Document:

EX-10.5 SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

 

Exhibit 10.5

TENSAR HOLDINGS INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

Effective as of

January 1, 2007

 

 

TENSAR HOLDINGS INC.

SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN

SECTION 1. ESTABLISHMENT OF THE PLAN

	1.1	 	Establishment of the Plan. Tensar Holdings Inc. (the “Company”) hereby establishes
the TENSAR HOLDINGS INC. SUPPLEMENTAL EXECUTIVE RETIREMENT PLAN (the “Plan”) effective as of
January 1, 2007.
	 
	1.2	 	Description of the Plan. This Plan is intended to constitute a nonqualified deferred
compensation plan which, in accordance with ERISA
Sections 201(2), 301(a)(3) and 401(a)(1), is
unfunded and established primarily for the purpose of providing supplemental retirement
benefits for a select group of management or highly compensated employees of the Company. The
Plan is also intended to comply with Section 409A of the Internal Revenue Code of 1986 and
shall be administered and interpreted in accordance with Section 409A and any regulations or
other guidance therunder.
	 
	1.3	 	Purpose of the Plan. In addition to the description of the Plan as set forth in
subsection 1.2 above, the primary objective of the Company in establishing this Plan is to
provide supplemental retirement income to certain employees of the Company in addition to that
provided through all other sources.

SECTION 2. DEFINITIONS

	2.1	 	Definitions. Whenever used in the Plan, the following terms shall have the respective
meanings set forth below, unless otherwise expressly provided herein or unless a different
meaning is plainly required by the context, and when the defined meaning is intended, the term
is capitalized. Other terms used herein without definitions shall have the meanings ascribed
to them by the Committee in its reasonable discretion.

	 	(a)	 	“Actuarially Equivalent” means both (i) a benefit calculated to
be of equal value by an actuary using the IRS Applicable Mortality Table contained in
Revenue Ruling 2001-62; and (ii) separately with respect to each Participant,
the discount rate equal to the policy interest crediting rate of the Pacific Life Versa
Flex VI life insurance policy (or the Pacific Life successor policy thereto) as of the
date such Participant first became a Participant in the Plan.
	 
	 	(b)	 	“Beneficiary” means any person or entity designated by the Participant or
otherwise entitled to receive any benefits under the Plan which may be due upon the
Participant’s death.
	 
	 	(c)	 	“Board” means the Board of Directors of the Company.
	 
	 	(d)	 	“Cause” shall mean the Participant’s:

 

 

	 	(1)	 	commission of a willful act (including, without limitation, a dishonest or
fraudulent act) or a grossly negligent act, or the willful or grossly negligent
omission to act that is intended to cause, causes or is reasonably likely to cause
material harm to the Company, monetarily, reputationally or otherwise;
	 
	 	(2)	 	violation of a non-competition or non-solicitation provision contained in any
written agreement between the Participant and the Company; or
	 
	 	(3)	 	commission or conviction of, or plea of nolo contendere to, any felony or any
crime or offense involving dishonesty or fraud or that is materially injurious to the
Company, monetarily, reputationally or otherwise.

	 	 	 	Unless otherwise defined in the Participant’s employment or other agreement to which the
Participant is a party, an act or omission is “willful” for this purpose if it was
knowingly done, or knowingly omitted to be done, by the Participant not in good faith and
without reasonable belief that the act or omission was in the best interest of the Company.
The Committee has the discretion to determine, in good faith, from all the facts and
circumstances reasonably available to it, whether a Participant who is under investigation
for, or has been charged with, a crime will be deemed to have committed it for purposes of
this Plan.
	 
	 	(e)	 	“Change of Control” means (i) a merger, consolidation, or reorganization involving
the Company in which the Company’s shareholders immediately prior to such transaction do not
own, immediately following the consummation of such transaction, more than fifty percent (50%)
of the voting power of the surviving company; or (ii) the sale of all or substantially all of
the Company’s assets (on a consolidated basis with its subsidiaries); or (iii) the Arcapita
Investors (as such term is defined in the Shareholders Agreement dated on or about October 31,
2005, by and among the Company and its shareholders, as such agreement may be amended from
time to time, no longer own more than (x) 50% of the then issued and outstanding capital stock
of the Company and (y) 50% of all classes of voting stock of the Company then issued and
outstanding; or (iv) any combination of, or similar transaction to, the foregoing; or (v)
Arcapita Bank B.S.C. no longer controls (either through the ownership of voting securities or
the holding of voting proxies) the Arcapita Investors. The foregoing definition of “Change of
Control” shall automatically be modified to the extent required in order to be consistent (and
not in conflict) with the definitions in proposed and then final Treasury Regulations issued
with respect to Section 409A of the Code dealing with a change in the ownership or effective
control of a corporation or a change in the ownership of a substantial portion of the assets
of a corporation.
	 
	 	(f)	 	“Committee” means the Company Board of Directors or other such committee designated in
writing by such Board of Directors.
	 
	 	(g)	 	“Company” means Tensar Holdings Inc. and any direct or indirect subsidiaries thereof, and
their successor(s) or assign(s), that adopt this Plan with the approval

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	 	 	 	by resolution of the Board of Directors (or, in the case of any such subsidiary, the
Board of Directors of such subsidiary).
	 
	 	(h)	 	“Disability or Disabled” means the Participant is unable to perform substantially all
of his principal duties on behalf of the Company, and by reason thereof either the Company or
the Participant elects to terminate the Participant’s employment with the Company. The parties
agree and covenant that this paragraph shall be interpreted and applied consistent with the
requirements of the Americans with Disabilities Act, Family and Medical Leave Act and any
applicable state law.
	 
	 	(i)	 	 “Early Retirement Date” means the first of the month coincident with or next
following the attainment of the Participant’s fifty-seventh birthday.
	 
	 	(j)	 	 “Eligible Employee” means an Employee who is nominated by the Chief
Executive Officer of the Company.
	 
	 	(k)	 	 “Final Average Compensation” means the highest consecutive twelve (12)
months of Monthly Salary during the last sixty (60) months of employment with the Company.
	 
	 	(l)	 	“Key Employee” is any Employee described in Section 409A(a)(2)(B)(i) of the Internal Revenue
Code.
	 
	 	(m)	 	“Life Annuity” means an annuity that is paid to the retired Participant for as long as he
lives and which does not provide any payments to a Beneficiary.
	 
	 	(n)	 	“Monthly Salary” means the base salary paid to the Participant during the
applicable month. Monthly Salary shall be based upon the Salary paid for completed
months.
	 
	 	(o)	 	“Normal Benefit” shall have the meaning ascribed to it in Section 4.1.
	 
	 	(p)	 	 “Normal Retirement Date” means the first of the month coincident with or next
following the attainment of the Participant’s sixty-fifth birthday.
	 
	 	(q)	 	“Participant” means any Eligible Employee that the Committee approves and
designates in writing (by written consent or otherwise) as a Participant in the Plan.
	 
	 	(r)	 	“Plan” means this Tensar Holdings Inc. Supplemental Executive Retirement Plan, as such may be
amended from time to time in accordance with the terms hereof.
	 
	 	(s)	 	 “Plan Administrator” means the Committee.
	 
	 	(t)	 	“Present Value” means the computed Actuarially Equivalent present value lump sum.

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	 	(u)	 	“Retirement or Retire” means termination of a Participant’s employment
with the Company on or after his Early Retirement Date, other than as a result of
his death, Disability or termination by the Company for Cause.
	 
	 	(v)	 	“Retirement Date” means the first day of the month coincident with or next
following the date when a Participant Retires after attaining his Early or Normal
Retirement Date.
	 
	 	(w)	 	“Trust” shall have the meaning ascribed to it in Section 5.2.

	2.2	 	Gender and Number. Except when otherwise indicated by the context, any masculine
terminology used herein shall also include the feminine and the feminine shall include the
masculine, and the use of any term herein in the singular may also include the plural and
the plural shall include the singular.

SECTION 3. ELIGIBILITY AND PARTICIPATION

	3.1	 	Eligibility and Participation. Eligibility is defined as being a member of the
Company’s senior management who is at least 40 years of age with seven (7) years of service
with the Company and who is nominated by the Company’s Chief Executive Officer for
participation in the Plan. Notwithstanding anything herein or in any other plan, program or
agreement to the contrary, “years of service” hereunder shall not include the period of time
that an employee was employed by an employer prior to such employer becoming owned or
controlled by the Company (or the predecessor or successor in interest to the Company).
Included in the list of potentially Eligible Employees are the Chief Executive Officer,
Corporate Vice Presidents and above, Subsidiary Presidents, Manufacturing and Operational
Senior Vice Presidents, and anyone else nominated at the discretion of the Company’s Chief
Executive Officer. Only those Eligible Employees who are selected by the Committee as
Participants shall participate in the Plan.
	 
	3.2	 	Termination of Participation. A Participant shall remain covered hereunder until the
date upon which his employment terminates for any reason and, thereafter, so long as any
benefits are payable to him from this Plan. If the Participant is not eligible for benefits in
accordance with the provisions of Section 4 at the time his employment terminates for any
reason, the Participant shall terminate his participation in the Plan when his employment with
the Company terminates. Notwithstanding the foregoing, the participation of any Participant
may be suspended or terminated by the Committee at any time, but no such suspension or
termination shall operate to reduce the benefits accrued by the Participant hereunder prior to
the actual date of the suspension or termination. If a Participant’s employment with the
Company is terminated for Cause, then such Participant shall forfeit all benefits under the
Plan and shall immediately cease to be a Participant and shall have no further or other
interest in or benefit under the Plan.
	 
	3.3	 	Reemployment of Former Participant. Notwithstanding any provision of the Plan to the
contrary, any person reemployed as an Employee who previously participated in and received
benefits under the Plan shall not be eligible to participate again in the Plan unless such
person is renominated by the Chief Executive Officer and again approved by

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	 	 	the Committee. Any previous Vested Benefits for such Participant will offset any new
benefits generated under the Plan for such Participant. Furthermore, any payments or future
rights to payments under the Plan made or to be made with respect to such Participant shall
not be discontinued on account of such reemployment.

SECTION 4. BENEFITS

	4.1	 	Normal Benefit. A Participant who is eligible for Retirement or a Vested Benefit
will receive the lump sum Present Value of a Life Annuity commencing on his Normal Retirement
Date with annual payments equal to 25% of his Final Average Compensation (the “Normal
Benefit”). To the extent required under Code Section 409(A)(2)(B)(i), any benefit, other than
that arising as a result of death or Disability, of a Key Employee shall not begin to be
distributed earlier than six (6) months after the date of the Key Employee’s separation from
service.
	 
	4.2	 	Deferred Retirement. The Deferred Retirement Benefit shall be calculated according to
Section 4.1, and shall mean the lump sum Present Value of a Life Annuity commencing on the
first of the month coincident with or next following the Participant’s actual Retirement Date
if it occurs after Normal Retirement Date.
	 
	4.3	 	Vested Benefit. Unless otherwise provided in Section 4.1, if a Participant Retires or
his employment terminates for any reason other than for Cause after attaining fifty-seven (57)
years of age, such Participant shall have a Vested Benefit. The Vested Benefit shall be
calculated according to Section 4.1.
	 
	4.4	 	Early Commencement of Benefits. At the time an Eligible Employee becomes a
Participant in the Plan, the Participant may elect to have his benefit commence as of his
Early Retirement Date. In such case, such benefit shall be adjusted to be Actuarially
Equivalent to his Normal Benefit as calculated according to Section 4.1.
	 
	4.5	 	Pre-Retirement Death Benefits. If a Participant dies while in the employment of the
Company, his Beneficiary shall receive a lump sum benefit equal to the Present Value of his
Normal Retirement Benefit as if the Participant had retired on the date of his death with a
Vested Benefit.
	 
	4.6	 	Disability Benefits. If a Participant is Disabled while in the employment of the
Company, he shall receive a lump sum benefit equal to the Present Value of his Normal
Retirement Benefit as if the Participant had retired on the date of his Disability with a
Vested Benefit.
	 
	4.7	 	Change of Control. If a Change of Control occurs, the Participant shall thereupon
become immediately and automatically vested in his Normal Benefit calculated as if the
Participant had retired on the date of the Change of Control with a Vested Benefit.

	 	a)	 	If within twelve (12) months after a Change of Control a Participant’s
employment with the Company is terminated for Cause, then his Vested Benefit
shall be forfeited and such Participant shall have no further or other interest in
or benefit under the Plan. This Section 4.7(a) shall control over any other
provision

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	 	 	 	of the Plan that may be to the contrary; accordingly, such Vested Benefit shall
be forfeited if termination of employment is for Cause.

	 	b)	 	If within twelve (12) months after a Change of Control a Participant’s
employment with the Company is terminated due to the Participant voluntarily
terminating (i.e., resigning or quitting) his employment with the Company, then the
Actuarial Equivalent of such Participant’s Vested Benefit under the Plan shall be paid
to such Participant as of his Early Retirement Date.
	 
	 	c)	 	If within twelve (12) months after a Change of Control a Participant’s
employment with the Company terminates (i) other than for Cause, and (ii) other than
due to the Participant voluntarily terminating (resigning or quitting) his employment
with the Company, then in all cases other than (i) or (ii) of this sentence, the
Company shall promptly pay to such Participant in a lump sum the Present Value of his
Vested Benefit.

SECTION 5. FINANCING

	5.1	 	Financing of Benefits. Benefits shall be payable, when due, by the Company to the
extent not paid from a trust created pursuant to Section 5.2. The Company’s obligation to make
payments to the recipient when due shall be contractual in nature only, and participation in
the Plan will not create in favor of any Participant any right or lien against the assets of
the Company. No benefits under the Plan shall be required to be funded by a trust fund or
insurance contracts or otherwise.
	 
	5.2	 	“Rabbi” Trust. In connection with this Plan, the Board shall establish a grantor
trust known as “The Tensar Holdings Inc. Executive Benefit Plan Trust” (the “Trust”) for the
purpose of accumulating funds to satisfy the obligations incurred by the Company under this
Plan. At any time, the Company may transfer assets to the Trust to satisfy all or part of the
obligations incurred by the Company under this Plan, as determined in the sole discretion of
the Committee, subject to the return of such assets to the Company at such time as determined
in accordance with the terms of such Trust. Any assets of such Trust shall remain at all times
subject to the claims of creditors of the Company in the event of the Company’s insolvency;
and no asset or other funding medium used to pay benefits accrued under the Plan shall result
in the Plan being considered as other than “unfunded” under ERISA. Notwithstanding the
establishment of the Trust, the right of any Participant to receive future payments under the
Plan shall remain an unsecured claim against the general assets of the Company.

SECTION 6. BENEFICIARY DESIGNATION

	6.1	 	Designation of Beneficiary.

	 	(a)	 	All Beneficiary designations shall be in writing and signed and dated by the
Participant. The designation shall be effective only if and when delivered to the
Company during the lifetime of the Participant. The Participant also may change his
Beneficiary or Beneficiaries by a signed and dated, written instrument delivered to
the Company. The payment of amounts shall be in accordance with

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	 	 	 	the last unrevoked written designation of Beneficiary that has been signed, dated
and delivered to the Company. All Beneficiary designations shall be addressed to the
Secretary of Tensar Holdings Inc. and delivered to his office, and shall be
processed as indicated in subsection (b) below by the Secretary or by his authorized
designee.
	 
	 	(b)	 	The Company (or its authorized designee) shall, upon receipt of the Beneficiary
designation:

	 	(1)	 	ascertain that the designation has been signed and dated, and
if it has not been, return it to the Participant for his signature;
	 
	 	(2)	 	if signed and dated, stamp the designation “Received”, indicate
the date of receipt, and initial the designation in the proximity of the stamp.

	 	(c)	 	Death of the Beneficiary prior to the Participant’s date of retirement shall
void the selection involving that Beneficiary. The Participant shall be immediately
required to execute a different selection of payment form or to name another
Beneficiary.

	6.2	 	Ineffective Designation.

	 	(a)	 	If the Participant does not designate a Beneficiary, or if for any reason such
designation is entirely ineffective, the amounts that otherwise would have been paid to
the Beneficiary shall be paid to the Participant’s estate as the alternate Beneficiary.
	 
	 	(b)	 	If a designation is effective in part and ineffective in part, to the extent
that a designation is effective, distribution shall be made so as to carry out as
closely as discernable the intent of the Participant, with the result that only to the
extent that a designation is ineffective shall distribution instead be made to the
Participant’s estate as an alternate Beneficiary.

	6.3	 	Simultaneous Death. If a Participant and Beneficiary die under circumstances such
that it is not possible to determine who died first, it is presumed that the Participant
survived the Beneficiary.
	 
	6.4	 	Disclaimer. A Beneficiary may disclaim any benefit hereunder in accordance with
Internal Revenue Code Section 2518 and applicable state law.

SECTION 7. GENERAL PROVISIONS

	7.1	 	Employment/Participation Rights.

	 	(a)	 	Nothing in the Plan shall interfere with or limit in any way
the right of the Company to terminate any Participant’s employment at any time, nor confer upon any
Participant any right to continue in the employ of the Company or to continue as a
Participant in the Plan. If any Participant’s participation in the Plan or his

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	 	 	 	employment is terminated for any reason, other than as a result of Death, Disability
or Change of Control, and he does not then have a Vested Benefit in accordance with
Section 4.3, then nothing shall be paid to such Participant or his Beneficiary(ies)
under this Plan.
	 
	 	(b)	 	Nothing in the Plan shall be construed to be evidence of any agreement or
understanding, express or implied, that the Company will continue to employ a
Participant in any particular position or at any particular rate of remuneration.
	 
	 	(c)	 	No employee shall have a right to be selected as a Participant or, if so
selected, to remain as a Participant, or, having been so selected, to be selected again
as a Participant upon being rehired by the Company.
	 
	 	(d)	 	Nothing in this Plan shall affect the right of a recipient to participate in
and receive benefits under and in accordance with any pension, profit sharing, deferred
compensation or other benefit plan or program of the Company. In addition, no payments
under this Plan shall be deemed salary or other compensation to the Participant for the
purpose of computing benefits to which the Participant may be entitled under any
pension plan or other arrangements that the Company may have for the benefit of its
employees.

	7.2	 	Nonalienation of Benefits.

	 	(a)	 	No right or benefit under this Plan shall be subject to anticipation,
alienation, sale, assignment, pledge, encumbrance, or change, and any attempt to
anticipate, alienate, sell, assign, pledge, encumber or change the same shall be null
and void; nor shall any such disposition be compelled by operation of law except to the
extent required by applicable law.
	 
	 	(b)	 	No right or benefit hereunder shall in any manner be liable for or subject to
the debts, contracts, liabilities, garnishment, assignment to an alternate payee or
torts of the person entitled to benefits under the Plan.

