schedule 1.1(b)

  	
   

  	
  List of Approved
  Customers

  
	
  Schedule 1.1(c)

  	
   

  	
  Unrestricted
  Subsidiaries

  
	
  Schedule 2.3(a)

  	
   

  	
  Letters of Credit

  
	
  Schedule 6.3

  	
   

  	
  Approvals and Consents

  
	
  Schedule 6.4

  	
   

  	
  Governmental Approval

  
	
  Schedule 6.5(a)

  	
   

  	
  Historical Financial
  Statements

  
	
  Schedule 6.5(d)

  	
   

  	
  Indebtedness and Other
  Material Liabilities

  
	
  Schedule 6.5(e)

  	
   

  	
  Pro Forma Balance Sheet

  
	
  Schedule 6.5(f)

  	
   

  	
  Financial Projections

  
	
  Schedule 6.12

  	
   

  	
  Capitalization of the
  Company

  
	
  Schedule 6.13

  	
   

  	
  Restricted Subsidiaries

  
	
  Schedule 6.21(c)

  	
   

  	
  Real Property

  
	
  Schedule 6.21(f)

  	
   

  	
  Deposit Accounts

  
	
  Schedule 7.8

  	
   

  	
  Insurance

  
	
  Schedule 7.10(f)

  	
   

  	
  IRIC Account Procedures

  
	
  Schedule 7.16

  	
   

  	
  Locations

  
	
  Schedule 8.1(a)

  	
   

  	
  Existing Liens

  

 

v

 

	
  Schedule 8.7

  	
   

  	
  Investments

  
	
  Schedule 8.14

  	
   

  	
  Permitted Activities of
  HSCHC and HSCC

  
	
  Schedule 8.15(a)

  	
   

  	
  Procedures for
  International Risk Insurance Company with respect to Insurance Proceeds

  
	
  Schedule 8.15(b)

  	
   

  	
  Foreign Deposit
  Accounts

  
	
  Schedule 13.3

  	
   

  	
  Addresses and
  Telecopier Numbers

  

 

vi

 

REVOLVING CREDIT AGREEMENT

 

THIS REVOLVING CREDIT
AGREEMENT is dated as of October 14, 2004, and is made by and among Huntsman
LLC, a Utah limited liability company (the “Company”), Huntsman
Petrochemical, Huntsman EPS, Polymers, Huntsman Fuels and Huntsman
International Trading Corporation (each, along with the Company, referred to
herein as a “Borrower” and collectively as “Borrowers”, with the
Company acting in its capacity as Funds Administrator for the Borrowers), the
financial institutions party hereto, including Deutsche Bank Trust Company
Americas (f/k/a Bankers Trust Company), in their capacities as lenders
hereunder (collectively, the “Lenders,” and each individually, a “Lender”),
and Deutsche Bank Trust Company Americas (f/k/a Bankers Trust Company), as
administrative agent (“Administrative Agent”) for the Lenders and as
Collateral Agent under the Security Agreement.

 

W I T N E S S E T
H:

 

WHEREAS, the Company,
Administrative Agent, and various financial institutions are entering into that
certain Term Credit Agreement, dated as of the date hereof, providing for
credit facilities of at least $675 million;

 

WHEREAS, the Company,
Administrative Agent and the other parties signatory thereto entered into that
certain Revolving Credit Agreement, dated as of September 30, 2002 (the “Existing
Revolving Credit Agreement”);

 

WHEREAS, this Agreement
is a refinancing of the Existing Revolving Credit Agreement;

 

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

 

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

 

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

 

“A Notes” means
the 13.375% Senior Discounted Notes due 2009 issued by HIH and outstanding on
the Closing Date.

 

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

 

 

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

 

“Additional Term B Loans”
shall have the meaning given such term in the Term Credit Agreement.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Asset Disposition”
means any sale, lease, transfer or other disposition (or series of related
sales, leases, transfers or dispositions) of all or any part of an interest in
shares of

 

2

 

Capital Stock of a
Restricted Subsidiary of any Borrower (other than directors’ qualifying shares
and similar arrangements required by applicable law with respect to any Foreign
Subsidiary), property or other assets (each referred to for the purposes of
this definition as a “disposition” or any variation thereof) by any Borrower or
any of such Borrower’s Restricted Subsidiaries provided, that (i) any
sale or series of related sales of assets (other than Inventory and
Receivables) having a fair market value not in excess of $2,500,000, (ii) any
disposition by a Borrower or a Subsidiary to a Borrower or a Wholly-Owned
Subsidiary which is not an Unrestricted Subsidiary and (iii) dispositions
permitted by Section  8.4 or Section 8.6(c), (d), (g),
(h), (i), (j) or (l) and dispositions of
Investments permitted by Section 8.7(d) shall not constitute an Asset
Disposition for purposes of this definition.

 

“Assignee” has the
meaning assigned to that term in Section 13.9(c).

 

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

 

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

 

“Australian
Consolidated Entities” has the meaning assigned to that term in Section
1.2(b).

 

“Australian Styrenics
Subsidiaries” has the meaning assigned to that term in Section 8.7(h).

 

“Australian
Surfactants Subsidiaries” has the meaning assigned to that term in Section
8.7(h).

 

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

 

“B Notes” means
the Senior Subordinated Reset Discount Notes due 2009 issued by HIH and
outstanding on the Closing Date.

 

“Bankruptcy Default”
means any Event of Default occurring under Section 10.1(e) or (f) of this
Agreement.

 

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

 

(a)           a
case or other proceeding shall be commenced, without the application or consent
of such Person, in any court, seeking the liquidation, reorganization, debt
arrangement, dissolution, winding up, or composition or readjustment of debts
of such Person, the appointment of a trustee, receiver,

 

3

 

custodian, liquidator,
assignee, sequestrator or the like for such Person or any substantial part of
its assets, or any similar action with respect to such Person under any law
(foreign or domestic) relating to bankruptcy, insolvency, reorganization,
winding up or composition or adjustment of debts, and such case or proceeding
shall continue undismissed, or unstayed and in effect, for a period of thirty
(30) days; or any of the actions sought in such petition or proceeding, including
the entering of an order for relief in respect of such Person or the
appointment of any trustee, receiver, custodian, liquidator, assignee,
sequestrator or the like for such Person or any substantial portion of such
Person’s property shall be granted or otherwise occur; or

 

(b)           such
Person shall fail to, or admit in writing its inability to, pay its debts
generally as they become due, or shall commence a voluntary case or other
proceeding under any applicable bankruptcy, insolvency, reorganization, debt
arrangement, dissolution or other similar law now or hereafter in effect, or
shall consent to the appointment of or taking possession by a receiver,
liquidator, assignee, trustee, custodian, sequestrator (or other similar
official) for, such Person or for any substantial part of its property, or
shall make any general assignment for the benefit of creditors, or shall take
any corporate or partnership action authorizing the taking of any of foregoing
actions.

 

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

 

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

 

“Base Rate Margin”
means 1.25%.

 

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

 

“Benefited Lender”
has the meaning assigned to that term in Section 4.10(a).

 

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

 

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

 

4

 

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

 

“Borrowing Base”
shall mean:

 

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

 

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

 

(ii)           the
lesser of sixty-five percent (65%) of the net value of the Eligible Inventory
of the Borrowers and eighty five percent of the Net Orderly Liquidation Value
of Eligible Inventory of the Borrowers; provided that the amount
calculated pursuant to this clause (ii) shall not exceed 50% of the Borrowing
Base, 

 

minus

 

(iii)          prior
to the occurrence of an Event of Default or Unmatured Event of Default, amounts
required to be but not yet applied to reinvestment or prepayment of the Term B
Loans pursuant to Section 4.2 of the Term Credit Agreement,

 

minus

 

(iv)          the
net amount of any reserves established by Administrative Agent pursuant to
clause (b) below.

 

(b)           Administrative Agent at any time in
the exercise of its Permitted Discretion shall be entitled to (i) establish and
increase or decrease reserves against Eligible Receivables and Eligible
Inventory, (ii) reduce the advance rates to be applied under clauses (a)(i) and
(a)(ii) above to a level below the rates stated therein or (following any such
reduction) restore such advance rates to any level equal to or below the
advance rates stated in clauses (a)(i) and (a)(ii) above, (iii) impose
additional restrictions (or eliminate any such additional restrictions) to the
standards of eligibility set forth in the respective definitions of “Eligible
Receivables” and “Eligible Inventory” and (iv) establish and, once established,
increase or decrease a reserve in the amount of accrued and unpaid interest
payable by any Borrower hereunder, including interest on Loans and drawings
under Letters of Credit.

 

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

 

“Borrowing Base Report”
has the meaning assigned to that term in Section 7.1(d).

 

“Business Day”
means (i) as it relates to any payment, determination, funding or notice to be
made or given in connection with any Loan, or otherwise to be made or given to
or from Administrative Agent, a day other than a Saturday, Sunday or other day
on which commercial banks in New York City are authorized or required by law to
close; provided, 

 

5

 

however,
that when used in connection with a Eurodollar Loan, the term “Business Day”
shall also exclude any day on which banks are not open for dealings in dollar
deposits in the London interbank market; provided, further, that
when used in connection with any Letter of Credit, the term “Business Day”
shall also exclude any day on which commercial banks in the city in which the
Facing Bank for such Letter of Credit is domiciled are required by law to
close.  For purposes of this Agreement
(other than for purposes of determining the end of any applicable Interest
Period), “Business Day” shall not include Pioneer Day as recognized in the
State of Utah in any year.

 

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

 

“Capitalized Lease”
means, with respect to any Person, any lease of any property (whether real,
personal or mixed) by such Person as lessee that, in accordance with GAAP, would
be required to be classified and accounted for as a capitalized lease on the
balance sheet of such Person.

 

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

 

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

 

“Cash Equivalents”
means any Investment in (i) a marketable obligation, maturing within two years
after issuance thereof, issued or guaranteed by the USA or an instrumentality
or agency thereof, (ii) a certificate of deposit or banker’s acceptance,
maturing within one year after issuance thereof, issued by any Lender, or a
national or state bank or trust company or a European, Canadian or Japanese
bank, in each case having capital, surplus and undivided profits of at least
$100,000,000 and whose long-term unsecured debt has a rating of “A” or better
by S&P or A2 or better by Moody’s or the equivalent rating by any other
nationally recognized rating agency (provided that the aggregate face
amount of all Investments in certificates of deposit or bankers’ acceptances
issued by the principal offices of or branches of such European or Japanese
banks located outside the USA shall not at any time exceed 33-1/3% of all
Investments described in this definition), (iii) open market commercial paper,
maturing within 270 days after issuance thereof, which has a rating of A-1 or
better by S&P or P-1 or better by Moody’s, or the equivalent rating by any
other nationally recognized rating agency, (iv) repurchase agreements and
reverse repurchase agreements with a term not in excess of one year with any
financial institution which has been elected primary government securities
dealers by the Federal Reserve Board or whose securities are rated AA- or
better by S&P or Aa3 or better by Moody’s or the equivalent rating by any
other nationally recognized rating agency relating to marketable direct
obligations issued or unconditionally guaranteed by the USA or any agency or
instrumentality thereof and backed by the full faith and credit of the USA, (v)
“Money Market” preferred stock maturing within six months after issuance
thereof or municipal bonds issued by a

 

6

 

corporation
organized under the laws of any state of the USA, which has a rating of “A” or
better by S&P or Moody’s or the equivalent rating by any other nationally
recognized rating agency, (vi) tax exempt floating rate option tender bonds
backed by letters of credit issued by a national or state bank whose long-term
unsecured debt has a rating of AA or better by S&P or Aa2 or better by
Moody’s or the equivalent rating by any other nationally recognized rating
agency, (vii) shares of any money market mutual fund rated at least “AAA” or
the equivalent thereof by S&P or at least “Aaa” or the equivalent thereof
by Moody’s or any other mutual fund holding assets consisting (except for de
minimis amounts) of the type specified in clauses of (i) through (vi) above.

 

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

 

“Change of Control”
means (i) prior to a Qualified Public Offering, (x) the failure by Mr. Jon M.
Huntsman, his spouse, direct descendants, an entity controlled by any of the
foregoing and/or by a trust of the type described hereafter, and/or a trust for
the benefit of any of the foregoing (the “Huntsman Group”), collectively
to own and control at least a majority of the outstanding voting Capital Stock
of the Company, Holdco I and Holdco II, or (y) the failure of the Company to be
a Wholly-Owned Direct Subsidiary of Holdco II or of Holdco II to be a
Subsidiary of Holdco I or (ii) after a Qualified Public Offering, the
occurrence of the following:  (x) any “person”
or “group” (as such terms are used in Sections 13(d) and 14(d) of the
Securities and Exchange Act of 1934, as amended (the “Exchange Act”)),
other than Matlin Patterson or one or more members of the Huntsman Group, is or
becomes the “beneficial owner” (as defined in Rules 13d-3 and 13d-5 under the
Exchange Act, except that a person shall be deemed to have “beneficial
ownership” of all securities that such Person has the right to acquire, whether
such right is exercisable immediately or only after the passage of time),
directly or indirectly, of 35% or more of the then outstanding voting Capital
Stock of the Company or Issuer or (y) Continuing Directors shall cease to
constitute at least a majority of the directors constituting the board of
directors of the Company or Issuer other than in a transaction having the
approval of the board of directors of the Company at least a majority of which
members are Continuing Directors.

 

“Closing Date”
means October 14, 2004.

 

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

 

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

 

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

 

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

 

7

 

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

 

“Commitment”
means, with respect to any Lender, the obligation of such Lender to make Loans
pursuant to Sections 2.1(a) and 2.1(b) and to participate in
Letters of Credit pursuant to Section 2.3(d), as such commitment may be
adjusted from time to time pursuant to this Agreement, which commitment as of
the date hereof is the amount set forth opposite such Lender’s name on Schedule
1.1(a) hereto under the caption “Amount of Commitment” and “Commitments”
means such commitments collectively, which commitments as of the date hereof
equal the amount of $350,000,000.

 

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

 

“Commitment
Termination Date” means October 14, 2009, or such earlier date as the
Commitments shall have been terminated or otherwise reduced to $0 pursuant to
this Agreement.

 

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

 

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

 

“Consolidated Net
Income” and “Consolidated Net Loss” mean, respectively, with respect
to any period, the aggregate of the net income (loss) of the Company for such
period, determined in accordance with GAAP on a consolidated basis, plus or
minus, to the extent not included therein, the net income (loss) of any
Restricted Subsidiary attributable to a minority interest in such Restricted
Subsidiary, less the amount of cash dividends paid on any preferred Capital
Stock of the Company in such period.

 

8

 

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

 

“Contaminant”
means any pollutant, contaminant (as those terms are defined in 42 U.S.C. §
9601(33)), toxic pollutant (as that term is defined in 33 U.S.C. § 1362(13)),
hazardous substance (as that term is defined in 42 U.S.C. § 9601(14)),
hazardous chemical (as that term is defined by 29 CFR § 1910.1200(c)),
hazardous waste (as that term is defined in 42 U.S.C. § 6903(5)), or any state
or local equivalent of such laws and regulations, including, without
limitation, radioactive material, special waste, polychlorinated biphenyls,
asbestos, petroleum, including crude oil or any petroleum-derived substance,
waste, or breakdown or decomposition product thereof, or any constituent of any
such substance or waste, including but not limited to polychlorinated biphenyls
and asbestos.

 

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

 

“Continuing Directors”
means, as of any date, the collective reference to (i) all members of the board
of directors of the Company or Issuer who have held office continuously for at
least twelve months prior to the date of determination, and (ii) all members of
the board of directors of Company or Issuer who assumed office after such date
and whose appointment or nomination for election by shareholders of the Company
or Issuer was approved by a vote of at least 50% of the Continuing Directors in
office immediately prior to such appointment or nomination.

 

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

 

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

 

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

 

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

 

“Credit Event”
means the making of any Loan or the issuance of any Letter of Credit; provided,
however, that the following shall not be deemed “Credit Events”:  (i) a conversion or continuation of any Loan
pursuant to Section 2.2 or 3.5; (ii) any extension or renewal of
any previously issued Letter of Credit which by its terms can be drawn if not
renewed

 

9

 

or replaced; or
(iii) any Loan deemed to be made to fund any Letter of Credit reimbursement
obligation pursuant to Section 2.3(c).

 

“Credit Exposure”
has the meaning assigned to that term in Section 13.9(b).

 

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

 

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

 

“Customary Permitted
Liens” means:

 

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

 

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

 

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

 

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

 

10

 

(v)           Permitted Real Property Encumbrances;

 

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

 

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

 

(viii)        customary rights of set-off, revocation,
refund or chargeback under deposit agreements or under the UCC of banks or
other financial institutions where Borrower or any of its Subsidiaries maintain
deposit in the ordinary course of business permitted by this Agreement; and

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

11

 

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

 

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

 

“Dollar Equivalent”
means, at any time, (i) as to any amount denominated in Dollars, the amount
thereof at such time, and (ii) as to any amount denominated in any other
currency, the equivalent amount in Dollars as determined by the Administrative
Agent at such time on the basis of the exchange rate at such time.

 

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

 

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

 

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

 

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

 

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

 

(b)           any Inventory as to which

 

(i)            a
Borrower has not acquired title,

 

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

 

12

 

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

 

(c)           any Inventory to the extent that it

 

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

 

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

 

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

 

(iv)          constitutes
finished goods which remain unsold in excess of ninety (90) days, or in the
case of performance and polymers products which are customarily produced in
batch form, the amount of such product has an aggregate book value inconsistent
with past practices.

 

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

 

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

 

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

 

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

 

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

 

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

 

(xi)           constitutes
Inventory which is not located on a Borrower’s or an Affiliate’s owned premises
in the USA listed on Schedule 2.7 to the Security Agreement, provided, however,
except to the extent that the Administrative Agent has agreed and has
established a reserve for potential lease obligations in an amount satisfactory
to the Administrative Agent, Eligible Inventory shall not include Inventory
which is located (A) on any leased premises in the USA listed

 

13

 

on Schedule 2.7 to the
Security Agreement where the landlord thereof has not consented in writing to
Administrative Agent’s prior Lien in such Inventory and Administrative Agent’s
right to enter such premises and take possession and remove such Inventory
pursuant to a landlord access and lien waiver in form and substance
satisfactory to Administrative Agent, (B) in warehouses or with bailees in the
USA listed on Schedule 2.7 to the Security Agreement where the warehousemen or
bailee has not consented in writing to Administrative Agent’s prior Lien in
such Inventory and Administrative Agent’s right to enter such premises and take
possession of and remove such Inventory, pursuant to an access and lien waiver
in form and substance satisfactory to Administrative Agent, or (C) on railroad
cars not subject to the control of such Borrower, or

 

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

 

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

 

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

 

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

 

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

 

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

 

14

 

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

 

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

 

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

 

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

 

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

 

15

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

16

 

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

 

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

 

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

 

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

 

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

 

“Environmental Laws”
means any and all applicable foreign, federal, state or local laws, statutes,
ordinances, codes, rules, regulations, orders, decrees, judgments, directives
or Environmental Permits and cleanup or action standards, levels or objectives
imposing liability or standards of conduct for or relating to the protection of
health, safety or the environment, including, but not limited to, the following
statutes as now written and amended, and as amended hereafter:  the Federal Water Pollution Control Act, as
codified in 33 U.S.C. § 1251 et seq., the Clean Air Act, as codified in 42
U.S.C. § 7401 et seq., the Toxic Substances Control Act, as codified in 15
U.S.C. § 2601 et seq., the Solid Waste Disposal Act, as codified in 42 U.S.C. §
6901 et seq., the Comprehensive Environmental Response, Compensation and
Liability Act, as codified in 42 U.S.C. § 9601 et seq., the Emergency Planning
and Community Right-to-Know Act of 1986, as codified in 42 U.S.C. § 11001 et
seq., and the Safe Drinking Water Act, as codified in 42 U.S.C. § 300f et seq.
and any related regulations, as well as all state and local equivalents.

 

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

 

17

 

Governmental
Authority in response to, a Release or threatened Release of a Contaminant into
the environment.

 

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

 

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

 

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

 

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

 

“Eurodollar Margin”
means 2.25%.

 

“Eurodollar Rate”
means the arithmetic average (rounded upwards, if necessary, to the nearest
1/100 of 1%) of the offered quotation, if any, to first class banks in the New
York interbank market by DB for U.S. Dollar deposits of amounts in immediately
available funds comparable to the principal amount of the applicable Eurodollar
Loan to be made or continued by DB for which the Eurodollar Rate is being
determined with maturities comparable to the Interest Period for which such
Eurodollar Rate will apply as of approximately 10:00 A.M. (New York City time)
on the applicable Interest Rate Determination Date. The determination of the
Eurodollar Rate by Administrative Agent shall be conclusive and binding on
Borrowers absent manifest error.

 

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

 

	
  Eurodollar
  Rate

  	
   

  
	
  1.00 - Eurodollar
  Reserve Requirements

  

 

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

 

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

 

18

 

“Excess Availability”
means the amount by which (a) the lesser of (i) the Borrowing Base and (ii) the
Commitments exceeds (b) the aggregate outstanding amount of all Loans.

 

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

 

“Existing Credit
Agreements” shall mean the Existing Revolving Credit Agreement and the
Existing Term Loan Agreement.

 

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

 

“Existing Revolving
Credit Agreement” has the meaning assigned to such term in the Recitals of
this Agreement.

 

“Existing Term Loan
Agreement” means that certain Amended and Restated Credit Agreement, dated
as of September 30, 2002, among the Company, DB as administrative agent, and
the other parties signatory thereto, as amended.

 

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

 

“Facing Bank”
means DB or (a) any Lender or (b) any Affiliate of a Lender that, in either
case, is acceptable to Administrative Agent and has agreed to issue a Letter of
Credit for the account of the Borrowers under this Agreement.

 

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

 

“Federal Funds Rate”
means on any one day, the rate per annum equal to the weighted average (rounded
upwards, if necessary, to the nearest 1/100th of 1%) of the rate on overnight
federal funds transactions with members of the Federal Reserve System only
arranged by federal funds brokers, as published as of such day by the Federal
Reserve Bank of New York, or, if such rate is not so published, the average of
the quotations for such day on such transactions received by DB from three
federal funds brokers of recognized standing selected by DB.

 

“Fee Letter” means
the letter agreement with respect to fees related to this Agreement between the
Company, DB and Deutsche Bank Securities Inc. dated on or before the Closing
Date.

 

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

 

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

 

19

 

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

 

“Foreign Pension Plan”
means any plan, fund (including, without limitation, any super-annuation fund)
or other similar program established or maintained outside of the USA by
Borrower or one or more of its Subsidiaries or their ERISA Affiliates,
primarily for the benefit of employees of Borrower or such Subsidiaries or such
ERISA Affiliates residing outside the USA, which plan, fund, or similar program
provides or results in, retirement income or a deferral of income in
contemplation of retirement, and which is not subject to ERISA or the Code.

 

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

 

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

 

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

 

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

 

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

 

20

 

“Headquarters Mortgage
Loan Documents” means a mortgage or deed of trust, assignment of rents and
leases and other customary mortgage loan documents entered into by Huntsman Headquarters
Corporation, a Utah corporation, in connection with the mortgaging of the
building located at 500 Huntsman Way, Salt Lake City, Utah and any agreements
or documents entered into by Huntsman Headquarters Corporation evidencing the
renewal, replacement or refinancing of the Indebtedness governed thereby in an
amount not to exceed the principal amount thereof on the Closing Date.

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Huntsman Affiliate”
means any Affiliate of the Company (other than the Company’s Subsidiaries).

 

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

 

21

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

(iii)          all
Capitalized Lease Obligations;

 

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

 

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

 

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

 

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

 

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

 

(ix)           Guarantee
Obligations of such Person;

 

22

 

(x)            the
aggregate outstanding amount of Receivables Facility Attributed Indebtedness or
the gross proceeds from any similar transaction, regardless of whether such
transaction is effected without recourse to such Person or in a manner that
would not otherwise be reflected as a liability on a balance sheet of such
Person in accordance with GAAP; and

 

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

 

provided, however,
notwithstanding the foregoing, “Indebtedness” shall not include deferred taxes
or indebtedness of the Company and/or the Company’s Restricted Subsidiaries
(which indebtedness may not be secured except as permitted by Section 8.1(l))
incurred to finance insurance premiums in a principal amount not in excess of
the casualty and other insurance premiums to be paid by the Company and/or the
Company’s Restricted Subsidiaries for a three-year period beginning on the date
of any incurrence of such indebtedness.

 

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

 

“Intercreditor
Agreement” means that certain Second Amended and Restated Intercreditor
Agreement, dated the date hereof, by and among the Collateral Agent,
Administrative Agent, the Term Collateral Agent, the Term Administrative Agent,
DB as beneficiary of the Mortgages, HSBC Bank USA, National Association (as
successor to HSBC Bank USA), as trustee for the Senior Secured Notes, and the
Company, in the form of Exhibit 1.2 to the Security Agreement, as amended,
modified or supplemented in accordance with the terms thereof.

 

“Interest Expense”
means, for the Company and its Restricted Subsidiaries with respect to any
period, the sum of (x) total interest expense for the Company and its
Restricted Subsidiaries to the extent reflected on a consolidated financial
statement of the Company, determined on a consolidated basis in accordance with
GAAP and (y) total cash dividends paid on any preferred Capital Stock of the
Company and its Restricted Subsidiaries to a Person other than the Company or
any of its Restricted Subsidiaries.  As
used in this definition, the term “interest” shall include, without limitation,
all interest and fees payable with respect to the Obligations under this
Agreement (other than fees which may be capitalized as transaction costs in
accordance with GAAP), any discount in respect of sales of accounts receivable
and/or related contract rights and the interest portion of Capitalized Lease
Obligations during such period, all as determined in accordance with GAAP, but
shall not include, to the extent otherwise includable therein, Restructuring Charges
of the type described in clause (a) of the definition thereof.

 

“Interest Payment Date”
means (a) as to any Base Rate Loan, the last Business Day of each March, June,
September and December to occur while such Loan is outstanding and

 

23

 

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

 

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

 

provided that:

 

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

 

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

 

(iii)          no
Interest Period for any Loan shall extend beyond the final maturity date for
such loan;

 

(iv)          all
Eurodollar Loans comprising a Borrowing shall at all times have the same
Interest Period; and

 

(v)           the
initial Interest Period for any Eurodollar Loan shall commence on the date of
such Borrowing of such Eurodollar Loan (including the date of any conversion
thereto from a Loan of a different Type) and each Interest Period occurring
thereafter in respect to such Eurodollar Loan shall commence on the last day of
the immediately preceding Interest Period.

 

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

 

24

 

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

 

“Interim Advance”
has the meaning assigned to that term in Section 2.1(e)(i).

 

“Interim Advance
Period” has the meaning assigned to that term in Section 2.1(e)(i).

 

“Inventory” of a
Person means, inclusively, all inventory as defined in the Uniform Commercial
Code and all goods, merchandise and other personal property wherever located,
now owned or hereafter acquired of every kind or description which are held for
sale or lease or are furnished or to be furnished under a contract of service
or are raw materials, work-in-process or materials used or consumed or to be
used or consumed in business.

 

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

 

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

 

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

 

“Issuer” has the
meaning given that term in the definition of “Qualified Public Offering.”

 

“L/C Effective Date”
shall mean, as applied to an L/C Notice of Drawing, the Business Day on which
Administrative Agent receives such L/C Notice of Drawing if such notice is
received by it not later than 11:00 A.M. (New York City time) on such day and,
if received after such time, the next succeeding Business Day.

 

25

 

“L/C Interest Rate”
shall have the meaning ascribed to that term in Section 2.3(f)(ii).

 

“L/C Notice of Drawing”
shall mean the date on which the Facing Bank provides Agent with notice that a
drawing has been made under a Letter of Credit.

 

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

 

“L/C Participation”
shall have the meaning ascribed to that term in Section 2.3(e)(i).

 

“L/C Participation
Funding Amount” shall have the meaning ascribed to that term in Section
2.3(g)(ii)(A).

 

“L/C Participation
Funding Date” shall have the meaning ascribed to that term in Section
2.3(g)(ii)(B).

 

“L/C Participation
Funding Notice” shall have the meaning ascribed to that term in Section
2.3(g)(ii)(A).

 

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

 

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

 

“Letter of Credit Fees”
shall have the meaning ascribed to that term in Section 3.2(c).

 

“Letters of Credit”
means all letters of credit (whether commercial or stand-by and whether for the
purchase of inventory, equipment or otherwise) issued for the account of any
Borrower by a Facing Bank pursuant to Section 2.3 of this Agreement,
including, without limitation, the Letters of Credit set forth on Schedule
2.3(m), and all amendments, renewals, extensions or replacements thereof.

 

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

 

26

 

“Letter of Credit
Request” shall have the meaning ascribed to that term in Section
2.3(c)(i).

 

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

 

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

 

“Loans” means
amounts advanced by Administrative Agent or a Lender pursuant to Article II or
any other provision of this Agreement.

 

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

 

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

 

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

 

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

 

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

 

“Master Collection
Account” means an account established pursuant to Section 11.1 which
is maintained by the Collateral Agent, for the benefit of the Secured Parties,
and to

 

27

 

which all
Collections received in any Lock-Box or Lock-Box Account are to be
remitted.  The initial Master Collection
Account shall be account no. 00-416-540 at DB.

 

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

 

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

 

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

 

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

 

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

 

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

 

“Membership Interests”
shall mean the limited liability company interests of the Company.

 

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

 

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

 

“Mortgaged Property”
means, collectively, all of the properties of the Borrowers and the
Subsidiaries of the Borrowers defined as “Mortgaged Property” in each of the
respective

 

28

 

Mortgages
including, without limitation, the properties listed on Schedule 6.21(c)
identified as Mortgaged Property and any other property which becomes Mortgaged
Property pursuant to Section 7.10.

 

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

 

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

 

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

 

“Net Orderly
Liquidation Value” shall mean (a) the “net orderly liquidation value”
determined by a valuation company acceptable to Administrative Agent after
performance of an Inventory valuation to be done at Administrative Agent’s
request and the Borrowers’ expense, less the amount estimated by such valuation
company for marshalling, reconditioning, carrying, and sales expenses designed
to maximize the resale value of such Inventory and assuming that the time
required to dispose of such Inventory is customary with respect to such
Inventory; or (b) if no such Inventory valuation has been requested by
Administrative Agent, the value customarily attributed to Inventory in the
appraisal industry for Inventory of similar quality and quantity,  and similarly dispersed (under similar and
relevant circumstances under standard asset-based lending procedures), at the
time of the valuation, less the amount customarily estimated in the appraisal
industry at the time of any determination for marshalling, recondition,
carrying, and sales expenses designed to maximize the resale value of such
Inventory and assuming that the time required to dispose of such Inventory is
customary with respect to such Inventory.