	7.3	 	Severability. If any particular provision of the Plan shall be found to be illegal or
unenforceable for any reason, the illegality or lack of enforceability of such provision shall
not affect the remaining provisions of the Plan, and the Plan shall be construed and enforced
as if the illegal or unenforceable provision had not been included.
	 
	7.4	 	No Individual Liability. It is declared to be the express purpose and intention of
the Plan that no liability whatsoever shall attach to or be incurred by the shareholders,
employees, officers, or directors of the Company or any representative or contractor appointed
hereunder by the Company or any member of the Committee, under or by reason of any of the
terms or conditions of the Plan.
	 
	7.5	 	Applicable Law. This Plan shall be governed by and construed in accordance with
the laws of the State of Georgia except to the extent governed by applicable Federal law.

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	7.6	 	Successors. The provisions of the Plan shall bind and inure to the benefit
of the Company and its successors and assigns. The term successors as used herein shall
include any corporate or other business entity that shall, either by merger, consolidation,
purchase or otherwise, acquire all or substantially all of the business and assets of the
Company, and successors of any such corporation or other business entity.
	 
	7.7	 	Indemnity of Committee. To the maximum extent permitted by applicable law, the
Company shall indemnify, hold harmless and defend the Committee, each member of the Committee,
any employee, officer or director of the Company, and/or any individual acting as an employee,
contractor or agent of any of them (to the extent not indemnified or saved harmless under any
liability insurance or any other indemnification arrangement) from any and all threats of and
claims, losses, damages, liabilities, costs and expenses (including attorneys’ fees) arising
out of any actual or alleged act or failure to act made in good faith in connection with the
Plan or Trust (or any related agreements), including expenses reasonably incurred in the
defense of any claim relating thereto or threat of claim.
	 
	7.8	 	Overpayment. If any Participant or Beneficiary receives any payment to which he or
she is not entitled hereunder, the Committee shall seek recovery of such overpayment, plus
interest.
	 
	7.9	 	Information to Company. The Company shall furnish to the Committee in writing all
information the Company deems appropriate for the Committee to exercise its duties hereunder.
Such information shall include, but shall not be limited to, the names of all Participants,
their Salary, and dates of birth, employment, termination of employment, retirement or death.
	 
	7.10	 	Information to Participant. The Committee shall make available to such Participant,
or upon the death of the Participant, the Participant’s Beneficiary, for examination at the
principal office of the Company (or at such other location as may be determined by the
Committee), a copy of the Plan and such of its records or copies thereof as may pertain to the
benefits of such Participant or Beneficiary.

SECTION
8. PLAN ADMINISTRATION, AMENDMENT AND TERMINATION

	8.1	 	In General. The Plan shall be administered by the Committee, which shall have the
sole authority to construe and interpret in good faith the terms and provisions of the Plan
and in order to determine the amount, manner and time of payment of any benefits hereunder.
The Committee shall maintain records, make the requisite calculations and disburse payments
hereunder, and its interpretations, determinations, regulations and calculations shall be
final and binding on all persons and parties concerned. The Committee may adopt such rules as
it deems necessary, desirable or appropriate in administering the Plan and the Committee may
act at a meeting, in a writing without a meeting, or by having actions otherwise taken by a
member of the Committee pursuant to a delegation of duties from the Committee. No member of
the Committee may act, vote, or otherwise influence a decision of the Committee specifically
relating to his benefits, if any, under the Plan.

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	8.2	 	Claims Procedure. If the Committee denies a benefit, in whole or in part, it
shall advise the Participant or Beneficiary, in writing, as applicable, of (i) the specific
basis or bases for the denial; (ii) the references to the specific Plan provisions upon
which the denial is based; (iii) any additional material or information that the Participant
or Beneficiary needs to provide in order for the Committee to process the claim, and an
explanation of why that material or information is necessary; and (iv) a statement of the
Plan’s appeal procedures as hereinafter set forth. Any person dissatisfied with the
Committee’s determination of a claim for benefits hereunder must file a written request for
reconsideration with the Committee within 60 calendar days of the date of denial by the
Committee. Such person has the right to request, free of charge, and obtain copies of, all
documents, records, and other information that was relied upon by the Committee in denying
such person’s benefits or was submitted, considered, or generated in the course of making
the benefit denial, regardless of whether it was used in denying the claim. This request
must include a written explanation setting forth the specific reasons for such
reconsideration. The Committee shall review its determination within 60 calendar days, plus
an extension for an additional 60 calendar days in special circumstances, and render a
written decision with respect to the claim, setting forth the specific reasons for denial
written in a manner calculated to be understood by the claimant. Such claimant shall be
given a reasonable time within which to comment, in writing, to the Committee with respect
to such explanation. The Committee shall review its determination promptly and render a
written final decision with respect to the claim. Such decision upon matters within the
scope of the authority of the Committee shall be conclusive, binding, and final upon all
claimants under this Plan.
	 
	8.3	 	Finality of Determination. The determination of the Committee rendered in good faith
as to any disputed questions arising under this Plan, whether of law or of fact, or mixed
questions of law and fact, including questions of construction and interpretation, shall be
final, binding, and conclusive upon all persons.
	 
	8.4	 	Delegation of Authority. The Committee may, in its discretion, delegate its duties to
an officer or other employee of the Company, or to a committee composed of one or more
Directors on the Board of Directors of the Company or officers or employees of the Company.
	 
	8.5	 	Expenses. The expenses of administering the Plan and of making payments hereunder
shall be borne by the Company.
	 
	8.6	 	Tax Withholding. The Company shall deduct from all payments made from the Plan, and
cause the trustee of the Trust to remit to the Company, any federal, state, or local taxes
required by applicable law to be withheld with respect to such payments.
	 
	8.7	 	Incompetency. Any person receiving or claiming benefits under the Plan shall be
conclusively presumed to be mentally competent and of age until the Committee receives written
notice, in a form and manner acceptable to it, that such person is incompetent or a minor, and
that a guardian, conservator, statutory committee or other person legally vested with the care
of his estate has been appointed. In the event that the Committee finds that any person to
whom a benefit is payable under the Plan is unable to properly

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	 	 	care for his affairs, or is a minor, then any payment due (unless a prior claim therefore
shall have been made by a duly appointed legal representative) may be paid to the spouse, a
child, a parent, or a brother or sister, or to any person deemed by the Committee to have
incurred expense for the care of such person otherwise entitled to payment.
	 
	 	 	In the event a guardian or conservator or statutory committee of the estate of any person
receiving or claiming benefits under the Plan shall be appointed by a court of competent
jurisdiction, payments shall be made to such guardian or conservator or statutory committee
provided that proper proof of appointment is furnished in a form and manner suitable to the
Committee. Any payment made under the provisions of this Section 8.7 shall be a complete
discharge of liability therefore under the Plan.
	 
	8.8	 	Action by Company. Any action required or permitted to be taken hereunder by
the Company or its Board shall be taken by the Board, or by any person or persons
authorized by the Board.
	 
	8.9	 	Notice of Address. Any payment made to a Participant or Beneficiary at the last known
post office address of the distributee on file with the Company, shall constitute a complete
acquittance and discharge to the Company and any director, officer or employee including,
without limitation, members of the Committee with respect thereto, unless the Company shall
have received prior written notice of any change in the condition or status of the
distributee. Neither the Company nor any director, officer or employee including, without
limitation, members of the Committee shall have any duty or obligation to search for or
ascertain the whereabouts of the Participant or the Beneficiary.
	 
	8.10	 	Amendment and Termination. This Plan may be amended, suspended or terminated, in
whole or in part, by action of the Board of Directors, but no such action shall retroactively
reduce the benefits under the Plan which have accrued prior to the actual date of such action.
Except as specifically provided in the Plan, no payment of any Vested Benefit shall be
accelerated. Any amendments hereto shall be made in order for the Plan to conform to Code
Section 409(A) and any other regulations or guidance issued thereunder.

[Signatures on next page]

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SECTION 9. EXECUTION

     IN WITNESS WHEREOF, the Company has caused this Tensar Holdings Inc.
Supplemental Executive Retirement Plan to be executed by its duly authorized officer this
28th day of December, 2006, to be effective as of January 1, 2007.

	 	 	 	 	 
	 	Tensar Holdings Inc.

 	 
	 	By:  	/s/ Philip D. Egan
 	 
	 	 	Philip D. Egan 	 
	 	 	President and Chief Executive Officer 	 
	 

	 	 	 
	ATTEST:
	 	 
	 
	 	 
	/s/ Robert F. Briggs
 

Robert F. Briggs

	 	 
	SecretaryEX-10.11 LEASE FINANCING & PURCHASE OPTION AGRMT.

 

Exhibit 10.11

 

LEASE FINANCING AND

PURCHASE OPTION AGREEMENT

dated as of October 31, 2005

 among

TCO FUNDING CORP., 

as Lessor,

TENSAR HOLDINGS, INC.,

THE TENSAR CORPORATION, LLC,

as Lessee,

and

CREDIT SUISSE,

as Administrative Agent

AS SET FORTH IN SECTION 13(a) HEREOF, TCO FUNDING CORP. HAS ASSIGNED TO CREDIT SUISSE ALL OF TCO
FUNDING CORP.’S RIGHT, TITLE AND INTEREST IN AND TO THIS AGREEMENT. TO THE EXTENT, IF ANY, THAT
THIS AGREEMENT CONSTITUTES CHATTEL PAPER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE,
AS IN EFFECT IN ANY APPLICABLE JURISDICTION), NO SECURITY INTEREST IN THIS AGREEMENT MAY BE CREATED
THROUGH THE TRANSFER OR POSSESSION OF ANY COUNTERPART OTHER THAN THE ORIGINAL EXECUTED COUNTERPART
NUMBER 1, WHICH SHALL BE IDENTIFIED AS THE COUNTERPART CONTAINING THE RECEIPT THEREFOR EXECUTED BY
CREDIT SUISSE ON THE SIGNATURE PAGE THEREOF.

 

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 
	SECTION 1.

	 	Definitions
	 	 	1	 
	SECTION 2.

	 	Agreement for Lease and Purchase Option Financing; Covenant of
Quiet Enjoyment
	 	 	5	 
	SECTION 3.

	 	Delivery and Acceptance of Leased Assets
	 	 	5	 
	SECTION 4.

	 	Term
	 	 	6	 
	SECTION 5.

	 	End of Term Delivery of Leased Assets
	 	 	6	 
	SECTION 6.

	 	Payments
	 	 	6	 
	SECTION 7.

	 	Net Lease
	 	 	7	 
	SECTION 8.

	 	TCO’s Title; Grant of Security Interest
	 	 	7	 
	SECTION 9.

	 	Use of Leased Assets; Compliance with Laws
	 	 	8	 
	SECTION
10.

	 	Maintenance and Repair of the Leased Assets
	 	 	8	 
	SECTION
11.

	 	Replacement of Parts; Alterations; Modifications and Additions
	 	 	9	 
	SECTION
12.

	 	Identification; Inspection
	 	 	9	 
	SECTION
13.

	 	Assignment
	 	 	9	 
	SECTION
14.

	 	Event of Loss
	 	 	10	 
	SECTION
15.

	 	Insurance
	 	 	11	 
	SECTION
16.

	 	Illegality
	 	 	11	 
	SECTION
17.

	 	Survival; Expenses; Indemnity; Waiver of Jury Trial; Jurisdiction; Consent to Service of Process 	 	 	11	 
	SECTION
18.

	 	
No Warranties
	 	 	
12	 
	SECTION
19.

	 	Representations and Warranties
	 	 	13	 
	SECTION
20.

	 	Affirmative Covenants
	 	 	13	 
	SECTION
21.

	 	Negative Covenants
	 	 	13	 
	SECTION
22.

	 	Events of Default
	 	 	13	 
	SECTION
23.

	 	Remedies Upon Default
	 	 	13	 
	SECTION
24.

	 	TCO’s Right to Perform for Tensar
	 	 	14	 
	SECTION
25.

	 	Notices
	 	 	14	 
	SECTION
26.

	 	Call Option
	 	 	15	 
	SECTION
27.

	 	Put Option
	 	 	17	 
	SECTION
28.

	 	Appointment of Administrative Agent
	 	 	18	 
	SECTION
29.

	 	Miscellaneous
	 	 	18	 

i

 

	 	 	 	 	 	 	 
	SECTION 30.

	 	Further Assurances
	 	 	18	 
	SECTION 31.

	 	Rights of Set-Off ; Adjustments
	 	 	19	 
	SECTION 32.

	 	Survival
	 	 	19	 

Schedules

	 	 	 	 	 	 	 
	Schedule 1	 	 	 	Definitions
	 

	 	 	 	Annex 1(a)
	 	Permitted Holders
	 

	 	 	 	Annex l(b)
	 	Subsidiary Guarantors
	 

	 	 	 	Annex l(c)
	 	EBITDA Adjustments
	 

	 	 	 	Annex l(d)
	 	Mortgaged Properties
	 
	 	 	 	 	 	 
	Schedule 2	 	 	 	Representations and Warranties
	 

	 	 	 	Annex 5
	 	Projections
	 

	 	 	 	Annex 8
	 	Subsidiaries
	 

	 	 	 	Annex 9
	 	Litigation
	 

	 	 	 	Annex 14
	 	Taxes
	 

	 	 	 	Annex 17
	 	Environmental
	 

	 	 	 	Annex 18
	 	Insurance
	 

	 	 	 	Annex 19(a)
	 	UCC Filing Offices
	 

	 	 	 	Annex 19(b)
	 	Intellectual Property Filing Offices
	 

	 	 	 	Annex 19(c)
	 	Real Property Filings
	 

	 	 	 	Annex 20
	 	Real Property
	 

	 	 	 	Annex 25
	 	Acquisition Documentation
	 

	 	 	 	Annex 29
	 	Tensar Holdings’ Contracts
	 

	 	 	 	Annex 30
	 	Customer Relations
	 

	 	 	 	Annex 31
	 	Brokers and Finders Fees
	Schedule 3	 	 	 	Affirmative Covenants
	 

	 	 	 	Annex 9
	 	Requirements for Mortgages
	Schedule 4	 	 	 	Negative Covenants
	 

	 	 	 	Annex 1
	 	Permitted Financing Obligations
	 

	 	 	 	Annex 2
	 	Permitted Liens
	 

	 	 	 	Annex 4
	 	Existing Investments
	 

	 	 	 	Annex 7
	 	Affiliate Transactions
	 

	 	 	 	Annex 8
	 	Capital Structure
	 

	 	 	 	Annex 17
	 	Existing Operating Leases
	Schedule 5	 	 	 	Events of Default
	Schedule 6

	 	 	 	Rent	 	 
	Schedule 7	 	 	 	Miscellaneous
	Schedule 8	 	 	 	Leased Assets
	 
	 	 	 	 	 	 
	Exhibits	 	 
	 
	 	 	 	 	 	 
	Exhibit A	 	-	 	Form of Call Option Letter
	Exhibit B	 	-	 	Form of Put Option Letter

ii

 

	 	 	 	 	 	 	 
	Exhibit C	 	-	 	Form of Supplemental Agreement
	Exhibit D	 	-	 	Form of Tax Matters Agreement
	Exhibit E-l	 	-	 	Form of Fee Mortgage
	Exhibit E-2	 	-	 	Form of Leasehold Mortgage
	Exhibit F	 	-	 	Form of Tensar Intercreditor Agreement
	Exhibit G	 	-	 	Form of Affiliate Subordination Agreement
	Exhibit H	 	-	 	Form of Tensar Holdings Subordination Agreement
	Exhibit I	 	-	 	Form of Guarantee and Collateral Agreement
	Exhibit J	 	-	 	Form of Perfection Certificate

iii

 

     This LEASE FINANCING AND
PURCHASE OPTION AGREEMENT (this “Agreement”), dated as of October 31,
2005, is made and entered into by and among TCO FUNDING CORP., a Delaware corporation ( “TCO”), The
Tensar Corporation, LLC, a Georgia limited liability company (“Tensar”), Tensar Holdings, Inc.
(“Tensar Holdings”), and Credit Suisse, as administrative agent for the benefit of TCO
(“Administrative Agent”).

Preliminary Statement

     Pursuant to the Asset Purchase Agreement, dated as of the date hereof (as amended, modified,
or supplemented from time to time, the “Asset Purchase Agreement”), between Tensar, as seller, and
TCO, as buyer, Tensar has sold to TCO, and TCO has purchased from Tensar, certain tangible personal
property (the “Equipment”) and intangible assets (the “Intangible Assets”). TCO wishes to lease the
Equipment and the Intangible Assets to Tensar, and Tensar wishes to lease the Equipment and the
Intangible Assets from TCO, all in accordance with the terms and conditions set forth herein.
Accordingly, in consideration of the premises and the mutual covenants and agreements hereinafter
set forth, and for other good and valuable consideration, the receipt and sufficiency of which are
hereby acknowledged, the parties hereto agree as follows:

     SECTION 1. Definitions.

     (a) Capitalized terms used in this Agreement (including the Schedules, Annexes and Exhibits
hereto) shall have the meanings assigned to them on Schedule 1 hereto and, to the extent
not defined on Schedule 1, shall have the meanings set forth below:

     “Acquisition Cost” shall mean, in relation to the aggregate of the Leased Assets,
$147,000,000. For purposes of this Agreement, the term “unpaid Acquisition Cost” means the
Acquisition Cost attributable to the Leased Assets, as reduced from time to time pursuant to (i) an
exercise by Tensar of the Call Option, (ii) an exercise by TCO of the Put Option, (iii) payments
made in connection with an Event of Loss as contemplated by Section 14(b), (iv) payments made in
accordance with Section 14(c) and (v) payments of a portion of the unpaid Acquisition Cost as a
component of Rent on a Rent Payment Date (as set forth in Section l(b) of Schedule 6).

     “Adjusted Eurodollar Rate” shall mean, for any Rent Period, a rate per annum equal to the
product of (a) the Eurodollar Rate in effect for such Rent Period and (b) the Eurodollar Reserve
Percentage.

     “Agreement” shall mean this Lease Financing and Purchase Option Agreement, together with the
Schedules, Annexes and Exhibits hereto, as the same may be amended, supplemented or modified from
time to time.

     “Alternate Rate” shall mean, as of any date of determination, a rate per annum equal to the
greater of (a) the Base Rate in effect on such day and (b) the Federal Funds Rate in effect on such
day plus 1/2 of 1%.

1

 

     “Applicable Margin” shall mean, as of a date of determination, a percentage per annum equal to
2.75%.

     “Applicable Rate” shall mean, for any Rent Period, the Adjusted Eurodollar Rate plus the
Applicable Margin; provided that if TCO determines (which determination shall be conclusive) that
by reason of circumstances affecting the relevant market, or restricting the ability of TCO to
obtain satisfactory funding to enable it to satisfy its obligations hereunder, adequate and
reasonable means do not exist for ascertaining the Adjusted Eurodollar Rate for such Rent Period,
the Applicable Rate shall mean the Stated Rate.

     “Asset Purchase Agreement” has the meaning set forth in the Preliminary Statement hereto.

     “Base Rate” shall mean, at any time, the rate per annum publicly announced from time to time
by Credit Suisse as its “prime rate” in effect at its principal office in New York City, each
change in the Base Rate shall be effective as of the opening of business on the date such change is
publicly announced as being effective. The Base Rate is a reference rate and does not necessarily
represent the lowest or best rate actually available.

     “Call Option” has the meaning set forth in the Call Option Letter.

     “Call Option Letter” shall mean the letter dated the date hereof by TCO to Tensar,
substantially in the form of Exhibit A hereto, as the same may be amended, supplemented or
modified from time to time in accordance with the provisions hereof.

     “Casualty/Condemnation Event” has the meaning set forth in Section 14(c).

     “Casualty/Condemnation Proceeds” shall mean Net Cash Proceeds received from a
Casualty/Condemnation Event.

     “Default Option” has the meaning set forth in the Put Option Letter.

     “Default Rate” shall mean (i)
the Stated Rate plus (ii) two percent (2%). 

     “ECF Option” has the meaning specified in the Put
Option Letter.

     “ECF Percentage” shall mean 75% or, if on the date of exercise of the ECF Option, the Leverage
Ratio is less than 3.00 to 1.00, 50%.

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

     “Equipment” shall mean the equipment and other assets described on Schedule 8 hereto,
and all items of equipment and other assets (including, without limitation, replacement Parts)
which may from time to time be incorporated in such equipment or other assets described on
Schedule 8 hereto and title to which shall have vested in TCO.

     “Equity Issuance Option” has the meaning specified in the Put Option Letter.

2

 

     “Eurodollar Rate” shall mean, for any Rent Period, the rate per annum determined by
Administrative Agent at approximately 11:00 a.m., London time, on the date that is two Business
Days prior to the commencement of such Rent Period by reference to the British Bankers’ Association
Interest Settlement Rates for deposits in dollars (as set forth by the Bloomberg Information
Service or any successor thereto or any other service selected by Administrative Agent which has
been nominated by the British Bankers’ Association as an authorized information vendor for the
purpose of displaying such rates) for a period equal to such Rent Period; provided that, to
the extent that a rate is not ascertainable pursuant to the foregoing provisions of this
definition, the “Eurodollar Rate” shall be the rate per annum determined by Administrative Agent to
be the average of the rates per annum at which deposits in dollars are offered for such relevant
Rent Period to major banks in the London interbank market in London, England by Administrative
Agent at approximately 11:00 a.m. (London time) on the date that is two Business Days prior to the
beginning of such Rent Period.

     “Eurodollar Reserve Percentage” shall mean a fraction (expressed as a decimal), the numerator
of which is the number one and the denominator of which is the number one minus the aggregate of
the maximum reserve percentages (including any marginal, special, emergency or supplemental
reserves) expressed as a decimal established by the Board of Governors of the Federal Reserve
System and any other banking authority, domestic or foreign, applicable to Eurocurrency Liabilities
(as that term is defined in Regulation D). Any change in the Eurodollar Reserves shall take effect
with the first Rent Period beginning after the date of such change.

     “Event of Loss” shall mean (i) the occurrence, as a single event or a series of related
events, of any of the following events, to the extent such events are insurable, with respect to
two-thirds or more (by fair market value) of the Leased Assets: (A) loss of such Leased Assets or
of the use thereof due to theft or disappearance during the Term, (B) destruction, damage beyond
repair, or rendition of such Leased Assets unfit for normal use for any reason whatsoever either
permanently or for longer than a commercially reasonable period of time, (C) any damage to such
Leased Assets which results in an insurance settlement with respect to such Leased Assets on the
basis of a total loss or (D) the permanent condemnation, confiscation, seizure, or requisition of
use or title to any Leased Assets by any Governmental Authority under the power of eminent domain
or otherwise or (ii) the enforcement and foreclosure by final, unappealable judicial determination,
of any Lien created, incurred, assumed or permitted to exist by TCO (other than Permitted Liens in
favor of TCO) on two-thirds or more of the Leased Assets, the result of which is to permanently
deprive Tensar of the use of such Leased Assets.

     “Federal Funds Rate” shall mean, for any day, the weighted average of the rates on overnight
Federal funds transactions with members of the Federal Reserve System arranged by Federal funds
brokers, as published on the next succeeding Business Day by the Federal Reserve Bank of New York,
or, if such rate is not so published for any day that is a Business Day, the average of the
quotations for the day for such transactions received by Administrative Agent from three Federal
funds brokers of recognized standing selected by it.

     “Final Rent Payment Date” means October 31, 2012.

     “Financing Obligation Option” has the meaning set forth in the Put Option Letter.

3

 

     “Illegality Unwind Option” has the meaning set forth in the Put Option Letter.

     “Intangible Assets”
means the intangible assets described on Schedule 8 hereto.

     “Leased Assets” shall mean the
Equipment and the Intangible Assets.

     “Leased Assets Register” has the meaning set forth in Section
6 of Schedule 6.

     “Major Maintenance” has the meaning set forth in Section 10.

     “Ordinary
Maintenance and Repair” has the meaning set forth in Section 10.

     “Parts” shall mean all appliances, parts, instruments, appurtenances, accessories and
miscellaneous property of whatever nature that may from time to time be incorporated or installed
in or attached to or otherwise made part of the Leased Assets.

     “Put Option” shall mean any option of TCO to require Tensar to purchase all or any portion of
the Leased Assets pursuant to the terms of the Put Option Letter.

     “Put Option Letter” shall mean the letter dated the date hereof by Tensar to TCO,
substantially in the form of Exhibit B hereto, as the same may be amended, supplemented or
modified from time to time.

     “Rent” shall mean the amounts payable during the Term pursuant to Section 6 of this Agreement
and Schedule 6.

     “Rent Anniversary Date” shall have the meaning specified in Section l(e) of Schedule 6
to this Agreement.

     “Rent Payment Date” shall mean (i) the last day of each Rent Period, (ii) the Effective Date
and (iii) without duplication, the Final Rent Payment Date.

     “Rent Period” shall mean the period commencing on a Rent Payment Date and ending on the
numerically corresponding day in the calendar month that is three months thereafter; provided
however that (a) if any Rent Period would end on a day other than a Business Day, such Rent Period
shall be extended to the next succeeding Business Day unless such next succeeding Business Day
would fall in the next calendar month, in which case such Rent Period shall end on the next
preceding Business Day; and provided that the first Rental Period shall begin on the Effective Date
and the final Rent Period shall end on the Final Rent Payment Date.

     “Rental Rate” has the meaning set forth in Sections l(c) of Schedule 6.

     “Replacement” has
the meaning set forth in Section 11.

     “Required Alteration” has the meaning set forth in Section 11.

     “Stated Rate” shall mean a rate per annum equal to the Alternate Rate on the day immediately
preceding the first day of such Rent Period plus 1.75%.

4

 

     “Supplemental Agreement” shall mean the Supplemental Agreement, dated as of the Effective
Date, by and among TCO, Tensar and Administrative Agent, substantially in the form of Exhibit D
hereto, as the same may be amended, supplemented or modified from time to time.

     “Supplemental Payments” shall mean all amounts, liabilities and obligations which Tensar has
assumed or agreed to pay to TCO hereunder and pursuant to any of the Lease Documents to which it is
a party, including, without limitation, indemnity payments, payments for increased costs and
expenses and other items identified herein and in Schedule 6, but excluding payments of
Rent and payments which reduce the Acquisition Cost.

     “Tax Matters Agreement” means the Tax Matters Agreement, dated as of the Effective Date, by
and among TCO, Tensar and Administrative Agent, substantially in the form of Exhibit C
hereto, as the same may be amended, supplemented or modified from time to time.

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

     “Term” has the meaning set forth in
Section 4.

     “Uniform Commercial Code” means the Uniform Commercial Code as in effect from time to time in
the State of New York.

     (b) Rules of Interpretation. Sections 2, 3 and 4 of Schedule 1 are hereby by reference in
their entirety.

     SECTION 2. Agreement for Lease and Purchase Option Financing; Covenant of Quiet Enjoyment.

     Subject to, and upon all of the terms and conditions of this Agreement, TCO hereby agrees to
provide financial accommodations consisting of a lease and purchase option finance facility to
Tensar for the Leased Assets by leasing each of the Leased Assets to Tensar and granting to Tensar
certain options to purchase all or a portion of the Leased Assets from TCO, and Tensar hereby
accepts such lease and purchase option finance facility by leasing from TCO each of the Leased
Assets from and including the Effective Date for the duration of the Term and by granting to TCO
certain options to require Tensar to purchase all or a portion of the Leased Assets. Provided that
no Event of Default has occurred and is continuing, TCO agrees that it will not interfere with
Tensar’s quiet enjoyment and use of the Leased Assets during the Term.

     SECTION 3. Delivery and Acceptance of Leased Assets.

     Tensar has inspected the Leased Assets and has (i) unconditionally and irrevocably accepted
the Leased Assets for all purposes of this Agreement, (ii) acknowledged and agreed that, as between
TCO and Tensar (A) each Leased Asset has been inspected to Tensar’s satisfaction, is in good
operating order, repair and condition, and is of a size, design, capacity and manufacture
acceptable to Tensar; (B) each Leased Asset is duly registered with and/or certified or licensed by
any Governmental Authority that is charged with such registration or with issuing such certificates
or licenses; (C) Tensar is satisfied that each Leased Asset is suitable for its intended purpose;
and (D) TCO has made no warranty, expressed or implied, as to any Leased

5

 

Asset, Tensar hereby acknowledging and accepting the disclaimers contained in Section 18 hereof;
and (iii) waived any defect or other proper objection to any Leased Asset.

     SECTION 4. Term.

     The term
for the lease and purchase financing of the Leased Assets hereunder (the “Term”)
shall commence on the Effective Date and, unless sooner terminated in accordance with this
Agreement, the Call Option Letter or the Put Option Letter, shall end on the Final Rent Payment
Date.

     SECTION 5. End of Term Delivery of Leased Assets.

     If on the Final Rent Payment Date, after giving effect to the Rent payment to be made on such
date, Tensar has not exercised the Call Option, or TCO has not exercised the Put Option,
collectively, as to all of the Leased Assets, then on such date Tensar shall deliver, at Tensar’s
expense, all of the Leased Assets to TCO (or to a third party designated by TCO) at a location or
locations within the continental United States as specified in writing by TCO or such third party.
At the time of such return to TCO or delivery to the third party, each Leased Asset (and each Part
or component thereof) shall be in good operating order and in the repair and condition as when
originally delivered to Tensar, ordinary wear and tear from proper use thereof excepted, and
refurbished where necessary. In addition, each Leased Asset shall (i) be in material compliance
with any and all statutes, laws, ordinances, rules and regulations of any Governmental Authority
applicable to the use and operation of such Leased Asset and (ii) be free and clear of all Liens,
other than Liens in favor of TCO.

     SECTION 6. Payments.

     (a) Tensar shall pay Rent to TCO in accordance with this Section 6 and Schedule 6.
Rent shall be paid with respect to each Rent Period in the amounts and on the Rent Payment Dates
specified in Schedule 6. Rent for each Rent Period is due and payable in arrears and in
full on each Rent Payment Date. Tensar shall pay Rent in accordance with the terms hereof without
prior notice or demand from TCO.

     (b) Tensar hereby undertakes that it shall pay to TCO, upon demand, to the extent permitted by
applicable law, a late fee on any Rent, Supplemental Payment or other amount payable under this
Agreement, any other Lease Document to which it is a party that is not paid when due, for any
period for which any of the same is overdue, at a rate per annum equal to the Default Rate.
Payment or acceptance of the fee provided for in this Section 6(b) is not a permitted alternative
to timely payment and shall not constitute a waiver of any Default or Event of Default or otherwise
prejudice or limit any rights or remedies of TCO.

     (c) The parties hereto acknowledge and agree that each Supplemental Payment and each payment
under the other documents entered into in connection with this Agreement shall be integral to this
Agreement.

6

 

     SECTION 7. Net Lease.

     Except as otherwise expressly provided herein, this Agreement is a net lease. Tensar
acknowledges and agrees that its obligations hereunder, under any other Lease Document or any
Security Document to which it is a party, including, without limitation, its obligation to pay all
Rent payable hereunder, shall be absolute and unconditional under any and all circumstances and
shall be paid to TCO without notice or demand and without any abatement, reduction, diminution,
setoff, defense, counterclaim or recoupment whatsoever, including, without limitation, any
abatement, reduction, diminution, setoff, defense, counterclaim or recoupment due or alleged to be
due to, or by reason of, any past, present or future claims which Tensar may have against TCO or
any person entering into contractual arrangements with TCO to enable it to satisfy its obligations
hereunder, or the manufacturer or producer of any Leased Asset, any Part or unit or component of
the Leased Assets, or any other person (including any agent or representative of any such Person)
for any reason whatsoever. Except as otherwise expressly provided herein and without in any manner
limiting the generality of the foregoing sentence, the obligations and liabilities of Tensar
hereunder shall in no way be released, discharged or otherwise affected for any reason, including,
without limitation, (i) any defect in any item of the Leased Assets, any Part or unit or component
of the Leased Assets, or the condition, design, operation or fitness for use thereof; (ii)
abandonment, salvage or destruction of, any item of the Leased Assets, or any Part or unit or
component of the Leased Assets; (iii) any Liens or rights of others with respect to any item of the
Leased Assets, or any Part or unit or component of the Leased Assets; (iv) any prohibition or
interruption of or other restriction against Tensar’s use, operation or possession of any item of
the Leased Assets, or any Part or unit or component of the Leased Assets for any reason whatsoever,
or any interference with such use, operation or possession by any person or entity; (v) any other
Financing Obligation or liability, howsoever and whenever arising, of TCO, of any person entering
into contractual arrangements with TCO to enable it to satisfy its obligations hereunder or of
Tensar to any other Person; (vi) any insolvency, bankruptcy or similar proceedings by or against
TCO, any person entering into contractual arrangements with TCO to enable it to satisfy its
obligations hereunder, any guarantor of Tensar or Tensar; or (vii) any other reason whatsoever,
whether similar or dissimilar to any of the foregoing, any present or future law to the contrary
notwithstanding; it being the intention of the parties hereto that the Rent and other amounts
payable by Tensar under this Agreement or any of the other Lease Documents to which it is a party
shall continue to be payable in all events and in the manner and at the times herein provided,
without notice or demand, unless the obligation to pay the same shall be terminated pursuant to the
express provisions of this Agreement.

     SECTION 8. TCO’s Title; Grant of Security Interest.

     (a) Except as otherwise provided herein, in the Call Option Letter or the Put Option Letter,
(i) title to each item of the Leased Assets shall at all times remain in TCO and (ii) at no time
during the Term shall title to any Leased Asset become vested in Tensar.

     (b) Without prejudice, and in addition to Section 8(a) hereof and the Guarantee and Collateral
Agreement, the parties hereto intend, for all purposes under applicable law (including, without
limitation, the Uniform Commercial Code and all federal and state bankruptcy and insolvency laws),
that this Agreement is to be treated as a security agreement pursuant to which

7

 

Tensar hereby grants to TCO a security interest in the Leased Assets and all proceeds thereof as
collateral security for the payment and performance by Tensar of Tensar’s Obligations hereunder and
under any other Lease/Purchase Facilities Documents to which it is a party.

     SECTION 9. Use of Leased Assets; Compliance with Laws.

     Tensar agrees that it shall not use or operate any Leased Asset, or knowingly permit any
Leased Asset to be used or operated, for any purpose for which such Leased Asset is not designed or
reasonably suitable, or in any fashion that may reasonably subject such Leased Asset to any Liens,
other than Permitted Liens, or in any area excluded from coverage by any insurance policy or
policies. Tensar further agrees that each Leased Asset will be used and operated in the conduct of
Tensar’s business and in compliance with all applicable law relating to the use, operation,
maintenance and condition of such Leased Asset (including, without limitation, all zoning,
environmental protection, pollution, sanitary and safety laws). Tensar will not load, use, operate,
or store any Leased Asset, or knowingly permit the loading, using, operating or storing of any
Leased Asset, in a negligent manner or otherwise in violation of this Agreement, any other Lease
Document or any Security Document, or so as to void any of the insurance coverages specified in
Section 15 on any Leased Asset. Tensar shall procure and maintain in effect all licenses,
certificates, permits, approvals and consents required by applicable law in connection with the
delivery, use, operation, maintenance and condition of each Leased Asset. The Leased Assets will at
all times be and remain in the control of Tensar and its Subsidiaries except (i) as Tensar’s
relinquishment of control of a Leased Asset is specifically permitted by this Agreement and (ii)
except while a Leased Asset is undergoing routine maintenance. To the extent that applicable law
requires the licensing or certification of an operator of any Leased Asset, each such operator or
user shall be duly licensed and currently certificated and qualified to operate such Leased Asset
and authorized by the terms of (and in accordance with the provisions and requirements of) the
insurance policy or policies providing the coverages specified in Section 15 hereof.

     SECTION 10. Maintenance and Repair of the Leased Assets.

     (a) Tensar agrees, at its own cost and expense, to be responsible for the performance of all
Ordinary Maintenance and Repair in connection with the Leased Assets. The term “Ordinary
Maintenance and Repair” shall mean all repair, replacement and maintenance required in the ordinary
and regular course of the business and operations of Tensar and its Subsidiaries to keep, repair,
maintain and preserve the Leased Assets in good order and operating condition, and in compliance
with such maintenance and repair standards and procedures as are set forth in the manufacturer’s
manuals pertaining to the Leased Assets, and as otherwise may be required to enforce warranty
claims against each vendor and manufacturer of each Leased Asset, and in compliance with the
maintenance and repair standards of Tensar for similar equipment and in compliance with prudent
national industry standards and with all requirements of applicable law relating to the maintenance
and condition of the Leased Assets.

     (b) TCO shall be obligated to perform or cause to be performed all Major Maintenance in
connection with the Leased Assets. TCO intends to enter into the Supplemental Agreement with Tensar
pursuant to which Tensar will perform or cause to be performed all Major Maintenance in connection
with the Leased Assets. The term “Major Maintenance” shall mean all repair,

8

 

replacement and maintenance in connection with the Leased Assets and not constituting Ordinary
Maintenance and Repair.

     SECTION 11. Replacement of Parts; Alterations; Modifications and Additions.