 

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

 

“Note” has the
meaning assigned to that term in Section 2.1(c).

 

29

 

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

 

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

 

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

 

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

 

“Operating Financing
Lease” means a lease of the type described in clause (xi) of the definition
of “Indebtedness”.

 

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

 

“Outstanding Balance”
means, for any Receivable, the outstanding principal balance of such
Receivable, including detention and other freight charges, and excluding any
Finance Charges.

 

“Participants” has
the meaning assigned to that term in Section 13.9(b).

 

“Payment Office”
means (a) with respect to Administrative Agent, 60 Wall Street, 2nd Floor, New
York, New York  10005, or such other
address as Administrative Agent may from time to time specify in accordance
with Section 13.3.

 

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

 

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

 

“Permitted Australia
Proceeds” has the meaning assigned to that term in Section 8.7(h).

 

“Permitted Discretion”
shall mean Administrative Agent’s judgment exercised in good faith based upon
its consideration of any factor which Administrative Agent believes in good
faith:  (a) will or could reasonably be
expected to adversely affect the value of any Collateral, the enforceability or
priority of the Collateral Agent’s Liens thereon or the amount

 

30

 

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

 

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

 

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

 

“Permitted Real
Property Encumbrances” means (i) those liens, encumbrances and other
matters affecting title to any Mortgaged Property listed in the applicable
title policy in respect thereof (or any update thereto) and found, on the date
of delivery of such title policy to Administrative Agent in accordance with the
terms hereof, reasonably acceptable by Administrative Agent, (ii) as to any
particular real property at any time, such easements, encroachments, covenants,
restrictions, rights of way, minor defects, irregularities or encumbrances on
title which do not, in the reasonable opinion of Administrative Agent,
materially impair such real property for the purpose for which it is held by
the mortgagor or owner, as the case may be, thereof, or the Lien held by
Administrative Agent, (iii) municipal and zoning laws, regulations, codes and
ordinances, which are not violated in any material respect by the existing
improvements and the present use made by the mortgagor or owner, as the case
may be, of such real property, (iv) general real estate taxes and assessments
not yet delinquent, and (v) such other items as Administrative Agent may
consent to.

 

“Permitted Unsecured
Debt” means unsecured Indebtedness (other than Indebtedness permitted by Section
8.2(d)) on terms and conditions and in form and substance satisfactory to
Administrative Agent; provided, that such terms and conditions shall not
be more restrictive to any Borrower than those set forth herein and shall be at
or below a market interest rate for comparable instruments and, in no event
shall any scheduled principal payments be required to be made prior to the
Commitment Termination Date.

 

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

 

31

 

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

 

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

 

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

 

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

 

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

 

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

 

“Prime Lending Rate”
shall mean the rate that DB announces from time to time in New York, New York
as its prime lending rate in the United States, as in effect from time to
time.  The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer.  DB and
each of the other Lenders may make commercial loans or other loans at rates of
interest at, above or below the Prime Lending Rate.

 

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

 

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

 

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

 

“Qualified Public
Offering” means the initial public offering (and any subsequent public
offerings) of the common equity of Holdco II or an entity of which Holdco II is
a Wholly-Owned Subsidiary (Holdco II or such other entity, the “Issuer”)
(including any such sale pursuant to any underwriter’s exercise of any
overallotment options); provided, that the gross proceeds of any initial
public offering exceed $500,000,000.

 

“Receivable” means
any indebtedness and other obligations now existing and hereafter arising owed
to, or any right to payment of, a Credit Party from, or on behalf of, an

 

32

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

“Related Security”
means, for any Receivable, all of the applicable Credit Party’s right, title
and interest in (a) the inventory, goods and merchandise (including any
returned or repossessed inventory, goods and/or merchandise) the sale or lease
of which by a Credit Party

 

33

 

gave rise to such
Receivable, and all insurance contracts with respect thereto, (b) all other
security interests or liens and property subject thereto purporting to secure
payment of such Receivable, together with all financing statements signed by an
Obligor describing any collateral securing such Receivable, (c) all guaranties,
letters of credit, indemnities, warranties, insurance policies and proceeds and
premium refunds thereof, and other agreements or arrangements supporting or
securing payment of such Receivable, (d) all service contracts and other
contracts and agreements related to such Receivable, (e) all Records related to
such Receivable, (f) the Related Accounts, and (g) all proceeds of any of the
foregoing.

 

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

 

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

 

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

 

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

 

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

 

34

 

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

 

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

 

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

 

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

 

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

 

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

 

“Restructuring Charges”
means (a) call premiums and call protection payments paid in connection with
prepayments of Indebtedness with proceeds of a Qualified Public Offering and
each write-off of deferred financing costs due to any early extinguishment of
Indebtedness occurring on or after the date hereof, (b) non-recurring
restructuring charges incurred during the preceding three Fiscal Quarters
ending June 30, 2004, in an aggregate amount not to exceed $25,000,000, and (c)
non-recurring restructuring charges incurred from July 1, 2004 until January 1,
2006, in an aggregate amount not to exceed $50,000,000; provided that
when the charges set forth in clause (c) are added with the charges set forth
in clause (b), the cash portion of such charges shall not exceed $30,000,000.

 

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

 

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

 

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

 

35

 

“Section 4.8(d)
Certificate” has the meaning assigned to that term in Section 4.8(d)
of this Agreement.

 

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

 

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

 

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

 

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

 

“Senior Secured Notes”
shall mean those certain 11-5/8% senior secured notes due October 15, 2010
issued by the Company pursuant to the terms of the Senior Secured Notes
Indenture, and secured by the Collateral on a pari passu basis with the Term
Loan Obligations.

 

“Senior Secured Notes
Indenture” shall mean that certain Indenture, dated as of September 30,
2003 among the Company, the guarantors named therein and HSBC Bank USA,
National Association (as successor to HSBC Bank USA), as trustee for the
holders of the Senior Secured Notes (as the same may be amended in compliance
with this Agreement) and any supplemental indenture or additional indenture to
be entered into with respect to the Senior Secured Notes; provided, that
(i) the terms and conditions thereof shall be satisfactory to the
Administrative Agent and, in any event, not be more restrictive to Borrowers
than those set forth herein, (ii) the Senior Secured Notes shall, at the date
of issuance, be at or below a market interest rate for comparable instruments
and (iii) in no event shall any scheduled principal payments be required to be made
on the Senior Secured Notes prior to the Commitment Termination Date.

 

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

 

36

 

“Senior Subordinated
Notes” means those certain 9-1/2% Senior Subordinated Notes of the Company
due 2007 and Senior Subordinated Floating Rate Notes of the Company due 2007,
each issued pursuant to the Senior Subordinated Notes Indentures.

 

“Senior Subordinated
Notes Indentures” means those certain indentures as
heretofore amended by those certain amendments, dated as of June 14, 2002, by
and between the Company, as Issuer, each of the Guarantors named therein and
Wilmington Trust Company, as Trustee.

 

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

 

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

 

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

 

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

 

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

 

“Tax Sharing Agreement”
means that certain tax sharing agreement dated as of September 30, 2002 by and
between the Company and Holdco II, as amended or otherwise modified (including
any replacement thereof following a Qualified Public Offering with an agreement
with the Issuer) from time to time in accordance with Section 8.11.

 

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

 

“Term Administrative
Agent” shall mean the “Administrative Agent” as such term is defined in the
Term Credit Agreement.

 

“Term B Loans” has
the meaning assigned to that term in the Term Credit Agreement.

 

“Term Collateral”
shall mean the “Collateral” as such term is defined in the Term Credit
Agreement.

 

37

 

“Term Collateral Agent”
means the “Collateral Agent” as such term is defined in the Term Credit
Agreement.

 

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

 

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

 

“Term Security
Documents” shall mean the “Security Documents” as such term is defined in
the Term Credit Agreement.

 

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

 

“Total Exposure”
means, at any time, an amount equal to the sum of (a) the L/C Obligations of
the Lenders and (b) the principal amount of outstanding Loans.

 

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

 

“Transferee” has
the meaning assigned to that term in Section 13.9(d).

 

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

 

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

 

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

 

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

 

“Unrestricted
Subsidiary” means any Subsidiary listed on Schedule 1.1(c) of this
Agreement and any Subsidiary thereof, or any Subsidiary of a Borrower that at
the time of

 

38

 

formation shall be
designated an Unrestricted Subsidiary in an officer’s certificate signed by two
Responsible Financial Officers of the Company and promptly delivered to
Administrative Agent.  

 

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

 

“Weighted Average Life
to Maturity” means, when applied to any Indebtedness at any date, the
number of years obtained by dividing (a) the then outstanding principal amount
of such Indebtedness into (b) the sum of the products obtained by multiplying
(x) the amount of each then remaining installment, sinking fund, serial
maturity or other required payments of principal, including payment at final
maturity, in respect thereof by (y) the number of years (calculated to the
nearest one-twelfth) that will elapse between such date and the making of such
payment.

 

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

 

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

 

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

 

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

 

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

 

39

 

1.2           Accounting Terms; Financial Statements.

 

(a)           All
accounting terms used herein but not expressly defined in this Agreement shall
have the respective meanings given to them in accordance with GAAP as applied
in effect on the date hereof in the USA. 
Except as otherwise expressly provided herein (including without
limitation, any modification to the terms hereof pursuant to Section 8.13),
all computations and determinations for purposes of determining compliance with
the financial requirements of this Agreement shall be made in accordance with
GAAP in effect in the USA on the date hereof and on a basis consistent with the
presentation of the financial statements delivered pursuant to, or otherwise
referred to in, Section 6.5. 
Notwithstanding the foregoing sentence, the financial statements
required to be delivered pursuant to Section 7.1 shall be prepared in
accordance with GAAP in the USA as in effect on the respective dates of their
preparation.  For purposes of the
financial terms set forth herein, whenever reference is made to a determination
which is required to be made on a consolidated basis (whether in accordance
with GAAP or otherwise) for Borrowers and their Restricted Subsidiaries or for
the Company and its Restricted Subsidiaries, such determination shall be made
as if each Unrestricted Subsidiary were wholly-owned by a Person not an
Affiliate of any Borrower.

 

(b)           Solely
for purposes of delivery of the financial statements required by Sections
7.1(a), (b) and (c), HF II Australia Holdings Company LLC,
Huntsman Australia Holdings Corp., HCPH Holdings Pty Limited, Huntsman Chemical
Australia Unit Trust and their Subsidiaries (collectively, the “Australian
Consolidated Entities”), Huntsman Verwaltungs GmbH and HSCC and HSCHC shall
be deemed to be Restricted Subsidiaries; provided, however,
concurrently with the delivery of the officer’s certificate required by Section
7.2(b), for purposes of calculating compliance with the financial covenants
hereof, Borrower shall also deliver to Administrative Agent statements
excluding the Unrestricted Subsidiaries, and, upon request of Administrative
Agent, reflecting the consolidating entries pertaining to the Unrestricted
Subsidiaries existing on the Closing Date, in each case in form and substance
satisfactory to the Administrative Agent.

 

ARTICLE II

AMOUNT AND TERMS OF CREDIT

 

2.1           Revolving Credit Borrowing.

 

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

 

40

 

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

 

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

 

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

 

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

 

41

 

(ii)           The Funds Administrator shall notify
the Administrative Agent in writing of the names of the officers of the Funds
Administrator authorized to request Loans on behalf of the Borrowers and
specifying which of those officers are also, or, if none are, the other
officers that are, authorized to direct the disbursement of Loans in a manner
contrary to standing disbursement instructions, and shall provide the
Administrative Agent with a specimen signature of each such officer.  In the absence of a specification of those
officers who are authorized to vary standing disbursement instructions, the
Administrative Agent may assume that each officer authorized to request Loans
also has such authority.  The Administrative
Agent shall be entitled to rely conclusively on the authority of such officers
of the Funds Administrator to request Loans on behalf of the Borrowers, or to
vary standing disbursement instructions, until the Administrative Agent
receives written notice to the contrary. 
The Administrative Agent shall have no duty to verify the authenticity
of the signature appearing on any Notice of Borrowing or other writing
delivered pursuant to this Section 2.1(d) and, with respect to an oral
or electronic E-mail request for Loans, the Administrative Agent shall have no
duty to verify the identity of any individual representing himself as one of
the officers of the Funds Administrator authorized to make such request on
behalf of the Borrowers.  Neither the
Administrative Agent nor any of the Lenders shall incur any liability to the
Funds Administrator or any of the Borrowers as a result of (A) acting upon any
telephonic or electronic E-mail notice referred to in this Section 2.1(d)
if the Administrative Agent believes in good faith such notice to have been given
by a duly authorized officer of the Funds Administrator or other individual
authorized to request Loans on behalf of the Borrowers or to direct the
disbursement thereof in a manner contrary to standing disbursement
instructions, or (B) otherwise acting in good faith under this Section
2.1(d) and an advance made and disbursed pursuant to any such telephonic or
electronic E-mail notice shall be deemed to be a Loan for all purposes of this
Agreement.

 

(e)           (i)            In the event the Borrowers are
unable to comply with (A) the Borrowing Base limitation set forth in Section
2.1(a) or (B) the conditions precedent set forth in Section 5.2 to a Credit
Event, the Lenders authorize Administrative Agent, in its sole discretion, to
make Loans (“Interim Advances”) to the Borrowers during the period commencing
on the date Administrative Agent first receives a Notice of Borrowing
requesting an Interim Advance until the earliest of (1) the twentieth (20th)
Business Day after such date, (2) the date the Borrowers are again able to
comply with such Borrowing Base limitation and conditions precedent, or obtains
an amendment or waiver with respect thereto and (3) the date the Required
Lenders instruct Administrative Agent, or Administrative Agent determines, to
cease making Interim Advances (in each case, the “Interim Advance Period”).

 

(ii)           Administrative Agent shall not, in
any event, (A) make any Interim Advance during any Interim Advance Period if,
after giving effect to such Interim Advance, Total Exposure would exceed one
hundred ten percent (110%) of Total Exposure on the first day of such Interim
Advance Period (calculated without giving effect to Interim Advances made on
such day) and (B) make any Interim Advance if, after giving effect to such
Interim Advance, Total Exposure would exceed the aggregate Commitments.

 

42

 

(iii)          All amounts received by Administrative
Agent during an Interim Advance Period on account of the Obligations, whether
in the form of payments from any Borrower, collections on the Collateral or
otherwise, shall, so long as any Interim Advances made during such Interim
Advance Period are outstanding, be applied by the Agent, first, to the
repayment of such Interim Advances and, second, in accordance with Section
4.6(b).

 

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

 

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

 

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

 

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

 

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

 

43

 

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

 

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

 

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

 

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

 

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

 

(A)          the proposed Conversion Date or
Continuation Date;

 

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

 

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

 

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

 

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

 

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

 

44

 

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

 

2.3           Issuance of Letters of Credit. 

 

(a)           Issuance.  The Funds Administrator may from time to time
request Administrative Agent to direct the Facing Bank to issue a Letter of
Credit for the account of a Borrower. 
All such Letters of Credit shall be denominated in Dollars.  No such request shall be granted if, after
such issuance:

 

(i)            (A) Total Exposure would exceed the
lesser of (1) the Commitments and (2) the Borrowing Base or (B) L/C Obligations
would exceed $50,000,000 or (C) the Total Available Commitment would be less
than zero;

 

(ii)           (A)          (1)
any order, judgment or decree of any Governmental Authority or arbitrator shall
enjoin or restrain such Borrower from procuring, such Facing Bank from issuing,
or a Lender from acquiring an L/C Participation in, such Letter of Credit, or
(2) any Requirement of Law applicable to such Borrower, such Facing Bank or a
Lender or any request or directive (whether or not having the force of law)
from any Governmental Authority with jurisdiction over such Borrower, such
Facing Bank or a Lender shall prohibit, or request that, any such Person
refrain from procuring, issuing or acquiring an L/C Participation in, such
Letter of Credit, as applicable, or, from performing its obligations under such
Letter of Credit or its L/C Participation thereunder, as applicable;

 

(B)           any Requirement of Law applicable to
such Facing Bank or a Lender or any request or directive (whether or not having
the force of law) from any Governmental Authority with jurisdiction over such
Facing Bank or a Lender shall impose upon such Facing Bank or such Lender (1)
any restriction or reserve or capital requirement or (2) any cost or expense
with respect to, in the case of such Facing Bank, such Letter of Credit and, in
the case of such Lender, such L/C Participation (for which such Facing Bank or
such Lender shall not otherwise be compensated) not in effect as of the Closing
Date, and which such Facing Bank or such Lender deems in good faith to be
material to it;

 

(C)           any Lender is a Defaulting Lender,
unless Administrative Agent and Facing Bank have entered into satisfactory
arrangements with the

 

45

 

Borrowers to eliminate
Administrative Agent’s and such Facing Bank’s risk with respect to such Lender,
including cash collateralization of such Lender’s Pro Rata Share of Letter of
Credit Obligations; or

 

(D)          Agent has determined that any of the
conditions set forth in Section 5.2 shall not be satisfied.

 

(b)           Notice
and Revocation.  Administrative Agent
may assume, as to any Borrower, any Facing Bank and any Lender, that none of
the conditions specified in Section 2.3(a) are applicable as to such
Person, unless Administrative Agent shall have received a notice from such
Person specifically entitled “Notice under Section 2.3(a),” specifying
the condition or conditions that are applicable to such Person.  Any such notice shall continue in effect
until Administrative Agent shall have received from the Person originally
sending such notice a subsequent notice, entitled “Revocation of Notice under Section
2.3(a),” stating that the condition or conditions specified in such Person’s
earlier notice are no longer applicable.

 

(c)           Procedure
for Issuance.  

 

(i)            The Funds Administrator may from
time to time request Administrative Agent to direct the issuance of a Letter of
Credit by delivering to Administrative Agent, with a copy to the  applicable Facing Bank, a Letter of Credit
Request in the form of Exhibit 2.3(c)(i) to this Agreement (a “Letter
of Credit Request”), not later than 12:00 P.M. (New York City time) at
least three (3) Business Days (or such shorter period as may be agreed to by
Administrative Agent and the applicable Facing Bank) in advance of the proposed
date of issuance. Prior to date of issuance or in conjunction with the
submission of a Letter of Credit Request, the Funds Administrator shall provide
to Administrative Agent and the applicable Facing Bank a precise description of
the format of the Letter of Credit or information and documents adequate to
allow for the Facing Bank to prepare the requested Letter of Credit and shall
specify that the only drawings permitted under the Letter of Credit shall be
sight drawings.  The Facing Bank shall
not issue any Letter of Credit until it has received authorization to do so
from Administrative Agent.  Promptly
after the issuance or amendment of any standby Letter of Credit, the Facing
Bank shall notify Administrative Agent and the Funds Administrator, in writing,
of such issuance or amendment and such notice shall be accompanied by a copy of
such issuance and amendment. Upon receipt of such notice, Administrative Agent
shall promptly notify the Lenders, in writing, of such issuance or amendment,
and if so requested by a Lender Administrative Agent shall provide such Lender
with copies of such issuance or amendment. With regards to commercial Letters
of Credit, the Facing Bank shall on the first Business Day of each week,
provide to Administrative Agent by facsimile a report detailing the daily
aggregate outstanding commercial Letters of Credit for the previous week.

 

(ii)           The transmittal by the Funds
Administrator of each Letter of Credit Request shall be deemed to be a
representation and warranty made by each of the Borrowers, both at the time of
such transmittal and at the time of the issuance of the requested Letter of
Credit, that the Letter of Credit may be issued in accordance with and will not
violate any of the requirements of Section 2.3(a) or (b).

 

46

 

(d)           Terms
of Letters of Credit.  Administrative
Agent shall not direct the issuance of any Letter of Credit unless:

 

(i)            if it is a standby Letter of Credit,
its term does not exceed one year from the date of issuance (except that any
such Letter of Credit may provide for annual renewals on terms reasonably
acceptable to Administrative Agent and the Facing Bank);

 

(ii)           if it is a commercial Letter of
Credit, its term does not exceed 120 days;

 

(iii)          in the case of any Letter of Credit,
it expires no later than thirty (30) Business Days prior to the Commitment
Termination Date.

 

(e)           Lender’s
Preparation.

 

(i)            Immediately upon issuance by any
Facing Bank of a Letter of Credit, each Lender shall be deemed to have
irrevocably and unconditionally acquired from such Facing Bank, without
recourse or warranty, an undivided interest and participation (an “L/C
Participation”), to the extent of such Lender’s Pro Rata Share, in such Facing
Bank’s rights to be paid the principal amount of, together with interest
accrued on, drawings under such Letter of Credit and in any security therefor
or Guaranty pertaining thereto.

 

(ii)           (A) 
Each Facing Bank shall, subject to Section 2.3(e)(iii), remit to
Administrative Agent, for the account of each Lender such Lender’s Pro Rata Share
of each payment of principal and interest (to the extent such interest does not
exceed the L/C Interest Rate) received by such Facing Bank on account of any
drawing under such Letter of Credit (x) with respect to which such Facing Bank
has delivered an L/C Notice of Drawing to Administrative Agent during a
Bankruptcy Default and (y) that is received by such Facing Bank on or after the
date of such L/C Notice of Drawing; provided, that in the event that any
such payment received by any Facing Bank shall be required to be returned by
such Facing Bank, such Lender shall return to such Facing Bank the portion
thereof previously distributed by it to Administrative Agent, but without
interest thereon (unless such Facing Bank is required to pay interest on the amount
returned, in which case such Lender shall be required to pay interest at the
same rate).

 

(B)  (x) 
Payments required to be made by any Facing Bank to Administrative Agent
for the account of a Lender, together with interest thereon at the rate specified
in Section 2.3(e)(ii)(B)(y), shall be made to Administrative Agent, if
the amount in respect of which the payment is to be made to Administrative
Agent is received by such Facing Bank on or before 1:00 P.M. (New York City
time) of such Facing Bank’s time on a Business Day, on the day received and, if
received after such time, on or before 11:00 A.M. (New York City time) of such
Facing Bank’s time, on the next succeeding Business Day.

 

47

 

(y)  Interest shall be payable by each Facing Bank
on amounts required to be paid by it to Administrative Agent pursuant to Section
2.3(e)(ii)(B)(x) from the date such payments are due until such amounts are
paid in full at, for the first three Business Days, the Federal Funds Rate,
and, thereafter, the Prime Lending Rate.

 

(iii)          Until an Facing Bank shall have
received from a Lender, or Administrative Agent on behalf of such Lender,
payment in full of the amount required to be paid by such Lender to such Facing
Bank pursuant to Section 2.3(g)(ii)(B), such Facing Bank may hold all
amounts otherwise payable by it to Administrative Agent for the account of such
Lender pursuant to Section 2.3(e)(ii)(A) as collateral to secure such
Lender’s obligation to make such payment to it.

 

(f)            Maturity
of Drawings; Interest Thereon.

 

(i)            Drawings under any Letter of Credit
shall, notwithstanding anything to the contrary contained therein, mature and
become due and payable, and shall be repaid to Administrative Agent for the
account of the applicable Facing Bank by the Borrowers in full, together with
interest accrued thereon, from the date and at the rate specified in Section
2.3(f)(ii), on the L/C Effective Date of the L/C Notice of Drawing in respect
of such drawing.

 

(ii)           Borrowers shall, notwithstanding
anything to the contrary contained in any Letter of Credit, pay interest on the
outstanding principal amount of each drawing under such Letter of Credit at a
rate per annum equal to the Base Rate (the “L/C Interest Rate”) from the
date such drawing is disbursed by the applicable Facing Bank to the date such
drawing is reimbursed by the Borrowers. 
Interest on each such drawing shall be payable when such drawing shall
be due (whether at maturity, by reason of acceleration or otherwise) and, prior
to such time, on demand.

 

(g)           Payment
of Amounts Drawn Under Letters of Credit; Funding of L/C Participations.  In the event of any drawing under any Letter
of Credit, the applicable Facing Bank may deliver an L/C Notice of Drawing to
Administrative Agent and Administrative Agent shall:

 

(i)            unless a Bankruptcy Default exists,
treat each L/C Notice of Drawing on its L/C Effective Date as a Notice of
Borrowing requesting Base Rate Loans in a principal amount equal to the amount
of such drawing plus interest on the amount of such drawing at the L/C
Interest Rate from the day such drawing was disbursed until the date of such
L/C Notice of Drawing (unless such drawing was disbursed and repaid on the same
day, in which case interest shall be payable for such day); and each such L/C
Notice of Drawing shall have the same force and effect as a Notice of Borrowing
given by the Funds Administrator for and on behalf of the Borrowers, except
that the conditions to borrowing specified in Section 2.1 and Section 5.2
(other than that a Bankruptcy Default shall not exist) shall not apply;

 

48

 

(ii)           (A) (x) during a Bankruptcy Default,
on the L/C Effective Date of an L/C Notice of Drawing, notify (an “L/C
Participation Funding Notice”) each Lender of the amount of such drawing,
and of interest accrued thereon at the L/C Interest Rate from the date
specified in such L/C Notice of Drawing as the date such drawing was disbursed
by the applicable Facing Bank to the L/C Participation Funding Date and of such
Lender’s Pro Rata Share of such amount (an “L/C Participation Funding Amount”).

 

(y)  Administrative Agent shall give an L/C
Participation Funding Notice to each Lender not later than 3:00 P.M. (New York
City time) time on the day Administrative Agent receives an L/C Notice of
Drawing, if such Notice of Drawing was received by it at or before 12:00 Noon
(New York City time) on a Business Day and, if not, not later than 12:00 Noon
(New York City time) on the next succeeding Business Day.

 

(B)           Each Lender shall make available to
Administrative Agent for the benefit of the applicable Facing Bank an amount
equal to such Lender’s L/C Participation Funding Amount in immediately
available funds, not later than 1:00 P.M. (New York City time) on the Business
Day (the “L/C Participation Funding Date”) next succeeding the date of
the applicable L/C Participation Funding Notice, together with interest on such
amount from the L/C Participation Funding Date until such amount is paid in
full at, for the first three Business Days, the Federal Funds Rate and,
thereafter, the Prime Lending Rate.

 

(C)           In the event that any Lender fails to
make available to Administrative Agent such Lender’s L/C Participation Funding
Amount as provided in Section 2.3(g)(ii)(b), Administrative Agent may,
but shall not be obligated to, fund the amount of such Lender’s L/C
Participation Funding Amount and recover such amount on demand from such Lender
in accordance with Section 13.5.

 

(D)          Administrative Agent shall distribute
to each Lender which has paid all amounts payable by it under this Section
2.3(g) with respect to any Letter of Credit such Lender’s Pro Rata Share of
all payments subsequently received by Administrative Agent from or for the
account of the Borrowers in reimbursement of the principal amount of all
drawings thereunder plus interest thereon from the date such drawings
were disbursed at the L/C Interest Rate, provided that in the event that any
such payment received by Administrative Agent for the account of any Facing
Bank shall be required to be returned by Administrative Agent, such Lender
shall return to Administrative Agent the portion thereof previously distributed
by Administrative Agent to it, but without interest thereon (unless
Administrative Agent or such Facing Bank is required to pay interest on the
amount returned, in which case the Lender shall be required to pay interest at
the same rate).

 

(E)           If a Bankruptcy Default occurs at or
after the time Administrative Agent receives an L/C Notice of Drawing and
before Administrative Agent has given the applicable L/C Participation Funding 

 

49

 

Notice, or, if it has
given such notice, before all of the Lenders have funded their L/C
Participation Funding Amounts, a Bankruptcy Default shall be deemed to “exist”,
and the provisions of Section 2.3(g)(ii) shall be applicable.

 

(h)           Nature
of Facing Bank’s Duties.  In
determining whether to pay under any Letter of Credit, the Facing Bank issuing
such Letter of Credit shall be responsible only to determine that the documents
and certificates required to be delivered under such Letter of Credit have been
delivered and that they comply on their face with the requirements of such
Letter of Credit.  As between the Borrowers,
any Facing Bank and each Lender, the Borrowers assume all risks of the acts and
omissions of any Facing Bank, or misuse of any Letter of Credit by the
respective beneficiaries of such Letter of Credit.  In furtherance and not in limitation of the
foregoing, neither any Facing Bank, Administrative Agent nor any of the Lenders
shall be responsible (a) for the form, validity, sufficiency, accuracy,
genuineness or legal effects of any document submitted by any party in
connection with the application for and issuance of or any drawing honored
under any Letter of Credit even if it should in fact prove to be in any or all
respects invalid, insufficient, inaccurate, fraudulent or forged, (b) for the
validity or sufficiency of any instrument transferring or assigning or
purporting to transfer or assign any Letter of Credit, or the rights or
benefits thereunder or proceeds thereof, in whole or in part, which may prove
to be invalid or ineffective for any reason, (c) for failure of the beneficiary
of any Letter of Credit to strictly comply with conditions required in order to
draw upon such Letter of Credit, (d) for errors, omissions, interruptions or
delays in transmission or delivery of any messages, by mail, cable, telegraph,
telex, telecopy, facsimile or otherwise, whether or not they be in cipher, (e)
for errors in interpretation of technical terms, (f) for any loss or delay in
the transmission or otherwise of an document required in order to make a
drawing under any Letter of Credit, or of the proceeds thereof and (g) for the
misapplication by the beneficiary of any Letter of Credit of the proceeds of
any drawing honored under such Letter of Credit.  Any action taken or omitted to be taken by
any Facing Bank under or in connection with any Letter of Credit shall not
create any liability on the part of Administrative Agent or any Lender to any
Borrower.

 

(i)            Obligations
Absolute.  The joint and several
obligations of the Borrowers to reimburse each Facing Bank for drawings honored
under a Letter of Credit issued by such Facing Bank, together with interest as
herein provided, and the obligations of the Lenders under Section 2.3(g)
shall be unconditional and irrevocable and shall be paid strictly in accordance
with the terms of this Agreement, without any reduction or deduction
whatsoever, including any reduction or deduction for any set-off, recoupment or
counterclaim, under all circumstances including the following circumstances:

 

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

 

(ii)           the existence of any claim, set-off,
defense or other right which any Borrower or any Affiliate of any Borrower may
have at any time against a beneficiary or any transferee of any Letter of
Credit (or any Persons for whom any such beneficiary or transferee may be
acting), the applicable Facing Bank, any Lender or any other Person, whether in
connection with this Agreement, the transactions contemplated herein or any
unrelated transaction;

 

50

 

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

 

(iv)          the surrender or impairment of any
security for the performance or observance of any of the terms of any of the
Loan Documents;

 

(v)           payment by the applicable Facing Bank
under any Letter of Credit against presentation of a demand, draft or
certificate or other document which does not comply with the terms of such
Letter of Credit (provided that the foregoing shall not be construed to excuse
the Facing Bank from liability to any Borrower to the extent of any direct
damages (as opposed to consequential damages) suffered by any Borrower that are
caused by the Facing Bank’s failure to exercise care when determining whether
drafts and other documents under a Letter of Credit comply with the terms
thereof);

 

(vi)          failure of any drawing under a Letter
of Credit or any non-application or misapplication by the beneficiary of the
proceeds of any drawing; or

 

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

 

provided
that no payment by a Borrower or a Lender to any Facing Bank shall constitute a
waiver or release by such Borrower or such Lender of any right it may have
against such Facing Bank, including, in the case of a Borrower, a claim that
such Facing Bank acted with willful misconduct or gross negligence as
determined by a court of competent jurisdiction in determining whether
documents presented under a Letter of Credit complied with the terms of such
Letter of Credit.