     In case any Part, component or unit of the Leased Assets is required to be altered or
modified, or any equipment or appliance on any Leased Asset is required to be altered, added,
replaced or modified, in either case in order to comply with applicable law (a “Required
Alteration”), TCO shall be obligated to make or cause to be made such Required Alteration. TCO
intends to enter into the Supplemental Agreement with Tensar pursuant to which Tensar will make or
cause to be made such Required Alterations. Such Required Alterations shall immediately be and
become part of the Leased Assets and subject to the terms of this Agreement, and title thereto
shall vest in TCO. All Parts, equipment and appliances incorporated or installed in or attached to
any Leased Asset in connection with servicing, repairing, maintaining and overhauling any Leased
Asset pursuant to the requirements of Sections 10 or 11 hereof (“Replacement”) shall be considered
accessions to such Leased Asset and shall immediately, without further act, be and become part of
the Leased Asset, and title thereto shall vest in TCO. Tensar may, without the prior written
consent of TCO, affix or install any accessory, equipment or device on any Leased Asset or make any
improvement or addition thereto other than a Required Alteration or Replacement (“Improvement”);
provided, that (i) a nonremovable Improvement may be made to the Leased Asset only if such
Improvement does not reduce the value of the Leased Asset and (ii) any other Improvement may be
made to the Leased Asset only if such Improvement is readily removable without causing damage to
the Leased Asset or impairing the value, utility or condition the Leased Asset would have had if
such Improvement had not been so affixed or installed. Nonremovable Improvements shall be
considered accessions to the Leased Asset and shall immediately without further act be and become
part of the Leased Asset, and title thereto shall vest in TCO. At the time title to any replacement
Part, equipment or appliance has become vested in TCO pursuant to the provisions of this Section
11, title to the Part, equipment or appliance replaced thereby shall thereupon vest in Tensar,
subject to the Lien thereon created under the Security Documents.

     SECTION 12. Identification; Inspection.

     Tensar shall, if requested by TCO, to the extent practicable and in a manner not detrimental
to Tensar’s business, promptly mark each item of the Leased Assets so as to identify that TCO holds
title to such item. Subject to the foregoing sentence, the manner in which each such item is to be
marked shall be specified by TCO.

     SECTION 13. Assignment.

     (a) TCO shall have the right, without the consent of Tensar Holdings or Tensar to collaterally
assign and grant a security interest in its rights hereunder and under any other Lease Documents
(including the Call Option Letter, the Put Option Letter, the Tax Matters Agreement, the
Supplemental Agreement, the Guarantee and Collateral Agreement, the Mortgages and the other
Security Documents) in favor of any person. Any such assignee (and its successors, assigns and
agents) shall have the right to foreclose upon any such collateral assignment or security interest,
and exercise all rights and remedies under the applicable documentation

9

 

relating thereto, without any requirement for consent from Tensar or Tensar Holdings, and Tensar
and Tensar Holdings agree to fully cooperate with any such exercise of rights or remedies by any
such assignee (and its successors, assigns and agents).

     (b) TCO may at any time sell or transfer all, but not less than all, of its right, title and
interest in and to the Leased Assets and, in connection therewith, sell, assign and transfer all,
but not less than all, of its right, title and interest in, to and under this Agreement and the
other Lease Documents. Any such assignee hereunder shall have all of TCO’s right, title and
interest accruing under this Agreement and any other Lease Document, shall be subject to and shall
assume all of TCO’s liabilities and obligations hereunder and thereunder and shall comply with all
of TCO’s covenants and agreements hereunder and thereunder, from the effective date of such
assignment. Tensar shall attorn to and recognize such assignee as “TCO” hereunder upon the same
terms and conditions as set forth in this Agreement and Tensar and Tensar Holdings agree to perform
all of Tensar’s obligations pursuant to this Agreement. No such assignment shall limit Tensar’s
rights under this Agreement. Any assignment by TCO pursuant to this Section 13 shall (i) be subject
to the rights of Tensar under the Call Option Letter and (ii) include an assignment by TCO of each
other agreement between TCO and Tensar relating to the Leased Assets, this Agreement, any other
Lease Documents, to the same assignee, and an assumption by such assignee of the obligations of TCO
thereunder. No such assignee shall be liable for any act or omission of the prior lessor hereunder
or subject to any defenses or offsets which Tensar may have against a prior lessor hereunder.
Tensar may not assign or otherwise transfer any of its rights or obligations hereunder without the
prior written consent of TCO (and any attempted assignment or transfer by Tensar without such
consent shall be null and void).

     SECTION 14. Event of Loss.

     (a) Termination
and Payments Upon Event of Loss, Upon the occurrence of an Event of Loss.
Tensar shall give prompt notice thereof to TCO and Tensar’s obligation to pay Rent hereunder shall
terminate immediately with respect to all of the Leased Assets; provided that TCO shall be entitled
to the payment specified in Section 14(b) in relation to the Leased Assets; provided, further, that
this Agreement, and each of the other obligations of Tensar hereunder, shall remain in effect and
survive such Event of Loss. Not later than one Business Day after the occurrence of an Event of
Loss, Tensar shall pay all outstanding Rental Rate applicable to the Leased Assets to the date of
such Event of Loss.

     (b) Event of Loss Payments. Pursuant to the Supplemental Agreement, Tensar
acknowledges and agrees that all insurance and other payments resulting from or becoming due in
connection with an Event of Loss in relation to the Leased Assets that are received by Tensar shall
be paid or remitted by Tensar to TCO on the date of receipt thereof. Upon such payment, TCO shall
update the Leased Assets Register accordingly.

     (c) Payments Not Relating to an Event of Loss. In the event of any condemnation,
confiscation, theft or seizure of, or requisition of title to or use of, or loss, casualty or
damage to, any Leased Asset not constituting an Event of Loss (each, a “Casualty/Condemnation
Event”), Tensar shall promptly give written notice thereof to TCO generally describing the nature
and extent of such damage, destruction or taking. If Tensar does not elect to use such
Casualty/Condemnation Proceeds for the repair, restoration or replacement of the Leased Assets

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within 180 days of receipt thereof, any Casualty/Condemnation Proceeds shall be applied by TCO in
reduction of the scheduled Acquisition Cost installment payments set forth in Schedule 6
pro rata as against such scheduled installments. Upon such application, TCO will update the
Leased Assets Register accordingly. Tensar may request TCO to agree to the use of any such
Casualty/Condemnation Proceeds for the repair, restoration or replacement of the Leased Asset which
was subject to such Casualty/Condemnation Event in the event that the conditions set forth in the
definition of Casualty/Condemnation Proceeds are met. If TCO agrees to such request, such funds
shall not be applied by TCO in reduction of the scheduled Acquisition Cost installment payments,
and TCO agrees that Tensar may use such funds within such 180-day period for the repair,
restoration or replacement of the Leased Assets and, if not so used within such period, such funds
shall be remitted by Tensar to TCO and applied by TCO in reduction of the scheduled Acquisition
Cost installment payments set forth in Schedule 6 pro rata as against such scheduled
installments.

     SECTION 15. Insurance.

     (a) Coverage — Leased Assets. TCO shall be responsible for maintaining or causing to be
maintained in full force and effect property damage and casualty insurance coverage for the Leased
Assets from financially sound and reputable insurers and to such an extent and against such risks
(and with such deductibles, retentions and exclusions), including fire and other risks insured by
extended coverage, as is customary for companies in the same or similar businesses operating in the
same or similar locations as the Tensar Parties, (or as otherwise required by this Section 15).
TCO intends to enter into the Supplemental Agreement with Tensar pursuant to which Tensar will
obtain, or arrange to obtain, the insurance required by this Section 15(a).

     (b) Coverage — Liability and Other Assets. Tensar will at all times maintain in full force and
effect insurance in relation to its owned assets and other liabilities in such amounts, covering
such risks and liabilities and with such deductibles or self-insurance retentions as are required
by Section 1.02 of Schedule 3 hereto.

     SECTION 16. Illegality.

     Where the introduction of any law, order, regulation or official directive or any change in
the interpretation or application thereof by any Governmental Authority makes it unlawful for any
person party to this Agreement or any of their respective successors and assigns to give effect to
its respective obligations under this Agreement or any of the other Lease Documents, then such
person shall notify the other parties hereto of such change in circumstances and, in consultation
with the other parties hereto, use all reasonable efforts to avoid the effects of such
introduction, variation or change. If the affected party determines in good faith that it is
unable, within any period which the relevant introduction, variation or change may allow, to avoid
the effects of the same, then the Illegality Unwind Option may be exercised by TCO.

     SECTION 17. Survival; Expenses; Indemnity; Waiver of Jury Trial; Jurisdiction; Consent to
Service of Process.

     Schedule 7 is hereby incorporated herein in its entirety by reference.

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     SECTION 18. No Warranties.

     (a) TCO, NOT BEING A SELLER (AS SUCH TERM IS DEFINED IN THE UNIFORM COMMERCIAL CODE IN EFFECT
IN ANY APPLICABLE JURISDICTION AND FOR THE PURPOSES OF SUCH UNIFORM COMMERCIAL CODE), OR A SELLER’S
AGENT, AND INASMUCH AS TENSAR HAS ACCEPTED DELIVERY OF THE LEASED ASSETS AFTER SATISFYING ITSELF
AS TO THE CONDITION, QUALITY, FITNESS FOR ANY PARTICULAR PURPOSE OR OTHERWISE OF
SUCH LEASED ASSETS, DOES NOT MAKE AND SHALL NOT BE DEEMED TO HAVE MADE, AND TENSAR HEREBY EXPRESSLY
DISCLAIMS, ANY WARRANTIES, REPRESENTATIONS OR GUARANTEES OF ANY KIND, EXPRESS OR IMPLIED,
INCLUDING, WITHOUT LIMITATION, ANY OF THE FOLLOWING: (I) VALUE, CONDITION, DESIGN,
COMPLIANCE WITH SPECIFICATIONS, DURABILITY OR OPERATION OF, OR QUALITY OF THE MATERIAL OR
WORKMANSHIP IN, OR TITLE TO, OR ANY DEFECT IN, THE LEASED ASSETS, ANY PART, OR ANY OTHER THING
DELIVERED, LEASED, SOLD OR TRANSFERRED HEREUNDER, (II) ANY IMPLIED WARRANTIES OF MERCHANTABILITY OR
FITNESS FOR USE OR FOR A PARTICULAR PURPOSE OF THE LEASED ASSETS, ANY PART, OR ANY OTHER THING
DELIVERED, LEASED, SOLD OR TRANSFERRED HEREUNDER, (III)WITH RESPECT TO ANY ACTUAL OR ALLEGED
INFRINGEMENT OF ANY PATENT, TRADEMARK OR COPYRIGHT OR THE LIKE, OR ARISING FROM COURSE OF
PERFORMANCE, COURSE OF DEALING OR USAGE OF TRADE, (IV) ANY OBLIGATION, LIABILITY,
RIGHT, CLAIM OR REMEDY IN TORT WITH RESPECT TO THE LEASED ASSETS, ANY PART, ANY OTHER ITEM OR
ANY OTHER THING DELIVERED, LEASED, SOLD OR TRANSFERRED HEREUNDER, WHETHER ACTUAL OR IMPUTED
(INCLUDING, WITHOUT LIMITATION, ANY STATUTORY WARRANTY OR CONDITION UNDER ANY REQUIREMENT OF LAW)
OR (V) ANY OBLIGATION, LIABILITY, RIGHT, CLAIM OR REMEDY FOR LOSS OF OR DAMAGE TO, THE LEASED
ASSETS, ANY PART, OR ANY OTHER THING, FOR ANY LOSS OF USE, REVENUE OR PROFIT, OR ANY OTHER DIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGES (INCLUDING, WITHOUT LIMITATION, ANY DIRECT, INDIRECT,
INCIDENTAL OR CONSEQUENTIAL DAMAGE TO OR LOSSES RESULTING FROM THE INSTALLATION, OPERATION OR USE
OF THE LEASED ASSETS OR ANY PRODUCTS MANUFACTURED THEREBY); IT BEING UNDERSTOOD THAT TCO SHALL HAVE
NO RESPONSIBILITY OR LIABILITY WITH RESPECT TO ANY OF THE FOREGOING MATTERS AND THAT ALL RISKS OF
ANY NATURE INCIDENT THERETO ARE TO BE BORNE BY TENSAR. TCO LEASES THE LEASED ASSETS HEREUNDER “AS
IS”, “WHERE IS” AND WITH ALL FAULTS, IF ANY.

     (b) TCO hereby assigns to Tensar all assignable warranties made by any supplier to TCO in
relation to any of the Leased Assets for and during the term of this Agreement, and Tensar hereby
acknowledges and agrees to resolve all such claims related to any such warranties directly with any
such supplier. TCO shall cooperate with Tensar with respect to the resolution of such claims and by
appropriate proceedings at Tensar’s expense. Any such claim shall not affect in any manner the
obligation of Tensar to pay Rent and other payments hereunder, under any other Lease Document or
under any Security Document.

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     (c) So long and only so long as a Default or an Event of Default shall not have occurred and
be continuing, and so long and only so long as any of the Leased Assets shall be subject to this
Agreement and Tensar shall be entitled to possession of the Leased Assets hereunder, TCO authorizes
Tensar, at Tensar’s sole expense, to assert for TCO’s account, all rights and powers of TCO under
any manufacturer’s, vendor’s or dealer’s warranty on any item of Leased Assets; provided, however,
that Tensar shall indemnify, protect, save, defend and hold harmless TCO from and against any and
all claims, and all costs, expenses, damages, losses and liabilities incurred or suffered by TCO or
any such person in connection therewith, as a result of, or incident to, any action by Tensar
pursuant to the foregoing authorization; provided, further, that the indemnity in this Section 18
shall be implemented in accordance with Section 17.

     SECTION 19. Representations and Warranties.

     Tensar Holdings and Tensar hereby make the representations and warranties set forth on
Schedule 2 hereto to TCO, each of which shall be true, correct, and complete, in all
material respects, as of the Effective Date.

     SECTION 20. Affirmative Covenants.

     Tensar Holdings and Tensar hereby covenant and agree that so long as this Agreement or any
other Lease Document is in effect or any amount is payable hereunder or under any other Lease
Document, Tensar Holdings and Tensar shall observe and comply with the general covenants and
agreements set forth in Schedule 3 hereto.

     SECTION 21. Negative Covenants.

     Tensar Holdings and Tensar hereby covenant and agree that so long as this Agreement or any
other Lease Document is in effect or any amount is payable hereunder or under any other Lease
Document, Tensar Holdings and Tensar shall observe and comply with the covenants and agreements set
forth in Schedule 4 hereto.

     SECTION 22. Events of Default.

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

     SECTION 23. Remedies
Upon Default.

     (a) The last paragraph of Schedule 5 hereto is hereby incorporated herein in its
entirety.

     (b) No remedy referred to in this Section 23 is intended to be exclusive, but each shall be
cumulative and in addition to any other remedy referred to in Schedule 5 or otherwise
available to TCO at law or in equity; and the exercise or beginning of exercise by TCO of any one
or more of such remedies shall not preclude the simultaneous or later exercise by TCO of any or all
such other remedies. No express or implied waiver by TCO of any Default or Event of Default
hereunder shall in any way be or be construed to be a waiver of any future or subsequent Default or
Event of Default. To the extent permitted by applicable law, Tensar hereby waives any rights now
or hereafter conferred by statute or otherwise which may require TCO to sell the

13

 

Leased Assets in mitigation of the damages or otherwise to limit or modify any of TCO’s rights or
remedies under this Section 23.

     SECTION 24. TCO’s Right to Perform for Tensar.

     If Tensar fails to make any Supplemental Payment required to be made by it hereunder or fails
to perform or comply with any of its agreements contained herein, TCO may itself make such payment
or perform or comply with such agreement, and the amount of such payment and the amount of the
expenses of TCO incurred in connection with such payment or the performance of or compliance with
such agreement, as the case may be, together with an amount thereon computed at the Default Rate in
accordance with Section 6, shall, if not paid by Tensar to TCO on demand, be deemed a Supplemental
Payment hereunder; provided, however, that no such payment, performance or compliance by TCO shall
be deemed to cure any Default or Event of Default hereunder.

     SECTION 25. Notices.

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

     if to TCO,

TCO Funding Corp.

c/o Global Securitization Services, LLC

445 Broad Hollow Road, Suite 239

Melville, New York 11747

Attn: Andrew Stidd

Telephone:     (631) 930-7203

Telecopy:      (212) 302-8767

With a copy to:

King & Spalding LLP

1185 Avenue of the Americas

New York, NY 10036

Attn: Isam Salah

Telephone:     (212) 556-2140

Telecopy:       (212) 556-2222

     if to Tensar,

The Tensar Corporation, LLC

5871 Glenridge Drive, Suite 330

Atlanta, GA 30328

Attn: Katherine Spear

Telephone: (404) 214-5375

Telecopy: (404) 214-5379

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With copies to:

Arcapita, Inc.

75 Fourteenth Street — 24th Floor

Atlanta, Georgia 30309

Attn: Scott Buschmann

Telephone: (404) 920-9000

Telecopy: (404) 920-9001

and

King & Spalding LLP

1185 Avenue of the Americas

New York, New York 10036

Attn: Isam Salah

Telephone: (212) 556-2100

Telecopy: (212) 556-2222

If to Administrative Agent:

Credit Suisse

Eleven Madison Avenue

New York, NY 10010

Attn: Jill Hogan

Telephone : (212) 325-9092

Facsimile: (212) 743-1860

with a copy to:

Latham & Watkins LLP

885 Third Avenue,

New York, New York, 10022

Attn: Michele Penzer, Esq.

Telephone : (212) 906-1200

Facsimile: (212) 751-4864

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

     SECTION 26. Call Option.

     (a) Call Option. Provided Tensar has made all Rent payments and all Supplemental Payments
then due, Tensar shall have the right and option to purchase, pursuant to, and subject to

15

 

the terms and conditions of, the Call Option Letter, all or a portion of the Leased Assets from TCO
on any date for an aggregate price of U.S. $10.00, payable in connection with each such purchase,
plus the other amounts specified in the Call Option Letter. Any exercise of the Call Option as of
the Final Rent Payment Date shall be for all of the Leased Assets then subject to this Agreement
and any exercise of the Call Option as of any other date may be for all or any portion of the
Leased Assets as specified by Tensar. Tensar shall notify TCO of its exercise of the Call Option
not less than three (3) Business Days prior to the date on which the purchase is to be effected,
any such notice to be irrevocable and to be provided in accordance with the terms of the Call
Option Letter. If Tensar exercises the Call Option under this Section 26(a), TCO shall sell the
Leased Assets (or the undivided percentage interest therein, as applicable) to Tensar on the terms
and conditions provided herein and in the Call Option Letter. The Call Option may be utilized on
more than one date.

     (b) Settlement Terms. In the event that Tensar purchases all or any portion of the Leased
Assets from TCO pursuant to Section 26(a) above and the Call Option Letter, TCO and Tensar hereby
agree that the following provisions shall apply:

     (i) Representations and Warranties of Tensar. Tensar shall represent, warrant,
covenant and agree with TCO as of the date of any sale of such Leased Assets by TCO to Tensar,
except where specific reference is made to another date or dates, that:

     (A) Tensar has the full right, power and authority to purchase such Leased Assets from TCO as
provided in this Agreement and to carry out Tensar’s obligations under this Agreement (as such
pertain to the sale of such Leased Assets), and all requisite action necessary to authorize Tensar
to enter into the purchase of such Leased Assets and to carry out Tensar’s obligations with respect
thereto has been, or on, or before the date of any sale of such Leased Assets to Tensar, will have
been, taken;

     (B) Tensar acknowledges that:

     (1) Tensar is purchasing such Leased Assets, and such Leased Assets shall be conveyed and
transferred to Tensar, “HAVING BEEN INSPECTED TO THE SATISFACTION OF TENSAR, AS-IS, WHERE-IS, AND
WITH ALL FAULTS AND SPECIFICALLY AND EXPRESSLY WITHOUT ANY RECOURSE OR WARRANTIES, REPRESENTATIONS,
COVENANTS OR GUARANTEES, EXPRESSED OR IMPLIED, OF ANY KIND, NATURE, OR TYPE WHATSOEVER FROM OR ON
BEHALF OF TCO”; provided, that TCO shall represent that it has not voluntarily incurred any Liens
on the Leased Assets which have not been released. Tensar acknowledges that it has not relied, and
is not relying, on any information, document, sales brochure, or other literature, sketch,
projection, pro forma, statement, representation, guaranty, or warranty (whether express or
implied, or oral or written, or material or immaterial) that may have been given by, or made by, or
on behalf of, TCO;

16

 

     (2) Tensar shall not be entitled to, and shall not rely on, TCO as to (x) the quality, nature,
adequacy, or physical condition of the Leased Assets; (y) the quality of any labor or materials
relating in any way to the Leased Assets; or (z) the condition of title to the Leased Assets;

     (3) EXCEPT AS EXPRESSLY SET FORTH IN THE PROVISO IN SUBPARAGRAPH (1) ABOVE (WITH
RESPECT TO LIENS VOLUNTARILY INCURRED BY TCO), TCO HAS NOT, DOES NOT, AND WILL NOT, WITH RESPECT TO
SUCH LEASED ASSETS, MAKE ANY WARRANTIES OR REPRESENTATIONS, EXPRESS OR IMPLIED, OR ARISING BY
OPERATION OF LAW, INCLUDING BUT NOT IN ANY WAY LIMITED TO, ANY WARRANTY OF CONDITION,
MERCHANTABILITY, HABITABILITY, OR FITNESS FOR A PARTICULAR USE, OR WITH
RESPECT TO THE VALUE, PROFITABILITY, OR MARKETABILITY OF SUCH LEASED ASSETS;
and

     (4) Without in any way limiting the generality of the preceding subparagraphs (1) through
(3), Tensar specifically acknowledges and agrees that Tensar hereby waives, releases, and
discharges any claim Tensar has, might have had, or may have against TCO with respect to the
condition of such Leased Assets, patent or latent, the actual or potential income or profits to be
derived from such Leased Assets, and any other state of facts which exists with respect to such
Leased Assets.

     (ii) Survival Beyond Closing. The representations and warranties of Tensar contained
in this Agreement as set forth in Section 26(b)(i) shall survive the closing of the sale of any
Leased Assets to Tensar and the termination of this Agreement.

     (iii) Seller. At the sale of any Leased Assets to Tensar, TCO shall deliver or cause
to be delivered to Tensar, at Tensar’s sole cost and expense, a bill of sale of such Leased Assets,
duly executed by TCO.

     (iv) Payment. On the closing date of the sale, Tensar shall pay U.S. $10.00 to TCO
Agent plus the other amounts required to be paid pursuant to the Call Option Letter and this
Agreement.

     SECTION 27. Put Option.

     (a) Upon the occurrence of any event specified in the Put Option Letter, TCO may exercise the
Put Option and require Tensar to purchase, and upon such exercise Tensar shall be obligated to
purchase and pay for, the Leased Assets in accordance with the terms of the Put Option Letter and
this Agreement.

     (a) (b) In the event that Tensar purchases all or any portion of the Leased Assets from TCO as
required by this Section and the Put Option Letter, TCO and Tensar hereby agree that the provisions
set forth in Section 26(b)(i)-(iv) shall apply.

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     SECTION 28. Appointment of Administrative Agent. TCO hereby appoints the Administrative Agent
as its agent for the purpose of taking all actions, exercising all rights and giving and receiving
all notices and instructions that may be taken, exercised, given or received directly by TCO
hereunder, and TCO hereby authorizes the Administrative Agent to take all such actions, to exercise
all such rights and to give and receive all such notices and instructions with the same effect as
if taken, exercised, given or received by TCO. All parties to this Agreement hereby acknowledge and
agree to such appointment and agree to accept the actions taken by the Administrative Agent, the
rights exercised by the Administrative Agent and the notices and instructions given by the
Administrative Agent with the same force and effect as if taken, exercised or given by TCO.

     SECTION 29. Miscellaneous.

     (a) Any provision of this Agreement, any other Lease Document, or any other document entered
into in connection herewith or therewith 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 or diminishing the rights of TCO under the remaining
provisions hereof or thereof, and any such prohibition or unenforceability in any jurisdiction
shall not invalidate or render unenforceable such provision in any other jurisdiction.

     (b) No term or provision of this Agreement, any other Lease Document or any other document
entered into in connection herewith or therewith or evidencing Obligations may be amended, altered,
waived, discharged or terminated orally, but only by an instrument in writing signed by a duly
authorized officer of each person party hereto. A waiver on any one occasion shall not be construed
as a waiver on a future occasion. All of the covenants, conditions and obligations contained in
this Agreement, any other Lease Document or any other document entered into in connection herewith
or therewith shall be binding upon and shall inure to the benefit of the respective successors and
assigns of TCO and Tensar. This Agreement, any other Lease Document or any other document entered
into in connection herewith or therewith may be executed in as many counterparts as shall be
determined by the parties hereto when so executed, and each such counterpart shall be binding on
all parties hereto, notwithstanding that such parties are not signatories to the same counterpart.
This Agreement and each related instrument, document, agreement and certificate collectively
constitute the entire agreement of TCO and Tensar with respect to the financing of the Leased
Assets, and cancel and supersede any and all prior oral or written understandings with respect
thereto. THIS AGREEMENT, ANY OTHER LEASE DOCUMENT OR ANY OTHER DOCUMENT ENTERED INTO IN CONNECTION
HEREWITH OR THEREWITH SHALL IN ALL RESPECTS BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK

     SECTION 30. Further Assurances.

     (a) TCO and Tensar agree to cooperate in good faith and to execute and deliver such documents
and further assurances consistent with and in clarification of the characterization and intent of
the parties with respect to this Agreement and the other Lease Documents.

     (b) Without limitation of Section 30(a), Tensar and Tensar Holdings will perform, and will
cause each other Tensar Party to perform, any and all acts and execute, and cause each other

18

 

Tensar Party to execute, any and all documents (including the execution, amendment or
supplementation of any financing statement and continuation statement or other statement) for
filing under the provisions of the Uniform Commercial Code and the rules and regulations
thereunder, or any other statute, rule or regulation of any applicable foreign, Federal, state or
local jurisdictions, including any filings in the United States Patent and Trademark Office or
similar foreign office, which are necessary (or reasonably requested by TCO or the Administrative
Agent), from time to time, in order to grant and maintain in favor of TCO a security interest in
each item of the Collateral of the type and priority described in the relevant Security Document or
herein.

     (c) Tensar will deliver or cause to be delivered to TCO or its agents or designees from time
to time such other documentation, consents, authorizations, approvals and orders in form and
substance satisfactory to TCO as TCO shall deem reasonably necessary or advisable to perfect or
maintain the Liens in favor of TCO, including with respect to assets which are required to become
Collateral after the Effective Date.

     SECTION 31. Rights of Set-Off; Adjustments. Upon the occurrence and during the continuance of
any Event of Default, TCO is hereby authorized at any time and from time to time, to the fullest
extent permitted by law, to set off and apply any and all deposits at any time held and other
obligations at any time owed to Tensar by TCO against any and all of the obligations of Tensar now
or hereafter existing under this Agreement or any other Lease Document or otherwise, irrespective
of whether TCO shall have made any demand hereunder or thereunder and although such obligations may
be unmatured. TCO agrees promptly to notify Tensar after any such set-off and application made by
TCO; provided, however, that the failure to give such notice shall not affect the validity of such
set-off and application. The rights of TCO under this Section 31 are in addition to other rights
and remedies (including, without limitation, other rights of set-off) that TCO may have.

     SECTION 32. Survival. In the event that during the Term of this Agreement, Tensar becomes
liable for the payment or reimbursement of any obligations, claims or taxes pursuant to any
provision hereof or any other Lease Document, such liability will continue, notwithstanding the
expiration or termination of this Agreement or such other Lease Document, until all such amounts
are paid or reimbursed by Tensar.

[Signature Page Follow]

19

 

     IN WITNESS WHEREOF, the parties hereto have caused this Lease Financing and Purchase Option
Agreement to be executed by their duly authorized representatives as of the date first above
written.

	 	 	 	 	 	 	 
	 	 	TCO FUNDING CORP.	 	 
	 
	 	 	 	 	 	 
	 

	 	By	 	/s/ Katherine Spear
 
Name:
Katherine Spear	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	THE TENSAR CORPORATION, LLC	 	 
	 
	 	 	 	 	 	 
	 
	 	By	 	/s/ Katherine Spear
 

Name: Katherine Spear
	 	 
	 

	 	 	 	Title: Chief Financial Officer	 	 
	 
	 	 	 	 	 	 
	 	 	CREDIT SUISSE, Cayman Islands Branch, as Administrative Agent	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ PHILLIP HO
 

Name: PHILLIP HO
	 	 
	 

	 	 	 	Title: DIRECTOR	 	 
	 
	 	 	 	 	 	 
	 

	 	By
	 	/s/ RIANKA MOHAN
 

Name: RIANKA MOHAN
	 	 
	 

	 	 	 	Title: ASSOCIATE	 	 

[Signature Page to Lease Financing And Purchase Option Agreement]

 

 

SCHEDULE 1

DEFINITIONS

 

 

Execution Copy

LEASE RIDERS

Schedule 1

Definitions

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

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

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

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

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

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

     “Administrative Agent” shall mean Credit Suisse acting through its Cayman Islands
branch.

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

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

Schedule 1, Defined Terms

 

 

     “Agreed Profit” shall mean “Agreed Profit” as defined in the Commodities Purchase Agreement
and in the Second Lien Commodities Purchase Agreement, as applicable.

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

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

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

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

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

     “Business Day” shall mean any day other than a Saturday, Sunday or day on which commercial
banks in New York City, Dallas, Texas, and Atlanta, Georgia are authorized or required by law to
close; provided, however, that when used in connection with any payment to TCO or the
Administrative Agent required hereunder (including with respect to all notices and determinations
in connection therewith), 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.

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

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

Schedule 1, Defined Terms

2

 

     A “Change in Control” shall be deemed to have occurred if (a) at any time prior to a
Qualified IPO, the Permitted Holders shall fail to own directly or indirectly, beneficially and of
record, Equity Interests representing at least 662/3% of the aggregate ordinary voting power and
aggregate equity value represented by the issued and outstanding Equity Interests in Tensar
Holdings; (b) after a Qualified IPO, any “person” or “group” (within the meaning of Rule 13d-5 of
the Securities Exchange Act of 1934 as in effect on the date hereof) other than the Permitted
Holders shall own directly or indirectly, beneficially or of record, Equity Interests representing
either (i) more than 30% of either the aggregate ordinary voting power or the aggregate equity
value represented by the issued and outstanding Equity Interests in Tensar Holdings or (ii) a
greater percentage of either the aggregate ordinary voting power or the aggregate equity value
represented by the issued and outstanding Equity Interests in Tensar Holdings then held, directly
or indirectly, beneficially and of record, by the Permitted Holders; (c) a majority of the seats
(other than vacant seats) on the board of directors of Tensar Holdings shall at any time be
occupied by persons who are not Continuing Directors; (d) Tensar Holdings shall at any time fail to
own directly or indirectly, beneficially and of record, 100% of each class of issued and
outstanding Equity Interests in Holdings or Holdings shall fail to own directly or indirectly,
beneficially and of record, 100% of each class of issued and outstanding Equity Interests in
Tensar, in each case, free and clear of all Liens (except Liens created by the Guarantee and
Collateral Agreement or by the Second Lien Commodities Purchase Facility Documents); or (e) any
change of control (or similar event, however denominated) with respect to any Tensar Party or any
Subsidiary shall occur under and as defined in the Related Financing Documents.

     “Collateral” shall mean all property and assets of the Tensar Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security Document, and shall include
the Mortgaged Properties.

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

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

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

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

     “Consolidated EBITDA” shall mean, for any period, Consolidated Net Income for such
period plus (a) without duplication and to the extent deducted in determining such Consolidated Net
Income, the sum of (i) Consolidated Financing Expense for such period, (ii) consolidated income tax
expense for such period, (iii) all amounts attributable to depreciation and

Schedule 1, Defined Terms

3

 

amortization for such period (including but not limited to any amortized obligation discount,
amortized administrative expense and amortized hedging transaction expense), (iv) the adjustments
set forth on Annex l(c) to Schedule 1, (v) management fees paid to the Sponsor for such period to
the extent permitted by Section 1.07 of Schedule 4 not to exceed $1,000,000 per fiscal year, (vi)
the amount of the Earnout Payment to the extent paid in cash and not to exceed $3,000,000, (vii)
any reduction to Consolidated Net Income as a result of extraordinary losses, and (viii) any
non-cash charges (other than the write-down of current assets) for such period (provided
that to the extent that all or any portion of the income of any person is excluded from
Consolidated Net Income pursuant to the definition thereof for all or any portion of such period
any amounts set forth in the preceding clauses (i) through (viii) that are attributable to such
person shall not be included for purposes of this definition for such period or portion thereof),
and minus (b) without duplication (i) all cash payments made during such period on account of
reserves, restructuring charges and other non-cash charges added to Consolidated Net Income
pursuant to clause (a)(viii) above in a previous period and (ii) to the extent included in
determining such Consolidated Net Income, any extraordinary gains and all non-cash items of income
for such period, all determined on a consolidated basis in accordance with GAAP; provided
that for purposes of calculating Consolidated EBITDA for any period to determine the Leverage Ratio
or the First Lien Leverage Ratio, (A) the Consolidated EBITDA of any Acquired Entity acquired by
Tensar or any Subsidiary during such period pursuant to a Permitted Acquisition which has
Consolidated EBITDA in excess of $500,000 for such period, shall be included on a pro forma
basis for such period (assuming the consummation of such acquisition and the incurrence or
assumption of any Financing Obligations in connection therewith occurred as of the first day of
such period) and (B) the Consolidated EBITDA of any person or line of business sold or otherwise
disposed of during such period by Tensar or any Subsidiary which has Consolidated EBITDA in excess
of $500,000 for such period for shall be excluded for such period (assuming the consummation of
such sale or other disposition and the repayment of any Financing Obligations in connection
therewith occurred as of the first day of such period).

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

     “Consolidated Fixed Charges” shall mean, for any period, without duplication, the sum
of (a) Consolidated Financing Expense for such period paid in cash, (b) the aggregate amount of
scheduled Acquisition Cost payments in respect of the Leased Assets or scheduled payments (whether
or not made) during such period to reduce the unpaid stated amount in respect of long term
Financing Obligations (including Capital Lease Obligations and Synthetic Lease Obligations, but
excluding payments applied to Purchase Price under the Commodities Purchase Facility) of Tensar and
its Subsidiaries (other than payments made by Tensar or any of its Subsidiaries to Tensar or
another Subsidiary), (c) Capital Expenditures for such period, less

Schedule 1, Defined Terms

4

 

Capital Expenditures incurred in connection with the new BX geogrid manufacturing line in Morrow,
Georgia, and (d) the aggregate amount of Taxes paid in cash (net of refunds received with respect
to such Taxes) payable by Holdings and its Subsidiaries during such period in accordance with
Section 1.06(iii)(y) of Schedule 4.

     “Consolidated Net Income” shall mean, for any period, the net income or loss of Tensar
Holdings and its Subsidiaries for such period determined on a consolidated basis in accordance with
GAAP; provided that there shall be excluded (a) the income of any Subsidiary of Tensar to
the extent that the declaration or payment of dividends or similar distributions by such Subsidiary
of that income is not at the time permitted by operation of the terms of any agreement, instrument,
or Requirement of Law applicable to such Subsidiary, (b) the income or loss of any person accrued
prior to the date it becomes a Subsidiary of Tensar or is merged into or consolidated with Tensar
or any of its Subsidiaries or the date that such person’s assets are acquired by Tensar or any of
its Subsidiaries, (c) the income of any person (other than a Subsidiary of Tensar) in which any
other person (other than Tensar or a wholly owned Subsidiary of Tensar or any director holding
qualifying shares in accordance with applicable law) has an interest, except to the extent of the
amount of dividends or other distributions actually paid to Tensar or a wholly owned Subsidiary
thereof by such person during such period, (d) any gains attributable to sales of assets out of the
ordinary course of business and (e) the Consolidated Net Income of the Merex Companies shall be
excluded.

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

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

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

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

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

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

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

Schedule 1, Defined Terms

5

 

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

     “Earnout Payment” shall mean any additional payment required to be made to Dr.
Nathaniel Fox pursuant to the Stock Purchase Agreement, dated as of July 31, 2002, between
Nathaniel Fox and Michael Fox, as sellers, and Tensar and Holdings, as buyers, pertaining to the
purchase of the stock and business of Geopier Foundation, Inc. and Geotechnical Reinforcement
Company, Inc. (the “Geopier Agreement”) in an amount equal to 50% of the amount by which the
combined “EBITDA” (as defined in the Geopier Agreement) of Geopier Foundation Company, Inc., a
Georgia corporation, and Geotechnical Reinforcement Company, Inc., a Georgia corporation, for the
fiscal year 2005 exceeds $3,498,012.50.

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

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

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

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

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

     “Equity Interests” shall mean shares of capital stock, partnership interests, membership
interests in a limited liability company, beneficial interests in a trust or other equity interests
in

Schedule 1, Defined Terms

6

 

any person, or any obligations convertible into or exchangeable for, or giving any person a right,
option or warrant to acquire, such equity interests or such convertible or exchangeable
obligations.

     “Equity Issuance” shall mean any issuance or sale by Tensar Holdings of any Equity
Interests of Tensar Holdings, or the receipt by Tensar Holdings of any capital contribution, except
in each case for (a) any issuance of directors’ qualifying shares and (b) sales or issuances of
common stock of Tensar Holdings to management or employees of Tensar Holdings, Tensar or any
Subsidiary under any employee stock option or stock purchase plan or employee benefit plan in
existence from time to time in the ordinary course of business.