 

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

 

51

 

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

 

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

 

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

 

(l)            any
increase in the Stated Amount of any Letter of Credit by reason of any
amendment to any Letter of Credit shall be deemed effective under this
Agreement as of the date the applicable Facing Bank actually issues an
amendment purporting to increase the Stated Amount of such Letter of Credit,
whether or not the applicable Facing Bank receives the consent of the Letter of
Credit beneficiary or beneficiaries to the amendment, except that if the Funds
Administrator has requested that the increase in Stated Amount be given effect
as of an earlier date and the applicable Facing Bank issues an amendment to that
effect, then such increase in Stated Amount shall be deemed effective under
this Agreement as of such earlier date requested by the Funds Administrator; provided
that any increase in the Stated Amount shall be subject to the satisfaction or
waiver of the conditions set forth in Section 5.2 and the applicable
Facing Bank shall promptly notify the other Lenders of any such increase; and

 

52

 

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

 

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

 

53

 

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

 

(m)          Existing
Letters of Credit.  Schedule
2.3(m) sets forth all letters of credit of the Borrowers issued by Facing
Bank each of which shall be deemed Letters of Credit under this Agreement and
shall count against the $50,000,000 limit on Letters of Credit as set forth in Section
2.3(a)(i)(B).  Each Lender shall be
deemed, without further action of any party hereto, to have purchased from the
Facing Bank a participation interest equal to its Pro Rata Share of such
Letters of Credit.

 

2.4           Master Collection Account.

 

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

 

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

 

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

 

54

 

Administrative Agent and the Collateral Agent, in
other overnight investments constituting Permitted Investments.  In no event shall the Collateral Agent,
Administrative Agent or any of the Lenders be liable for any losses incurred on
such investments, including as a result of any early termination of such
investments as aforesaid.

 

ARTICLE III

INTEREST AND FEES

 

3.1           Interest.

 

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

 

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

 

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

 

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

 

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

 

3.2           Fees.

 

(a)           Commitment
Fee.  The Borrowers shall pay in
Dollars to Administrative Agent, for the ratable benefit of the Lenders, a
commitment fee on the sum of the Total

 

55

 

Available Commitment of the Lenders in effect for each
day, at a rate per annum equal to 0.50%. 
Such commitment fee shall accrue from the Closing Date to the Commitment
Termination Date and shall be payable quarterly, in arrears, on the last
Business Day of each Fiscal Quarter (or if such day is not a Business Day, on
the immediately preceding Business Day), and on the Commitment Termination Date.

 

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

 

(c)           Letter
of Credit Fees.

 

(i)            Administrative Agent shall be
entitled to charge to the account of the Funds Administrator on the first
Business Day of the month immediately succeeding each Fiscal Quarter, a fee for
the ratable benefit of the Lenders for distribution to each Lender, in an
amount equal to the Eurodollar Margin for Loans with respect to all Letters of
Credit on the daily undrawn amounts outstanding during the immediately
preceding Fiscal Quarter; provided that from the date an Event of
Default occurs, and at all times thereafter until the earlier of the date upon
which (A) all Obligations have been paid and satisfied in full and (B) such
Event of Default shall not be continuing, such fee shall be equal to two (2%)
percent per annum above the Eurodollar Margin, otherwise applicable hereunder
and shall be payable on demand (such fees, the “Letter of Credit Fees”);
and

 

(ii)           Administrative Agent shall be
entitled to charge to the account of the Funds Administrator on the first
Business Day of the month immediately succeeding each Fiscal Quarter, a fee for
the benefit of the Facing Bank equal to the greater of (X) $500 per annum and
(Y) 0.125% per annum with respect to all Letters of Credit on the daily undrawn
amounts outstanding during the immediately preceding Fiscal Quarter (the “Fronting
Fee”). In addition to the Fronting Fee, Administrative Agent shall be
entitled to charge the account of the Funds Administrator, as and when
incurred, the customary charges, fees, costs and expenses of the Facing Bank
for the issuance, transfer, amendment or payment of any Letter of Credit (the “Facing
Bank Fees”). Each determination of the Fronting Fee and Facing Bank Fees
shall be made by the Facing Bank and provided in writing to Administrative
Agent and shall be conclusive and binding for purposes of Agent’s right to
collect and distribute such fees, absent manifest error.

 

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

 

56

 

3.4           Compensation For Funding Losses.  Borrowers shall compensate each Lender, upon
its written request (which request shall set forth the basis for requesting
such amounts, showing the calculation thereof in reasonable detail), for all
losses, expenses and liabilities (including, without limitation, any interest
paid by such Lender to lenders of funds borrowed by it to make or carry its
Loans to the extent not recovered by the Lender in connection with the
liquidation or re-employment of such funds and including the compensation
payable by such Lender to a Person to which the Lender has participated all or
a portion of such Loan) and any loss sustained by such Lender in connection
with the liquidation or re-employment of such funds (including, without
limitation, a return on such liquidation or re-employment that would result in
such Lender receiving less than it would have received had such Loan remained
outstanding until the last day of the Interest Period applicable to such Loans)
which the Lender may sustain as a result of: 
(i) for any reason (other than a default by such Lender or
Administrative Agent) a Borrowing of, continuation of, or conversion from or
into, Eurodollar Loans does not occur on a date specified therefor in a Notice
of Borrowing or Notice of Conversion or Continuation (whether or not
withdrawn); (ii) any payment, prepayment or conversion or continuation of any
of its Eurodollar Loans occurring for any reason whatsoever on a date which is
not the last day of an Interest Period applicable thereto; (iii) any repayment
of any of its Eurodollar Loans not being made on the date specified in a notice
of payment given by the Funds Administrator; or (iv) (A) any other failure by
the Borrowers to repay their Eurodollar Loans when required by the terms of
this Agreement or (B) an election made by Borrowers pursuant to Section 3.6.  Each Lender shall submit its written request
as to additional amounts owed such Lender under this Section 3.4 to the
Funds Administrator and Administrative Agent within ten Business Days of the
event giving rise to such request, which request shall, absent manifest error,
be final, conclusive and binding for all purposes.

 

3.5           Increased Costs, Illegality, Etc. 

 

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

 

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

 

(ii)           at any time that any Lender shall
incur increased costs or reduction in the amounts received or receivable
hereunder with respect to any Eurodollar Loan because of any change since the
date of this Agreement in any applicable law or governmental rule, regulation,
order, guideline or request (whether or not having the force of law) or in the
interpretation or administration thereof and including the introduction of any
new law or governmental rule, regulation, order, guideline or request, such as,
for example, but not limited to (A) a change in the basis of taxation of payments

 

57

 

to any Lender of the Principal
of or interest on the Notes or any other amounts payable hereunder (except for
(a) changes in the rate of tax on, or determined by reference to, the net
income or profits of such Lender imposed by the jurisdiction in which its
principal office or applicable lending office is located and (b) USA
withholding taxes, which shall be governed by the provisions of Section 4.5) or
(B) a change in official reserve requirements (but, in all events, excluding
reserves required under Regulation D to the extent included in the computation
of the Eurodollar Rate) and/or (y) other circumstances since the date of this
Agreement affecting such Lender or the interbank Eurodollar market or the
position of such Lender in such market (excluding, however, differences in a
Lender’s cost of funds from those of Administrative Agent which are solely the
result of credit differences between such Lender and Administrative Agent); or

 

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

 

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

 

58

 

methods which are
reasonable and which cover all loans similar to the Loans made by such Lender
whether or not the loan documentation for such other loans permits the Lender
to receive increased costs of the type described in this Section 3.5(a).

 

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

 

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

 

59

 

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

 

3.6           Replacement of Lenders.

 

If any Lender is owed
increased costs under Section 3.5(a)(ii) or (iii) or Section
3.5(c) or the Borrowers are required to make any payments under Section
4.8(c) to any Lender materially in excess of those of the other Lenders,
the Borrowers shall have the right, if no Default or Event of Default then
exists, to replace such Lender (the “Replaced Lender”) with one or more
other Eligible Assignee or Assignees (collectively, the “Replacement Lender”)
acceptable to Administrative Agent; provided that (i) at the time of any
replacement pursuant to this Section 3.6, the Replaced Lender and
Replacement Lender shall enter into one or more assignment agreements, in form
and substance satisfactory to such parties and Administrative Agent, pursuant
to which the Replacement Lender shall acquire all or a portion, as the case may
be, of the outstanding Loans of the Replaced Lender and (ii) all obligations of
the Borrowers owing to the Replaced Lender relating to the Loans so replaced
(including, without limitation, such increased costs and excluding those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being paid) shall be paid in full
to such Replaced Lender concurrently with such replacement.  Upon the execution of the respective
assignment documentation, the payment of amounts referred to in clauses (i) and
(ii) above and, if so requested by the Replacement Lender, delivery to the
Replacement Lender of the appropriate Note or Notes executed by the Borrowers,
the Replacement Lender shall become a Lender hereunder and the Replaced Lender
shall cease to be a Lender hereunder with respect to such replaced Loans, except
with respect to indemnification provisions under this Agreement, which shall
survive as to such Replaced Lender.  The
Replaced Lender shall be required to deliver for cancellation its Notes to be
cancelled on the date of replacement, or if any such Note is lost or
unavailable, such other assurances or indemnification therefor as the Funds
Administrator may reasonably request.

 

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

 

60

 

ARTICLE IV

REPAYMENTS; REDUCTION OF COMMITMENTS; PAYMENTS AND PREPAYMENTS

 

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

 

4.2           Voluntary Reduction of Commitments.  Upon at least one Business Days’ prior
written notice (or telephonic notice confirmed in writing) to Administrative
Agent at the Payment Office (which notice Administrative Agent shall promptly
transmit to each Lender), Borrowers shall have the right, without premium or
penalty, to terminate the unutilized portion of the Commitments, in part or in
whole; provided that (x) any such voluntary termination of the
Commitments shall apply to proportionately and permanently reduce the
Commitment of each Lender, (y) any partial voluntary reduction pursuant to this
Section 4.2 shall be in the amount of at least $5,000,000 and integral
multiples of $1,000,000 in excess of that amount, and (z) any such voluntary
termination of the Commitments shall occur simultaneously with a voluntary
prepayment, if necessary, pursuant to Section 4.4 such that the total of
the Commitments shall not be so reduced below the aggregate principal amount of
outstanding Loans plus the aggregate L/C Obligations.

 

4.3           Mandatory Reductions of Commitments.

 

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

 

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

 

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

 

61

 

notice provisions, the provisions with respect to the
minimum amount of any prepayment and the provisions requiring prepayments in
integral multiples above such minimum amount are for the benefit of
Administrative Agent and may be waived unilaterally by Administrative Agent.

 

4.5           Mandatory Prepayments.

 

(a)           Prepayment
of Loans Upon Overadvance.  The
Borrowers shall prepay the outstanding principal amount of the Loans on any
date on which the aggregate outstanding principal amount of such Loans together
with the L/C Obligations (after giving effect to any other repayments or
prepayments on such day) exceeds the aggregate Commitments.

 

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

 

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

 

(d)           Mandatory
Prepayment of Loans After Event of Default. 
Upon the occurrence and during the continuance of any Event of Default,
at 5:00 P.M. (New York City time) on any Business Day on which Loans are
outstanding and funds are on deposit in the Master Collection Account,
Collateral Agent shall transfer from the Master Collection Account an amount
equal to the Master Collection Account Balance first, to prepay outstanding
Loans and second to cash collateralize outstanding Letters of Credit in
an amount equal to 105% of the L/C Obligations, and third, at Funds
Administrator’s request to any accounts established or maintained in compliance
with the provisions of Section 8.15.

 

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

 

62

 

(f)            Daily
Mandatory Prepayment of Loans.  On
any Business Day on which Loans are outstanding and funds are on deposit in the
Master Collection Account, Collateral Agent shall transfer from the Master
Collection Account an amount equal to the lesser of (i) the amount of
outstanding Loans and (ii) the Master Collection Account Balance to prepay
outstanding Loans; provided, that, the Funds Administrator may direct
the Collateral Agent to reduce the amount transferred on such Business Day to
an amount equal to the outstanding amount of Base Rate Loans and Eurodollar
Loans the Interest Periods of which end on such Business Day.  If funds remain in the Master Collection
Account after giving effect to the provisions of the preceding sentence, such
remaining balance shall be retained in the Master Collection Account; provided,
that, subject to Section 4.5(d), if no Loans are outstanding, such funds
may be transferred at the Funds Administrator’s request to any accounts
established or maintained in compliance with the provisions of Section 8.15.

 

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

 

4.6           Payments.

 

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

 

(b)           Prepayments.  Except as expressly provided in this
Agreement (including Section 2.1(e)(iii)), all amounts received by the
Administrative Agent pursuant to Section 4.5 shall be distributed in the
following order and if to the Lenders, according to each Lender’s Pro Rata
Share with respect to each category set forth below:

 

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

 

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

 

63

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

4.7           Method and Place of Payment by
Borrowers.

 

(a)           Except
as otherwise specifically provided herein, all payments (including prepayments)
to be made by the Borrowers on account of principal, interest, fees and other
amounts required hereunder shall be made without set-off or counterclaim and
shall, except as otherwise expressly provided herein, be made to Administrative
Agent for the ratable account of the applicable Lenders in Dollars and in
immediately available funds, no later than 2:00 P.M. (New York city time) on
the date specified herein.  Any such
payment shall be made to such account of Administrative Agent as Administrative
Agent shall specify by notice to the Funds Administrator, provided that unless
and until otherwise specified, all such payments payable in Dollars shall be
made to Administrative Agent at its office at 60 Wall Street, 2nd Floor, New
York, New York  10005.  Administrative Agent will promptly distribute
to each Lender its applicable Pro Rata Share (or other applicable share as
expressly provided herein), as the case may be, of such principal, interest,
fees or other amounts, in like funds as received.  Any payment which is received by
Administrative Agent later than 2:00 P.M. (New York City time) shall be deemed
to have been received on the immediately succeeding Business Day and any

 

64

 

applicable interest or fee shall continue to accrue
until such payment is deemed to have been received.

 

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

 

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

 

4.8           Net Payments.

 

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

 

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

 

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

 

(iii)          any taxes to which the Lender (to the
extent of the tax rate then in effect) would be subject to (as of the Closing
Date) if a payment hereunder had been

 

65

 

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

 

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

 

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

 

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

 

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

 

66

 

reasonable detail, absent manifest error, shall be
final, conclusive and binding upon all parties hereto for all purposes.

 

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

 

67

 

immediately notify the Funds Administrator and
Administrative Agent of its inability to deliver any such form or certificate; provided,
however, that no Lender shall be required to deliver an IRS Form W8-BEN,
W-8ECI, or W-8IMY under this Section 4.8(d) to the extent that the
delivery of such form is not authorized by law; provided, further,
however, that any Lender which does not deliver the applicable form
pursuant to Section 4.8(d) shall be entitled to additional payment
pursuant to Section 4.8(a) or indemnification under Section 4.8(c)
only if and to the extent (i) such failure results solely from a change in law
or (ii) the Tax to which such additional payment or indemnification relates
would have been imposed regardless of whether such Lender provided such
forms.  Notwithstanding anything to the contrary
contained in Section 4.8, any Lender that has not provided to the Funds
Administrator the IRS Forms required to be provided to the Funds Administrator
pursuant to this Section 4.8(d) shall not be entitled to any payment of
additional amounts pursuant to Section 4.8(a) or indemnification under Section
4.8(c) with respect to any deduction or withholding which would not have
been required if such Lender had provided such forms.

 

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

 

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

 

4.9           Payments by the Lenders to
Administrative Agent.

 

(a)           Except
as provided in Section 4.9(b), Administrative Agent shall give to each
Lender prompt notice of each Notice of Borrowing by telecopy or facsimile
transmission.  No later than 4:00 P.M.
(New York City time) on the date of receipt of each Notice of Borrowing

 

68

 

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

 

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

 

(i)            The amount of each Lender’s Pro Rata
Share of such Loans shall be computed weekly (or more frequently in
Administrative Agent’s discretion) and shall be adjusted upward or downward on
the basis of the amount of outstanding Loans as of 5:00 P.M. (New York City
time) on the last Business Day of the period specified by Administrative Agent
(such date, the “Settlement Date”). 
Administrative Agent shall deliver to each of the Lenders promptly after
the Settlement Date a summary statement of the amount of such outstanding Loans
for such period.  The Lenders shall
transfer to Administrative Agent such amounts as are necessary so that (after
giving effect to all such transfers) the amount of Loans made by each Lender
shall be equal to such Lender’s Pro Rata Share of the aggregate amount of Loans
outstanding as of such Settlement Date. 
During an Event of Default or Unmatured Event of Default relating to a
Bankruptcy Event, amounts required to be transferred by the Lenders to
Administrative Agent shall, instead of constituting Loans to the Borrowers, be
in the form of participations purchased by the Lenders in the outstanding Loans
of DB, acting as Administrative Agent. 
If the summary statement is received by the Lenders prior to 12:00 Noon
(New York City time) on any Business Day, each Lender shall make the transfers
described above in immediately available funds no later than 3:00 P.M. (New
York City time) on the day such summary statement was received; and if such
summary statement is received by the Lenders after 12:00 Noon (New York City
time) on such day, each Lender shall make such transfers no later than 3:00
P.M. (New York City time) on the next succeeding

 

69

 

Business Day.  The obligation of each of the Lenders to
transfer such funds shall be irrevocable and unconditional and without recourse
to or warranty by Administrative Agent. 
Each of Administrative Agent and the Lenders agrees to mark its books
and records on the Settlement Date to show at all times the dollar amount of
its Pro Rata Share of the outstanding Loans.

 

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

 

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

 

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

 

4.10         Sharing of Payments; etc.

 

(a)           If
any Lender (a “Benefited Lender”) shall at any time receive any payment
of all or part of its Loans, or interest thereon, or receive any collateral in
respect thereof (whether voluntarily or involuntarily, by setoff, pursuant to
events or proceedings of the nature referred to in Section 10.1(e) or Section
10.1(f) hereof, or otherwise) in a greater proportion than any such payment
to and collateral received by any other Lender in respect of such other Lender’s
Loans or interest thereon not expressly provided hereby, such Benefited Lender
shall purchase for cash from the other Lenders such portion of each such other
Lender’s Loans, or shall provide such other Lenders with the benefits of any
such collateral, or the proceeds thereof, as shall be necessary to cause such
Benefited Lender to share the excess payment or benefits of such collateral or
proceeds ratably with each Lender except to the extent expressly provided
hereby; provided, however, that if all or any portion of such
excess payment or benefits is thereafter recovered from such Benefited Lender,
such purchase shall be rescinded, and the purchase price and benefits returned,
to the extent of such recovery, but without interest unless the Benefited
Lender from which such excess payment is recovered is required by court order
to pay interest thereon, in which case each Lender returning funds to such
Benefited Lender shall pay its pro rata share of such interest.  Borrower agrees that each Lender so
purchasing a portion of another Lender’s Loans may exercise all rights of
payment (including, without limitation, rights of setoff) with respect to such
portion as fully as if such Lender were the direct holder of such portion.

 

70

 

(b)           Each
Borrower agrees that any Lender so purchasing a participation from another
Lender pursuant to this Section 4.10 may, to the fullest extent
permitted by law, exercise all its rights of payment (including the right of
setoffs, but subject to Section 13.7) with respect to such participation
as fully as if such Lender were the direct creditor of such Borrower in the
amount of such participation.

 

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

 

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

 

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

 

ARTICLE V

CONDITIONS OF CREDIT

 

5.1           Conditions Precedent to the
effectiveness of the Agreement. 
The obligation of the Lenders to make the Loans and the obligation of
the Facing Bank to issue and the Lenders to participate in Letters of Credit
under this Agreement shall be subject to the fulfillment, at or prior to the
time of the making of such Loans, of each of the following conditions:

 

(a)           Loan
Documents.

 

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

 

(ii)           Security Documents.  The Company, HSCC, HSCHC and each Restricted
Domestic Subsidiary of the Company (other than IRIC) shall have duly

 

71

 

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

 

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

 

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

 

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

 

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

 

(iii)          Subsidiary Guarantee Agreements.

 

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

 

(B)           Other Subsidiary Guarantee
Agreements.  Huntsman Headquarters
Corporation shall have duly executed and delivered an Amended and Restated
Subsidiary Guarantee Agreement substantially in the form of Exhibit
5.1(a)(iii)(B)-1 (as modified, supplemented or otherwise amended from time
to time, the “Headquarters Subsidiary Guarantee Agreement”) and HSCC
shall have duly executed and delivered a Subsidiary

 

72

 

Guaranty Agreement
substantially in the form of Exhibit 5.1(a)(iii)(B)-2 (as modified,
supplemented or amended from time to time, the “HSCC Subsidiary Guarantee
Agreement” and, together with the Restricted Subsidiary Guarantee Agreement
and the Headquarters Subsidiary Guarantee Agreement, the “Subsidiary
Guarantee Agreements”).

 

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

 

(v)           Mortgage; Title Insurance; Surveys.  Administrative Agent shall have received (A)
fully executed counterparts of mortgages or amendments to mortgages (collectively,
the “Mortgages”) in each case in form and substance satisfactory to
Administrative Agent, which mortgages shall cover such of the real property
owned by the Borrowers and their Restricted Subsidiaries as shall be listed as
mortgaged property on Schedule 6.21(c), together with evidence that
counterparts of the Mortgages have been delivered to the title insurance
company for recording in all places to the extent necessary or desirable, in
the judgment of Administrative Agent, to create a valid and enforceable lien on
each Mortgaged Property in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the Lenders
and the other secured parties under the Security Agreement, subject only to Permitted
Liens; (B) mortgagee title insurance policies issued by title insurance
companies satisfactory to Administrative Agent (the “Mortgage Policies”)
with respect to the Mortgaged Properties in amounts satisfactory to
Administrative Agent assuring Administrative Agent that the Mortgages with
respect to such Mortgaged Properties are valid and enforceable mortgage liens
on the respective Mortgaged Properties, free and clear of all defects,
encumbrances and other Liens except Permitted Liens, and the Mortgage Policies
shall be in form and substance satisfactory to Administrative Agent and shall
include, as appropriate, any other matter that Administrative Agent in its
discretion may request, shall not include an exception for mechanics’ liens,
and shall provide for affirmative insurance and such reinsurance as
Administrative Agent in its discretion may request; and (C) to the extent
requested by Administrative Agent, a survey, in form and substance satisfactory
to Administrative Agent, of each Mortgaged Property dated a recent date
acceptable to Administrative Agent, certified by a licensed professional
surveyor satisfactory to Administrative Agent, provided, however,
in the event that any survey delivered pursuant to this provision is dated on a
date which is more than six (6) months prior to the Closing Date, but less than
one (1) year prior to the Closing Date, such survey shall be acceptable so long
as such survey otherwise complies with the ALTA/ACSM standards required by
Administrative Agent, and the owner and/or lessee of the Mortgaged Property
delivers a “no change survey affidavit” in a form which is acceptable to the
title insurance company issuing the Mortgage Policy, so that the title
insurance company will delete any general survey exception in such Mortgage
Policy.

 

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

 

73

 

effect and in form and
substance satisfactory to Administrative Agent as of the Closing Date.

 

(vii)         Termination of Existing Credit
Facilities.  On the Closing Date, the
total commitments under each of the Existing Credit Agreements shall have been
terminated, all loans thereunder shall have been repaid in full, together with
interest thereon, and all other amounts owing pursuant to such agreements shall
have been repaid in full and such agreements shall have been terminated on
terms and conditions satisfactory to Administrative Agent and the Required
Lenders and be of no further force or effect and the creditors thereunder shall
have terminated, released or modified all security interests and Liens on the
assets owned by the Company and its Subsidiaries in a manner satisfactory to
Administrative Agent.

 

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

 

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

 

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

 

(ii)           Copies of its bylaws or operating
agreement, as the case may be, , certified as of the Closing Date by its
corporate secretary or an assistant secretary;

 

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

 

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

 

(c)           Financial
Statements.  Administrative Agent
shall have received and reviewed, and be satisfied with, (i) audited
consolidated balance sheets and related statements of

 

74

 

income, stockholders’ equity and cash flows of the
Company prepared in accordance with GAAP for each of the last two fiscal years
ending more than 90 days prior to the Closing Date, (ii) unaudited consolidated
balance sheets and related statements of income, stockholders’ equity and cash
flows of Borrower prepared in accordance with GAAP for each fiscal quarter
ending after the last fiscal year (other than the year-end fiscal quarter)
covered by the Historical Financial Statements and prior to 30 days prior to
the Closing Date and for the comparable periods of the preceding fiscal year
(with respect to which the independent auditors shall have performed a SAS 71
or SAS 100 review, as applicable), (iii) 
forecasts of the financial performance of Borrower and its subsidiaries
and (iv) such other financial information as Administrative Agent may request.

 

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

 

(e)           Certificates
and Opinions of Parties’ Counsel.

 

(i)            Representations and Warranties;
Default; Officer’s Certificate.  The
representations and warranties set forth in Article VI hereof shall be
true and correct and no Event of Default or Unmatured Event of Default shall
have occurred or be continuing (after giving effect to this Agreement) and
Administrative Agent shall have received a certificate executed by a
Responsible Officer on behalf of the Borrowers, dated the Closing Date and in
the form of Exhibit 5.1(e)(i) hereto, stating that the representations
and warranties set forth in Article VI hereof are true and correct as of
the date of the certificate, that no Event of Default or Unmatured Event of
Default has occurred and is continuing (after giving effect to this Agreement),
and that the conditions of Section 5.1 hereof have been fully satisfied
or waived.

 

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

 

75

 

(iii)          Solvency Certificate.  Administrative Agent shall have received a
certificate executed by a Responsible Officer on behalf of each Credit Party
dated the Closing Date and in the form of Exhibit 5.1(e)(iii) hereto.

 

(f)            Tax
Sharing Agreement.  Administrative
Agent shall have received a certified copy of the fully executed Tax Sharing
Agreement.

 

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

 

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

 

(i)            Litigation.  No litigation by any entity (private or
governmental) shall be pending or, to the best knowledge of any Borrower,
threatened with respect to this Agreement, any other Loan Document or any
documentation executed in connection herewith or the transactions contemplated
hereby, or which Administrative Agent or the Required Lenders shall determine
could reasonably be expected to have a Material Adverse Effect.

 

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

 

(k)           Adverse
Change.  Since December 31, 2003,
nothing shall have occurred (and the Lenders shall have become aware of no
facts or conditions not previously known) which Administrative Agent or the
Required Lenders shall reasonably determine has, or could have, a Material
Adverse Effect.

 

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

 

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

 

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

 

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

 

(p)           Excess
Availability.  After giving effect to
all Loans on the Closing Date, there shall be unused availability under this
Agreement of at least $150,000,000.00.

 

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

 

(r)            Structure.  The legal, organizational and financial
structure of the Borrower and its Subsidiaries and the financial, legal,
accounting and tax matters relating to this Agreement and the Term Credit
Agreement shall be satisfactory to Administrative Agent and Lenders.

 

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

 

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

 

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

 

77

 

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

 

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

 

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

 

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

 

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

 

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

 

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

 

ARTICLE VI

REPRESENTATIONS AND WARRANTIES

 

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

 

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

 

78

 

authorization or good standing, except for such
failure to be so qualified, authorized or in good standing which, in the
aggregate, would not have a Material Adverse Effect.

 

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

 

6.3           No Violation. 
Neither the execution, delivery or performance by any Credit Party of
the Loan Documents to which it is a party (including, without limitation, the
granting of Liens pursuant to the Security Documents), nor compliance by it
with the terms and provisions thereof, nor the consummation of the transactions
contemplated therein (i) will contravene any provision of any Requirement of
Law applicable to any Credit Party, (ii) will conflict with or result in any
breach of or constitute a tortious interference with any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
result in the creation or imposition of (or the obligation to create or impose)
any Lien (except pursuant to the Security Documents) upon any of the property
or assets of any Credit Party pursuant to the terms of, any material
Contractual Obligation to which any Credit Party is a party or by which it or
any of its property or assets is bound or to which it may be subject, (iii)
will violate any provision of any Organizational Document of any Credit Party
or (iv) will require any approval of stockholders or any approval or consent of
any Person (other than a Governmental Authority) except as have been obtained
on or prior to the Closing Date or as set forth on Schedule 6.3.

 

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

 

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

 

(a)           Financial
Statements.  The Historical Financial
Statements copies of which have been furnished to Administrative Agent prior to
the date hereof present fairly the financial condition of the applicable Credit
Party as of the date thereof.  The
Historical Financial Statements identified on Schedule 6.5(a) as audited
financial statements for the Fiscal Year ended December 31, 2003, have been
examined by Deloitte & Touche, independent certified public accountants,
who delivered a report and opinion that is not subject to any “going concern”
or like qualification or exception or any qualification or exception as to the
scope of the audit.

 

79

 

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

 

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

 

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

 

(e)           Pro
Forma.  The pro  forma
balance sheet of the Borrowers attached hereto as Schedule 6.5(e) (the “Pro
Forma Balance Sheet”) presents fairly the financial condition of the
Borrowers at the date of such balance sheet and presents a good faith estimate
of the pro  forma financial condition of the Borrowers and their
Subsidiaries on a consolidated basis (after giving effect to the transactions
contemplated hereby) at June 30, 2004. 
The Pro Forma Balance Sheet

 

80

 

has been prepared using financial statements of the Borrowers
and their Subsidiaries which were prepared in accordance with GAAP consistently
applied (except as may be indicated in the notes thereto) subject to normal
year-end adjustments.

 

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

 

(g)           No
Material Adverse Change.  As of the
Closing Date and at any time thereafter, there has been no material adverse
change in the business, condition (financial or otherwise), assets, liabilities
or operations of the Borrowers and their Restricted Subsidiaries taken as a
whole since December 31, 2003 based on the financial statements delivered
pursuant to Section 6.5(a)(i).

 

6.6           Litigation. 
There are no actions, suits or proceedings pending or, to the best
knowledge of Borrowers, threatened in writing against Borrowers or any of its
Subsidiaries (i) with respect to any Loan Document seeking to enjoin any
Borrower’s or any Subsidiary’s performance thereof or (ii) which would
reasonably be expected to have a Material Adverse Effect.