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

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

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

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

     “Excess Cash Flow” shall mean, for any fiscal year of Tensar Holdings, the excess of
(a) the sum, without duplication, of (i) Consolidated EBITDA for such fiscal year and (ii) the
decrease, if any, in Current Assets minus Current Liabilities from the beginning to the end of

Schedule 1, Defined Terms

7

 

such fiscal year over (b) the sum, without duplication, of (i) the amount of any Taxes payable (net
of refunds received with respect to such Taxes in such fiscal year) in cash by Tensar and its
Subsidiaries with respect to such fiscal year, (ii) Consolidated Financing Expense for such fiscal
year payable in cash, (iii) Capital Expenditures made in cash in accordance with Section 1.10 of
Schedule 4 during such fiscal year, except to the extent financed with the proceeds of Financing
Obligations, equity issuances, casualty proceeds, condemnation proceeds or other proceeds that
would not be included in Consolidated EBITDA, (iv) permanent repayments of Financing Obligations
(other than mandatory prepayments of Acquisition Cost pursuant to the terms hereof) permitted
hereunder made by Tensar and its Subsidiaries during such fiscal year, but only to the extent that
such prepayments by their terms cannot be redrawn and do not occur in connection with a refinancing
of all or any portion of such Financing Obligations and (v) the increase, if any, in Current Assets
minus Current Liabilities from the beginning to the end of such fiscal year.

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

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

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

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

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

     “Financing Obligations” of any person shall mean, without duplication, (a) all
obligations of such person in respect of any financing, including for borrowed money (including
Acquisition Cost, any Purchase Price and any Unpaid Reimbursement Obligations) or with respect to
deposits or advances of any kind or under any other Murabaha arrangements or Ijara arrangements,
(b) all obligations of such person evidenced by bonds, debentures, notes or similar instruments,
(c) all obligations of such person under conditional sale or other title retention agreements
relating to property or assets acquired by such person, (d) all obligations of such person in
respect of the deferred purchase price of property or services (other than current trade accounts
payable incurred in the ordinary course of business), (e) all obligations of such person,

Schedule 1, Defined Terms

8

 

contingent or otherwise, to purchase, redeem, retire or otherwise acquire for value any Equity
Interests in such person, (f) all Financing Obligations of others secured by (or for which the
holder of such Financing Obligations has an existing right, contingent or otherwise, to be secured
by) any Lien on property owned or acquired by such person, whether or not the Financing Obligations
secured thereby has been assumed, (g) all Guarantees by such person of Financing Obligations of
others, (h) all Capital Lease Obligations or Synthetic Lease Obligations of such person, (i) all
obligations, contingent or otherwise, of such person as an account party in respect of letters of
credit and letters of guaranty and (j) all obligations, contingent or otherwise, of such person in
respect of bankers’ acceptances. The Financing Obligations of any person shall include the
Financing Obligations of any other person (including any partnership in which such person is a
general partner) to the extent such person is liable therefor as a result of such person’s
ownership interest in, or other relationship with, such other person, except to the extent the
terms of such Financing Obligations provide that such person is not liable therefor. For the
avoidance of doubt, it is the intention of the Tensar Parties to incur only financing obligations
acceptable under Islamic Shari’ah principles.

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

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

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

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

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

     “Guarantee” of or by any person (the “guarantor”) shall mean any obligation, contingent or
otherwise, of (a) the guarantor or (b) another person (including any bank under a letter of credit)
to induce the creation of which the guarantor has issued a reimbursement, counterindemnity or
similar obligation, in either case guaranteeing or having the economic effect of guaranteeing any
Financing Obligations or other obligation of any other person (the “primary obligor”) in
any manner, whether directly or indirectly, and including any obligation, contingent or otherwise,
of the guarantor, direct or indirect, (i) to purchase or pay (or advance or supply funds for the
purchase or payment of) such Financing Obligations or other obligation or to purchase (or to
advance or supply funds for the purchase of) any security for the payment of such Financing
Obligations or other obligation, (ii) to purchase or lease property, securities or services for the
purpose of assuring the owner of such Financing Obligations or other obligation of the

Schedule 1, Defined Terms

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payment of such Financing Obligations or other obligation, (iii) to maintain working capital,
equity capital or any other financial statement condition or liquidity of the primary obligor so as
to enable the primary obligor to pay such Financing Obligations or other obligation, (iv) as an
account party in respect of any letter of credit or letter of guaranty issued to support such
Financing Obligations or obligation or (v) to otherwise assure or hold harmless the owner of such
Financing Obligations or other obligation against loss in respect thereof; provided,
however, that the term “Guarantee” shall not include endorsements for collection or deposit in
the ordinary course of business.

     “Guarantee and Collateral Agreement” shall mean the First Lien Guarantee and
Collateral Agreement in the form of Exhibit I, to be executed and delivered by Tensar Holdings,
Holdings, Tensar and each Subsidiary which provides a guarantee in respect of the Obligations or
the Working Capital Obligations.

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

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

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

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

     “Indemnitee” shall have the meaning assigned to such term in Section 2(b) of Schedule 7.

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

     “Intellectual Property Security Agreement” shall mean all Intellectual Property
Security Agreements to be executed and delivered by the Tensar Parties, each substantially in the
applicable form required by the Guarantee and Collateral Agreement.

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

Schedule 1, Defined Terms

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

     “Lease Documents” shall mean this Agreement, the Asset Purchase Agreement, the Call
Option Letter, the Put Option Letter, the Tax Matters Agreement, the Supplemental Agreement and the
Security Documents and all other instruments, agreements and other documents evidencing or
governing the foregoing or providing for any Guarantee, Lien or other right in respect thereof, as
the same may be amended, supplemented or otherwise modified from time to time.

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

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

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

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

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

     “Material Obligations” shall mean (i) all Financing Obligations of Tensar with respect
to any Commodities Purchase Facility Document, any Second Lien Commodities Purchase Facility
Document or any Tensar Holdings Commodities Purchase Facility Document and (ii) all Financing
Obligations (other than the Financing Obligations described in clause (i) and the Obligations of
the Tensar Parties under the Lease Documents), or obligations in respect of one or more Hedging
Agreements, of any one or more of the Tensar Parties or the Subsidiaries in an

Schedule 1, Defined Terms

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aggregate principal amount exceeding, in the case of clause (ii), $2,500,000. For purposes of
determining Material Obligations, the “principal amount” of the obligations of the Tensar Parties
or any Subsidiary in respect of any Hedging Agreement at any time shall be the maximum aggregate
amount (giving effect to any netting agreements) such Tensar Party or such Subsidiary would be
required to pay if such Hedging Agreement were terminated at such time.

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

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

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

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

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

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

     “Mortgages” shall mean the fee or leasehold mortgages or deeds of trust, assignments of leases
and rents and other security documents granting a Lien on any Mortgaged Property to secure the
Obligations, each in the form of Exhibit E-l or Exhibit E-2, as the case may be, with such changes
as shall be advisable under the law of the jurisdiction in which such Mortgage is to be recorded
and as are reasonably satisfactory to TCO and the Administrative Agent, as the same may be amended,
supplemented, replaced or otherwise modified from time to time in accordance with this Agreement.

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

     “Murabaha Guarantee Obligations” shall have the meaning assigned to the term
“Guarantee Obligations” in the Commodities Purchase Agreement.

Schedule 1, Defined Terms

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     “Murabaha Price” shall have the meaning assigned to such term in the Commodities
Purchase Agreement or the Second Lien Commodities Purchase Agreement, as applicable.

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

     “NAG Sale-Leaseback” shall mean the substantially concurrent purchase by NAG of the
manufacturing facility and land located at 5315 Cynthiana Road, St. Wendell, Posey County, Indiana
(the “NAG Facility”) pursuant to the terms of the lease agreement entered into by and between Dan
Koester Properties, Inc., an Indiana corporation, and NAG dated as of September 24, 2004, and the
sale of such NAG Facility to a non-Affiliate third party and the subsequent (and substantially
concurrent) lease back from such non-Affiliate third party.

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

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

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

Schedule 1, Defined Terms

13

 

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

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

     “Perfection Certificate” shall mean the Pre-Closing UCC Diligence Certificate
substantially in the form of Exhibit J or any other form approved by TCO and the Administrative
Agent.

     “Permits” shall mean any and all franchises, licenses, leases, permits, approvals,
notifications, certifications, registrations, authorizations, exemptions, qualifications,
easements, rights of way, Liens and other rights, privileges and approvals required under any
Requirement of Law.

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

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

     “Permitted Investments” shall mean:

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

Schedule 1, Defined Terms

14

 

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

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

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

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

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

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

     “Permitted Lien” shall mean, with respect to Pledged Collateral, Liens created by the
Guarantee and Collateral Agreement and, with respect to all other Collateral, Liens permitted to be
prior to the Lien created by the Guarantee and Collateral Agreement by Section 1.02 of Schedule 4.

     “Permitted Refinancing Obligations” shall mean Financing Obligations issued or
incurred (including by means of the extension or renewal of existing Financing Obligations) to
refinance, refund, extend, renew or replace existing Financing
Obligations (“Refinanced
Obligations”); provided that (a) the stated amount of such refinancing, refunding,
extending, renewing or replacing Financing Obligations is not greater than the stated amount of
such Refinanced Obligations plus the amount of any rent, profit, premiums or penalties and accrued
and unpaid amounts paid thereon and reasonable fees and expenses, in each case associated with such
refinancing, refunding, extension, renewal or replacement, (b) such refinancing, refunding,
extending, renewing or replacing Financing Obligations has a final maturity that is no sooner than,
and a weighted average life to maturity that is no shorter than, such Refinanced Obligations, (c)
if such Refinanced Obligations or any Guarantees thereof are subordinated to the Obligations, such
refinancing, refunding, extending, renewing or replacing Financing Obligations and any Guarantees
thereof remain so subordinated on terms no less favorable to TCO or the Administrative Agent, (d)
the obligors in respect of such Refinanced Obligations immediately prior to such refinancing,
refunding, extending, renewing or replacing are the only obligors on such refinancing, refunding
extending, renewing or replacing Financing Obligations

Schedule 1, Defined Terms

15

 

and (e) such refinancing, refunding, extending, renewing or replacing Financing Obligations
contains covenants and events of default and is benefited by Guarantees, if any, which, taken as a
whole, are determined in good faith by a Financial Officer of Tensar to be no less favorable to
Tensar, the applicable Subsidiary, TCO or the Administrative Agent in any material respect than the
covenants and events of default or Guarantees, if any, in respect of such Refinanced Obligations.

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

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

     “Purchase Price” shall have the meaning set forth in the Commodities Purchase
Agreement and the Second Lien Commodities Purchase Agreement.

     “Qualified IPO” shall mean an underwritten initial public offering of common stock of (and by)
Tensar Holdings pursuant to an effective registration statement filed with the Securities and
Exchange Commission in accordance with the Securities Act of 1933, as amended, which initial public
offering results in gross cash proceeds to Tensar Holdings of $100,000,000 or more.

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

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

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

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

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

     “Reimbursement Letter” shall mean the Reimbursement Letter, dated as of the Effective
Date, from Tensar to TCO and the Administrative Agent, in the form attached as Exhibit M to the
Commodities Purchase Agreement.

Schedule 1, Defined Terms

16

 

     “Related Financing Documents” shall mean the Commodities Purchase Facility Documents,
the Second Lien Commodities Purchase Facility Documents and the Holdings Commodities Purchase
Facility Documents,

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

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

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

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

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

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

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

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

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

Schedule 1, Defined Terms

17

 

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

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

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

     “Security Documents” shall mean the Guarantee and Collateral Agreement, the Mortgages,
the Intellectual Property Security Agreements and each of the other security agreements, pledges,
mortgages, consents and other instruments and documents executed and delivered pursuant to any of
the foregoing or pursuant to Section 1.09 or 1.10 of Schedule 3.

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

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

     “Sponsor” shall mean Arcapita Inc.

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

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

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

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

Schedule 1, Defined Terms

18

 

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

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

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

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

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

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

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

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

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

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

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

Schedule 1, Defined Terms

19

 

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

     “Transactions” shall mean, collectively, (a) the execution, delivery and performance by the
Tensar Parties of the Lease Documents and the Related Financing Documents to which they are a
party, (b) the granting of Liens pursuant to the Lease Documents and the Related Financing
Documents, (c) the Acquisition and the other Acquisition Transactions and (d) any other
transactions related to or entered into in connection with any of the foregoing.

     “UCC” shall mean the Uniform Commercial Code.

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

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

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

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

     2. Terms Generally. The definitions in Section 1 shall apply equally to both the
singular and plural forms of the terms defined. Whenever the context may require, any pronoun shall
include the corresponding masculine, feminine and neuter forms. The words “include”, “includes” and
“including”, and words of similar import, shall not be limiting and shall be deemed to be followed
by the phrase “without limitation”. The word “will” shall be construed to have the same meaning and
effect as the word “shall”. The words “asset” and “property” shall be construed as having the same
meaning and effect and to refer to any and all rights and interests in tangible and intangible
assets and properties of any kind whatsoever, whether real, personal or mixed, including cash,
securities, Equity Interests, accounts and contract rights. The words “herein”, “hereof” and
“hereunder”, and words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision of this Agreement unless the context shall otherwise
require. All references herein to Articles, Sections, Exhibits

Schedule 1, Defined Terms

20

 

and Schedules shall be deemed references to Articles and Sections of, and Exhibits and Schedules
to, this Agreement unless the context shall otherwise require. Except as otherwise expressly
provided herein, (a) any definition of, or reference to, any Lease Document or any other agreement,
instrument or document in this Agreement shall mean such Lease Document or other agreement,
instrument or document as amended, restated, supplemented or otherwise modified from time to time
(subject to any restrictions on such amendments, restatements, supplements or modifications set
forth herein) and (b) all terms of an accounting or financial nature shall be construed in
accordance with GAAP, as in effect from time to time;
provided, however, that if Tensar
notifies TCO and the Administrative Agent that Tensar wishes to amend any covenant in Schedule 4 or
any related definition to eliminate the effect of any change in GAAP occurring after the date of
this Agreement on the operation of such covenant (or if TCO or the Administrative Agent notifies
Tensar that it wishes to amend Schedule 4 or any related definition for such purpose), then
Tensar’s compliance with such covenant shall be determined on the basis of GAAP without giving
effect to the relevant change in GAAP, until either such notice is withdrawn or such covenant is
amended in a manner satisfactory to Tensar, TCO and the Administrative Agent. For purposes of GAAP,
references herein to “Rental Rate”, “Agreed Profit” or “Financing Expense” shall be treated as
interest and “Acquisition Cost” and “Purchase Price” shall be treated as indebtedness.

     3. Pro Forma Calculations. All pro forma calculations permitted or required
to be made by Tensar or any Subsidiary pursuant to this Agreement shall include only those
adjustments that would be permitted or required by Regulation S-X under the Securities Act of 1933,
as amended, together with those adjustments that (a) have been certified by a Financial Officer of
Tensar as having been prepared in good faith based upon reasonable assumptions and (b) are based on
reasonably detailed written assumptions reasonably acceptable to TCO and the Administrative Agent.

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

Schedule 1, Defined Terms

21

 

SCHEDULE 2

REPRESENTATIONS AND WARRANTIES

 

 

Execution Copy

Schedule 2

Representations and Warranties

     Tensar Holdings and Tensar jointly and severally represent and warrant to TCO and the
Administrative Agent that:

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

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

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

Schedule 1, Defined Terms

 

 

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

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

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

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

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

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

Schedule 2, Representations and Warranties

2

 

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

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

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

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

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

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

Schedule 2, Representations and Warranties

3

 

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

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

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

     SECTION 1.09. Litigation; Compliance with Laws. (a) There are no actions, suits or
proceedings at law or in equity or by or before any arbitrator or Governmental Authority now
pending or, to the knowledge of Tensar Holdings or Tensar threatened against or affecting any

Schedule 2, Representations and Warranties

4

 

Tensar Party or any Subsidiary or any business, property or rights of any such person (i) that
involve any Lease Document or the Transactions or (ii) except as set forth on Annex 9 to this
Schedule 2, as to which there is a reasonable possibility of an adverse determination and that, if
adversely determined, could reasonably be expected, individually or in the aggregate, to result in
a Material Adverse Effect.

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

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

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

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

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

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

Schedule 2, Representations and Warranties

5

 

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

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

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

     SECTION 1.15. No Material Misstatements; Acquisition Documentation. (a) each of the
Tensar Parties has disclosed to TCO and the Administrative Agent all agreements, instruments and
corporate or other restrictions to which any Tensar Party or any of the Subsidiaries is subject,
and all other matters known to any of them, that, individually or in the aggregate, could
reasonably be expected to result in a Material Adverse Effect. None of (i) the Confidential
Information Memorandum or (ii) any other information, report, financial statement, exhibit or
schedule furnished by or on behalf of any Tensar Party or any Subsidiary to TCO or the
Administrative Agent for use in connection with the transactions contemplated by the Lease
Documents (including any for use in connection with the financing obtained by TCO) or in connection
with the negotiation of any Lease Document or included therein or delivered pursuant thereto
contained, contains or will contain any material misstatement of fact or omitted, omits or

Schedule 2, Representations and Warranties

6

 

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

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

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

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

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

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

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

Schedule 2, Representations and Warranties

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

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

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

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

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

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

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

Schedule 2, Representations and Warranties

8

 

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

     SECTION 1.19. Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of TCO for the benefit of TCO and the Administrative Agent, a legal,
valid, binding and enforceable security interest in the Collateral described therein and proceeds
thereof and (i) in the case of the Pledged Collateral, upon the earlier of (A) when such Pledged
Collateral is delivered to TCO and (B) when financing statements in appropriate form are filed in
the offices specified on Annex 19(a) to this Schedule 2 (as such schedule may be supplemented for
any new Subsidiary in connection with the execution of an Assumption Agreement (as defined in the
Guarantee and Collateral Agreement)) and (ii) in the case of all other Collateral described therein
(other than Intellectual Property Collateral), when financing statements in appropriate form are
filed in the offices specified on Annex 19 to this Schedule 2, the Lien created by the Guarantee
and Collateral Agreement shall constitute a fully perfected Lien on, and security interest in, all
right, title and interest of TCO in such Collateral and proceeds thereof, as security for the
Obligations, in each case prior and superior to the rights of any other person (except for
Permitted Liens).

     (b) Each Intellectual Property Security Agreement is effective to create in favor of TCO for
the benefit of TCO and the Administrative Agent, a legal, valid, binding and enforceable
security interest in the Intellectual Property Collateral described therein and proceeds thereof.
When each Intellectual Property Security Agreement is filed in the United States Patent and
Trademark Office and the United States Copyright Office, respectively, together with financing
statements in appropriate form filed in the offices specified in Annex 19(b) to this Schedule 2
and, with respect to Intellectual Property acquired after the Effective Date, such other offices as
may be specified by Tensar in written notice to TCO and the Administrative Agent, the Lien created
by such Intellectual Property Security Agreement shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereunder in the Intellectual
Property Collateral and proceeds thereof, as security for the Obligations, in each case prior and
superior in right to any other person (except for Permitted Liens) (it being understood that
subsequent recordings in the United States Patent and Trademark Office and the United States
Copyright Office may be necessary to perfect a lien on registered trademarks, trademark
applications and copyrights acquired by the grantors after the date hereof).

     (c) Each of the Mortgages is effective to create in favor of TCO for the benefit of TCO and
the Administrative Agent, a legal, valid, binding and enforceable Lien on, and security interest
in, all of the Tensar Parties’ right, title and interest in and to the Mortgaged Property
thereunder and proceeds thereof, and when the Mortgages are filed in the offices specified on Annex
19(c) to this Schedule 2 and, with respect to any Mortgage entered into after the Effective Date,
such other offices as may be specified by Tensar in written notice to TCO and the Administrative
Agent, the Lien created by each such Mortgage shall constitute a fully perfected Lien on, and
security interest in, all right, title and interest of the grantors thereof in such Mortgaged
Property and proceeds thereof, as security for the Obligations, in each case prior and superior in
right to any other person (except for Permitted Liens).

Schedule 2, Representations and Warranties

9

 

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

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

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

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

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

     SECTION 1.25. Acquisition Documentation. The Acquisition Documentation listed on Annex
25 to this Schedule 2 constitutes all of the material agreements, instruments and undertakings to
which any of the Tensar Parties or any of the Subsidiaries is bound or by which

Schedule 2, Representations and Warranties

10

 

any of their respective property or assets is bound or affected relating to, or arising out of, the
Acquisition. None of such material agreements, instruments or undertakings has been amended,
supplemented or otherwise modified, and all such material agreements, instruments and undertakings
are in full force and effect. No party to any of the Acquisition Documentation is in default
thereunder of a material provision as of the Effective Date and no party thereto has the right to
terminate any of the material Acquisition Documentation.

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

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

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

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

     SECTION 1.30. Customer Relations. Except as set forth in Annex 30 to this Schedule 2,
as of the Effective Date, there exists no actual or, to the knowledge of Tensar Holdings or Tensar,
threatened termination or cancellation of, or any material adverse modification or change in, the
business relationship of any Tensar Party with (i) any customer whose purchases during the
preceding 12 months caused them to be ranked among the five largest customers of the Tensar
Parties, taken as a whole or (ii) the counterparties to the Contech Agreement.

Schedule 2, Representations and Warranties

11

 

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

     SECTION 1.32. Patriot Act, Etc.

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

Schedule 2, Representations and Warranties

12

 

SCHEDULE 3 

AFFIRMATIVE COVENANTS

 

 

Execution Copy

Schedule 3 

Affirmative Covenants

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

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

     (b) Do or cause to be done all things necessary to obtain, preserve, renew, extend and keep in
full force and effect the rights, licenses, permits, franchises, authorizations, patents,
copyrights, trademarks and trade names material to the conduct of its business; maintain and
operate such business in substantially the manner in which it is presently conducted and operated;
comply in all material respects with all applicable laws, rules, regulations and decrees and orders
of any Governmental Authority, whether now in effect or hereafter enacted; comply with the terms
of, and enforce its rights under, each material lease of real property and each other material
agreement so as to not permit any material uncured default on its part to exist thereunder, except
as otherwise expressly permitted under Section 1.05 of Schedule 4; and at all times maintain and
preserve all property material to the conduct of such business and keep such property in good
repair, working order and condition and subject to Section 10 of this Agreement, from time to time
make, or cause to be made, all needful and proper repairs, renewals, additions, improvements and
replacements thereto necessary in order that the business carried on in connection therewith may be
properly conducted at all times.

     SECTION 1.02. Insurance. Subject to Section 15 of this Agreement, keep its insurable
properties adequately insured at all times by financially sound and reputable insurers; maintain
such other insurance, to such extent and against such risks (and with such deductibles, retentions
and exclusions), including fire and other risks insured against by extended coverage, as is
customary for companies in the same or similar businesses operating in the same or similar
locations, including public liability insurance against claims for personal injury or death or
property damage occurring upon, in, about or in connection with the use of any properties owned,
occupied or controlled by it; maintain such other insurance as may be required by law; and maintain
such other insurance as otherwise required by the Security Documents (and comply with all covenants
in the Security Documents with respect thereto).

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

Schedule 3, Affirmative Covenants

 

 

by appropriate proceedings and Tensar Holdings, Tensar or the applicable Subsidiary shall have set
aside on its books adequate reserves with respect thereto in accordance with GAAP and such contest
operates to suspend collection of the contested obligation, tax, assessment or charge and
enforcement of a Lien and, in the case of a Mortgaged Property, there is no risk of forfeiture of
such property. In addition, none of the Tensar Parties or any of the Subsidiaries shall treat the
Asset Purchase Agreement or any of the Transactions as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4).

     SECTION 1.04. Financial Statements, Reports, etc. In the case of Tensar Holdings,
furnish to TCO and the Administrative Agent:

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

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

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

Schedule 3, Affirmative Covenants

2

 

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

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

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

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

     (h) promptly, from time to time, such other information regarding the operations,
business affairs and financial condition of Tensar Holdings, Tensar or any Subsidiary, or
compliance with the terms of any Lease/Purchase Facilities Document, as TCO or the
Administrative Agent may reasonably request.

     SECTION 1.05. Litigation and Other Notices. Furnish to TCO and the Administrative
Agent prompt written notice of the following:

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

     (b) the filing or commencement of, or any written threat or written notice of intention
of any person to file or commence, any action, suit or proceeding, whether at law or in
equity or by or before any arbitrator or Governmental Authority, against any

3

 

Tensar Party or any Subsidiary that could reasonably be expected to result in a Material
Adverse Effect;

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

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

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

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

     SECTION 1.06. Information Regarding Collateral. (a) Furnish to TCO and the
Administrative Agent prompt written notice of any change (i) in any Tensar Party’s corporate name
or in any trade name used to identify it in the conduct of its business or in the ownership of its
properties, (ii) in the location of any Tensar Party’s chief executive office, its principal place
of business, any office in which it maintains books or records relating to Collateral owned by it
or any office or facility at which Collateral owned by it is located (including the establishment
of any such new office or facility), (iii) in any Tensar Party’s identity or corporate structure
or (iv) in any Tensar Party’s Federal Taxpayer Identification Number. Each of Tensar Holdings and
Tensar agree not to effect or permit any change referred to in the preceding sentence unless all
filings have been made under the UCC or otherwise and all other actions have been taken that are
required in order for TCO to continue at all times following such change to have a valid, legal
and perfected security interest in all the Collateral. Each of Tensar Holdings and Tensar also
agrees promptly to notify TCO and the Administrative Agent if any material portion of the
Collateral is damaged or destroyed.

     (b) In the case of Tensar Holdings, each year, at the time of delivery of the annual
financial statements with respect to the preceding fiscal year pursuant to Section 1.04(a) of this
Schedule 3, deliver to TCO and the Administrative Agent a certificate of a Financial Officer

4

 

setting forth the information required by the Perfection Certificate or confirming that there has
been no change in such information since the date of the Perfection Certificate delivered on the
Effective Date or the date of the most recent Perfection Certificate delivered pursuant to this
Section.

     SECTION 1.07. Maintaining Records; Access to Properties and Inspections; Environmental
Assessments. (a) Keep proper books of record and account in which full, true and correct
entries in conformity with GAAP and all requirements of law are made of all dealings and
transactions in relation to its business and activities. Each of Tensar Holdings and Tensar will,
and will cause each of its subsidiaries to, permit any representatives designated by TCO or the
Administrative Agent to visit and inspect the financial records and the properties of Tensar
Holdings or Tensar, as the case may be, or any of its subsidiaries at reasonable times and as
often as reasonably requested and to make extracts from and copies of such financial records, and
permit any such representatives designated by TCO or the Administrative Agent to discuss the
affairs, finances and condition of the Tensar Parties, as the case may be, or any of its
subsidiaries with the officers thereof and independent accountants therefor.

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

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

5

 

performance of any such environmental assessment and permit any such engineer or consultant
designated by TCO or the Administrative Agent to have full access to each property or facility at
reasonable times and after reasonable notice to Tensar of the plans to conduct such an
environmental assessment. All environmental assessments conducted pursuant to this Section 1.07(c)
of this Schedule 3 shall be at Tensar’s sole cost and expense.

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

     SECTION 1.09. Additional Collateral, etc. (a) With respect to any Collateral acquired
after the Effective Date or, in the case of inventory or equipment, any material Collateral moved
after the Effective Date by any Tensar Party (other than any Collateral described in clauses (b),
(c) or (d) of this Section) as to which TCO does not have a first priority perfected security
interest, promptly (and, in any event, within 10 days following the date of such acquisition) (i)
execute and deliver to TCO and the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other Security Documents as TCO or the Administrative Agent deems
necessary or advisable to grant to TCO a security interest in such Collateral and (ii) take all
actions necessary or advisable to grant to, or continue on behalf of, TCO, a perfected first
priority security interest in such Collateral, including entering into landlord waivers and the
filing of UCC financing statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or by law or as may be reasonably requested by TCO or the Administrative
Agent.

     (b) With respect to any fee interest in any Collateral consisting of Real Property or any
lease interest in Collateral consisting of Real Property with an annual rent in excess of
$1,000,000 acquired or leased after the Effective Date by any Tensar Party, promptly (and, in any
event, within 20 days following the date of such acquisition) (i) execute and deliver a first
priority Mortgage in favor of TCO covering such real property and complying with the provisions
herein and in the Security Documents, (ii) provide the Secured Parties with title and extended
coverage insurance in an amount at least equal to the purchase price of such Real Property (or such
other amount as TCO or the Administrative Agent shall reasonably specify), Surveys, and if
applicable, flood insurance, lease estoppel certificates, memoranda or amendments, all in
accordance with the standards for deliveries contemplated on the Effective Date, as described in
Annex 9 to this Schedule 3, (iii) deliver to TCO and the Administrative Agent legal opinions
relating to the matters described above, which opinions shall be in form and substance, and from
counsel, reasonably satisfactory to TCO and the Administrative Agent and (iv) deliver to TCO and
the Administrative Agent a notice identifying, and upon TCO’s or the Administrative Agent request,
provide a copy of, the consultant’s reports, environmental site assessments or other documents
relied upon by any Tensar Party to determine that any Real Property included in such Collateral
does not contain Hazardous Materials of a form or type or in a quantity or location that could
reasonably be expected to result in a material Environmental Liability or otherwise cause any of
the representatives or warranties contained in Section 1.17 of Schedule 2 to be untrue.

     (c) With respect to any Subsidiary (other than an Excluded Foreign Subsidiary) created or
acquired after the Effective Date (which, for the purposes of this clause (c), shall include any
existing Subsidiary that ceases to be an Excluded Foreign Subsidiary at any time

6

 

after the Effective Date) by Tensar Holdings, Tensar or any of the Subsidiaries, promptly (and, in
any event, within 10 days following such creation or the date of such acquisition) (i) execute and
deliver to TCO such amendments to the Guarantee and Collateral Agreement as TCO or the
Administrative Agent deem necessary or advisable to grant to TCO a valid, perfected first priority
security interest in the Equity Interests in such new Subsidiary that are owned by any Tensar
Party, (ii) deliver to TCO the certificates, if any, representing such Equity Interests, together
with undated stock powers, in blank, executed and delivered by a duly authorized officer of such
Tensar Party, as the case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement (and provide Guarantees of the Obligations) and an Intellectual
Property Security Agreement and (B) to take such actions necessary or, in the reasonable opinion of
TCO or the Administrative Agent, advisable to grant to TCO a perfected first priority security
interest in the Collateral described in the Guarantee and Collateral Agreement and such
Intellectual Property Security Agreement with respect to such new Subsidiary, including the
recording of instruments in the United States Patent and Trademark Office and the United States
Copyright Office and the filing of UCC financing statements in such jurisdictions as may be
required by the Guarantee and Collateral Agreement, such Intellectual Property Security Agreement
or by law or as may be reasonably requested by TCO, (iv) deliver to TCO and the Administrative
Agent legal opinions relating to the matters described above, which opinions shall be in form and
substance, and from counsel, reasonably satisfactory to TCO and the Administrative Agent, and (v)
deliver to TCO and the Administrative Agent a notice identifying, and upon TCO’s or the
Administrative Agent’s request, provide a copy of, the consultant’s reports, environmental site
assessments or other documents relied upon by any Tensar Party to determine that any such real
property owned by such Tensar Party does not contain Hazardous Materials of a form or type or in a
quantity or location that could reasonably be expected to result in a material Environmental
Liability or that acquisition of such Subsidiary will not cause any of the representations and
warranties contained in Section 1.17 of Schedule 2 to be untrue.

     (d) With respect to any Excluded Foreign Subsidiary created or acquired after the Effective
Date by Tensar Holdings or any of its Domestic Subsidiaries, promptly (and, in any event, within
10 days following such creation or the date of such acquisition) (i) execute and deliver to TCO
and the Administrative Agent such amendments to the Guarantee and Collateral Agreement as TCO or
the Administrative Agent deems necessary or advisable in order to grant to TCO a perfected first
priority security interest in the Equity Interests in such new Excluded Foreign Subsidiary that is
owned by any Tensar Party (provided that in no event shall 66-2/3% or more of the total
outstanding voting Equity Interests in any such new Excluded Foreign Subsidiary be required to be
so pledged), (ii) deliver to TCO the certificates representing such Equity Interests, together
with undated stock powers, in blank, executed and delivered by a duly authorized officer of such
Tensar Party and take such other action as may be necessary or, in the reasonable opinion of TCO
or the Administrative Agent, desirable to perfect the security interest of TCO thereon, (iii)
deliver to TCO and the Administrative Agent legal opinions relating to the matters described
above, which opinions shall be in form and substance, and from counsel, reasonably satisfactory to
TCO and the Administrative Agent, and (iv) deliver to TCO and the Administrative Agent a notice
identifying, and upon TCO’s or the Administrative Agent’s request, provide a copy of, the
consultant’s reports, environmental site assessments or other documents relied upon by the Tensar
or any other Tensar Party to determine that any real property owned by such Subsidiary does not
contain Hazardous Materials of a form or type or in

7

 

a quantity or location that could reasonably be expected to result in a material Environmental
Liability or that acquisition of such Subsidiary will not cause any of the representations and
warranties contained in Section 1.17 of Schedule 2 to be untrue.

     SECTION 1.10. Further Assurances. From time to time duly authorize, execute and
deliver, or cause to be duly authorized, executed and delivered, such additional instruments,
certificates, financing statements, agreements or documents, and take all such actions (including
filing UCC and other financing statements), as TCO or the Administrative Agent may reasonably
request, for the purposes of implementing or effectuating the provisions of this Agreement and the
other Lease Documents, or of more fully perfecting or renewing the rights of TCO with respect to
the Collateral (or with respect to any additions thereto or replacements or proceeds or products
thereof or with respect to any other property or assets hereafter acquired by Tensar Holdings,
Tensar or any Subsidiary which may be deemed to be part of the Collateral) pursuant hereto or
thereto. Upon the exercise by TCO or the Administrative Agent of any power, right, privilege or
remedy pursuant to this Agreement or the other Lease Documents which requires any consent,
approval, recording, qualification or authorization of any Governmental Authority, each of Tensar
Holdings and Tensar will execute and deliver, or will cause the execution and delivery of, all
applications, certifications, instruments and other documents and papers that TCO or the
Administrative Agent may be required to obtain from either Tensar Holdings, Tensar or any of the
Subsidiaries for such governmental consent, approval, recording, qualification or authorization.

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

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

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

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

     SECTION 1.15. Patriot Act, Etc. Provide all documentation and other information
required by TCO to satisfy its obligations with respect under “know your customer” and anti-money
laundering rules and regulations, including without limitation the Patriot Act and any other
similar law, rule or regulation of any relevant jurisdiction to the extent requested by TCO

8

 

or the Administrative Agent. No part of the proceeds from the Asset Purchase Agreement or any
proceeds from the sale of Metals or Goods will be used, directly or indirectly, for any payments to
any governmental official or employee, political party, official of a political party, candidate
for political office, or anyone else acting in an official capacity, in order to obtain, retain or
direct business or obtain any improper advantage, in violation of the United States Foreign Corrupt
Practices Act of 1977, as amended.

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

9

 

SCHEDULE 3: AFFIRMATIVE COVENANTS

TABLE OF ANNEXES 

Annex 9: Standards for Delivery

 

 

SCHEDULE 3

ANNEX 9: STANDARDS FOR DELIVERY

     The Administrative Agent shall receive in respect of each Mortgaged Property a mortgagee’s
title insurance policy (or policies) or marked up unconditional binder for such insurance. Each
such policy shall (i) be in an amount satisfactory to the Administrative Agent; (ii) be issued at
ordinary rates; (iii) insure that the Mortgage insured thereby creates a valid first Lien on, and
security interest in, such Mortgaged Property free and clear of all defects and encumbrances,
except as disclosed therein; (iv) name (a) TCO Funding Corp. in its capacity as a party to the
Lease Agreement and the Commodities Purchase Agreement, with an endorsement in favor of the
Administrative Agent or (b) the Administrative Agent, in each case in form and substance as
reasonably satisfactory to the Administrative Agent, as the insured thereunder and; (v) be in the
form of ALTA Loan Policy — 1970 Form B (Amended 10/17/70 and 10/17/84) (or equivalent policies), if
available; (vi) contain such endorsements and affirmative coverage as the Administrative Agent may
reasonably request in form and substance acceptable to the Administrative Agent, including (to the
extent applicable with respect to such Mortgaged Property and available in the jurisdiction in
which such Mortgaged Property is located), the following endorsements: variable rate; survey;
comprehensive; zoning (ALTA 3.1 with parking added); first loss, last dollar and tie-in; access;
separate tax parcel; usury; doing business; subdivision; environmental protection lien; CLTA 119.2
and CLTA 119.3 (for leased Mortgaged Property, only); contiguity; and such other endorsements as
the Administrative Agent shall reasonably require in order to provide insurance against specific
risks identified by the Administrative Agent in connection with such Mortgaged Property; and (vii)
be issued by title companies satisfactory to the Administrative Agent (including any such title
companies acting as co-insurers or reinsurers, at the option of the Administrative Agent) (in each
such case, a ‘Title Insurance Company”). The Administrative Agent shall have received
evidence satisfactory to it that all premiums in respect of each such policy, all charges for
mortgage recording tax, and all related expenses, if any, have been paid. The Administrative Agent
shall have received a copy of all recorded documents referred to, or listed as exceptions to title
in, the title policy or policies referred to above and a copy of all other material documents
affecting the Mortgaged Property.