 

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

 

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

 

81

 

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

 

6.10         Compliance With ERISA.  

 

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

 

(b)           (i)
Each Foreign Pension Plan is in compliance and in good standing (to the extent
such concept exists in the relevant jurisdiction) in all material respects with
all laws, regulations and rules applicable thereto, including all funding
requirements, and the respective requirements of the governing documents for
such Foreign Pension Plan; (ii) with respect to each Foreign Pension Plan
maintained or contributed to by each Borrower or any of its Subsidiaries, (x)
that is required by applicable law to be funded in a trust or other funding
vehicle is in

 

82

 

material compliance with applicable law regarding
funding requirements, and (y) that is not required by applicable law to be
funded in a trust or other funding vehicle, reasonable reserves have been established
in accordance with prudent business practice or where required by ordinary
accounting practices in the jurisdiction in which such Foreign Pension Plan is
maintained; (iii) all material contributions required to have been made by each
Borrower or any of its Subsidiaries to any Foreign Pension Plan have been made
within the time required by law or by the terms of such Foreign Pension Plan;
and (iv) to the knowledge of each Borrower or any of its Subsidiaries, no
actions or proceedings have been taken or instituted to terminate or wind-up a
Foreign Pension Plan with respect to which such Borrower, its Subsidiaries and
their ERISA Affiliates could have any material liability.

 

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

 

6.12         Capitalization of the Company.  On the Closing Date, the capitalization of
the Company is as set forth on Schedule 6.12 hereto.  All shares of Capital Stock of the Company
have been duly authorized and validly issued and are fully paid and
non-assessable.  Except as set forth on Schedule
6.12, no authorized but unissued or treasury shares of Capital Stock of the
Company are subject to any option, warrant, right to call or commitment of any
kind or character.  A complete and
correct copy of each of the certificate of formation and operating agreements
of the Company in effect on the Closing Date has been delivered to
Administrative Agent.  Except as set
forth on Schedule 6.12, no Borrower has any outstanding stock or
securities convertible into or exchangeable for any shares of its Capital
Stock, or any rights issued to any Person (either preemptive or other) to
subscribe for or to purchase, or any options for the purchase of, or any
agreements providing for the issuance (contingent or otherwise) of, or any
calls, commitments or claims of any character relating to any of its Capital
Stock or any stock or securities convertible into or exchangeable for any of
its Capital Stock (other than as set forth in the Organizational Documents of
such Borrower).  Neither the Company nor
any of its Subsidiaries is subject to any obligation (contingent or otherwise)
to repurchase or otherwise acquire or retire any shares of its Capital Stock or
any convertible securities, rights or options of the type described in the
preceding sentence except for agreements the performance of which would not
violate this Agreement.  As of the
Closing Date, all of the issued and outstanding shares of Capital Stock of the
Company are owned of record by the stockholders as set forth on Schedule
6.12 hereto.

 

6.13         Subsidiaries.

 

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

 

83

 

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

 

(c)           Restrictions
on or Relating to Subsidiaries. 
There does not exist any consensual encumbrance or restriction on the
ability of (i) any Restricted Subsidiary of a Borrower to pay dividends or make
any other distributions on its Capital Stock or any other interest or
participation in its profits owned by a Borrower or any Restricted Subsidiary
of a Borrower, or to pay any Indebtedness owed to a Borrower or a Restricted
Subsidiary of a Borrower, (ii) any Restricted Subsidiary of a Borrower to make
loans or advances to a Borrower or any Borrower’s Restricted Subsidiaries or
(iii) a Borrower or any of its Restricted Subsidiaries to transfer any of its
properties or assets to a Borrower or any of its Restricted Subsidiaries,
except, in each case, for such encumbrances or restrictions permitted to exist
under Section 8.12.

 

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

 

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

 

6.16         Public Utility Holding Company Act.  No Borrower and no Subsidiary of any Borrower
is a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.

 

6.17         Environmental Matters.  (i) The operations of and the real property
owned or operated by each Borrower and each of its Subsidiaries is in compliance
with all applicable Environmental Laws except where the failure to be in
compliance, individually or in the aggregate, could not reasonably be expected
to have a Material Adverse Effect; (ii) each Borrower and each of its
Subsidiaries has obtained and will continue to maintain all Environmental
Permits, and all such Environmental Permits are in good standing and each
Borrower and each of its Subsidiaries are in compliance with all terms and
conditions of such Environmental Permits, except where failure to so obtain,
maintain or comply, individually or in the aggregate, could not reasonably be
expected to have a Material Adverse Effect; (iii) no Borrower, Subsidiary of
any Borrower and none of their present or past properties or operations
(whether owned or leased) is subject to: 
(A) any Environmental Claim or other written claim, request for
information, judgment, order, decree or agreement from or with any Governmental
Authority or private party related to any material violation of or material
non-compliance with Environmental Laws or Environmental Permits to the extent
any of the foregoing could

 

84

 

reasonably be expected to have a Material Adverse
Effect, (B) any pending or, to the knowledge of any Borrower, threatened
judicial or administrative proceeding, action, suit or investigation related to
any Environmental Laws or Environmental Permits which, if determined adversely
to a Borrower or any of its Subsidiaries, could reasonably be expected to have
a Material Adverse Effect, (C) any Remedial Action which if not taken could
reasonably be expected to have a Material Adverse Effect or (D) any
liabilities, obligations or costs arising from the Release or substantial
threat of a material Release of a Contaminant into the environment regardless
of whether the Release or substantial threat of a material Release is occurring
on any Borrower’s or any Subsidiaries’ present or past properties or at any
other location, in each case where such Release or substantial threat of a
Material Release could reasonably be expected to have a Material Adverse
Effect; (iv) no Borrower and no Subsidiary of a Borrower has received any
written notice or claim to the effect that a Borrower or any of its
Subsidiaries is or may be liable to any Person as a result of the Release or
substantial threat of a material Release of a Contaminant into the environment,
which notice or claim could reasonably be expected to result in a Material
Adverse Effect; and (v) no Environmental Lien has attached to any property
(whether owned or leased) of a Borrower or of any of its Subsidiaries which
could reasonably be expected to have a Material Adverse Effect, nor are there
any facts or circumstances currently known to a Borrower or any of its Subsidiaries
that may reasonably be expected to give rise to such an Environmental Lien.

 

6.18         Labor Relations. 
No Borrower and no Restricted Subsidiary of a Borrower is engaged in any
unfair labor practice that could reasonably be expected to have a Material
Adverse Effect.  There is (i) no
significant unfair labor practice complaint pending against a Borrower or any
of its Restricted Subsidiaries or, to the best knowledge of any Borrower,
threatened against any of them before the National Labor Relations Board or
appropriate national court or other forum, and no significant grievance or
significant arbitration proceeding arising out of or under any collective
bargaining agreement is so pending against a Borrower or any of its Restricted
Subsidiaries or, to the best knowledge of a Borrower, threatened against any of
them or (ii) no significant strike, labor dispute, slowdown or stoppage is
pending against a Borrower or any of its Restricted Subsidiaries or, to the
best knowledge of a Borrower, threatened against a Borrower or any of its
Restricted Subsidiaries, in each case, except such as could not reasonably be
expected to have a Material Adverse Effect.

 

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

 

6.20         Certain Fees. 
No broker’s or finder’s fees or commissions or any similar fees or
commissions will be payable by any Borrower or any Restricted Subsidiary with
respect

 

85

 

to the incurrence and maintenance of the Obligations,
any other transaction under the Loan Documents or any services rendered in
connection with such transactions.  

 

6.21         Security Documents.

 

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

 

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

 

(c)           Real
Property Collateral.  The Mortgages
create, as security for the obligations purported to be secured thereby, a
valid and enforceable perfected security interest in and Lien on all of the
Mortgaged Property (including, without limitation, all fixtures and
improvements relating to such Mortgaged Property and affixed or added thereto
on or after the Closing Date) in favor of the Collateral Agent (or such other
trustee as may be named therein) for the benefit of the secured parties under
the Security Agreement, superior to and prior to the

 

86

 

rights of all third Persons (except that the security
interest created in the Mortgaged Property may be subject to the Permitted
Liens related thereto) and subject to no other Liens (other than Liens
permitted under Section 8.1).  Schedule
6.21(c) contains a true and complete list as of the Closing Date of (x)
each parcel of real property of each Borrower and each Restricted Subsidiary
with an estimated fair market value in excess of $1,000,000, (y) the type of
interest in such parcel of real property held by such Borrower or such
Restricted Subsidiaries and (z) whether or not such parcel of real property is
Mortgaged Property.  Each Borrower and
each Restricted Subsidiary has good and marketable title to all Mortgaged
Property free and clear of all Liens except those described in the first
sentence of this Section 6.21(c).

 

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

 

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

 

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

 

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

 

6.23         Use of Proceeds. 
All proceeds of the Loans shall be used: 
(i) to refinance all outstanding obligations under the Existing
Revolving Credit Agreement and to pay fees and expenses related to such
refinancing, (ii) for working capital and (iii) for general corporate
purposes.  Notwithstanding the foregoing,
proceeds of the Loans shall not be used to make voluntary prepayments of the
Term Loan Obligations or the Senior Secured Notes Obligations.

 

6.24         Anti-Terrorism Law.

 

(a)           No
Borrower is, and, to the knowledge of each Borrower, none of its Affiliates is,
in violation of any laws relating to terrorism or money laundering (“Anti-Terrorism
Laws”), including Executive Order No. 13224 on Terrorist Financing,
effective September 24, 2001 (the “Executive Order”), and the Uniting
and Strengthening America by Providing

 

87

 

Appropriate Tools Required to Intercept and Obstruct
Terrorism Act of 2001, Public Law 107-56.

 

(b)           No
Borrower is, and, to the knowledge of each Borrower, no Affiliate or broker or
other agent of any Borrower is, acting or benefiting in any capacity in connection
with any Loans hereunder is any of the following:

 

(i)            a person that is listed in the annex
to, or is otherwise subject to the provisions of, the Executive Order;

 

(ii)           a person owned or controlled by, or
acting for or on behalf of, any person that is listed in the annex to, or is
otherwise subject to the provisions of, the Executive Order;

 

(iii)          a person with which any Lender is
prohibited from dealing or otherwise engaging in any transaction by any
Anti-Terrorism Law;

 

(iv)          a person that commits, threatens or
conspires to commit or supports “terrorism” as defined in the Executive Order;
or

 

(v)           a person that is named as a “specially
designated national and blocked person” on the most current list published by
the U.S. Treasury Department Office of Foreign Assets Control (“OFAC”)
at its official website or any replacement website or other replacement
official publication of such list.

 

(c)           No
Borrower is, and, to the knowledge of each Borrower, no broker or other agent
of any Borrower is, acting in any capacity in connection with any Loans
hereunder (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any person
described in paragraph (b) above, (ii) deals in, or otherwise engages in any
transaction relating to, any property or interests in property blocked pursuant
to the Executive Order, or (iii) engages in or conspires to engage in any
transaction that evades or avoids, or has the purpose of evading or avoiding,
or attempts to violate, any of the prohibitions set forth in any Anti-Terrorism
Law.

 

ARTICLE VII

AFFIRMATIVE COVENANTS

 

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

 

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

 

(a)           Quarterly
Financial Statements.  As soon as
available, but in any event not later than 45 days after the end of each of the
first three quarterly periods of each Fiscal Year of the Company (or in the
event that a request for an extension of the required filing date for the
Company’s Form 10-Q with the SEC has been timely filed, the last day of such
requested

 

88

 

extension period, but in no event later than 55 days),
(i) the unaudited consolidated balance sheet of the Company and its
consolidated Subsidiaries as at the end of such quarter setting forth in
comparative form the audited balance sheet of the Company and its consolidated
Subsidiaries for the prior Fiscal Year, (ii) the related unaudited consolidated
statement of income of the Company and its consolidated Subsidiaries as at the
end of such quarter and for the portion of the Fiscal Year through the end of
such quarter setting forth in comparative form the figures for the related
periods in the prior Fiscal Year and (iii) the related unaudited consolidated
statements of cash flow of the Company and its consolidated Subsidiaries for
the portion of the Fiscal Year through the end of such quarter, and setting
forth in comparative form figures for the related period in the prior Fiscal
Year, all of which shall be certified by a Responsible Financial Officer of the
Company, subject to normal year-end audit adjustments and, if the Company has
established any Unrestricted Subsidiaries, such consolidated statements shall
be accompanied by a balance sheet as of such date, and a statement of income
and cash flows for such period and the prior year comparative period,
reflecting on a combined basis, for Restricted Subsidiaries and on a combined
basis for Unrestricted Subsidiaries, the consolidating entries for each of such
types of Subsidiaries; and

 

(b)           Annual
Financial Statements.  As soon as
available, but in any event within 90 days after the end of each Fiscal Year of
the Company (or in the event that a request for an extension of the required
filing date for the Company’s Form 10-K with the SEC has been timely filed, the
last day of such requested extension period, but in no event later than 105
days), a copy of the consolidating and consolidated balance sheet of the
Company and its consolidated Subsidiaries as at the end of such year and the
related consolidating and consolidated statements of income and of cash flows
for such year, and setting forth in each case in comparative form the figures
for the previous year and such consolidated statements shall be accompanied by
a balance sheet as of such date, and a statement of income and cash flows for
such period, reflecting on a combined basis, for Restricted Subsidiaries and on
a combined basis for Unrestricted Subsidiaries, the consolidating entries for
each of such types of Subsidiaries; all such financial statements shall be
complete and correct in all material respects and shall be prepared in
accordance with GAAP applied consistently throughout the periods reflected
therein and with prior periods (except as approved by the accountants preparing
such statements or the Responsible Financial Officer, as the case may be, and
disclosed therein) and, in the case of the consolidated financial statements
referred to in this Section 7.1(b), accompanied by a report thereon of
Deloitte & Touche or such other independent certified public accountants of
recognized national standing, which report shall contain no “going concern” or
like qualification or exception or any qualification or exception as to the
scope of such audit and shall state that such financial statements present
fairly the financial position of the Company and its Subsidiaries as at the
dates indicated and the results of their operations and cash flow for the
periods indicated in conformity with GAAP.

 

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

 

89

 

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

 

(d)           Upon
request by Administrative Agent at any time, and in any event within ten (10)
Business Days after the last Business Day of each fiscal month (and within two
(2) Business Days after the last Business Day of each week in which Total
Exposure has exceeded 80% of the Borrowing Base for five (5) consecutive
Business Days), a Borrowing Base Report in the form of Exhibit 7.1(d)
(the “Borrowing Base Report”) reflecting information as of the close of
business of the Borrowers for the immediately preceding calendar month (or such
shorter period as the case may be) with all supporting detail as Agent may from
time to time reasonably require, duly completed, detailing each Borrower’s
understanding as to which Receivables or Inventory constitute Eligible
Receivables and Eligible Inventory as of the last day of such fiscal month (or
such other date as the Agent may specify in such request) (including but not
limited to monthly aging and concentration of Receivables, monthly listing of
Inventory and such additional information in respect of Inventory, Receivables
and the Obligors as is from time to time requested by Administrative Agent),
and certified by a Responsible Financial Officer of the Company and subject
only to adjustment upon completion of the normal year-end audit of physical
inventory. In addition, each Borrowing Base Report shall have attached to it
such additional schedules and/or other information as Administrative Agent may
reasonably request.

 

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

 

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

 

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

 

90

 

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

 

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

 

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

 

(f)            Projections.  As soon as available and in any event within
sixty (60) days following the first day of each Fiscal Year commencing with the
Fiscal Year of the Company beginning January 1, 2005 projections in form
similar to that delivered on the Closing Date covering the period from the
beginning of such Fiscal Year (on a quarterly basis for the first Fiscal Year
and an annual basis thereafter) through the end of the third Fiscal Year
thereafter, prepared in reasonable detail, with appropriate presentation and
discussion of the principal assumptions upon which such projections are based,
which shall be accompanied by the statement of the chief executive officer or
Responsible Financial Officer of the Company to the effect that, to the best of
his knowledge, such projections are a reasonable estimate for the periods
respectively covered thereby.

 

(g)           Insurance.  (i) Prior to the Closing Date, the Company
shall have delivered to Administrative Agent evidence of insurance complying
with the requirements of Section 7.8 for the business and properties of
the Borrowers and their Subsidiaries, in form reasonably satisfactory to
Administrative Agent and the Required Lenders and naming Administrative Agent
as an additional insured, mortgagee and/or loss payee as its interests may
appear, and stating that such insurance shall not be canceled or revised
without 30 days’ prior written notice by the insurer to Administrative Agent
and (ii) the Company shall deliver to Administrative Agent information
concerning insurance at the times and in the manner specified in Section 7.8.

 

(h)           Management
Letters.  Promptly after receipt
thereof, a copy of any “management letter” received by Borrower or any of its
Subsidiaries from its certified public accountants.

 

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

 

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

 

91

 

(b)           Litigation
and Related Matters.  The
commencement of, or any material development in, any action, suit, proceeding
or investigation affecting the Borrowers or any of their Restricted
Subsidiaries or any of their respective properties before any arbitrator or
Governmental Authority, (i) in which the amount involved that the Borrowers
reasonably determine is not covered by insurance or other indemnity is
$10,000,000 or more, (ii) with respect to any Loan Document or any material
Indebtedness or preferred stock of a Borrower or any of its Restricted
Subsidiaries or (iii) which, if determined adversely to a Borrower or any of
its Subsidiaries, could reasonably be expected to have a Material Adverse
Effect.

 

(c)           Environmental
Notification.

 

(i)            The occurrence of one or more of the
following, to the extent that any of the following, if adversely determined,
would have a material adverse effect on the financial condition, business or
properties of the Company and its Subsidiaries taken as a whole or, in any
event, could reasonably be expected to result in liability to a Borrower or any
of its Restricted Subsidiaries in excess of $5,000,000 or a fine or penalty in
excess of $3,000,000:  (A) written
notice, claim or request for information to the effect that a Borrower or any
of its Subsidiaries is or may be liable in any material respect to any Person
as a result of the presence of or the Release or substantial threat of a
material Release of any Contaminant into the environment; (B) written notice
that a Borrower or any of its Subsidiaries is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the presence or to the Release or substantial threat of a material
Release of any Contaminant into the environment; (C) written notice that any
property, whether owned or leased by, or operated on behalf of, a Borrower or
its Subsidiaries is subject to a material Environmental Lien; (D) written
notice of violation to a Borrower or any of its Subsidiaries of any
Environmental Laws or Environmental Permits; or (E) commencement or written
threat of any judicial or administrative proceeding alleging a violation of any
Environmental Laws or Environmental Permits; provided, however,
that the provisions of this clause (i) shall not require a Borrower to violate
or breach any confidentiality covenants to which it is bound.

 

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

 

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

 

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(e)           Notice
of Change of Control.  Each occasion
that any Change of Control shall occur and such notice shall set forth in
reasonable detail the particulars of such occasion.

 

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

 

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

 

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

 

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

 

provided,
however, that neither a Borrower nor any of its Subsidiaries shall be
required to pay or discharge any such material tax, assessment, charge, levy or
claim (A) while the same is being contested by it in good faith and by
appropriate proceedings diligently pursued so long as such Borrower or such
Subsidiary, as the case may be, shall have set aside on its books adequate
reserves in accordance with GAAP (segregated to the extent required by GAAP)
with respect thereto and title to any material properties or assets is not
jeopardized in any material respect or (B) which could not reasonably be
expected to have a Material Adverse Effect.

 

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

 

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discuss with the Lenders and such representatives the
affairs, finances and accounts of the Borrowers and their Subsidiaries).

 

7.7           ERISA.

 

(a)           (i)  As soon as practicable and in any event
within ten (10) days after any Borrower or any of its Subsidiaries or ERISA
Affiliates knows or has reason to know that a Reportable Event has occurred
with respect to any Plan, deliver, or cause such Subsidiary or ERISA Affiliate
to deliver, to Administrative Agent a certificate of a Responsible Officer of
the Company or such Subsidiary or ERISA Affiliate, as the case may be, setting
forth the details of such Reportable Event and the action, if any, which the
Company or such Subsidiary or ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given; (ii) upon the
request of any Lender made from time to time, deliver, or cause each Subsidiary
or ERISA Affiliate to deliver, to each Lender a copy of the most recent
actuarial report and annual report completed with respect to any Plan; (iii) as
soon as possible and in any event within ten (10) days after any Borrower or
any of its Subsidiaries or ERISA Affiliates knows or has reason to know that
any of the following have occurred or is reasonably likely to occur with
respect to any Plan:  (A) such Plan has
been terminated, reorganized, petitioned or declared insolvent under Title IV
of ERISA, (B) the Plan Sponsor intends to terminate such Plan, (C) the PBGC has
instituted or will institute proceedings under Section 515 of ERISA to collect
a delinquent contribution to such Plan or under Section 4042 of ERISA to
terminate such Plan pursuant to Section 4041(c) of ERISA, (D) that an
accumulated funding deficiency has been incurred or that an application has
been made to the Secretary of the Treasury for a waiver or modification of the
minimum funding standard (including any required installment payments) or an
extension of any amortization period under Section 412 of the Code, or (E) that
any Borrower, or any Subsidiary of any Borrower and their ERISA Affiliates will
incur any material liability under Section 401(a)(29), 4971 or 4975 of the Code
or Section 409 or 502(1) of ERISA, deliver, or cause such Subsidiary or ERISA
Affiliate to deliver, to Administrative Agent a written notice thereof; and
(iv) as soon as possible and in any event within thirty days after any Borrower
or any of its Subsidiaries or ERISA Affiliates knows or has reason to know that
any of them has caused a complete withdrawal or partial withdrawal (within the
meaning of Sections 4203 and 4205, respectively, of ERISA) from any
Multiemployer Plan, deliver, or cause such Subsidiary or ERISA Affiliate to
deliver, to Administrative Agent a written notice thereof.  For purposes of this Section 7.7, any
Borrower shall be deemed to have knowledge of all facts known by the Plan
Administrator of any Plan of which such Borrower is the Plan Sponsor, and each
Subsidiary and ERISA Affiliate of any Borrower shall be deemed to have
knowledge of all facts known by the Plan Administrator of any Plan of which
such Subsidiary or ERISA Affiliate, respectively, is a Plan Sponsor.  In addition to its other obligations set
forth in this Article VII, each Borrower shall, and shall cause each of its
Subsidiaries and ERISA Affiliates to:

 

(A)          provide Administrative Agent with
prompt written notice, with respect to any Plan, of any failure to satisfy the
minimum funding standard requirements of Section 412 of the Code,

 

(B)           furnish to Administrative Agent,
promptly after delivery of the same to the PBGC, a copy of any delinquency
notice pursuant to Section 412(n)(4) of the Code,

 

94

 

(C)           correct any such failure to satisfy
funding requirements or delinquency referred to in the foregoing clauses (A)
and (B) within ninety (90) days after the occurrence thereof, except where the
failure to so satisfy would not reasonably be expected to have a Material
Adverse Effect;

 

(D)          comply in good faith in all material
respects with the requirements set forth in Section 4980B of the Code and with
Sections 601(a) and 606 of ERISA;

 

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

 

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

 

(b)           Establish,
maintain and operate and cause each of its Subsidiaries to, establish, maintain
and operate all Foreign Pension Plans in compliance in all material respects
with all laws, regulations and rules applicable thereto and the respective
requirements of the governing documents for such Foreign Pension Plans.

 

7.8           Maintenance of Property; Insurance.  (i) Keep and cause each of its Restricted Subsidiaries
to keep, all material property (including but not limited to equipment) useful
and necessary in its business in good working order and condition, normal wear
and tear and damage by casualty excepted, (ii) maintain on behalf of its
Restricted Subsidiaries and cause each of its Restricted Subsidiaries to
maintain, with financially sound and reputable insurers, insurance with respect
to its material properties and business against loss or damage of the kinds
customarily insured against by Persons engaged in the same or similar business,
of such types and in such amounts as are customarily carried under similar
circumstances by such other Persons. 
Such insurance shall be maintained with financially sound and reputable
insurers, except that a portion of such insurance program (not to exceed that
which is customary in the case of companies engaged in the same or similar
business or having similar properties similarly situated) may be effected
through self-insurance, provided adequate reserves therefor, in accordance with
GAAP, are maintained.  All insurance
policies or certificates (or certified copies thereof) with respect to such
insurance (A) shall be endorsed to the Collateral Agent’s reasonable
satisfaction for the benefit of the Collateral Agent for the benefit of the
Secured Parties (including, without limitation, by naming the Collateral Agent
as loss payee or additional insured, as appropriate); and (B) shall state that
such insurance policy shall not be cancelled or revised without thirty days’
prior written notice thereof by the insurer to Administrative Agent and (iii)
furnish to Administrative Agent, on the Closing Date and on the date of
delivery of each annual financial statement, full information as to the
insurance carried.  At any time that
insurance at levels described in Schedule 7.8 is not being maintained by
or on behalf of the Borrowers or any of their Subsidiaries, the Borrowers will
notify the Lenders in writing within two Business Days thereof and, if
thereafter notified by Administrative Agent or the Required Lenders to do so,
the Borrowers or any such Subsidiary, as the case may be, shall use

 

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commercially reasonable efforts to obtain insurance at
such levels at least equal to those set forth on Schedule 7.8.

 

7.9           Environmental Laws.

 

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

 

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

 

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7.10         Additional Security; Further Assurances.

 

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

 

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

 

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

 

(d)           Grant
of Security by New Subsidiaries. 
Subject to the provisions of Sections 7.10(a) and 7.10(c),
cause each Restricted Domestic Subsidiary established or created in accordance
with Section 8.7 to grant to the Collateral Agent for the benefit of the
Secured Parties pursuant to the Security Agreement a first or second priority
Lien in the manner set forth in the Security Documents (subject to Permitted
Liens) on all property (tangible and intangible) of such Subsidiary by
executing and delivering an agreement substantially in the form of Exhibit A to

 

97

 

the Security Agreement, or on other terms satisfactory
in form and substance to the Collateral Agent and Administrative Agent.  Each Borrower shall cause each of its
Restricted Domestic Subsidiaries, at its own expense, to execute, acknowledge
and deliver, or cause the execution, acknowledgment and delivery of, and
thereafter register, file or record in any appropriate governmental office, any
document or instrument reasonably deemed by Administrative Agent to be
necessary or desirable for the creation and perfection of the foregoing
Liens.  Each Borrower will cause each of
its Restricted Domestic Subsidiaries to take all actions requested by
Administrative Agent or the Required Lenders (including, without limitation,
the filing of UCC-l’s) in connection with the granting of such security
interests.

 

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

 

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

 

(g)           Documentation
for Additional Security.  The
security interests required to be granted pursuant to this Section 7.10,
shall be granted pursuant to the Annexes to the Security Documents or such
other security documentation satisfactory in form and substance to
Administrative Agent and the Required Lenders and shall constitute valid and
enforceable perfected security interests prior to the rights of all third
Persons (other than the “Secured Parties” with respect to “Term and Note First
Priority Collateral” as such terms are defined in the Term Security Documents)
and subject to no other Liens except Permitted Liens.  The Additional Security Documents and other
instruments related thereto shall be duly recorded or

 

98

 

filed in such manner and in such places and at such
times as are required by law to establish, perfect, preserve and protect the
Liens, in favor of Administrative Agent for the benefit of the Lenders,
required to be granted pursuant to the Additional Security Document and, all
taxes, fees and other charges payable in connection therewith shall be paid in
full by such Borrower or its Subsidiaries. 
At the time of the execution and delivery of the Additional Security
Documents, such Borrower shall cause to be delivered to Administrative Agent
such agreements, opinions of counsel, title surveys, real estate appraisals
satisfying any Requirements of Law, and other related documents as may be
reasonably requested by Administrative Agent or the Required Lenders to assure
themselves that this Section 7.10 has been complied with.

 

7.11         End of Fiscal Years; Fiscal Quarters.  (a) Cause each of its annual accounting
periods to end December 31 of each year (each a “Fiscal Year”, with
quarterly accounting periods ending on March 31, June 30, September 30 and
December 31 of each Fiscal Year (each a “Fiscal Quarter”)), and (b)
cause each of its Subsidiaries’ Fiscal Years to end on December 31 of each year
with Fiscal Quarters ending on March 31, June 30, September 30 and December 31
of each Fiscal Year, unless, in each case, otherwise required by applicable
law.

 

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

 

7.13         Maintenance of Corporation
Separateness.  Satisfy and cause
each of its Subsidiaries to, satisfy customary corporate (or other similar)
formalities, including the maintenance of corporate (or other similar) records.  No Borrower nor any Subsidiary of any
Borrower shall make any payment to a creditor of any Huntsman Affiliate in
respect of any liability of any of the foregoing, and no bank account of such
Borrower shall be commingled with any bank account of any Huntsman
Affiliate.  Any financial statements
distributed to any creditors of any Borrower shall, to the extent permitted by
GAAP, clearly establish the corporate separateness of the Huntsman Affiliates
from each Borrower and each of such Borrower’s Subsidiaries.  Finally, no Borrower nor any of its
Subsidiaries shall take any action, or conduct its affairs in a manner, which
is likely to result in the corporate existence of any Huntsman Affiliate on the
one hand and of any Borrower or any Subsidiary of any Borrower on the other
hand being ignored, or in the assets and liabilities of any Borrower or any
Subsidiary of any Borrower being substantively consolidated with those of any
Huntsman Affiliate in a bankruptcy, reorganization or other insolvency proceeding.

 

7.14         Certain Fees Indemnity.  Indemnify Administrative Agent and each
Lender against and hold Administrative Agent and each Lender harmless from any
claim, demand or liability for broker’s or finder’s fees or similar fees or
commissions alleged to have been incurred in connection with any of the
transactions contemplated hereby.

 

7.15         Compliance with Laws.  Comply and cause each Credit Party to comply
with all laws, rules, regulations, orders, writs, judgments, injunctions,
decrees or awards imposed by any Governmental Authority to which it or any of
its properties may be subject, including those with respect to any Receivable,
the collectibility or enforceability thereof, or any Contract related thereto
(including any requirements of licensing, registration, authorizations,
consents

 

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and approvals necessary or desirable to enter into any
Contract or create any Receivable and including laws, rules and regulations
relating to usury, disclosures, truth-in lending, fair credit billing, fair
credit reporting, equal credit opportunity, fair debt collection practices,
trade practices, consumer protection and privacy), except, in each case, where
the failure to do so would not cause a Material Adverse Effect.  Each Credit Party will pay all taxes payable
thereby as and when due.

 

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

 

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

 

(a)           Have
and maintain (i) administrative and operating procedures (including an ability
to recreate records evidencing Receivables and Inventory if the originals are
destroyed), (ii) adequate facilities, personnel and equipment and (iii) all
Records, documents, books, records and other information necessary or advisable
for collecting the Receivables (including records adequate to permit the immediate
identification of each new Receivable and all Collections of, and adjustments
to, each existing Receivable).  Each
Borrower will give

 

100

 

Administrative Agent prompt notice prior to making any
material change in such administrative and operating procedures.

 

(b)           Keep
and cause each other Credit Party to keep true books of record and account in
which full and correct entries in accordance with GAAP will be made of all
dealings or transactions in relation to its business and activities.

 

7.18         Conduct of Business.  Each Borrower will and will cause each other
Credit Party to (at its expense) (i) comply in all material respects with each
applicable Credit and Collection Policy and (ii) refrain from any actions which
may adversely affect in any material respect the rights of the Collateral Agent
in the Collateral.

 

7.19         Letters of Credit.  Promptly following the Collateral Agent’s
request at any time during an Event of Default, deliver and cause each other
Credit Party to deliver to the Collateral Agent each letter of credit issued in
favor of such Borrower or the applicable Credit Party supporting a Receivable,
together with evidence (satisfactory to the Collateral Agent) that the issuing
bank or confirming bank with respect to such letter of credit shall have (i)
been notified of the assignment thereof hereunder to the Collateral Agent, (ii)
been requested to make payment thereunder directly to the Master Collection
Account and (iii) agreed to such request.

 

7.20         Inventory. 
Upon the request of the Collateral Agent from time to time, provide to
the Collateral Agent written statements listing items of Inventory in
reasonable detail as requested by the Collateral Agent.  Each Borrower shall conduct or cause to be conducted
annually a physical count of the Inventory, and a copy of such count shall be
promptly supplied to the Collateral Agent accompanied by a report of the value
(valued at the first-in-first-out method) of such Inventory.  Each Borrower shall conduct such a physical
count at such other times and as of such dates as the Collateral Agent shall
reasonably request.

 

7.21         Lender Meeting. 
Upon the reasonable request of Administrative Agent, the Company shall
hold at least one meeting per year (at a mutually agreeable location and time
or at the option of Administrative Agent, by conference call) with all of the
Lenders at which meeting shall be reviewed the financial results of the
previous fiscal year and the financial condition of the Company and its Subsidiaries
and the budgets presented for the current Fiscal Year of the Company and its
Subsidiaries.

 

7.22         Senior Subordinated Notes.  On or before the maturity date of the Senior
Subordinated Notes, the Company shall have refinanced the then outstanding Senior
Subordinated Notes with proceeds of Permitted Unsecured Debt permitted by Section
8.2(e) and/or shall have redeemed or repurchased such Senior Subordinated
Notes with the proceeds of a Qualified Public Offering in accordance with
Section 4.2(d) of the Term Credit Agreement or otherwise as permitted by the
Term Credit Agreement.

 

101

 

ARTICLE VIII

NEGATIVE COVENANTS

 

Each Borrower hereby
agrees that, so long as any of the Commitments remain in effect or any Loan or
L/C Obligation remains outstanding and unpaid or any other amount is owing to
any Lender or Administrative Agent hereunder:

 

8.1           Liens.  No Borrower
shall, nor shall permit any of its Restricted Subsidiaries to, directly or
indirectly, create, incur, assume or suffer to exist or agree to create, incur
or assume any Lien in, upon or with respect to any of its properties or assets
(including, without limitation, any securities or debt instruments of any of
its Subsidiaries), whether now owned or hereafter acquired, or assign or
otherwise convey any right to receive income to secure any obligation; except
for the following Liens (herein referred to as “Permitted Liens”):

 

(a)           Liens
existing on the Closing Date listed on Schedule 8.1(a) hereto and any extension,
renewal or replacement thereof but only if the principal amount of the
Indebtedness is not increased and such Liens do not extend to or cover any
other property or assets;

 

(b)           (i)
Liens (including Liens under Capitalized Leases) in respect of property or
assets acquired or constructed by a Borrower or a Subsidiary after the date
hereof, including, without limitation, liens on rolling stock, which Liens are
created at the time of acquisition or completion of construction of such
property or asset or within 120 days thereafter, to secure Indebtedness assumed
or incurred to finance all or any part of the purchase price or cost of
construction of such property or asset, (ii) in the case of any Person that
hereafter becomes a Subsidiary or is consolidated with or merged with or into a
Borrower or a Subsidiary, Liens existing at the time such Person becomes a
Subsidiary or is so consolidated or merged (and not incurred in anticipation
thereof), (iii) in the case of any property or asset acquired by a Borrower or
any Subsidiary after the Closing Date, Liens existing on such property or asset
at the time of acquisition thereof (and not incurred in anticipation thereof),
whether or not the Indebtedness secured thereby is assumed by a Borrower or a
Subsidiary; provided, that in any such case:

 

(x)            no such Lien shall extend to or
cover any other property or assets of a Borrower or of such Subsidiary, as the
case may be;

 

(y)           the aggregate principal amount of the
Indebtedness secured by all such Liens in respect of any such property or
assets shall not exceed 100% of the fair market value of such property or
assets at the time of such acquisition or, in the case of a Lien in respect of
property or assets existing at the time of such Person becoming a Subsidiary or
being so consolidated or merged, the fair market value of the property or
assets acquired at such time and the amount of Indebtedness secured on the date
of issuance of such Liens shall not be less than 70% of the fair market value
unless the Collateral Agent shall have a perfected second lien on such
equipment; and

 

102

 

(z)            the Indebtedness secured thereby is
permitted to be incurred pursuant to Section 8.2(h);

 

(c)           Customary
Permitted Liens;

 

(d)           Liens
granted pursuant to the Security Documents;

 

(e)           Liens
consisting of an agreement to sell, transfer or dispose of any asset (to the
extent such sale, transfer or disposition is permitted hereunder);

 

(f)            Liens
on property of Huntsman Headquarters Corporation incurred pursuant to the
Headquarters Mortgage Loan Documents and Liens on property of Airstar
Corporation incurred pursuant to the Airstar Aircraft Financing Documents;

 

(g)           Lien
on the assets of Nitroil Vegyipari Termeló-Fejlesztó Résvénytárság (Nitroil
Chemical Engineering and Production Co., Plc) which secure not more than
$2,000,000 of Indebtedness;

 

(h)           Liens
on property of Foreign Subsidiaries securing Indebtedness permitted by Section
8.2(f);

 

(i)            Liens
securing the Term Loan Obligations to the extent such Indebtedness is permitted
by Section 8.2(b) and the Intercreditor Agreement is in full force and
effect;

 

(j)            Liens
incurred in connection with the sale and leaseback by any Borrower or any of
its Subsidiaries of railcars acquired after the date hereof;

 

(k)           Liens
(other than Liens securing Indebtedness) with respect to property with a fair
market value not exceeding $5,000,000 in the aggregate at any one time
outstanding;

 

(l)            Liens
on prepaid insurance premiums securing Indebtedness incurred by the Company
and/or its Restricted Subsidiaries to finance such insurance premiums in a
principal amount not to exceed at any time the amount of such insurance
premiums to be paid by the Company and/or its Restricted Subsidiaries for up to
a three year period; and

 

(m)          Liens
securing the Senior Secured Notes Obligations on a pari passu basis with the
Term Loan Obligations, but only to the extent that such Indebtedness is
permitted by Section 8.2(l).

 

8.2           Indebtedness. 
No Borrower shall, nor shall it permit any of its Restricted
Subsidiaries to, directly or indirectly, incur, create, assume directly or
indirectly, or suffer to exist any Indebtedness (including without limitation
any Guarantee Obligation in respect of Indebtedness of its Unrestricted Subsidiaries
and any Receivables Facility Attributed Indebtedness) except for:

 

(a)           Indebtedness
incurred pursuant to this Agreement and the other Loan Documents;

 

103

 

(b)           Indebtedness
of a Borrower or its Subsidiaries which are parties to the Subsidiary Guarantee
Agreement pursuant to the Term Credit Agreement and the Loan Documents (as
defined in the Term Credit Agreement) and guarantees thereof by any Subsidiary
Guarantor;

 

(c)           Indebtedness
(other than Intercompany Indebtedness) outstanding on the Closing Date listed
on Schedule 6.5(d) hereto;

 

(d)           Indebtedness
resulting from the extension, renewal or refinancing or successive refinancing
(whether in whole or in part) of any Indebtedness, permitted under Section
8.2(c); provided, however, that (i) the principal amount of
any such refinancing Indebtedness (as determined as of the date of the
incurrence of such refinancing Indebtedness in accordance with GAAP) does not
exceed the principal amount of the Indebtedness refinanced thereby on such date
plus the amount of accrued and unpaid interest and fees (including call
premiums) and expenses incurred in connection with such refinancing, (ii) the
Weighted Average Life to Maturity of such Indebtedness is not decreased, (iii)
the covenants, defaults and similar provisions applicable to such refinancing
Indebtedness or obligations are customary market terms reasonably satisfactory
to the Administrative Agent and do not conflict in any material respect with
the provisions of this Agreement and (iv) the terms of such refinancing
Indebtedness shall be reasonably satisfactory to the Administrative Agent.  In the case of any Indebtedness which is
subordinated to the Obligations, such refinancing Indebtedness shall be
subordinated to the Obligations on the same terms or on such other terms as may
be approved by the Administrative Agent.

 

(e)           Permitted
Unsecured Debt of the Company and guarantees thereof by a Restricted Subsidiary
consisting of Permitted Unsecured Debt of such Restricted Subsidiary; provided,
that Borrower shall have complied with the mandatory prepayment requirements of
Section 4.2(e) of the Term Credit Agreement;

 

(f)            Indebtedness
of any Foreign Subsidiary (or, to the extent such Indebtedness is incurred with
respect to its international activities, Huntsman International Trading
Corporation) and guarantees thereof by a Borrower and/or its Subsidiaries
pursuant to over-draft lines or similar extensions of credit such that the
aggregate amount of such Indebtedness under this clause outstanding at any one
time does not exceed $5,000,000 (or the dollar equivalent thereof determined on
a quarterly basis);

 

(g)           Intercompany
Indebtedness to the extent permitted by Sections 8.7(c), (e), (f)
and (g); provided, however, that in the event of any
subsequent issuance or transfer of any Capital Stock which results in the
holder of such Indebtedness ceasing to be a Restricted Subsidiary of a Borrower
or any subsequent transfer of such Indebtedness (other than to a Borrower or
any of its Restricted Subsidiaries) such Indebtedness shall be required to be
permitted under another clause of this Section 8.2; provided, further,
however, that (x) such Intercompany Indebtedness arising after the
Closing Date shall be evidenced by a Pledged Intercompany Note and (y) any loan
or advance to any Borrower shall be unsecured;

 

(h)           Indebtedness
secured by Liens permitted by Section 8.1(b) or 8.1(j) or
constituting Capitalized Lease Obligations or Indebtedness under Operating
Financing Leases,

 

104

 

provided, that, (x) all such
Capitalized Lease Obligations are permitted under Section 9.1 and (y)
the sum, without duplication, of (i) the aggregate outstanding Capitalized
Lease Obligations plus (ii) the aggregate outstanding Indebtedness under
Operating Financing Leases plus (iii) the aggregate outstanding
principal amount of such Indebtedness secured by Liens permitted by Section
8.1(b) at any time shall not exceed $20,000,000; and any extension, renewal
or replacement thereof provided such Indebtedness is not increased and is not
secured by any additional assets or property;

 

(i)            Indebtedness
with respect to Hedging Agreements entered into in the ordinary course of
business in order to manage existing or anticipated interest rate, exchange
rate, commodity or other revenue or expense risk, and not for speculative
purposes, in any case;

 

(j)            Indebtedness
consisting of Guarantee Obligations of any Subsidiary of a Borrower of the
Obligations under any Loan Document or consisting of a guarantee of obligations
of a Restricted Subsidiary under any lease or other agreement entered into in
the ordinary course of business not constituting Indebtedness and for which the
liability with respect thereto is not required to be reflected on a balance
sheet prepared in accordance with GAAP;

 

(k)           Indebtedness
consisting of Guarantee Obligations incurred to satisfy bonding obligations not
in excess of $15,000,000 at any one time which arise in the ordinary course of
business; and

 

(l)            Indebtedness
incurred pursuant to the Senior Secured Notes Indenture not to exceed
$455,400,000 outstanding on the Closing Date and evidenced by the Senior
Secured Notes and additional Senior Secured Notes issued after the Closing Date
and evidenced by the Senior Secured Notes Indenture, but only to the extent
that the aggregate principal amount of such additional Senior Secured Notes is
not greater than (i) $25,000,000 minus (ii) the amount of Additional
Term B Loans incurred pursuant to Section 2.4 of the Term Credit Agreement; and
guarantees thereof by any Subsidiary Guarantor.

 

For purposes of this Section
8.2, any Indebtedness of an entity outstanding when it becomes a Subsidiary
shall be deemed to have been incurred at that time.

 

8.3           Fundamental Changes.  No Borrower shall, nor shall it permit any of
its Restricted Subsidiaries to, directly or indirectly, (i) consummate any
Acquisition or (ii) enter into any merger, consolidation or amalgamation, or
liquidate, wind-up or dissolve itself (or suffer any liquidation or
dissolution) or convey, sell, assign, lease, transfer or otherwise dispose of
(or agree to do any of the foregoing at any future time) all or substantially
all of its property, business or assets; provided, however, that
so long as prior to or simultaneously with such transactions, such Borrower has
complied with, and has caused its Subsidiaries to comply with, the provisions
of Section 7.10:

 

(a)           any
Subsidiary of the Company may be merged or consolidated with or into the
Company so long as the Company is the surviving corporation or with or into any
one or more Wholly-Owned Subsidiaries of the Company (other than an
Unrestricted Subsidiary, Airstar Corporation, Huntsman Headquarters Corporation
or IRIC); provided, however, that (i) the Wholly-Owned Subsidiary
or Subsidiaries shall be the surviving corporation and (ii) in the

 

105

 

case of any merger or consolidation between
Subsidiaries at least one of which is a Subsidiary Guarantor, the surviving
Person shall be or become a party to the Subsidiary Guarantee Agreement;

 

(b)           any
Subsidiary of a Borrower may sell, lease, transfer or otherwise dispose of any
or all of its assets to a Borrower or any other Wholly-Owned Subsidiary of a
Borrower (other than an Unrestricted Subsidiary);

 

(c)           any
Subsidiary of a Borrower may voluntarily liquidate, wind-up or dissolve;

 

(d)           any
transaction permitted pursuant to Section 8.6(e) may be consummated;

 

(e)           agreements
to conduct the transactions referred to in clauses (a) through (d)
above may be entered into;

 

8.4           Dividends or Other Distributions.  No Borrower shall, nor shall it permit any of
its Restricted Subsidiaries to, directly or indirectly, either:  (i) declare or pay any dividend or make any
distribution on or in respect of its Capital Stock or to the direct or indirect
holders of its Capital Stock in respect of such Capital Stock (except dividends
or distributions payable solely in such Capital Stock or in options, warrants
or other rights to purchase such Capital Stock and except dividends or
distributions payable to a Borrower or a Wholly-Owned Subsidiary of a
Borrower), (ii) purchase, redeem or otherwise acquire or retire for value any
of its Capital Stock (other than Capital Stock held by a Borrower or a
Wholly-Owned Subsidiary of a Borrower), (iii) make a loan (a “Shareholder
Loan”) to any direct or indirect owner of its Capital Stock, (iv) pay any
Management Fees or (v) make any principal payment on, purchase, defease,
redeem, prepay, decrease or otherwise acquire or retire for value, prior to any
scheduled final maturity, any Permitted Unsecured Debt or any Indebtedness that
is subordinate or junior in right of payment to the Obligations (any such
non-excepted dividend, distribution, purchase, redemption, repurchase, other
acquisition, retirement or Shareholder Loan or payment being hereinafter
referred to as a “Restricted Payment”); provided, however,
that (w) a Borrower may make payments described under clause (v) above with
proceeds of Permitted Unsecured Debt, Senior Secured Notes or Additional Term B
Loans, in each case, to the extent such Indebtedness is permitted to be
incurred hereunder and is not otherwise required to be applied to prepay Loans
pursuant to Section 4.2(e) or Section 4.2(f) of the Term Credit Agreement; provided,
further, however, that proceeds of Senior Secured Notes and Additional
Term B Loans may not be used to make such payments with respect to Indebtedness
that is subordinate or junior in right of payment to the Obligations, (x) a
Borrower may make payments described under clause (v) above with proceeds of a
Qualified Public Offering to the extent such proceeds are not otherwise
required to be applied to prepay Loans pursuant to Section 4.2(d) of the Term
Credit Agreement, and (y) a Borrower may make payments pursuant to the terms of
the Tax Sharing Agreement.

 

8.5           Issuance of Stock.

 

(a)           No
Borrower will, nor will it permit any of its Restricted Subsidiaries to,
directly or indirectly, issue, sell, assign, pledge or otherwise encumber or
dispose of any shares of Capital Stock of any Restricted Subsidiary of a
Borrower, except (i) to a Borrower, (ii) to

 

106

 

another Wholly-Owned Subsidiary of a Borrower which is
a Restricted Subsidiary, (iii) to qualify directors if required by applicable
law or similar de minimis issuances of Capital Stock to comply with
Requirements of Law or (iv) pledges constituting Permitted Liens pursuant to Section
8.1(a) or 8.1(d) or 8.1(e). 
Notwithstanding the foregoing, the Borrowers and their Subsidiaries
shall be permitted to sell the outstanding stock of a Subsidiary, subject to Sections
8.3 and 8.6.

 

(b)           The
Company shall not issue any Capital Stock, except for (i) issuances of
additional units of Membership Interests to Holdco II and (ii) issuances of
Capital Stock, where Administrative Agent and the Required Lenders have
consented to the terms and conditions of such offering.  In the event any Capital Stock of the Company
is issued pursuant to this Section 8.5(b), the Company shall apply the
Net Offering Proceeds (as such term is defined in the Term Credit Agreement)
received in connection with such disposition in accordance with Section
4.2(d) of the Term Credit Agreement.

 

8.6           Disposition of Assets.  No Borrower will, nor will it permit, any of
its Restricted Subsidiary to, directly or indirectly, sell, lease, assign,
transfer or otherwise dispose of any of its assets to any Person, including,
without limitation, pursuant to a Sale and Leaseback Transaction, except that:

 

(a)           Any
Borrower or any Subsidiary may engage in a transaction permitted by Section
8.3;

 

(b)           Any
Foreign Subsidiary which is a Wholly-Owned Subsidiary may transfer, sell or
assign any of its assets to another Foreign Subsidiary which is a Wholly-Owned
Subsidiary;

 

(c)           Any
Borrower or any Subsidiary may sell, transfer or otherwise dispose of inventory
and Cash Equivalents in the ordinary course of business;

 

(d)           Any
Borrower or any Subsidiary may permit to exist Liens upon its assets which are
permitted by Section 8.1;

 

(e)           Any
Borrower or any Subsidiary may sell, assign, transfer or otherwise dispose of
an Investment permitted under Sections 8.7(d) and 8.7(g);

 

(f)            Any
Borrower and any Subsidiary may sell, assign, transfer or otherwise dispose of
its assets to a Borrower or any Wholly-Owned Domestic Subsidiary which is a
Restricted Subsidiary (other than Airstar Corporation, Huntsman Headquarters
Corporation or IRIC);

 

(g)           Any
Borrower or any Subsidiary may sell, lease or otherwise dispose of any assets
in the ordinary course of business which, in the reasonable judgment of the
Company, have become uneconomic, obsolete or worn out and may sell or discount,
in each case without recourse and in the ordinary course of business, overdue
accounts receivable arising in the ordinary course of business, but only in
connection with the compromise or collection thereof consistent with customary
industry practice (and not as part of any bulk sale or financing of receivables
not otherwise permitted under clause (k) below);

 

107

 

(h)           Any
Borrower or any Subsidiary may enter into operating leases as lessor in the
ordinary course of business which are not substantially equivalent to sales;

 

(i)            Any
Borrower or any Subsidiary may enter into assignments and licenses of
intellectual property in the ordinary course of business;

 

(j)            Any
Borrower and any Subsidiaries may sell railcars acquired after the Closing Date
in connection with sale and leaseback transactions; 

 

(k)           Any
Borrower or any Restricted Subsidiary may dispose of any of its assets if the
aggregate fair market value (at the time of disposition thereof) of all assets
disposed of by the Borrowers and their Restricted Subsidiaries subsequent to
the Closing Date pursuant to this clause (k) plus the aggregate fair market
value (net, in the case of the real estate owned by Huntsman Headquarters
Corporation, of the debt secured by such real estate) of all the assets then
proposed to be disposed of does not exceed $50,000,000 per annum and
$150,000,000 in the aggregate from and after the Closing Date; and

 

(l)            the
Borrowers and their Subsidiaries may sell, transfer or otherwise dispose of any
asset in connection with any Sale and Leaseback Transaction involving
Indebtedness, Capitalized Lease Obligations or an Operating Financing Lease
otherwise permitted hereunder so long as, in the case of a transaction
involving operating assets, such transaction occurs within 120 days of the
acquisition by such Borrower or Subsidiary of the asset sold, transferred or
otherwise disposed of.

 

8.7           Loans and Investments.  No Borrower shall, nor shall it permit any of
its Restricted Subsidiaries to, directly or indirectly, make any or own any
Investments except that a Borrower and its Restricted Subsidiaries may:

 

(a)           acquire
and hold Cash and Cash Equivalents; 

 

(b)           make
or maintain advances to their employees in the ordinary course of business for
travel, relocation and related expenses;

 

(c)           hold
(i) its existing Investments in Subsidiaries and (ii) the other Investments
identified on Schedule 8.7 (in each case, as such Investments may be
adjusted due to appreciation, repayment of principal, payment of interest,
return of capital and similar circumstances);

 

(d)           acquire
and hold Investments (including debt obligations) received in connection with
the bankruptcy or reorganization of suppliers and customers and other Persons
having obligations in favor of a Borrower or a Subsidiary in settlement of
delinquent obligations of, and other disputes with, customers and suppliers and
such other Persons arising in the ordinary course of business;

 

(e)           make
additional Investments in any Restricted Domestic Subsidiary; provided
that any such Investment constituting a loan or advance to a Restricted
Domestic Subsidiary shall be made pursuant to one of the Pledged Intercompany
Notes;

 

108

 

(f)            make
(i) any Investment by any Borrower or any Restricted Subsidiary in any Foreign
Subsidiary or joint venture after the Closing Date in an aggregate amount for
all such Investments from and after the Closing Date not in excess of
$25,000,000 (provided that Investments in Foreign Subsidiaries or joint
ventures made in Cash and permitted by this Section 8.7(f)(i) shall not
exceed $15,000,000 in the aggregate during the eighteen months following the
Closing Date) or (ii) any Investment by a Foreign Subsidiary in any other
Foreign Subsidiary; 

 

(g)           make
any Investment after the Closing Date in Unrestricted Subsidiaries in an amount
not in excess of $15,000,000 in the aggregate from and after the Closing Date;

 

(h)           to the extent not required to be
applied to prepay the Term Loan Obligations pursuant to Section 4.2(e) of the
Term Credit Agreement, use net cash proceeds of Permitted Unsecured Debt to
make Investments on or after the Closing Date in any Australian Consolidated
Entity in an aggregate amount not to exceed $60,000,000 (“Permitted
Australia Proceeds”); provided that the Permitted Australia Proceeds
shall be used to make an Investment (which, to the extent permitted under local
law and not resulting in adverse tax consequences, shall be in the form of an
intercompany loan) to permanently prepay Indebtedness (and in the case of
revolving loans permanently reduce the commitments thereunder); provided,
further, that on the date that the aggregate amount of Investments made
with Permitted Australia Proceeds in HF II Australia Holdings Company LLC or
Huntsman Australia Holdings Corporation, or subsidiaries thereof (collectively,
the “Australian Surfactants Subsidiaries”) exceeds $20,000,000, then the
Australian Surfactants Subsidiaries shall cease to be Unrestricted Subsidiaries
for purposes of this Agreement and all Indebtedness of such entities shall be
deemed to have been incurred on such date, and on the date that the aggregate
amount of Investments made with Permitted Australia Proceeds in HCPH Holdings
Pty Limited or Huntsman Chemical Australia Unit Trust, or subsidiaries thereof
(collectively, the “Australian Styrenics Subsidiaries”) exceeds
$15,000,000, then the Australian Styrenics Subsidiaries shall cease to be
Unrestricted Subsidiaries for purposes of this Agreement and all Indebtedness
of such entities shall be deemed to have been incurred on such date; 

 

(i)            make
one or more Investments in HSCHC (which may be reinvested by HSCHC in HSCC) (i)
when and as interest payments become due and payable on the BASF Note, each in
an amount not to exceed the interest payment required to be paid in cash by HSCC
on the BASF Note and (ii) when and as HSCC makes principal payments on the BASF
Note provided that such Investment pursuant to this clause (ii) may be made
only with proceeds from a Qualified Public Offering or from the issuance of
Permitted Unsecured Indebtedness; and

 

(j)            acquire
for the purposes of retirement Senior Secured Notes with proceeds of a
Qualified Public Offering to the extent contemplated by Sections 4.2(d) and
4.3(d) of the Term Credit Agreement.

 

8.8           Transactions with Affiliates.  No Borrower shall, nor shall it permit any of
its Restricted Subsidiaries to, directly or indirectly, enter into any
transaction with any Affiliate of a Borrower or any of its Subsidiaries (other
than any Borrower or any Restricted Subsidiary), except for (i) transactions
that are on terms no less favorable to such Borrower or such Subsidiary, as
applicable, than could be obtained in a comparable arms-length transaction with
a Person not an Affiliate of a Borrower or any of its Subsidiaries and are
necessary or desirable for

 

109

 

such Borrower or its Subsidiary in the conduct of its
business and (ii) the Tax Sharing Agreement and transactions thereunder in
accordance with the terms thereof.

 

8.9           Lines of Business.  No Borrower shall, nor shall it permit any of
its Restricted Subsidiaries to, directly or indirectly, enter into or acquire
any line of business which does not consist of the manufacture, distribution,
purchase or sale of chemicals, plastics or finished products made therefrom or
is not otherwise reasonably related to the business engaged in as of the
Closing Date, except to the extent that after any such entry or acquisition,
such Borrower and its Restricted Subsidiaries, taken as a whole, remain substantially
engaged in similar lines of business as are conducted by them as of the Closing
Date.  Notwithstanding anything to the
contrary in this Agreement, IRIC shall not engage in any business other than
the business of serving as a captive insurance company for the Company and its
Subsidiaries and engaging in such necessary activities related thereto as may
be permitted to be engaged in by a Vermont captive insurance company pursuant
to applicable Vermont captive insurance company rules and regulations; provided,
that IRIC shall not hold cash or other Investments except in a manner
consistent with Schedule 8.15(a).

 

8.10         Fiscal Year. 
No Borrower shall change its Fiscal Year.

 

8.11         Amendments to Organizational and
Other Documents.  No Borrower shall,
nor shall it permit any of its Restricted Subsidiaries to, directly or
indirectly, amend, modify or waive, or permit any amendment, modification or
waiver to its Organizational Documents if such amendment, modification or
waiver could reasonably be expected to adversely affect the interests of the
Collateral Agent, Administrative Agent or the Lenders.  No Borrower shall, nor shall it permit any of
its Subsidiaries to waive or release any interest under any Security Document except
as expressly permitted hereby or thereby. 
No Borrower shall, and nor shall it permit any Subsidiary to, amend,
modify or waive or cause to be amended, modified or waived any provision of (a)
the BASF Note, unless such amendment, modification or waiver is approved by the
Administrative Agent, (b) the Tax Sharing Agreement, unless such amendment,
modification or waiver is approved by the Administrative Agent and, if adverse
to the interests of the Lenders (as determined by the Administrative Agent in
its sole reasonable discretion after reasonable advance notice of such proposed
change), by the Required Lenders or (c) the Horizon Subordinated Note, unless
such amendment, modification or waiver is approved by the Administrative Agent
and, if adverse to the interests of the Lenders (as determined by the
Administrative Agent in its sole reasonable discretion after reasonable advance
notice of such proposed change), by the Required Lenders.  Neither a Borrower nor any of its Restricted
Subsidiaries shall enter into any tax sharing agreement with Holdco I or Holdco
II except as set forth in the Tax Sharing Agreement.

 

8.12         Limitation on Certain Restrictions on
Subsidiaries.  No Borrower shall, nor
shall it permit any of its Restricted Subsidiaries to, create or otherwise
cause or permit to exist or become effective any consensual encumbrance or
restriction on the ability of any Restricted Subsidiary to (i) pay dividends or
make any other distributions on its Capital Stock or pay any Indebtedness or
other Obligations owed to any Borrower or any of its other Subsidiaries, (ii)
make any loans or advances to any Borrower or any of its other Subsidiaries,
(iii) transfer any of its property or assets to any Borrower or any of its
other Subsidiaries or (iv) enter into any Material Agreement unless such agreement
expressly provides that it may be collaterally

 

110

 

assigned to the Collateral Agent and may be further
assigned by the Collateral Agent in any foreclosure, except:

 

(a)           any
encumbrance or restriction pursuant to the Term Credit Agreement, the Senior
Secured Notes Indenture or the agreement governing Permitted Unsecured Debt or
any extension, replacement or refinancing thereof which is not otherwise
prohibited by the terms of this Agreement;

 

(b)           any
such encumbrance or restriction consisting of customary non-assignment
provisions in Contractual Obligations which are not Material Agreements and are
entered into in the ordinary course of business to the extent such provisions
restrict the transfer or assignment of such agreement;

 

(c)           in
the case of clause (iii) above, Permitted Liens or other restrictions contained
in security agreements securing Indebtedness permitted hereby to the extent
such restrictions restrict the transfer of the assets specifically secured by
such security agreement;

 

(d)           any
restriction on transfer of an asset pursuant to an agreement to sell such asset
to the extent such sale would be permitted under the terms of this Agreement;

 

(e)           restrictions
on Airstar Corporation in the Airstar Aircraft Financing Documents and
restrictions on Huntsman Headquarters Corporation in the Headquarters Mortgage
Loan Documents;

 

(f)            restrictions
in Section 4.03 of the Articles of Incorporation of Huntsman Chemical
Corporation; and

 

(g)           restrictions
on Foreign Subsidiaries in Foreign Overdraft Facilities.

 

8.13         Accounting Changes.  No Borrower shall, nor shall it permit any of
its Restricted Subsidiaries to, make or permit to be made any change in
accounting policies affecting the presentation of financial statements or
reporting practices from those employed by it on the Closing Date, unless (i)
such change is required by GAAP, (ii) such change is disclosed to the Lenders
through the Administrative Agent or otherwise and (iii) relevant prior
financial statements that are affected by such change are restated (in form and
detail satisfactory to Administrative Agent) as may be required by GAAP to show
comparative results.  If any changes in
GAAP or the financial statements referred to in Section 6.5(a) hereof
occur after the Closing Date and such changes result in, in the sole judgment
of Administrative Agent, a meaningful change in the calculation of any
financial covenants or restrictions set forth in this Agreement, then the
parties hereto agree to enter into and diligently pursue negotiations to amend
the covenants employing financial calculations herein so as to equitably
reflect such changes, with the desired result that the criteria for evaluating
the financial condition and results of operations of the Borrowers and its
Subsidiaries shall be the same after such changes as if such changes had not
been made.

 

111

 

8.14         Restrictions on Certain Unrestricted Subsidiaries.  

 

(a)           The
Borrowers will not permit either HSCHC or HSCC to, and HSCHC and HSCC hereby
agree that they will not, except in each case as described on Schedule 8.14,
(i) incur any Indebtedness or other material obligations of any kind; (ii)
directly or indirectly, create, incur, assume or suffer to exist or agree to
create, incur or assume any Lien in, upon or with respect to any of their
properties or assets (including, without limitation any securities or
intercompany Indebtedness in favor of HSCC or HSCHC); (iii) issue any Capital
Stock; (iv) dispose of or transfer any assets; (v) in the case of HSCHC, engage
in any business other than holding securities of its Subsidiaries; or (vi) in
the case of HSCC, engage in any business other than holding securities of HIH;
provided, (a) that this Section 8.14 shall not prohibit any amendment to
the BASF Note to the extent not prohibited by Section 8.11 and (b) HSCHC
and HSCC may incur (x) Liens securing the Senior Secured Notes on a pari passu
basis with the Term Loan Obligations and (y) Indebtedness consisting of
guarantees of Indebtedness incurred pursuant to Section 8.2(h).  Neither HSCHC nor HSCC will create any
additional direct Subsidiaries after the Closing Date.

 

(b)           The Company and HSCC will not permit HIH to issue
any Capital Stock except Capital Stock with the same economic, voting and other
rights as the Capital Stock of HIH held indirectly on the Closing Date by the
Company in exchange for a capital contribution the proceeds of which are used
to repay, or in exchange for or in repayment of, any indebtedness of HIH or
Huntsman International LLC; provided, that the A Notes shall be repaid
in full prior to the exchange or repayment of any other such indebtedness  other than the B Notes as long as (i) such
issuance is made contemporaneously with a Qualified Public Offering and (ii)
the Capital Stock is issued at a valuation comparable to the value of the
Capital Stock issued in the Qualified Public Offering or at such valuation as
set forth in a fairness opinion obtained by HIH and satisfactory to Administrative
Agent.  

 

(c)           Neither
the Company nor HSCC will permit Huntsman International LLC to issue any
Capital Stock to any Person other than HIH.

 

8.15         Collateral Account Agreements.  No Borrower shall, nor shall it permit any
Credit Party to, establish or utilize any domestic Deposit Account, unless a
fully executed Collateral Account Agreement shall be in full force and effect
with respect thereto, except with respect to one or more Deposit Accounts
maintained at financial institutions with which no Collateral Account Agreement
shall have previously been entered into with account balances of any such
accounts not to at any time exceed $100,000 and the aggregate of all such
accounts not at any time to exceed $500,000, except in the case of IRIC, with
respect to insurance proceeds which may be disbursed and held in accordance
with the procedures set forth on Schedule 8.15(a).  Except as set forth on Schedule 8.15(b),
at no time shall the Dollar Equivalent of the aggregate balances in all
accounts maintained by the Borrowers and their Restricted Subsidiaries outside
the USA exceed $1,000,000.

 

8.16         Extension or Amendment of Receivables.  No Borrower will, or will permit any other
Credit Party to, extend or amend any Receivable or any Contract to the extent
related thereto; provided, however, that each Borrower and each
Credit Party may grant rebates, extensions, or adjustments in the ordinary
course of business provided, however, that such extension or
adjustment shall not affect the aging of such Receivable (which shall be
calculated based on the original terms of such Receivable) nor alter the status
of such Receivable as

 

112

 

delinquent, defaulted or charged off or limit any
rights of Administrative Agent, Collateral Agent or the Lenders under the
Agreement or the Security Documents.

 

8.17         Accounts.  No
Borrower will, or will permit any Restricted Subsidiary party to the Security
Agreement to instruct any Obligor to remit any Collections to any Person, account
or lock-box other than a Lock-Box Bank, a Lock-Box Account or a Lock-Box; provided,
however, that a Borrower that is the Obligor on another Borrower’s
Receivable may make payments of Collections on such Receivable to a Deposit
Account of such other Borrower so long as there has been no incremental
borrowing on a net basis as a result of such remittance.  No Borrower will, or will permit any such
Restricted Subsidiary to permit funds other than Collections of Receivables to
be deposited into any Lock-Box, Lock-Box Account or (except as permitted by Section
4.5(c)) the Master Collection Account. 
At any time, if funds other than Collections are deposited into any such
Lock-Box, Lock-Box Account or (except as permitted by Section 4.5(c))
the Master Collection Account, such Borrower shall promptly identify such funds
for segregation therefrom, and after providing the Collateral Agent with
reasonable evidence of the rightful ownership of such funds, shall instruct the
Collateral Agent to transfer such funds to such rightful owners.  No Borrower will, or will permit any such
Restricted Subsidiary to, commingle Collections or other funds to which
Collateral Agent is entitled hereunder with any other funds.  The Borrower shall instruct each Lock-Box
Bank to transfer all Collections at the end of each Business Day to the Master
Collection Account.  No Borrower will, or
will permit, any such Restricted Subsidiary to add any Lock-Box Bank, any
Lock-Box, or any Lock-Box Account to those listed on Exhibit 1.1(b)
unless Administrative Agent and Collateral Agent shall have consented thereto
(which consent shall not be unreasonably withheld) and received an executed and
acknowledged copy of a Lock-Box Letter substantially in the form of Exhibit
1.1(c) (with such changes as are acceptable to Administrative Agent and
Collateral Agent) to each new Lock-Box Bank with respect thereto.  No Borrower will, or will permit any such
Restricted Subsidiary to, terminate any Lock-Box Bank or Lock-Box or close any
Lock-Box Account or Lock-Box unless Collateral Agent shall have received at
least thirty (30) days prior notice of such termination or such shorter period
as the Collateral Agent may agree to.

 

8.18         Use of Proceeds. 
No Borrower shall, nor shall it permit any of its Subsidiaries, to use
the proceeds of Loans made hereunder for any purpose which is not permitted by Section
6.23.

 

8.19         No Excess Cash. 
No Borrower shall, nor shall it permit any Domestic Restricted
Subsidiary to, directly or indirectly, maintain in the aggregate in all of the
accounts described in Schedule 6.21(f) total Cash and Cash Equivalents
in excess of $10,000,000 at any time during which any Loans are outstanding
except for any such excess maintained in the Master Collection Account.

 

8.20         Amendments or Modifications to Senior
Secured Notes.  No Borrower shall,
nor shall it permit any of its Subsidiaries to, directly or indirectly, either:

 

(a)           Amend,
modify, waive or supplement, or cause to be amended, modified, waived or
supplemented, any provision of the Senior Secured Notes Indenture or the terms
of the Senior Secured Notes, unless such amendment, modification, waiver or
supplement is approved by the Administrative Agent and, if adverse to the
interests of the Lenders (as determined by the 

 

113

 

Administrative Agent in its sole reasonable discretion
after reasonable advance notice of such proposed change), by the Required
Lenders; or

 

(b)           Make
any principal payment on, purchase, defease, redeem, prepay, decrease or
otherwise acquire or retire for value, prior to any scheduled final maturity,
any Senior Secured Notes, except as required by the Senior Secured Notes
Indenture.

 

8.21         Anti-Terrorism Law; Anti-Money Laundering.  No Borrower shall directly or indirectly:  (a) (i) knowingly conduct any business or
engage in making or receiving any contribution of funds, goods or services to
or for the benefit of any person described in Section 6.24(b), (ii)
knowingly deal in, or otherwise engage in any transaction relating to, any
property or interests in property blocked pursuant to the Executive Order or
any other Anti-Terrorism Law, or (iii) knowingly engage in or conspire to
engage in any transaction that evades or avoids, or has the purpose of evading
or avoiding, or attempts to violate, any of the prohibitions set forth in any
Anti-Terrorism Law (and each Borrower shall deliver to the Lenders any
certification or other evidence requested from time to time by any Lender in
its reasonable discretion, confirming such Borrower’s compliance with this Section
8.21) or (b) cause or permit any of the funds of any Borrower or any Credit
Party that are used to repay the Loan to be derived from any unlawful activity
with the result that the making of the Loans would be in violation of law.

 

ARTICLE IX

FINANCIAL COVENANTS

 

The Borrowers hereby
agree that, so long as any of the Commitments remain in effect or any Loan or
L/C Obligation remains outstanding and unpaid or in any other amount is owing
to any Lender or Administrative Agent hereunder, the Borrowers shall not
directly or indirectly:

 

9.1           Capital Expenditures.  Make, nor permit any of their Restricted
Subsidiaries to, make any Consolidated Capital Expenditures, except that
Borrowers and their Restricted Subsidiaries may make such Consolidated Capital
Expenditures during any Fiscal Year and until payment in full of all
Obligations hereunder, not in excess of an amount equal to $135,000,000; provided,
further, however, to the extent Consolidated Capital Expenditures
for any Fiscal Year are less than $135,000,000, the difference thereof may be
carried forward to the immediately following Fiscal Year in an amount not to
exceed $20,000,000.

 

9.2           Fixed Charge Coverage Ratio.  Permit the ratio of (1) EBITDA of the Company
for each period of four consecutive Fiscal Quarters ending on the last day of
the then most recently completed Fiscal Quarter to (ii) Consolidated Fixed
Charges for such period to be less than 1.10 to 1.00 at any time when Excess
Availability is less than $50,000,000.

 

ARTICLE X

EVENTS OF DEFAULT

 

10.1         Events of Default.  Any of the following events, acts,
occurrences or states of facts shall constitute an “Event of Default”
for purposes of this Agreement:

 

114

 

(a)           Failure
to Make Payments When Due.  A
Borrower (i) shall default in the payment of principal on any of the Loans or
any reimbursement obligation with respect to any Letter of Credit; or (ii)
shall default in the payment of interest on any of the Loans or default in the
payment of any fee or any other amount owing hereunder or under any other Loan
Document when due and such default in payment shall continue for five (5)
Business Days; or

 

(b)           Representations
and Warranties.  Any representation
or warranty made by or on the part of a Borrower or any Credit Party, as the
case may be, contained in any Loan Document or any document, instrument or
certificate delivered pursuant hereto or thereto shall have been incorrect or
misleading in any material respect when made or deemed made; or

 

(c)           Covenants.  Any Credit Party shall (i) default in the
performance or observance of any term, covenant, condition or agreement on its
part to be performed or observed under Article VIII, Article IX
hereof or Sections 7.1, 7.2, 7.3(a), 7.4, 7.8,
7.9, 7.10, 7.11(a), 7.12, 7.13, 7.17
and 7.18; or (ii) default in the due performance or observance by it of
any other term, covenant or agreement contained in this Agreement and such
default shall continue unremedied for a period of thirty (30) days after
written notice to the Borrowers by Administrative Agent or any Lender; or

 

(d)           Default
Under Other Loan Documents.  Any
Credit Party shall default in the performance or observance of any term,
covenant, condition or agreement on its part to be performed or observed
hereunder or under any Loan Document (and not constituting an Event of Default
under any other clause of this Section 10.1) and such default shall
continue unremedied for a period of thirty (30) days (or in the case of any
such breach of the Security Agreement, such default shall continue unremedied
for a period of ten (10) days) after written or telephonic (immediately
confirmed in writing) notice thereof has been given to the Borrowers by
Administrative Agent; or

 

(e)           Voluntary
Insolvency, Etc.  Holdco I, Holdco
II, any Borrower or any of its Material Subsidiaries which are Restricted
Subsidiaries shall become insolvent or generally fail to pay, or admit in
writing its inability to pay, its debts as they become due, or shall voluntarily
commence any proceeding or file any petition under any bankruptcy, insolvency
or similar law or seeking dissolution (except as permitted by Section 8.3(c))
or reorganization or the appointment of a receiver, trustee, administrator,
custodian or liquidator for it or a substantial portion of its property, assets
or business or to effect a plan or other arrangement with its creditors, or
shall file any answer admitting the jurisdiction of the court and the material
allegations of an involuntary petition filed against it in any bankruptcy,
insolvency or similar proceeding, or shall be adjudicated bankrupt, or shall
make a general assignment for the benefit of creditors, or shall consent to, or
acquiesce in the appointment of, a receiver, trustee, administrator, custodian
or liquidator for a substantial portion of its property, assets or business,
shall call a meeting of its creditors with a view to arranging a composition or
adjustment of its debts or shall take any corporate action authorizing any of
the foregoing; or

 

(f)            Involuntary
Insolvency, Etc.  Involuntary
proceedings or an involuntary petition shall be commenced or filed against
Holdco I, Holdco II, any Borrower or any of its Material Subsidiaries which are
Restricted Subsidiaries under any bankruptcy, insolvency or similar law or
seeking the dissolution or reorganization of it or the appointment of a receiver,

 

115

 

trustee, administrator, custodian or liquidator for it
or of a substantial part of its property, assets or business, or any similar
writ, judgment, warrant of attachment, execution or process shall be issued or
levied against a substantial part of its property, assets or business, and
(other than a petition for administration) such proceedings or petition shall
not be dismissed, or such writ, judgment, warrant of attachment, execution or
similar process shall not be released, vacated or fully bonded, within thirty
(30) days (or in the case of a petition for administration, five (5) days) after
commencement, filing or levy, as the case may be, or any order for relief shall
be entered in any such proceeding; or

 

(g)           Default
Under Other Agreements.  (i) Holdco
I, Holdco II, any Borrower or any of its Restricted Subsidiaries shall default
in the payment when due, whether at stated maturity or otherwise, of any amount
pursuant to any Indebtedness (other than Indebtedness owed to the Lenders under
the Loan Documents) in excess of $10,000,000 (or in the case of such a default
under a Hedging Agreement, $2,500,000 measured by reference to the mark to
market termination value of obligations under the respective Hedging
Agreement(s) at the time) in the aggregate beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created, (ii) a default shall occur in the performance or observance of any
agreement under any such Indebtedness in excess of $10,000,000 or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause (determined without regard to whether any notice of acceleration or
similar notice is required), any such Indebtedness to become due or be repaid
prior to its stated maturity or (iii) any Indebtedness in excess of $10,000,000
of Holdco I, Holdco II, any Borrower or any of its Restricted Subsidiaries
shall be declared to be due and payable, or required to be prepaid other than
by a regularly scheduled required prepayment (other than with proceeds of the
event giving rise to such prepayment), prior to the stated maturity thereof; or

 

(h)           Judgments.  One or more judgments or decrees shall be
entered against any Borrower or any of its Restricted Subsidiaries involving,
individually or in the aggregate, a liability (to the extent not paid or
covered by a reputable insurance company which has accepted liability in
writing) of $10,000,000 or more and all such judgments or decrees shall not
have been vacated, discharged, satisfied, stayed or bonded pending appeal
within thirty (30) days from the entry thereof; or

 

(i)            ERISA.  (i) Either (a) any Reportable Event which
constitutes grounds for the termination of any Plan by the PBGC or of any
Multiemployer Plan or for the appointment by the appropriate United States
District Court of a trustee to administer or liquidate any Plan or Multiemployer
Plan shall have occurred; (b) a trustee shall be appointed by a United States
District Court to administer any Plan or Multiemployer Plan; (c) the PBGC shall
institute proceedings to terminate any Plan or Multiemployer Plan or to appoint
a trustee to administer any Plan; (d) any Borrower or any of its ERISA
Affiliates shall become liable to the PBGC or any other party under Section
4062, 4063 or 4064 of ERISA with respect to any Plan; or (e) any Borrower or
any of its Subsidiaries or any of their ERISA Affiliates shall become liable to
make a current payment with respect to any Multiemployer Plan under Section
4201 et seq. of ERISA; if as of the date thereof or any subsequent date, the
sum of all Borrowers and their Subsidiaries’ and their ERISA Affiliates’
various liabilities (such liabilities to include, without limitation, any

 

116

 

liability to the PBGC or to any other party under
Section 4062, 4063 or 4064 of ERISA with respect to any Plan, or to any Multiemployer
Plan under Section 4201 et seq. of ERISA) as a result of such events listed in
subclauses (a) through (e) above exceeds $10,000,000; or (ii) either (a) a
foreign governmental authority has instituted proceedings to terminate a
Foreign Pension Plan or a foreign governmental authority has appointed a
trustee to administer any Foreign Pension Plan in place of the existing
administrator, in each case by reason of a distress termination within the
meaning of Section 4041(c) of ERISA, treating such Foreign Pension Plan as if
it were subject to ERISA; or (b) any Foreign Pension Plan that is required by
applicable law to be funded in a trust or other funding vehicle has failed to
comply with such funding requirements; if, as of the date thereof or as of any
subsequent date, the sum of each of Borrower’s and its Subsidiaries’ various
liabilities to any Foreign Pension Plan solely as a result of such events
listed in subclauses (a) and (b) of this clause (ii) exceeds the Dollar
Equivalent of $10,000,000; or

 

(j)            Change
in Control.  A Change of Control
shall occur; or

 

(k)           Security
Documents; Guarantees.  (i) At any
time after the execution and delivery thereof, any of the Security Documents
shall cease to be in full force and effect (other than as a result of the
actions taken by the Collateral Agent) or shall cease to give the Collateral
Agent for the benefit of the Lenders the Liens, rights, powers and privileges
purported to be created thereby (including, without limitation, a first
priority perfected security interest in, and Lien on, all of the Collateral),
in favor of the Collateral Agent for the benefit of the Secured Parties subject
to no other Liens (except to the extent expressly permitted herein or therein);
or (ii) any Guaranty or any provision thereof shall (other than as a result of
the actions taken by Administrative Agent or the Lenders to release such
Guaranty) cease to be in full force and effect in accordance with its terms, or
any Credit Party or any Person acting by or on behalf of such Guarantor shall
deny or disaffirm such Credit Party’s obligations under any Guaranty.

 

If any of the foregoing
Events of Default shall have occurred and be continuing, Administrative Agent,
at the written direction of the Required Lenders (administered as if the
Commitments have been terminated in full) shall, take one or more of the
following actions:  (i) by written or
oral or telephonic notice (in the case of oral or telephonic notice confirmed
in writing immediately thereafter) to the Funds Administrator declare the
Commitments to be terminated whereupon the Commitments shall forthwith
terminate, (ii) by written or oral or telephonic notice (in the case of oral or
telephonic notice confirmed in writing immediately thereafter) to the Funds
Administrator declare all sums then owing by the Borrowers hereunder and under
the Loan Documents to be forthwith due and payable, whereupon all such sums
shall become and be immediately due and payable without presentment, demand,
protest or notice of any kind, all of which are hereby expressly waived by the
Borrowers, (iii) terminate any Letter of Credit which may be terminated in
accordance with its terms, (iv) direct the Borrowers to pay (and the Borrowers
agree that upon receipt of such notice, or upon the occurrence of any Event of
Default specified in Section 10.1(e) or Section 10.1(f) with
respect to the Borrowers they will pay) to Administrative Agent at the Payment
Office such additional amount of cash, to be held as security by Administrative
Agent, as is equal to 105% of the aggregate Stated Amount of all Letters of
Credit issued for the account of the Borrowers and its subsidiaries and then
outstanding and (v) enforce, as Administrative Agent (to the extent permitted
under the applicable Loan Documents), or direct the Collateral Agent to enforce,
pursuant to the terms of

 

117

 

the Security
Agreement, any of the liens and security interests created pursuant to the
Security Documents.  In cases of any
occurrence of any Event of Default described in clause (e) or (f)
of this Section 10.1, the Commitments shall terminate and the Loans,
together with accrued interest thereon, shall become due and payable forthwith
without the requirement of any such acceleration or request, and without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived by the Borrowers, any provision of this Agreement or any other
Loan Document to the contrary notwithstanding, and other amounts payable by the
Borrowers hereunder shall also become immediately due and payable all without
notice of any kind.

 

Anything in this Section
10.1 to the contrary notwithstanding, Administrative Agent shall, at the
request of the Required Lenders, rescind and annul any acceleration of the
Loans and termination of the Commitments by written instrument filed with the
Funds Administrator; provided that at the time such acceleration is so
rescinded and annulled:  (A) all past due
interest and principal (other than principal due solely as a result of such
acceleration), if any, on the Loans and all other sums payable under this
Agreement and the other Loan Documents shall have been duly paid, and (B) no
other Event of Default shall have occurred and be continuing which shall not
have been waived in accordance with the provisions of Section 13.1
hereof.  Upon any such rescission and
annulment, Administrative Agent shall return to the Borrowers any cash
collateral delivered pursuant to the preceding paragraph.

 

10.2         Rights Not Exclusive.  The rights provided for in this Agreement and
the other Loan Documents are cumulative and are not exclusive of any other
rights, powers, privileges or remedies provided by law or in equity, or under
any other instrument, document or agreement now existing or hereafter arising.

 

ARTICLE XI

COLLATERAL ADMINISTRATION

 

11.1         Lock-Box and Master Collection
Account Arrangements.  The Borrowers
and the Credit Parties shall deliver to Administrative Agent and Collateral
Agent a Lock-Box Letter with respect to each of its Lock-Boxes and Lock-Box
Accounts.  Each such Lock-Box Letter
shall direct that all collected and available funds on deposit in such Lock-Box
Accounts are to be remitted on a daily basis by electronic wire or ACH transfer
to the Master Collection Account.  In
addition to the above-described Lock-Box Letters, the Borrowers shall deliver
to Administrative Agent and Collateral Agent (on or prior to the date hereof or
of any relocation of such account to any other financial institution) a Master
Collection Account Agreement substantially in the form attached hereto as Exhibit
11.1 (a “Master Collection Account Agreement”), executed by the
applicable Borrowers and the applicable bank at which such account is then
being maintained (the “Master Collection Account Bank”) and covering the
Master Collection Account.  Each Borrower
and each Credit Party hereby grant to Collateral Agent exclusive dominion and
control of all of the Lock-Box Accounts, the Lock-Boxes and the Master Collection
Account (and all funds deposited, or to be deposited, therein), with all rights
to, among other things, at any time (i) give notices to each Lock-Box Bank or
the Master Collection Account Bank, as applicable, (ii) direct the disposition
of all Collections that are sent to any of the Lock-Boxes and the Lock-Box
Accounts to the Master Collection Account, and all Collections that are on
deposit in the Master Collection Account in accordance with the terms

 

118

 

hereof, and (iii) take all other actions permitted
under the Lock-Box Letters and the Master Collection Account Agreement.  Unless directed to do so by Administrative
Agent and Collateral Agent, no Borrower shall have authority to, nor shall it terminate
any bank as the Master Collection Account Bank, add any other financial
institution as a Master Collection Account Bank, or consent to the transfer of
any funds from any Lock-Box Bank to any financial institution other than the
Master Collection Account Bank.  To the
extent a Borrower is directed by Collateral Agent to move the Master Collection
Account to a different account or to a different financial institution, such
Borrower shall deliver to Collateral Agent a new or revised Master Collection
Account Agreement, as applicable, executed by such Borrower and the Master
Collection Account Bank or new Master Collection Account Bank, as applicable,
relating to such new Master Collection Account, in any case, prior to the
designation of such account as the Master Collection Account.  If notwithstanding the directions in the
Lock-Box Letters and this Agreement, any Borrower receives any Collections
directly, it hereby agrees to remit such Collections (within one (1) Business
Day thereafter) to the Master Collection Account in the identical form as
received by it (with any necessary endorsements).  Prior to its turnover of such Collections,
such Borrower shall hold any such Collections received by it in trust for the
Collateral Agent.

 

11.2         Enforcement Rights.  

 

(a)           Collateral
Agent may, at any time upon the occurrence and during the continuance of an
Event of Default, direct the Obligors and the Lock-Box Banks to make all
payments with respect to the Receivables directly to the Master Collection
Account.  Collateral Agent may, and the
Funds Administrator shall at Collateral Agent’s request, withhold the identity
of the Lenders from the Obligors and Lock-Box Banks.  Upon Collateral Agent’s request at any time
during an Event of Default, the Funds Administrator (at the Borrower’s expense)
shall, or shall cause any applicable Credit Party to, (i) give notice to each
Obligor of the Collateral Agent’s lien on the Receivables and direct that
payments be made directly to Collateral Agent or its designee and (ii) assemble
all of the Related Security and transfer, or license the use of, all software
necessary or desirable to collect the Receivables and the Related Security to
Collateral Agent or its designee at a place selected by Collateral Agent and
(iii) segregate all cash, checks and other instruments received by it which
constitute Collections in a manner acceptable to Collateral Agent.

 

(b)           Each
Borrower hereby irrevocably appoints Collateral Agent as its attorney-in-fact
coupled with an interest, with full power of substitution and with full authority
in the place and stead of such Borrower, to take any and all steps in the name,
and on behalf, of such Borrower necessary or desirable, in the determination of
Collateral Agent, (i) to collect any amounts due under any Receivables or
Related Security, including endorsing the name of such Borrower or any Credit
Party on checks and other instruments representing Collections and enforcing
such Receivables and Related Security. 
The Borrowers’ conferring of powers upon Collateral Agent under this Section
11.3(b) shall not subject Collateral Agent to any liability if any action
taken by it shall prove to be inadequate or invalid, nor shall it confer any
obligations upon Collateral Agent in any manner whatsoever.

 

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(c)           Neither
Administrative Agent nor the Lenders shall have any obligation to take any
action or commence any proceedings to realize upon any Receivable or to enforce
any of their respective rights, powers, privileges or remedies with respect
thereto.

 

11.3         Responsibilities of Borrowers.  Notwithstanding anything herein to the
contrary, each Borrower shall (a) perform all of its obligations under the
Contracts related to the Receivables to the same extent as if such Receivables
had not been pledged under the Security Documents (the exercise by Collateral
Agent, Administrative Agent or any Lender of its rights hereunder shall not
relieve the Borrowers or any Credit Party from such obligations) and (b) pay
when due any Taxes payable in connection with the Receivables or their creation
or satisfaction.  Collateral Agent,
Administrative Agent and the Lenders shall neither have any obligation or
liability with respect to any Receivable nor be obligated to perform any of the
obligations of the Borrowers or any Credit Party under any of the foregoing
(including under any Contract with respect thereto).

 

ARTICLE XII

ADMINISTRATIVE AGENT

 

In this Article XII,
the Lenders agree among themselves as follows:

 

12.1         Appointment. 
Each Lender hereby irrevocably appoints, designates and authorizes
Administrative Agent (for purposes of this Article XII, the term “Administrative
Agent” shall, except for purposes of Section 12.10, include
Administrative Agent in its capacity as Collateral Agent pursuant to the
Security Documents) to act as specified herein and in the other Loan
Documents.  Each Lender hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, Administrative Agent to take
such action on its behalf under the provisions hereof, the other Loan Documents
(including, without limitation, to give notices and take such actions on behalf
of the Required Lenders as are consented to in writing by the Required Lenders
or all Lenders, as the case may be) and any other instruments, documents and
agreements referred to herein or therein and to exercise such powers hereunder
and thereunder as are specifically delegated to Administrative Agent by the
terms hereof and thereof and such other powers as are reasonably incidental
thereto.  Administrative Agent may
perform any of its duties hereunder and under the other Loan Documents, by or
through its officers, directors, agents, employees or affiliates.

 

12.2         Nature of Duties.  Administrative Agent shall not have any
duties or responsibilities except those expressly set forth in this
Agreement.  The duties of Administrative
Agent shall be mechanical and administrative in nature.  EACH LENDER
HEREBY ACKNOWLEDGES AND AGREES THAT, ADMINISTRATIVE AGENT SHALL NOT HAVE, BY
REASON OF THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, A FIDUCIARY RELATIONSHIP
TO OR IN RESPECT OF ANY LENDER. 
Nothing in any of the Loan Documents, expressed or implied, is intended
to or shall be so construed as to impose upon Administrative Agent any
obligations in respect of any of the Loan Documents except as expressly set
forth herein or therein.  Each Lender
shall make its own independent investigation of the financial condition and
affairs of the Borrowers in connection with the making and the continuance of
the Loans hereunder and shall make its own appraisal of the

 

120

 

credit worthiness of the Borrowers, and Administrative
Agent shall not have any duty or responsibility, either initially or on a
continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before making of the
Loans or at any time or times thereafter. 
Except as expressly set forth in the Loan Documents, Administrative
Agent shall not have any duty to disclose, and shall not be liable for the
failure to disclose, any information relating to any of the Borrowers or any of
their Subsidiaries that is communicated to or obtained by the financial
institution serving as Administrative Agent or any of its Affiliates in any
capacity. Administrative Agent will promptly notify each Lender at any time
that the Required Lenders have instructed it to act or refrain from acting
pursuant to Article X.

 

12.3         Rights, Exculpation, Etc.  Neither Administrative Agent nor any of its
officers, directors, agents, employees or affiliates shall be liable to any
Lender for any action taken or omitted by it hereunder or under any of the Loan
Documents, or in connection herewith or therewith, unless caused by its or
their gross negligence or willful misconduct. 
Administrative Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the
execution, effectiveness, genuineness, validity, enforceability,
collectibility, or sufficiency of any of the Loan Documents or any other
document or the financial condition of the Borrowers.  Administrative Agent shall not be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any of the Loan Documents
or any other document or the financial condition of the Borrowers, or the
existence or possible existence of any Unmatured Event of Default or Event of Default
unless requested to do so by the Required Lenders.  Administrative Agent may at any time request
instructions from the Lenders with respect to any actions or approvals
(including the failure to act or approve) which by the terms of any of the Loan
Documents Administrative Agent is permitted or required to take or to grant,
and if such instructions are requested, Administrative Agent shall be
absolutely entitled to refrain from taking any action or to withhold any
approval and shall not be under any liability whatsoever to any Person for
refraining from any action or withholding any approval under any of the Loan
Documents until it shall have received such instructions from the Required
Lenders or all Lenders, as applicable. 
Without limiting the foregoing, no Lender shall have any right of action
whatsoever against Administrative Agent as a result of either Administrative
Agent acting or refraining from acting or approving under any of the Loan
Documents in accordance with the instructions of the Required Lenders or, to
the extent required by Section 12.1, all of the Lenders.

 

12.4         Reliance. 
Administrative Agent shall be entitled to rely, and shall be fully
protected in relying, upon any notice, writing, resolution, statement,
certificate, order or other document or any telephone, telex, teletype,
telecopier or electronic message reasonably believed by it to be genuine and
correct and to have been signed, sent or made by the proper Person, and, with
respect to all matters pertaining herein or to any of the other Loan Documents
and its duties hereunder or thereunder, upon advice of counsel selected by
Administrative Agent.

 

12.5         Indemnification.  To the extent that Administrative Agent is
not reimbursed and indemnified by the Borrowers, the Lenders will reimburse and
indemnify Administrative Agent for and against any and all liabilities,
obligations, losses, damages, claims, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind or nature whatsoever which may be
imposed on, incurred by, or asserted against Administrative Agent,

 

121

 

acting pursuant hereto in such capacity, in any way
relating to or arising out of this Agreement or any of the other Loan Documents
or any action taken or omitted by Administrative Agent under this Agreement or
any of the other Loan Documents, in proportion to each Lender’s Pro Rata Share;
provided, however, that no Lender shall be liable for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from
Administrative Agent’s gross negligence or willful misconduct.  The obligations of the Lenders under this Section
12.5 shall survive the payment in full of the Notes and the termination of
this Agreement.

 

12.6         Administrative Agent in its Individual
Capacity.  With respect to its Loans
made by it, the Administrative Agent shall have and may exercise the same
rights and powers hereunder and is subject to the same obligations and
liabilities as and to the extent set forth herein for any other Lender or
holder of Obligations.  The terms “Lenders”,
“holder of Obligations” or “Required Lenders” or any similar terms shall,
unless the context clearly otherwise indicates, include the Administrative
Agent in its individual capacity as a Lender, one of the Required Lenders or a
holder of Obligations.  The
Administrative Agent may accept deposits from, lend money to, and generally
engage in any kind of banking, trust or other business with any Borrower or any
Subsidiary or affiliate of any Borrower as if it were not acting as the
Administrative Agent hereunder or under any other Loan Document, including,
without limitation, the acceptance of fees or other consideration for services
without having to account for the same to any of the Lenders.

 

12.7         Notice of Defaults.  Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default or Unmatured
Event of Default hereunder unless Administrative Agent has received written
notice from a Lender or any Borrower referring to this Agreement describing
such Event of Default or Unmatured Event of Default and stating that such
notice is a “notice of default”.  In the
event Administrative Agent receives such a notice, Administrative Agent shall
give prompt notice thereof to the Lenders.

 

12.8         Holders of Obligations.  Administrative Agent may deem and treat the
payee of any Obligation as reflected on the books and records of Administrative
Agent as the owner thereof for all purposes hereof unless and until a written
notice of the assignment or transfer thereof shall have been filed with
Administrative Agent pursuant to Section 13.9(c).  Any request, authority or consent of any
Person who, at the time of making such request or giving such authority or
consent, is the holder of any Obligation shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Obligation or of any
Obligation or Obligations granted in exchange therefor.

 

12.9         Actions with Respect to Defaults.  In addition to the Administrative Agent’s
right to take actions on its own accord as permitted under this Agreement, the
Administrative Agent shall take such action with respect to a Default or Event
of Default as shall be directed by the Required Lenders; provided that until
the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable and in the best interests of the Lenders and
the Facing Banks; and, further, provided that the Administrative Agent shall
not be required under any circumstances to take any action that, in its judgment,
(a) is contrary to any provision of the Loan Documents or applicable

 

122

 

law or (b) will expose it to any liability or expense
against which it has not been indemnified to its satisfaction.  If any indemnity furnished to Administrative
Agent for any purpose shall, in the opinion of Administrative Agent, be
insufficient or become impaired, Administrative Agent may call for additional
indemnity and cease, or not commence, to do the acts indemnified against until
such additional indemnity is furnished.

 

12.10       Resignation.

 

(a)           Administrative
Agent may resign from the performance of all its functions and duties hereunder
at any time by giving fifteen (15) Business Days’ prior written notice to the
Funds Administrator and the Lenders. 
Such resignation shall take effect upon the acceptance by a successor
Administrative Agent of appointment pursuant to clauses (b), (c) or (d) below.

 

(b)           Upon
any such notice of resignation by Administrative Agent, Required Lenders shall
appoint a successor Administrative Agent who shall be satisfactory to the Funds
Administrator and shall be an incorporated bank or trust company.

 

(c)           If
a successor Administrative Agent shall not have been so appointed within said
fifteen (15) Business Day period, Administrative Agent, with the consent of the
Funds Administrator, shall then appoint its successor who shall serve as
Administrative Agent, as the case may be, until such time, if any, as the
Required Lenders, with the consent of the Funds Administrator, appoint a
successor Administrative Agent as provided above.

 

(d)           If
no successor Administrative Agent has been appointed pursuant to clause (b) or
(c), by the twentieth (20th) Business Day after the date such notice of
resignation was given by Administrative Agent, Administrative Agent’s
resignation shall become effective and the Required Lenders shall thereafter
perform all the duties of Administrative Agent hereunder until such time, if
any, as the Required Lenders, with the consent of the Funds Administrator,
appoint a successor Administrative Agent as provided above.

 

ARTICLE XIII

MISCELLANEOUS

 

13.1         No Waiver; Modifications in Writing.  No failure or delay on the part of
Administrative Agent or any Lender in exercising any right, power or remedy
hereunder shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right, power or remedy preclude any other or further
exercise thereof or the exercise of any other right, power or remedy.  The remedies provided for herein are
cumulative and are not exclusive of any remedies that may be available to
Administrative Agent or any Lender at law or in equity or otherwise.  No amendment or waiver of any provision of
this Agreement or any other Loan Document, nor consent to any departure by any
Credit Party therefrom, shall in any event be effective unless the same shall
be in writing and signed by the Required Lenders (or by Administrative Agent on
their behalf), or if the Lenders shall not be parties thereto, by the parties
thereto and consented to by the Required Lenders (or by Administrative Agent on
their behalf), and each such amendment, waiver or consent shall be effective
only in the specific instance and for the specific purpose for which given; provided,
that, notwithstanding the foregoing:

 

123

 

(a)           no
amendment, waiver or consent shall, unless in writing and signed by all of the
Lenders, increase the percentages in clauses (a)(i) or (a)(ii) of
the definition of the term Borrowing Base.

 

(b)           no
amendment, waiver or consent shall, unless in writing and signed by all the
Lenders, do any of the following:  (i)
increase the Commitments of the Lenders or subject the Lenders to any
additional obligations; (ii) except as otherwise expressly provided in this
Agreement, reduce the principal of, or interest on, the Loans or Notes or any
drawing under any Letter of Credit or any fees hereunder; (iii) postpone any
date fixed for any payment in respect of principal of, or interest on, the
Loans or for the reimbursement of any drawing under any Letter of Credit or any
fees hereunder; (iv) change the percentage of the Commitments, or any minimum
requirement necessary for the Lenders or the Required Lenders to take any
action hereunder; (v) amend or waive this Section 13.1, or change the
definition of Required Lenders or Pro Rata Share; (vi) except in connection
with the financing, refinancing, sale or other disposition of any Collateral of
the Borrower permitted under this Agreement, release Administrative Agent’s
Liens on all or a substantial portion of the Collateral; (vii) release any
Borrower or Guarantor from its obligations under the Loan Documents except
pursuant to a transaction permitted by this Agreement; and, provided that no
amendment, waiver or consent affecting the rights or duties of Administrative
Agent or any Facing Bank under, (x) in the case of Administrative Agent, any
term or provision of this Letter of Credit Request Agreement and (y) in the
case of any Facing Bank, (1) Sections 2.3(d), 2.3(e), 2.3(g)
and 2.3(i) of this Agreement, (2) any Letter of Credit or (3) any Letter
of Credit Request, shall in any event be effective, unless in writing and
signed by Administrative Agent or such Facing Bank, as applicable, in addition
to the Lenders required hereinabove to take such action.

 

Notwithstanding any of
the foregoing to the contrary, the consent of the Borrowers shall not be
required for any amendment, modification or waiver of the provisions of Article
XII (other than the provisions of Section 12.10).  In addition, the Borrowers and the Lenders
hereby authorize the Agent to modify this Agreement by unilaterally amending or
supplementing Annex I from time to time in the manner requested by the
Borrowers, the Agent or any Lender in order to reflect any assignments or
transfers of the Loans as provided for hereunder.

 

13.2         Further Assurances.  Each Borrower agrees, on behalf of itself and
its Subsidiaries, to do such further acts and things and to execute and deliver
to Administrative Agent such additional assignments, agreements, powers and
instruments, as Administrative Agent may reasonably require or deem advisable
to carry into effect the purposes of this Agreement or any of the Loan
Documents or to better assure and confirm unto Administrative Agent its rights,
powers and remedies hereunder.

 

13.3         Notices, Etc.

 

(a)           Except
where telephonic instructions or notices are authorized herein to be given (and
except as provided in paragraph (b) below), all notices, demands, instructions
and other communications required or permitted to be given to or made upon any
party hereto or any other Person shall be in writing and shall be personally
delivered or sent by registered or certified mail, postage prepaid, return
receipt requested, or by a reputable overnight or courier delivery service, or
by telecopier, and shall be deemed to be given for purposes of this Agreement
when

 

124

 

received, or in the case of notice delivered by telecopy,
upon completion of transmission with a copy of such notice also being delivered
under any of the other methods provided above, all in accordance with the
provisions of this Section 13.3. 
Unless otherwise specified in a notice sent or delivered in accordance
with the foregoing provisions of this Section 13.3, notices, demands,
instructions and other communications in writing shall be given to or made upon
the respective parties hereto at their respective addresses (or to their
respective telecopier numbers) indicated on Schedule 13.3 attached
hereto or, in the case of any Assignee, on its signature page to its Assignment
and Assumption Agreement and, in the case of telephonic instructions or
notices, by calling the telephone number or numbers indicated for such party on
Schedule 13.3 attached hereto or such Assignment or Assumption
Agreement, as the case may be.

 

(b)           Notices
and other communications to or by Administrative Agent and the Lenders
hereunder may be delivered or furnished by electronic communication (including
e-mail and Internet or intranet websites) pursuant to procedures approved by
Administrative Agent, provided that the foregoing shall not apply to notices
pursuant to Article II unless otherwise agreed by Administrative Agent and the
applicable Lender.  Administrative Agent
or a Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may be limited
to particular notices or communications.

 

Unless Administrative
Agent otherwise prescribes, (i) notices and other communications sent to an
e-mail address shall be deemed received upon the sender’s receipt of an
acknowledgement from the intended recipient (such as by the “return receipt
requested” function, as available, return e-mail or other written
acknowledgement), provided that if such notice or other communication is sent
after 5:00 p.m. (New York City time), such notice or communication shall be
deemed to have been sent at the opening of business on the next Business Day
for the recipient, and (ii) notices or communications posted to an Internet or
intranet website shall be deemed received upon the deemed receipt by the
intended recipient at its e-mail address as described in the foregoing clause
(i) of notification that such notice or communication is available and
identifying the website address therefor.

 

13.4         Costs, Expenses and Taxes.

 

(a)           Generally.  Each Borrower agrees without duplication to
pay promptly upon request by Administrative Agent all reasonable costs and
expenses incurred by or on behalf of the Administrative Agent in connection
with the negotiation, preparation, printing, typing, reproduction, execution
and delivery of this Agreement and the other Loan Documents and the documents
and instruments referred to herein and therein and any amendment, waiver,
consent relating hereto or thereto or other modifications of (or supplements
to) any of the foregoing and any and all other documents and instruments
furnished pursuant hereto or thereto or in connection herewith or therewith,
including without limitation, the reasonable fees and out-of-pocket expenses of
Winston & Strawn LLP, special counsel to Administrative Agent, and any local
counsel retained by Administrative Agent relative thereto, other Attorney
Costs, independent public accountants and other outside experts retained by
Administrative Agent in connection with the administration of this Agreement
and the other Loan Documents, and all search fees, appraisal fees and expenses,
title insurance policy fees, costs and expenses and filing and recording fees
and all costs and expenses (including, without limitation, Attorney Costs), if

 

125

 

any, in connection with the enforcement of this
Agreement, any of the Loan Documents or any other agreement furnished pursuant
hereto or thereto or in connection herewith or therewith.  In addition, each Borrower shall pay any and
all present and future stamp, transfer, excise and other similar taxes payable
or determined to be payable in connection with the execution and delivery of
this Agreement, any Loan Document, or the making of any Loan, and agrees to
save and hold Administrative Agent and each Lender harmless from and against
any and all liabilities with respect to or resulting from any delay by such
Borrower in paying, or omission by such Borrower to pay, such taxes.  Any portion of the foregoing fees, costs and
expenses which remains unpaid more than thirty (30) days following
Administrative Agent’s or any Lender’s statement and request for payment
thereof shall bear interest from the date of such statement and request to the
date of payment at the Default Rate.

 

(b)           Indemnification.  Borrowers will jointly and severally
indemnify and hold harmless Administrative Agent and each Lender and each
director, officer, employee, agent, attorney, trustee, advisor and Affiliate of
Administrative Agent and each Lender (each such Person an “Indemnified Person”
and collectively, the “Indemnified Persons”) from and against all
losses, claims, damages, obligations (including removal or remedial actions),
expenses or liabilities (not including Taxes as to which a Borrower is not
required to make any payment of additional amounts pursuant to Section
4.8(c) hereof) to which such Indemnified Person may become subject, insofar
as such losses, claims, damages, penalties, obligations (including removal or
remedial actions), expenses or liabilities (or actions, suits or proceedings
including any inquiry or investigation or claims in respect thereof (whether or
not Administrative Agent or any Lender is a party thereto)) arise out of, in
any way relate to, or result from the transactions contemplated by this
Agreement or any of the other Loan Documents and to reimburse each Indemnified
Person upon their demand, for any Attorney Costs or other expenses incurred in
connection with investigating, preparing to defend or defending any such loss,
claim, damage, liability, action or claim; provided, however,

 

(i)            that no Indemnified Person shall
have the right to be so indemnified hereunder for any loss, claim, damage,
penalties, obligations, expense or liability to the extent it arises or results
from the gross negligence or willful misconduct or bad faith of such
Indemnified Person as finally determined by a court of competent jurisdiction
and

 

(ii)           that nothing contained herein shall
affect the obligations and liabilities of the Lenders to the Borrowers
contained herein.

 

(iii)          If any action, suit or proceeding
arising from any of the foregoing is brought against Administrative Agent, any
Lender or any other Person indemnified or intended to be indemnified pursuant
to this Section 13.4, the Borrowers will, if requested by Administrative
Agent, any Lender or any such Indemnified Person, resist and defend such
action, suit or proceeding or cause the same to be resisted and defended by
counsel reasonably satisfactory to the Person or Persons indemnified or
intended to be indemnified.  Each
Indemnified Person shall, unless Administrative Agent, a Lender or other
Indemnified Person has made the request described in the preceding sentence and
such request has been complied with, have the right to employ its own counsel
(or (but not as well as) staff counsel) to investigate and control the defense
of any matter covered

 

126

 

by such indemnity and the
reasonable fees and expenses of such counsel shall be at the expense of the
indemnifying party.  Excluding any
liability to the extent arising out of the gross negligence or willful
misconduct of any Indemnified Person as determined by a court of competent
jurisdiction in a final non-appealable judgment, the Borrowers further agree to
indemnify and hold each Indemnified Person harmless from all loss, cost
(including Attorney Costs), liability and damage whatsoever incurred by any
Indemnified Person by reason of any violation of any Environmental Laws or
Environmental Permits or for the Release or threatened Release of any
Contaminants into the environment for which any Borrower or any of its
Subsidiaries has any liability or which occurs upon the Mortgaged Property or
which is related to any property currently or formerly owned, leased or operated
by or on behalf of any Borrower or any of its Subsidiaries, or by reason of the
imposition of any Environmental Lien or which occurs by a breach of any of the
representations, warranties or covenants relating to environmental matters
contained herein, provided that, with respect to any liabilities arising
from acts or failure to act for which any Borrower or any of its Subsidiaries
is strictly liable under any Environmental Law or Environmental Permit, such
Borrower’s obligation to each Indemnified Person under this indemnity shall
likewise be without regard to fault on the part of any Borrower or any such
Subsidiary.  If the Borrowers shall fail
to do any act or thing which it has covenanted to do hereunder or any representation
or warranty on the part of any Borrower or any Subsidiary contained herein or
in any other Loan Document shall be breached, Administrative Agent may (but
shall not be obligated to) do the same or cause it to be done or remedy any
such breach, and may expend its funds for such purpose, and will use its best
efforts to give prompt written notice to the Funds Administrator that it
proposes to take such action.  Any and
all amounts so expended by Administrative Agent shall be repaid to it by the Borrowers
promptly upon Administrative Agent’s demand therefor, with interest at the
Default Rate in effect from time to time during the period including the date
so expended by Administrative Agent to the date of repayment.  To the extent that the undertaking to
indemnify, pay or hold harmless Administrative Agent or any Lender as set forth
in this Section 13.4 may be unenforceable because it is violative of any
law or public policy, the Borrowers shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.  The
obligations of the Borrowers under this Section 13.4 shall survive the
termination of this Agreement and the discharge of the Borrowers’ other
Obligations hereunder.

 

13.5         Defaulting Lender.

 

(a)           Unless
the Administrative Agent shall have received notice from a Lender that such
Lender will not make available to the Administrative Agent a Loan required to
be made by it pursuant to Section 2.2 or its participation pursuant to Section
2.5(d)(ii), Administrative Agent may assume that such Lender has made such
amounts available to the Administrative Agent in accordance with such Sections
and the Administrative Agent in its sole discretion may, in reliance upon such
assumption, make available to the Borrowers, pursuant to the directions of the
Funds Administrator, or the applicable Facing Bank a corresponding amount on
behalf of such Lender.

 

127

 

(b)           If
any amount referred to in Section 13.5(a) or in Section 4.9 is
not made available to the Administrative Agent by a Lender (a “Defaulting
Lender”) and the Administrative Agent has made such amount available to the
Borrowers or a Facing Bank, the Administrative Agent shall be entitled to
recover such amount on demand from such Defaulting Lender together with
interest as hereinafter provided.  If
such Defaulting Lender does not pay such amount forthwith upon the
Administrative Agent’s demand therefore, Administrative Agent shall promptly
notify the Borrowers and the Borrowers shall immediately (but in no event later
than five Business Days after such demand) pay such amount to the
Administrative Agent together with interest calculated as hereinafter
provided.  The Administrative Agent shall
also be entitled to recover from such Defaulting Lender and/or the Borrowers,
as the case may be, (i) interest on such amount in respect of each day from the
date such corresponding amount was made available by the Administrative Agent
to the Borrowers to the date such amount is recovered by the Administrative
Agent, at a rate per annum equal to either (A) if paid by such Defaulting
Lender, the Federal Funds Rate or (B) if paid by the Borrowers, the then
applicable rate of interest, calculated in accordance with Section 3.1, plus
(ii) in each case, an amount equal to any costs (including legal expenses) and
losses incurred as a result of the failure of such Defaulting Lender to provide
such amount as provided in this Agreement. 
Nothing herein shall be deemed to relieve any Lender from its duty to
fulfill its obligations hereunder or to prejudice any rights which the
Borrowers or the Facing Bank, may have against any Lender as a result of any
default by such Lender hereunder, including the right of the Borrowers to seek
reimbursement from any Defaulting Lender for any amounts paid by the Borrowers
under clause (ii) above on account of such Defaulting Lender’s default.

 

(c)           Notwithstanding
anything contained herein to the contrary, so long as any Lender is a
Defaulting Lender or has rejected its Commitment, the Administrative Agent
shall not be obligated to transfer to such Lender any payments made by the
Borrowers to the Administrative Agent for the benefit of such Lender; and such
Lender shall not be entitled to the sharing of any payments pursuant to Section
4.10.  Amounts otherwise payable to
such Lender under Section 4.10 shall instead be paid to the
Administrative Agent.  For so long as any
Lender shall be in default for a period of at least 2 Business Days of its
obligation to fund its Pro Rata Share of any Loan, no fees shall be accrued by
or paid to such Lender.

 

(i)            For purposes of voting or consenting
to matters with respect to the Loan Documents and determining Pro Rata Share,
such Defaulting Lender shall be deemed not to be a “Lender” and such Lender’s
Commitment shall be deemed to be zero (0).

 

(ii)           This Section 13.5(c) shall
remain effective with respect to a Defaulting Lender until (A) the Obligations
under this Agreement shall have been declared or shall have become immediately
due and payable or (B) the Required Lenders, the Administrative Agent and the
Funds Administrator shall have waived such Lender’s default in writing.

 

(iii)          No Lender’s Commitment shall be
increased or otherwise affected, and performance by the respective Borrower
shall not be excused, by the operation of this Section 13.5(c).  Any payments of principal or interest which
would, but for this Section  13.5(c), be paid to any Lender, shall
be paid to the Lenders who shall not be in default 

 

128

 

under their respective
Commitments and who shall not have rejected any Commitment, for application to
the Loans then due and payable or to the other Obligations then due and payable
or to provide cash collateral to secure Obligations not then due and payable in
such manner and order as shall be determined by the Administrative Agent.

 

13.6         Confirmations. 
Each Borrower and each holder of any portion of the Obligations agrees
from time to time, upon written request received by it from the other, to
confirm to the other in writing (with a copy of each such confirmation to
Administrative Agent) the aggregate unpaid principal amount of the Loan or
Loans and other Obligations then outstanding.

 

13.7         Setoff; Recoupment.

 

(a)           In
addition to any rights and remedies of the Lenders provided by law, each Lender
shall have the right, without prior notice to the Funds Administrator, any such
notice being expressly waived by the Funds Administrator, upon the occurrence
and during the continuance of an Event of Default, to setoff and apply against
any Obligations, whether matured or unmatured, of the Borrowers to such Lender,
any amount owing from such Lender to the Borrowers, at or at any time after,
the happening of any of the above-mentioned events, and the aforesaid right of
setoff may be exercised by such Lender against the Borrowers or against any
trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor of the
Borrowers, or against anyone else claiming through or against, the Borrowers or
such trustee in bankruptcy, debtor in possession, assignee for the benefit of
creditors, receivers, or execution, judgment or attachment creditor,
notwithstanding the fact that such right of setoff shall not have been
exercised by such Lender prior to the making, filing or issuance, or service
upon such Lender of, or of notice of, any such petition, assignment for the
benefit of creditors, appointment or application for the appointment of a
receiver, or issuance of execution, subpoena, order or warrant.  Each Lender agrees promptly to notify the
Funds Administrator and Administrative Agent after any such setoff and
application made by such Lender, provided that the failure to give such
notice shall not affect the validity of such setoff and application.

 

(b)           Borrowers
expressly agree that to the extent the Borrowers make a payment or payments and
such payment or payments, or any part thereof, are subsequently invalidated,
declared to be fraudulent or preferential, set aside or are required to be
repaid to a trustee, receiver, or any other party under any bankruptcy act,
state or federal law, common law or equitable cause, then to the extent of such
payment or repayment, the Indebtedness to the Lenders or part thereof intended
to be satisfied shall be revived and continued in full force and effect as if
said payment or payments had not been made.

 

13.8         Execution in Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto on separate counterparts, each
of which counterparts, when so executed and delivered, shall be deemed to be an
original and all of which counterparts, taken together, shall constitute but
one and the same Agreement.  Delivery of
an executed counterpart of a signature page of this Agreement by telecopy shall
be effective as delivery of a manually executed counterpart of this Agreement.

 

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13.9         Binding Effect; Assignment; Addition and
Substitution of Lenders.

 

(a)           This
Agreement shall be binding upon, and inure to the benefit of, the Borrowers,
Collateral Agent, Administrative Agent, the Lenders, all future holders of the
Notes and their respective successors and assigns; provided, however,
that the Borrowers may not assign their rights or obligations hereunder or in
connection herewith or any interest herein (voluntarily, by operation of law or
otherwise) without the prior written consent of Administrative Agent and all of
the Lenders.

 

(b)           Each
Lender may at any time sell to one or more banks or other entities (“Participants”)
participating interests in all or any portion of its Commitment and Loans or
participation in Letters of Credit or any other interest of such Lender
hereunder (in respect of any Lender, its “Credit Exposure”).  In the event of any such sale by a Lender of
participating interests to a Participant, such Lender’s obligations under this
Agreement shall remain unchanged, such Lender shall remain solely responsible
for the performance thereof, and the Funds Administrator and Administrative
Agent shall continue to deal solely and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement.  At the time of each sale of a participating
interest, pursuant to this Section 13.9(b), the Lender shall provide to
the Funds Administrator or Administrative Agent revised IRS Forms, and if
applicable, a Section 4.8(d) Certificate described in Section 4.8(d),
reflecting that portion of its Commitment and Loan retained by it on an amended
IRS Form W-8BEN and that portion of its Commitment and Loan which had been sold
to a Participant on a IRS Form W-8IMY (together with any required attachments).  The Borrowers agree that if amounts
outstanding under this Agreement or any of the Loan Documents are due or
unpaid, or shall have been declared or shall have become due and payable upon
the occurrence of an Event of Default, each Participant shall be deemed to have
the right of setoff in respect of its participating interest in amounts owing
under this Agreement and the Loan Documents to the same extent as if the amount
of its participating interest were owing directly to it as a Lender under this
Agreement or any other Loan Document, provided, however, that
such right of setoff shall be subject to the obligation of such Participant to
share with the Lenders, and the Lenders agree to share with such Participant,
as provided in Section 4.10.  The
Borrowers also agree that each Participant shall be entitled to the benefits of
Section 3.5 and 4.8 with respect to its participation in the
Loans outstanding from time to time, provided that such Participant’s benefits
under Sections 3.5 and 4.8 shall be limited to the benefits that
the primary Lender would be entitled to thereunder.  Each Lender agrees that any agreement between
such Lender and any such Participant in respect of such participating interest
shall not restrict such Lender’s right to approve or agree to any amendment,
restatement, supplement or other modification to, waiver of, or consent under,
this Agreement or any of the Loan Documents except to the extent that any of
the forgoing would (i) extend the final scheduled maturity of any Loan or Note
in which such Participant is participating or extend the stated maturity of any
Letter of Credit in which such Participant is participating beyond the
Commitment Termination Date, or reduce the rate or extend the time of payment
of interest or fees on any such Loan, Note or Letter of Credit (except in
connection with a waiver of applicability of any post-default increase in
interest rates) or reduce the principal amount thereof, or increase the amount
of the Participant’s participation over the amount thereof then in effect (it
being understood that waivers or modifications of conditions precedent,
covenants, Events of Default or Unmatured Events of Default or of a mandatory
reduction in Commitments shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or

 

130

 

Loan shall be permitted without the consent of any
Participant if the Participant’s participation is not increased as a result
thereof), (ii) consent to the assignment or transfer by the Borrowers of any of
their rights and obligations under this Agreement or (iii) release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Loan Documents) supporting the Loans and/or Letters
of Credit hereunder in which such Participant is participating.

 

(c)           Any
Lender may at any time assign to one or more Eligible Assignees, including an
Affiliate thereof (treating any Related Fund as a single Eligible Assignee)
(each an “Assignee”), all or any part of its Credit Exposure pursuant to
an Assignment and Assumption Agreement, provided that (i) it assigns its
Credit Exposure in an amount not less than $1,000,000 with respect to Loans,
and (ii) any assignment of all or any portion of any Lender’s Credit Exposure
to an Assignee other than an Affiliate of such Lender or another Lender, or in
the case of a Lender that is a fund that invests in senior loans, any Related
Fund, shall require the prior written consent of the Administrative Agent and, so
long as no Event of Default has occurred and is continuing, the Funds
Administrator (the consent of the Funds Administrator and the Administrative
Agent not to be unreasonably withheld or delayed, provided, however,
that for the first fifteen Business Days following the Closing Date,
assignments by Administrative Agent shall not require the consent of the Funds
Administrator) and provided  further, that notwithstanding the
foregoing limitations, any Lender may at any time assign all or any part of its
Credit Exposure to any Affiliate of such Lender or to any other Lender (or in
the case of a Lender which is a fund, any Related Fund).  Upon execution of an Assignment and
Assumption Agreement and the payment of a nonrefundable assignment fee of
$3,500 (provided that no such fee shall be payable upon assignments by any
Lender which is a fund that invests in bank loans to any Related Fund) in
immediately available funds to the Administrative Agent at its Payment Office
in connection with each such assignment, written notice thereof by such
transferor Lender to the Administrative Agent and the recording by the
Administrative Agent in the Register of such assignment and the resulting
effect upon the Commitment of the assigning Lender and the Assignee, the
Assignee shall have, to the extent of such assignment, the same rights and
benefits as it would have if it were a Lender hereunder and the holder of the
Obligations (provided that the Funds Administrator and the Administrative Agent
shall be entitled to continue to deal solely and directly with the assignor
Lender in connection with the interests so assigned to the Assignee until
written notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall have been
given to the Funds Administrator and the Administrative Agent by the assignor
Lender and the Assignee) and, if the Assignee has expressly assumed, for the
benefit of the Borrowers, some or all of the transferor Lender’s obligations
hereunder, such transferor Lender shall be relieved of its obligations
hereunder to the extent of such assignment and assumption, and except as
described above, no further consent or action by any Borrower, the Funds
Administrator, the Lenders or the Administrative Agent shall be required.  At the time of each assignment pursuant to
this Section 13.9(c) to a Person which is not already a Lender hereunder
and which is not a United States person (as such term is defined in Section
7701(a)(30) of the Code) for United States Federal income tax purposes, the
respective Assignee shall provide to the Funds Administrator and the
Administrative Agent the appropriate IRS Forms (and, if applicable a Section
4.8(d) Certificate) described in Section 4.8(d) and (e).  Each Assignee shall take such Credit Exposure
subject to the provisions of this Agreement and to any request made, waiver or
consent given or other action taken hereunder, prior to the receipt by
Administrative Agent and the Funds Administrator of written notice of

 

131

 

such transfer, by each previous holder of such Credit
Exposure.  Such Assignment and Assumption
Agreement shall be deemed to amend this Agreement and Schedule 1.1(a)
hereto, to the extent, and only to the extent, necessary to reflect the
addition of such Assignee as a Lender and the resulting adjustment of all or a
portion of the rights and obligations of such transferor Lender under this
Agreement, the Commitments, the determination of its Pro Rata Share (rounded to
twelve decimal places), the Loans, any outstanding Letters of Credit and any
new Notes to be issued, at the Borrowers’ expense, to such Assignee, and no
further consent or action by the Borrowers, the Funds Administrator or Lenders
shall be required to effect such amendments.

 

(d)           The
Borrowers authorize each Lender to disclose to any Participant or Assignee
(each, a “Transferee”) and any prospective Transferee any and all
financial information in such Lender’s possession concerning any Borrower and
any Subsidiary of any Borrower which has been delivered to such Lender by any
Borrower pursuant to this Agreement or which has been delivered to such Lender
by such Borrower in connection with such Lender’s credit evaluation of such
Borrower prior to entering into this Agreement; provided that such Transferee
or prospective Transferee agrees to treat any such information which is not
public as confidential in accordance with Section 13.17.

 

(e)           Notwithstanding
any other provision set forth in this Agreement, any Lender may at any time
pledge or assign all or any portion of its rights under this Agreement and the
other Loan Documents (including, without limitation, the Notes held by it) to
any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Board without notice to, or the consent of, any Borrower or the Funds
Administrator; provided that no such pledge or assignment of a security
interest under this Section 13.9(f) shall release a Lender from any
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.  Any Lender
which is a fund may pledge all or any portion of its Notes or Loans to its
trustee (or other similar representative) in support of its obligations to its
trustee.  No such pledge or assignment
shall release the transferor Lender from its obligations hereunder.

 

13.10       CONSENT TO JURISDICTION; MUTUAL WAIVER
OF JURY TRIAL.

 

(A)          EACH BORROWER, ADMINISTRATIVE AGENT,
AND EACH LENDER HEREBY IRREVOCABLY SUBMIT TO THE NONEXCLUSIVE JURISDICTION OF
ANY UNITED STATES FEDERAL OR NEW YORK STATE COURT SITTING IN THE CITY OF NEW
YORK IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT, AND HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS IN
RESPECT TO SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
UNITED STATES FEDERAL OR NEW YORK STATE COURT AND EACH BORROWER, THE
ADMINISTRATIVE AGENT, AND EACH LENDER IRREVOCABLY WAIVE ANY OBJECTION,
INCLUDING, WITHOUT LIMITATION, ANY OBJECTION TO THE LAYING OF VENUE OR ANY
OBJECTION BASED ON THE GROUNDS OF FORUM NON CONVENIENS WHICH ANY OF THEM MAY
NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING IN SUCH
RESPECTIVE JURISDICTIONS.

 

132

 

(B)           AS A METHOD OF SERVICE, EACH
BORROWER, ADMINISTRATIVE AGENT, AND EACH LENDER IRREVOCABLY CONSENT TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING, BROUGHT IN ANY
SUCH UNITED STATES FEDERAL OR NEW YORK STATE COURT BY THE DELIVERY OF COPIES OF
SUCH PROCESS TO SUCH BORROWER, THE ADMINISTRATIVE AGENT, OR EACH RESPECTIVE
LENDER, AS THE CASE MAY BE, AT THE ADDRESSES SPECIFIED ON THEIR RESPECTIVE
SIGNATURE PAGES TO THIS AGREEMENT OR BY CERTIFIED MAIL DIRECT TO SUCH
RESPECTIVE ADDRESSES.

 

(C)           EACH BORROWER, ADMINISTRATIVE AGENT
AND EACH LENDER HEREBY EXPRESSLY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY
ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHT, POWER OR REMEDY UNDER OR
IN CONNECTION WITH THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.  THE TERMS AND THE PROVISIONS OF THIS SECTION
CONSTITUTE A MATERIAL INDUCEMENT TO LENDERS ENTERING INTO THIS AGREEMENT.

 

13.11       GOVERNING LAW. 
THIS AGREEMENT AND EACH NOTE SHALL BE DEEMED TO BE A CONTRACT MADE UNDER
THE LAWS OF THE STATE OF NEW YORK, AND FOR ALL PURPOSES SHALL BE CONSTRUED IN
ACCORDANCE WITH THE INTERNAL LAWS AND DECISIONS OF SAID STATE, WITHOUT REGARD
TO PRINCIPLES OF CONFLICTS OF LAW.

 

13.12       Severability of Provisions.  Any provision of this Agreement which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining provisions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.

 

13.13       Transfers of Notes.  In the event that the holder of any Note
(including any Lender) shall transfer such Note, it shall immediately advise
Administrative Agent and the Funds Administrator of such transfer, and
Administrative Agent and the Borrowers shall be entitled conclusively to assume
that no transfer of any Note has been made by any holder (including any Lender)
unless and until Administrative Agent and the Funds Administrator shall have
received written notice to the contrary. 
Except as otherwise provided in this Agreement or as otherwise expressly
agreed in writing by all of the other parties hereto, no Lender shall, by
reason of the transfer of a Note or otherwise, be relieved of any of its
obligations hereunder.  Each transferee
of any Note shall take such Note subject to the provisions of this Agreement
and to any request made, waiver or consent given or other action taken
hereunder, prior to the receipt by Administrative Agent and the Funds
Administrator of written notice of such transfer, by each previous holder of
such Note, and, except as expressly otherwise provided in such transfer,
Administrative Agent, any Borrower and the Funds Administrator shall be
entitled conclusively to assume that the transferee named in such notice shall hereafter
be vested with all rights and powers under this Agreement with respect to the
Pro Rata Share of the Loans of the Lender named as the payee of the Note which
is the subject of such transfer.

 

133

 

13.14       Registry.  The
Borrowers hereby designate Administrative Agent to serve as the Borrowers’
agent, solely for purposes of this Section 13.14 to maintain a register
(the “Register”) on which it will record the Loans made by each of the Lenders
and each repayment in respect of the principal amount of the Loans of each
Lender.  Failure to make any such
recordation, or any error in such recordation shall not affect any Borrower’s
obligations in respect of such Loans. 
With respect to any Lender, the transfer of the rights to the principal
of, and interest on, any Loan shall not be effective until such transfer is
recorded on the Register maintained by Administrative Agent with respect to
ownership of such Loans and prior to such recordation all amounts owing to the
transferor with respect to such Loans shall remain owing to the
transferor.  The registration of
assignment or transfer of all or part of any Loans shall be recorded by
Administrative Agent on the Register only upon the acceptance by Administrative
Agent of a properly executed and delivered Assignment and Assumption Agreement
pursuant to Section 13.9(c). 
Coincident with the delivery of such an Assignment and Assumption
Agreement to Administrative Agent for acceptance and registration of assignment
or transfer of all or part of a Loan, or as soon thereafter as practicable, the
assigning or transferor Lender shall surrender the Note (if any) evidencing
such Loan, and thereupon one or more new Notes in the same aggregate principal
amount then owing to such assignor or transferor Lender shall be issued to the
assigning or transferor Lender and/or the new Lender.  The Borrowers agree to indemnify
Administrative Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by Administrative Agent (other than those arising from the gross
negligence or willful negligence of the Administrative Agent) in performing its
duties under this Section 13.14.

 

13.15       Headings.  The
Table of Contents and Article and Section headings used in this Agreement are
for convenience of reference only and shall not affect the construction of this
Agreement.

 

13.16       Termination of Agreement.  This Agreement shall terminate when the
Commitment of each Lender has terminated and all outstanding Obligations and
Loans have been paid in full and all Letters of Credit have expired or been
terminated or otherwise handled in a manner satisfactory to the issuer thereof;
provided, however, that the rights and remedies of Collateral
Agent, Administrative Agent and each Lender with respect to any representation
and warranty made by the Borrowers pursuant to this Agreement or any other Loan
Document, and the indemnification and expense reimbursement provisions contained
in this Agreement and any other Loan Document, including, without limitation, Sections
3.4, 3.5, and 4.8, shall be continuing and shall survive any
termination of this Agreement or any other Loan Document.  The Mortgaged Property, the Collateral and
any other collateral security for the Obligations shall be released from any
security interest or Lien created by the Loan Documents in accordance with the
terms of the applicable Security Documents.

 

13.17       Confidentiality.  Each of the Lenders severally agrees to keep
confidential all non-public information pertaining to any Borrower and any
Subsidiaries or Affiliates which is provided to it by any such parties in
accordance with such Lender’s customary procedures for handling confidential
information of this nature and in a prudent fashion, and shall not disclose
such information to any Person except:

 

134

 

(a)           to
the extent such information is public when received by such Lender or becomes
public thereafter due to the act or omission of any party other than a Lender,

 

(b)           to
the extent such information is independently obtained from a source other than
a Borrower or its Subsidiaries and such information from such source is not, to
such Lender’s knowledge, subject to an obligation of confidentiality or, if
such information is subject to an obligation of confidentiality, that
disclosure of such information is permitted,

 

(c)           to
an Affiliate of such Lender, counsel, auditors, examiners of any regulatory
authority having or reasonably asserting jurisdiction over such Lender,
accountants and other consultants retained by Administrative Agent or any
Lender or to any Affiliate of a Lender which is a direct or indirect
contractual counterparty in swap agreements with any Borrower or a Subsidiary
of any Borrower or such contractual counterparty’s professional advisor (so
long as such contractual counterparty or professional advisor to such
contractual counterparty agrees to be bound by the provisions of this Section
13.17) or to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
rating issued with respect to such Lender,

 

(d)           in
connection with any litigation or the enforcement of the rights of any Lender
or Administrative Agent under this Agreement or any other Loan Document,

 

(e)           to
the extent (x) required by any applicable statute, rule or regulation or court
order (including, without limitation, by way of subpoena) or pursuant to the
request of any Governmental Authority having or reasonably asserting
jurisdiction over any Lender or Administrative Agent; provided, however, that
in such event, if the Lender(s) are able to do so, the Lender shall provide the
Funds Administrator with prompt notice of such requested disclosure so that the
Borrowers may seek a protective order or other appropriate remedy, and, in any
event, the Lenders will endeavor in good faith to provide only that portion of
such information which, in the reasonable judgment of the Lender(s), is
relevant and legally required to be provided, (y) requested by any nationally
recognized rating agency that requires access to information about a Lender’s
investment portfolio in connection with rating issued with respect to such
Lender or (z) requested by an Affiliate of a Lender which is a direct or
indirect contractual counterparty in swap agreements with a Borrower or a
Subsidiary of the Borrower or such contractual counterparty’s professional
advisor (so long as such contractual counterparty or professional advisor to
such contractual counterparty agrees to be bound by the provisions of this Section
13.17) or to the National Association of Insurance Commissioners or any
similar organization or any nationally recognized rating agency that requires
access to information about a Lender’s investment portfolio in connection with
rating issued with respect to such Lender,

 

(f)            to
the extent disclosure to other entities is appropriate in connection with any
proposed or actual assignment or grant of a participation by any of the Lenders
of interests in this Agreement and/or any of the other Loan Documents to such
other entities (who will in turn be required to maintain confidentiality as if
they were Lenders parties to this Agreement). 
In no event shall Administrative Agent or any Lender be obligated or
required to return any such information or other materials furnished by the
Borrowers.

 

135

 

13.18       Concerning the Collateral and the Loan
Documents.

 

(a)           Authority.  Each Lender and each Facing Bank authorizes
and directs DB to act as Collateral Agent and to enter into the Loan Documents
relating to the Collateral for the benefit of the Lenders and the Facing Banks
and the other Secured Parties.  Each
Lender and each Facing Bank agree that any action taken by Administrative
Agent, the Collateral Agent or the Required Lenders (or, where required by the
express terms hereof, a different proportion of the Lenders) in accordance with
the provisions hereof or of the other Loan Documents, and the exercise by
Administrative Agent, the Collateral Agent or the Required Lenders (or, where
so required, such different proportion of the Lenders) of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all of the Lenders and Facing
Banks.  Without limiting the generality
of the foregoing, Administrative Agent or the Collateral Agent as the case may
be, shall have the sole and exclusive right and authority to (i) act as the
disbursing and collecting agent for the Lenders and the Facing Banks with
respect to all payments and collections arising in connection herewith and with
the Loan Documents relating to the Collateral; (ii) execute and deliver each
Loan Document relating to the Collateral and accept delivery of each such
agreement delivered by any Borrower or any of its Subsidiaries; (iii) act as
Collateral Agent for the Lenders and the Facing Banks for purposes of the
perfection of security interests and Liens created by such agreements and all
other purposes stated therein to the extent such perfection is required under
the Loan Documents, provided, however, the Collateral Agent
hereby appoints, authorizes and directs each Lender and each Facing Bank to act
as collateral sub-agent for Administrative Agent, the Lenders and the Facing
Banks for purposes of the perfection of all security interests and Liens with
respect to a Borrower’s and its Subsidiaries’ respective deposit accounts
maintained with, and cash and Cash Equivalents held by, such Lender or such
Facing Bank; (iv) manage, supervise and otherwise deal with the Collateral; (v)
take such action as is necessary or desirable to maintain the perfection and
priority of the security interests and liens created or purported to be created
by the Loan Documents; and (vi) except as may be otherwise specifically
restricted by the terms hereof or of any other Loan Document, exercise all
remedies given to Administrative Agent, the Lenders or the Facing Banks with
respect to the Collateral under the Loan Documents relating thereto, applicable
law or otherwise.

 

(b)           Release
of Collateral.  (i) Each of the
Administrative Agent, the Lenders and the Facing Banks hereby direct the
Administrative Agent or the Collateral Agent, as the case may be, to release,
in accordance with the terms hereof, any Lien held by the Administrative Agent
or the Collateral Agent, as the case may be, under the Security Documents (and,
in the case of clause (B) below, release the affected Subsidiary from its
guaranty),

 

(A)          against all of the Collateral, upon
final and indefeasible payment in full in cash of the Loans and Obligations and
termination hereof;

 

(B)           against any part of the Collateral
sold or disposed of by any Borrower or any of its Restricted Subsidiaries
(other than sales permitted under Section 8.6(e) but including, without
limitation, in the case of a sale or disposition of all of the Capital Stock of
a Subsidiary owned by a Borrower and its Subsidiaries, all assets of such
Subsidiary and its Subsidiaries and all Pledged Intercompany Notes issued by
such Subsidiary and its Subsidiaries), if such sale or disposition is permitted
hereby (or 

 

136

 

permitted pursuant to a
waiver or consent of a transaction otherwise prohibited by such Section);

 

(C)           against any Collateral acquired by
any Borrower or any of its Subsidiaries after the Closing Date financed with
Indebtedness secured by a Lien permitted by Section 8.1(b)(i);

 

(D)          against a part of the Collateral which
release does not require the consent of all of the Lenders as set forth in Section
13.1(a)(D), if such release is consented to by the Required Lenders;

 

provided,
however, that (i) the Administrative Agent or the Collateral Agent, as
the case may be, shall not be required to execute any such document on terms
which, in its opinion, would expose it to liability or create any obligation or
entail any consequence other than the release of such Liens without recourse or
warranty, and (ii) such release shall not in any manner discharge, affect or
impair the Obligations or any Liens upon (or obligations of any Borrower or any
of its Subsidiaries in respect of) all interests retained by any Borrower
and/or any of its Subsidiaries, including (without limitation) the proceeds of
any sale, all of which shall continue to constitute part of the Collateral.

 

(ii)           Each of the Lenders and the Facing
Banks hereby direct the Collateral Agent to execute and deliver or file such
termination and partial release statements and do such other things as are
necessary to release Liens to be released pursuant to this Section 13.18
promptly upon the effectiveness of any such release or enter into intercreditor
agreements contemplated or permitted herein.

 

(c)           No
Obligation.  Neither Administrative
Agent nor the Collateral Agent shall have any obligation whatsoever to any
Lender or to any other Person to assure that the Collateral exists or is owned
by any Borrower or any of its Subsidiaries or is cared for, protected or
insured or has been encumbered or that the Liens granted to Administrative
Agent or the Collateral Agent herein or pursuant to the Loan Documents have
been properly or sufficiently or lawfully created, perfected, protected or
enforced or are entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure or fidelity, or
to continue exercising, any of the rights, authorities and powers granted or
available to Administrative Agent or the Collateral Agent in any of the Loan
Documents, it being understood and agreed that in respect of the Collateral, or
any act, omission or event related thereto, Administrative Agent and the
Collateral Agent may act in any manner it may deem appropriate, in its sole
discretion, given Administrative Agent’s own interests in the Collateral as one
of the Lenders and that neither Administrative Agent nor the Collateral Agent
shall have any duty or liability whatsoever to any Lender; provided,
that, notwithstanding the foregoing, Administrative Agent shall be responsible
for their grossly negligent actions or actions constituting intentional misconduct.

 

(d)           Senior
Liens.  Each Lender hereby instructs
the Administrative Agent and the Collateral Agent to enter into the Security
Agreement and the Intercreditor Agreement and such amendments or modifications
thereto and to the other Security Documents consistent herewith and as the
Administrative Agent or the Collateral Agent reasonably determines to be

 

137

 

necessary to cause the Liens on the Revolver First
Priority Collateral (as defined in the Intercreditor Agreement) securing the
Obligations to be senior to the Liens on the Revolver First Priority Collateral
securing the Term Loan Obligations and to cause the Liens on the Term and Note
First Priority Collateral (as defined in the Intercreditor Agreement) securing
the Obligations to be subordinated to the Liens on the Term and Note First
Priority Collateral securing the Term Loan Obligations, in each case, to the
extent set forth in the Intercreditor Agreement.  Each Lender agrees that, notwithstanding the
time, order or method of attachment or perfection of Liens granted in favor of
the Collateral Agent and/or the Term Collateral Agent, to secure the
Obligations and/or the Term Loan Obligations or the filing or recording of
financing statements or other Security Documents and/or the Term Security
Documents; the validity or enforceability of the security interests and Liens
granted in favor of the Collateral Agent or the Term Collateral Agent; any
provisions of the UCC or any applicable law or decision; any provision set
forth in any Security Document and/or any Term Security Document in the
possession or control by the Collateral Agent or the Term Collateral Agent of
all or any part of any Collateral as of the date hereof or otherwise, the Liens
granted under the Term Security Documents and the Liens granted under the
Security Documents shall have the priority set forth above as more fully set
forth in the Intercreditor Agreement. 
Each Lender agrees that it shall not challenge or question in any
proceeding the validity or enforceability of this Section 13.18(d) or
any corresponding provisions with respect to lien subordination in the Security
Agreement or the Intercreditor Agreement. 
Each Lender agrees that it shall not challenge or question in any
proceeding the priority or validity of the liens granted to Administrative
Agent, “Lenders” (as defined in the Term Credit Agreement), Term Administrative
Agent, Collateral Agent or the Term Collateral Agent to secure the Term Loan
Obligations (as defined in the Term Credit Agreement).

 

(e)           Refinancing.  Notwithstanding the second priority liens
granted to the Collateral Agent for the benefit of the Lenders, the parties
hereto agree that, for purposes of the Senior Secured Notes Indenture, this
Agreement constitutes a refinancing and replacement of the First Priority
Credit Facility and the Indebtedness incurred pursuant to this Agreement shall
continue to constitute First Priority Credit Facility Indebtedness and First
Priority Senior Secured Indebtedness; that Administrative Agent and Collateral
Agent have been appointed to such roles as successors to the Bank Agent and
First Priority Collateral Agent, respectively; that Administrative Agent, as
Bank Agent, shall continue to be the First Priority Representative; that the
Security Agreement constitutes a replacement of the existing First Priority
Security Agreement and therefore is the new First Priority Security Agreement;
and that the Secured Parties constitute First Priority Senior Secured Parties.  Capitalized terms used in this Section
13.18(e) but not defined in this Agreement shall have the meanings assigned
to such terms in the Senior Secured Notes Indenture.

 

13.19       Joint and Several Liability of
Borrowers.

 

(a)           Each
of the Borrowers shall be jointly and severally liable hereunder and under each
of the other Loan Documents with respect to all Obligations, regardless of
which of the Borrowers actually receives the proceeds of the Loans or the
benefit of any other extensions of credit hereunder, or the manner in which the
Funds Administrator, the Borrowers, the Administrative Agent, the Lenders or
any of the Facing Banks account therefore in their respective books and
records.  In furtherance and not in
limitation of the foregoing, (i) each Borrower’s obligations and liabilities
with respect to proceeds of Loans which it receives or

 

138

 

Letters of Credit issued for its account, and related
fees, costs and expenses, and (ii) each Borrower’s obligations and liabilities
arising as a result of the joint and several liability of the Borrowers
hereunder with respect to proceeds of Loans received by, or Letters of Credit
issued for the account of, any of the other Borrowers, together with the
related fees, costs and expenses, shall be separate and distinct obligations,
both of which are primary obligations of such Borrower.  Neither the joint and several liability of,
nor the Liens granted to the Collateral Agent under the Security Documents by,
any of the Borrowers shall be impaired or released by (A) the failure of the
Administrative Agent, any Lender or any Facing Bank, any successors or assigns
thereof, or any holder of any Note or any of the Obligations to assert any
claim or demand or to exercise or enforce any right, power or remedy against
the Funds Administrator, any Borrower, any Subsidiary of any Borrower, any
other Person, the Collateral or otherwise; (B) any extension or renewal for any
period (whether or not longer than the original period) or exchange of any of the
Obligations or the release or compromise of any obligation of any nature of any
Person with respect thereto; (C) the surrender, release or exchange of all or
any part of any property (including without limitation the Collateral) securing
payment, performance and/or observance of any of the Obligations or the
compromise or extension or renewal for any period (whether or not longer than
the original period) of any obligations of any nature of any Person with
respect to any such property; (D) any action or inaction on the part of the
Administrative Agent, any Lender or any Facing Bank, or any other event or
condition with respect to any other Borrower, including any such action or
inaction or other event or condition, which might otherwise constitute a defense
available to, or a discharge of, such Borrower, or a guarantor or surety of or
for any or all of the Obligations; and (E) any other act, matter or thing
(other than payment or performance of the Obligations) which would or might, in
the absence of this provision, operate to release, discharge or otherwise
prejudicially affect the obligations of such Borrower or any other Borrower.

 

(b)           Notwithstanding
any provision to the contrary contained herein or in any other of the Loan
Documents, to the extent the joint obligations of a Borrower shall be
adjudicated to be invalid or unenforceable for any reason (including, without
limitation, because of Section 548 of Chapter 11 of the Federal Bankruptcy Code
or under any applicable state Uniform Fraudulent Transfer Act, Uniform
Fraudulent Conveyance Act or similar statute or common law) then the
Obligations of each Borrower hereunder shall be limited to the maximum amount
that is permissible under applicable law (whether federal or state and
including, without limitation, the Federal Bankruptcy Code).

 

(c)           To
the extent that any Borrower shall make a payment under this Section
13.19(c) of all or any of the Obligations (other than Loans made to that
Borrower for which it is primarily liable) (a “Guarantor Payment”) that,
taking into account all other Guarantor Payments then previously or
concurrently made by any other Borrower, exceeds the amount that such Borrower
would otherwise have paid if each Borrower had paid the aggregate Obligations
satisfied by such Guarantor Payment in the same proportion that such Borrower’s
“Allocable Amount” (as defined below) (as determined immediately prior to such
Guarantor Payment) bore to the aggregate Allocable Amounts of each of the
Borrowers as determined immediately prior to the making of such Guarantor
Payment, then, following indefeasible payment in full in cash of the
Obligations and termination of the Commitments, such Borrower shall be entitled
to receive contribution and indemnification payments from, and be reimbursed
by, each other Borrower for the amount of such excess, pro rata based upon
their respective Allocable Amounts in effect

 

139

 

immediately prior to such Guarantor Payment.  As of any date of determination, the “Allocable
Amount” of any Borrower shall be equal to the maximum amount of the claim that
could then be recovered from such Borrower under this Section 13.19(c)
without rendering such claim voidable or avoidable under Section 548 of Chapter
11 of the Federal Bankruptcy Code or under any applicable state Uniform
Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar statute
or common law.  This Section 13.19(c)
is intended only to define the relative rights of the Borrowers and nothing set
forth in this Section 13.19(c) is intended to or shall impair the
obligations of the Borrowers, jointly and severally, to pay any amounts as and
when the same shall become due and payable in accordance with the terms of this
Agreement, including Section 13.19(a). 
Nothing contained in this Section 13.19(c) shall limit the
liability of any Borrower to pay the Loans made directly or indirectly to that
Borrower and accrued interest, fees and expenses with respect thereto for which
such Borrower shall be primarily liable. 
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets of the Borrower to which such
contribution and indemnification is owing. 
The rights of each Borrower against each other Borrower under this Section
13.19(c) shall not be exercisable until the full and indefeasible payment
of the Obligations and the termination of the Commitments.

 

(d)           The
liability of the Borrowers under this Section 13.19 is in addition to
and shall be cumulative with all liabilities of each Borrower to Administrative
Agent and Lenders under this Agreement and the other Loan Documents to which
such Borrower is a party, without any limitation as to amount.

 

13.20       Appointment and Authorization of
Funds Administrator.

 

(a)           Each
Borrower hereby designates, appoints, authorizes and empowers the Company as
its agent to act as specified in the capacity of Funds Administrator under this
Agreement and each of the other Loan Documents and the Company hereby
acknowledges such designation, authorization and empowerment, and accepts such
appointment.  Each Borrower hereby
irrevocably authorizes and directs the Funds Administrator to take such action
on its behalf under the respective provisions of this Agreement and the other
Loan Documents, and any other instruments, documents and agreements referred to
herein or therein, and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Funds Administrator by the respective terms and provisions hereof and thereof,
and such other powers as are reasonably incidental thereto, including, without
limitation, to take the following actions for and on such Borrower’s behalf:

 

(i)            to submit on behalf of each Borrower
Notices of Borrowing, Notices of Conversion and Notices of Continuation to
Administrative Agent in accordance with the provisions of this Agreement, each
such notice to be submitted by the Funds Administrator to Administrative Agent
as soon as practicable after its receipt of a request to do so from a Borrower;
and

 

(ii)           to submit on behalf of each Borrower
requests for the issuance of Letters of Credit in accordance with the
provisions of this Agreement, each such request for the issuance of a Letter of
Credit to be submitted by the Funds Administrator as soon as practicable after
its receipt of a request to do so from any Borrower.

 

140

 

The Funds Administrator
is further authorized and directed by each of the Borrowers to take all such
actions on behalf of such Borrower necessary to exercise the specific powers
granted in clauses (i) and (ii) above and to perform such other duties
hereunder and under the other Loan Documents, and deliver such documents as
delegated to or required of the Funds Administrator by the terms hereof or
thereof Administrative Agent and each Lender may regard any notice or other
communication pursuant to any Loan Documents from the Funds Administrator as a
notice or communication from all Borrowers, and may give any notice or
communication required or permitted to be given to any Borrower or Borrowers
hereunder to the Funds Administrator on behalf of such Borrower or
Borrowers.  Each Borrower agrees that each
notice, election, representation and warranty, covenant, agreement and
undertaking made on its behalf by the Funds Administrator shall be deemed for
all purposes to have been made by such Borrower and shall be binding upon and
enforceable against such Borrower to the same extent as if the same had been
made directly by such Borrower.

 

(b)           The
Funds Administrator may perform any of its duties hereunder or under any of the
other Loan Documents by or through its agents or employees.

 

13.21       Termination of Revolving Credit
Commitments under the Existing Revolving Credit Agreement.  The undersigned Lenders that constitute a
majority of the “Revolving Lenders” as defined in the Existing Revolving Credit
Agreement, hereby agree and acknowledge that the “Revolving Commitments” as
defined in the Existing Revolving Credit Agreement shall be terminated on the
Closing Date of this Agreement, and hereby waive any right of the “Revolving
Lenders” as defined in the Existing Revolving Credit Agreement to receive any
prior notice of such termination.  Notice
of termination of such “Revolving Commitments” given on the Closing Date to any
other such “Revolving Lender” shall constitute effective notice of termination
of its “Revolving Commitment” under the Existing Revolving Credit Agreement
with respect to such Revolving Lender.

 

[signature pages
follow]

 

141

 

IN WITNESS WHEREOF, the
parties hereto have caused this Agreement to be duly executed by their
respective officers thereunto duly authorized, as of the date first above
written.

 

	
   

  	
  HUNTSMAN LLC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Sean Douglas

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108 Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN PETROCHEMICAL CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Sean Douglas

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108 Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
				

 

 

	
   

  	
  HUNTSMAN EXPANDABLE POLYMERS COMPANY, LC

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: Huntsman Chemical Company LLC, its Manager

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Sean Douglas

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108 Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN INTERNATIONAL TRADING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Sean Douglas

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108 Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN FUELS, L.P.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
  Petrostar Fuels LLC, its General Partner

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Samuel D. Scruggs

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Samuel D. Scruggs

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108 Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HUNTSMAN POLYMERS CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Sean Douglas

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Vice President

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Huntsman LLC

  
	
   

  	
  500 Huntsman Way

  
	
   

  	
  Salt Lake City, Utah 84108 Attn: General Counsel

  
	
   

  	
  Tel. No.: (801) 584-5700

  
	
   

  	
  Telecopier No.: (801) 584-5781

  
					

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS, in its
  individual capacity as a Lender and as Administrative Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Frank Fazio

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Frank Fazio

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust Company Americas

  
	
   

  	
  60 Wall Street, 2nd Floor

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attention: Frank Fazio

  
	
   

  	
  Tel. No.: (212) 250-2267

  
	
   

  	
  Telecopier No.: (212) 797-4655

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Winston & Strawn LLP

  
	
   

  	
  35 West Wacker Drive

  
	
   

  	
  Chicago, Illinois 60601

  
	
   

  	
  Attention: Charles B. Boehrer, Esq.

  
	
   

  	
  Tel. No.: (312) 558-5600

  
	
   

  	
  Telecopier No.: (312) 558-5700

  
				

 

 

	
   

  	
  DEUTSCHE BANK TRUST COMPANY AMERICAS, as Collateral
  Agent

  
	
   

  	
   

  
	
   

  	
  By: 

  	
  /s/ Frank Fazio

  
	
   

  	
   

  
	
   

  	
  Name: 

  	
  Frank Fazio

  
	
   

  	
   

  	
   

  
	
   

  	
  Title: 

  	
  Director

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
   

  
	
   

  	
  Deutsche Bank Trust Company Americas

  
	
   

  	
  60 Wall Street, 2nd Floor

  
	
   

  	
  New York, New York 10005

  
	
   

  	
  Attention: Frank Fazio

  
	
   

  	
  Tel. No.: (212) 250-2267

  
	
   

  	
  Telecopier No.: (212) 797-4655

  
	
   

  	
   

  
	
   

  	
  Winston & Strawn LLP

  
	
   

  	
  35 West Wacker Drive

  
	
   

  	
  Chicago, Illinois 60601

  
	
   

  	
  Attention: Charles B. Boehrer, Esq.

  
	
   

  	
  Tel. No.: (312) 558-5600

  
	
   

  	
  Telecopier No.: (312) 558-5700

  
				

 

 

	
  Solely for purposes of Section
  8.14 of this Agreement:

  
	
   

  
	
  HUNTSMAN SPECIALTY
  CHEMICALS CORPORATION

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Sean Douglas

  	
   

  
	
   

  
	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  
	
  Title: 

  	
  Vice President

  
	
   

  
	
   

  
	
  Solely for purposes of
  Section 8.14 of this Agreement:

  
	
   

  
	
   

  
	
  HUNTSMAN SPECIALTY
  CHEMICALS HOLDINGS CORPORATION

  
	
   

  
	
   

  
	
  By: 

  	
  /s/ Sean Douglas

  	
   

  
	
   

  
	
  Name: 

  	
  Sean Douglas

  
	
   

  	
   

  
	
  Title: 

  	
  Vice President

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