     If requested by the Administrative Agent, the Administrative Agent shall receive (i) a policy
of flood insurance that (A) covers any parcel of improved Mortgaged Property that is located in a
flood zone, (B) is written in an amount not less than the outstanding principal amount of the
financing obligations secured by such Mortgage that is reasonably allocable to such Mortgaged
Property or the maximum limit of coverage made available with respect to the particular type of
property under the National Flood Insurance Act of 1968, whichever is less, and (C) has a term
ending not later than the Final Rent Paymentand (ii) confirmation that Tensar has received the
notice required pursuant to Section 208(e)(3) of Regulation H of the Board of Governors of the
Federal Reserve System.

 

 

     The Administrative Agent and the Title Insurance Company shall receive maps or plans of an
as-built survey (in each case, a “Survey”) of the sites of the owned Mortgaged Property
intended to be subject to a Mortgage under the Lease/Purchase Facilities Documents certified to the
Administrative Agent and the Title Insurance Company in a manner satisfactory to them, dated not
more than 2 years prior to the delivery of the Mortgage by an independent professional licensed
land surveyor satisfactory to the Administrative Agent and the Title Insurance Company, which maps
or plans and the surveys on which they are based shall be made in accordance with the Minimum
Standard Detail Requirements for Land Title Surveys jointly established and adopted by the American
Land Title Association and the American Congress on Surveying and Mapping in 1997 or 1999 and
meeting the accuracy requirements as defined therein. Without limiting the generality of the
foregoing, each Survey shall (i) be a current “as-built” survey showing the location of any
adjoining streets (including their widths and any pavement or other improvements), easements
(including the recorded information with respect to all recorded instruments), the mean high water
base line or other legal boundary lines of any adjoining bodies of water, fences, zoning or
restriction setback lines, rights-of-way, utility lines to the points of connection and any
encroachments; (ii) locate all means of ingress and egress, certifying the amount of acreage and
square footage, indicate the address of the Mortgaged Property, contain the legal description of
the Mortgaged Property, and also contain a location sketch of the Mortgaged Property; (iii) show
the location of all improvements as constructed on the Mortgaged Property, all of which shall be
within the boundary lines of the Mortgaged Property and conform to all applicable zoning
ordinances, set-back lines and restrictions; (iv) indicate the location of any improvements on the
Mortgaged Property with the dimensions in relations to the lot and building lines; (v) show
measured distances from the improvements to be set back and specified distances from street or
Mortgaged Property lines in the event that deed restrictions, recorded plats or zoning ordinances
require same; (vi) designate all courses and distances referred to in the legal description, and
indicate the names of all adjoining owners on all sides of the Mortgaged Property, to the extent
available; and (vii) indicate the flood zone designation, if any, in which the Mortgaged Property
is located. The legal description of the applicable Mortgaged Property shall be shown on the face
of each survey or affixed thereto, and the same shall conform to the legal description contained in
the title policy described above.

 

 

SCHEDULE 4 

NEGATIVE COVENANTS

 

 

Execution Copy

Schedule 4

Negative Covenants

     Each of Tensar Holdings and Tensar covenants and agrees with TCO and the Administrative Agent
that, so long as this Agreement shall remain in effect and until all Obligations have been paid in
full and this Agreement has been terminated, neither Tensar Holdings nor Tensar will, nor will it
cause or permit any of the Subsidiaries to:

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

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

     (b) Financing Obligations created hereunder and under the other Lease Documents;

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

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

     (e) Financing Obligations of Tensar under (i) the Commodities Purchase Facility in an
aggregate stated amount (excluding profit amount) not to exceed $30,000,000 and Financing
Obligations of the Guarantors under any Guarantees in respect of such Financing Obligations
and any Permitted Refinancing Obligations in respect of any such Financing Obligations and
(ii) the Second Lien Commodities Purchase Facility in aggregate stated amount (excluding
profit amount) not to exceed $84,000,000 and Financing Obligations of the Guarantors under
any Guarantees in respect of such Financing Obligations and any Permitted Refinancing
Obligations in respect of any such Financing Obligations;

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

 

 

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

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

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

     (i) Financing Obligations of Tensar Holdings under the Tensar Holdings Commodities Purchase
Facility and any Permitted Refinancing Obligations in respect of any such Financing Obligations,
provided that any such Financing Obligations are subordinated to the Obligations of Tensar
Holdings under the Lease Documents pursuant to the Tensar Holdings Subordination Agreement;

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

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

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

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

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

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

2

 

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

     (e) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens
arising in the ordinary course of business and securing obligations that are not due and payable or
which are being contested in compliance with Section 1.03 of Schedule 3;

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

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

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

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

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

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

     (1) Liens on the collateral securing obligations under the Second Lien Commodities Purchase
Facility; provided that such Liens are subordinated to the Liens securing the Obligations
in accordance with the terms of the Intercreditor Agreement; and

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

3

 

is not intended by Tensar Holdings or any of its Subsidiaries to provide collateral or
security to the applicable depositary institution or any other person.

     SECTION 1.03. Sale and Lease-Back Transactions. Enter into any arrangement, other
than the transactions contemplated by the Lease Documents and the NAG Sale-Leaseback, directly or
indirectly, with any person whereby it shall sell or transfer any property, real or personal or
mixed, used or useful in its business, whether now owned or hereafter acquired, and thereafter
rent or lease such property or other property which it intends to use for substantially the same
purpose or purposes as the property being sold or transferred unless (a) the sale of such property
is permitted by Section 1.05 of this Schedule 4 and (b) (i) the aggregate amount of any
obligations of Tensar Holdings and its Subsidiaries with respect to operating or capital leases
entered into in connection therewith does not exceed the amount which Tensar Holdings and its
Subsidiaries would be permitted to incur as Capital Lease Obligations under Section 1.01 of this
Schedule 4 and (ii) the Liens arising in connection therewith are permitted by Section 1.02 of
this Schedule 4.

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

     (a) (i) Investments by Tensar Holdings, Holding, Tensar and the Subsidiaries existing
on the date hereof in the Equity Interests of Tensar and the Subsidiaries and (ii)
additional Investments by Tensar Holdings, Holdings, Tensar and the Subsidiaries in the
Equity Interests of Tensar and its Subsidiaries; provided that (A) any such Equity
Interests held by a Tensar Party shall be pledged pursuant to the Guarantee and Collateral
Agreement (subject to the limitation referred to in Section 1.09(d) of Schedule 3 in the
case of any Excluded Foreign Subsidiary), (B) the aggregate amount of Investments by Tensar
Parties in Subsidiaries of Tensar that are not Subsidiary Guarantors shall not exceed
$2,500,000 at any time outstanding and (C) if such Investment shall be in the form of a
loan or advance, such loan or advance shall be unsecured and subordinated to the
Obligations pursuant to an Affiliate Subordination Agreement and, if such loan or advance
shall be made by a Tensar Party, it shall be evidenced by a promissory note pledged to TCO
pursuant to the Guarantee and Collateral Agreement;

     (b) Permitted Investments;

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

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

4

 

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

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

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

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

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

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

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

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

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

     SECTION 1.05. Mergers, Consolidations, Sales of Assets and Acquisitions. Enter into
transaction of merger or consolidation or liquidate, wind-up or dissolve itself (or suffer any

5

 

liquidation or dissolution), or convey, sell, lease or sub-lease (as lessor or sublessor), license
or sub-license (as licensor or sub-licensor), exchange, transfer or otherwise dispose of (in one
transaction or in a series of transactions) all or any part of its business, assets or property of
any kind whatsoever, including the Equity Interests of a Subsidiary, whether real, personal or
mixed and whether tangible or intangible (whether now owned or hereafter acquired) or purchase,
lease or otherwise acquire (in one transaction or a series of transactions) all or any substantial
part of the assets of any other person, except for:

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

     (b) the sale or discount by Tensar or any of its Subsidiaries in each case without recourse
and in the ordinary course of business of overdue accounts receivable arising in the ordinary
course of business, but only in connection with the compromise or collection thereof consistent
with customary industry practice (and not as part of any bulk sale or financing transaction);

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

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

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

     (f) the purchase and sale of commodities by Tensar under the Commodities Purchase Agreement;

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

     (h) if at the time thereof and immediately after giving effect thereto no Event of Default or
Default shall have occurred and be continuing, (w) the merger or consolidation of any wholly owned
Subsidiary into or with Tensar in a transaction in which Tensar is the surviving corporation, (x)
the merger or consolidation of any wholly owned Subsidiary into or with any other wholly owned
Subsidiary in a transaction in which the surviving entity is a wholly owned Subsidiary and no
person other than Tensar or a wholly owned Subsidiary receives any consideration (provided
that if any party to any such transaction is (A) a Tensar Party, the surviving entity of such
transaction shall be a Tensar Party and (B) a Domestic Subsidiary, the surviving entity of such
transaction shall be a Domestic Subsidiary), (y) Permitted Acquisitions by Tensar or any of its
Subsidiaries (otherwise permitted by Section 1.04(h) of this Schedule 4), and (z) the sale, lease,
sub-lease, license, sub-license or other disposition of any part of its business, assets or
property (except any Equity Interests of Tensar) so long as (i) such Asset Sale is for
consideration at least 80% of which is cash (and no portion of the remaining consideration shall
be in the form of Financing Obligations of Tensar any of its Subsidiaries), (ii) such
consideration is at least equal to the fair market value of the assets being sold, transferred,
leased,

6

 

licensed or disposed of and (iii) the fair market value of all assets sold, transferred, leased,
licensed or disposed of pursuant to this clause (z) shall not exceed $40,000,000 in the aggregate.

     SECTION 1.06. Restricted Payments; Restrictive Agreements. (a) Declare or make, or
agree to declare or make, directly or indirectly, any Restricted Payment (including pursuant to any
Synthetic Purchase Agreement), or incur any obligation (contingent or otherwise) to do so;
provided, however, that (i) any wholly-owned Subsidiary may declare and pay
dividends or make other distributions to its equity holders, (ii) so long as no Event of Default or
Default shall have occurred and be continuing or would result therefrom, Tensar may, or may make
distributions to Holdings, and Holdings may make distributions to Tensar Holdings so that Tensar
Holdings may, repurchase its Equity Interests owned by employees of Tensar Holdings or the
Subsidiaries or make payments to employees of Tensar Holdings or the Subsidiaries upon termination
of employment in connection with the exercise of stock options, stock appreciation rights or
similar equity incentives or equity based incentives pursuant to management incentive plans or in
connection with the death or disability of such employees in an aggregate amount not to exceed
$2,000,000 in any fiscal year and (iii) Tensar may make Restricted Payments to Holdings and
Holdings may make Restricted Payments to Tensar Holdings (x) in an amount not to exceed, when taken
together with the aggregate amount of all loans or advances made pursuant to Section 1.04(1) of
this Schedule 4 for such purpose, $350,000 in any fiscal year to the extent necessary to pay
general corporate and overhead expenses incurred by Tensar Holdings in the ordinary course of
business and (y) in an amount necessary to pay the Tax liabilities of Tensar Holdings directly
attributable to (or arising as a result of) the operations of Tensar and its Subsidiaries;
provided that (A) the amount of such dividends pursuant to clause (iii)(y) shall not exceed
the amount that Tensar and its Subsidiaries would be required to pay in respect of Federal, State
and local Taxes were Tensar and its Subsidiaries to pay such Taxes as stand-alone taxpayers and (B)
all Restricted Payments made to Tensar Holdings pursuant to clause (iii) shall be used by Tensar
Holdings for the purpose specified herein within 20 days of the receipt thereof.

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

7

 

(F) clause (i) of the foregoing shall not apply to customary provisions in leases, licenses and
other contracts restricting the assignment thereof.

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

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

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

     (c) Enter into any Hedging Agreement other than (a) any such agreement or arrangement entered
into in the ordinary course of business and consistent with prudent business

8

 

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

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

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

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

9

 

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

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

The amount of permitted Capital Expenditures set forth above in respect of any fiscal year
commencing with the fiscal year ending on December 31, 2006, shall be increased (but not
decreased) by 50% of (a) the amount of unused permitted Capital Expenditures for the immediately
preceding fiscal year less (b) an amount equal to unused Capital Expenditures carried forward to
such preceding fiscal year.

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

	 	 	 	 	 
	Fiscal Quarter Ended:	 	Ratio	 
	December 31, 2005
	 	 	1.50:1.00	 
	March 31, 2006
	 	 	1.50:1.00	 
	June 30, 2006
	 	 	1.50:1.00	 
	September 30, 2006
	 	 	1.50:1.00	 
	December 31, 2006
	 	 	1.75:1.00	 
	March 31, 2007
	 	 	1.75:1.00	 
	June 30, 2007
	 	 	1.75:1.00	 
	September 30, 2007
	 	 	1.75:1.00	 
	December 31, 2007
	 	 	2.00:1.00	 
	March 31, 2008
	 	 	2.00:1.00	 
	June 30, 2008
	 	 	2.00:1.00	 
	September 30, 2008
	 	 	2.00:1.00	 
	December 31, 2008
	 	 	2.25:1.00	 
	March 31, 2009
	 	 	2.25:1.00	 
	June 30, 2009
	 	 	2.25:1.00	 
	September 30, 2009
	 	 	2.25:1.00	 
	December 31, 2009
	 	 	2.50:1.00	 
	March 31, 2010
	 	 	2.50:1.00	 
	June 30, 2010
	 	 	2.50:1.00	 
	September 30, 2010
	 	 	2.50:1.00	 
	December 31, 2010
and each fiscal
quarter
thereafter until 2012
	 	 	3.00:1.00	 

10

 

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

	 	 	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005
	 	 	6.75:1.00	 
	March 31,2006
	 	 	6.75:1.00	 
	June 30, 2006
	 	 	6.75:1.00	 
	September 30, 2006
	 	 	6.50:1.00	 
	December 31, 2006
	 	 	6.25:1.00	 
	March 31, 2007
	 	 	6.25:1.00	 
	June 30, 2007
	 	 	5.75:1.00	 
	September 30, 2007
	 	 	5.50:1.00	 
	December 31, 2007
	 	 	5.25:1.00	 
	March 31,2008
	 	 	5.25:1.00	 
	June 30, 2008
	 	 	5.25:1.00	 
	September 30, 2008
	 	 	5.25:1.00	 
	December 31, 2008
	 	 	4.75:1.00	 
	March 31, 2009
	 	 	4.75:1.00	 
	June 30, 2009
	 	 	4.75:1.00	 
	September 30, 2009
	 	 	4.75:1.00	 
	December 31, 2009
	 	 	4.25:1.00	 
	March 31, 2010
	 	 	4.25:1.00	 
	June 30, 2010
	 	 	4.25:1.00	 
	September 30, 2010
	 	 	4.25:1.00	 
	December 31, 2010
	 	 	3.75:1.00	 
	March 31, 2011
	 	 	3.75:1.00	 
	June 30, 2011
	 	 	3.75:1.00	 
	September 30, 2011
	 	 	3.75:1.00	 
	December 31,2011
	 	 	3.25:1.00	 
	March 31, 2012
	 	 	3.25:1.00	 
	June 30, 2012
	 	 	3.25:1.00	 
	September 30, 2012
	 	 	3.25:1.00	 
	December 31, 2012
	 	 	2.75:1.00	 

11

 

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

	 	 	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005
	 	 	1.25:1.00	 
	March 31, 2006
	 	 	1.25:1.00	 
	June 30, 2006
	 	 	1.25:1.00	 
	September 30, 2006
	 	 	1.25:1.00	 
	December 31,2006
	 	 	1.25:1.00	 
	March 31, 2007
	 	 	1.25:1.00	 
	June 30, 2007
	 	 	1.25:1.00	 
	September 30, 2007
	 	 	1.25:1.00	 
	December 31, 2007
	 	 	1.35:1.00	 
	March 31, 2008
	 	 	1.35:1.00	 
	June 30, 2008
	 	 	1.35:1.00	 
	September 30, 2008
	 	 	1.35:1.00	 
	December 31, 2008
	 	 	1.40:1.00	 
	March 31, 2009
	 	 	1.40:1.00	 
	June 30, 2009
	 	 	1.40:1.00	 
	September 30, 2009
	 	 	1.40:1.00	 
	December 31, 2009 and each fiscal quarter
thereafter through 2012
	 	 	1.50:1.00	 

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

	 	 	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2005
	 	 	4.50:1.00	 
	March 31, 2006
	 	 	4.50:1.00	 
	June 30, 2006
	 	 	4.50:1.00	 
	September 30, 2006
	 	 	4.50:1.00	 
	December 31, 2006
	 	 	4.00:1.00	 
	March 31, 2007
	 	 	4.00:1.00	 
	June 30, 2007
	 	 	3.75:1.00	 
	September 30, 2007
	 	 	3.50:1.00	 

12

 

	 	 	 	 	 
	Fiscal Quarter Ended:	 	Ratio
	December 31, 2007
	 	 	3.25:1.00	 
	March 31, 2008
	 	 	3.25:1.00	 
	June 30, 2008
	 	 	3.00:1.00	 
	September 30, 2008
	 	 	3.00:1.00	 
	December 31, 2008
	 	 	2.75:1.00	 
	March 31, 2009
	 	 	2.75:1.00	 
	June 30, 2009
	 	 	2.75:1.00	 
	September 30, 2009
	 	 	2.75:1.00	 
	December 31, 2009
	 	 	2.50:1.00	 
	March 31, 2010
	 	 	2.50:1.00	 
	June 30, 2010
	 	 	2.50:1.00	 
	September 30, 2010
	 	 	2.50:1.00	 
	December 31, 2010
	 	 	2.25:1.00	 
	March 31, 2011
	 	 	2.25:1.00	 
	June 30, 2011
	 	 	2.25:1.00	 
	September 30, 2011
	 	 	2.25:1.00	 
	December 31, 2011
	 	 	2.00:1.00	 
	March 31, 2012
	 	 	2.00:1.00	 
	June 30, 2012
	 	 	2.00:1.00	 
	September 30, 2012
	 	 	2.00:1.00	 
	December 31, 2012
	 	 	1.75:1.00	 

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

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

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

13

 

SCHEDULE 5 

EVENTS OF DEFAULT

 

Execution Copy

Schedule 5 

Events of Default

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

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

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

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

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

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

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

     (g) an involuntary proceeding shall be commenced or an involuntary petition shall be
filed in a court of competent jurisdiction seeking (i) relief in respect of Tensar Holdings,
Holdings, Tensar or any Material Subsidiary, or of a substantial part of the property or
assets of
Tensar Holdings, Holdings, Tensar or such Material Subsidiary, under Title 11 of the United

Schedule 5, Events of Default

 

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

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

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

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

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

     (1) any Lien purported to be created under any Security Document shall cease to be, or shall
be asserted by any Tensar Party not to be, a valid, perfected and, with respect to TCO, first
priority (except as otherwise expressly provided in this Agreement or such Security

Schedule 5, Events of Default

2

 

Document) Lien on any material Collateral covered thereby, except to the extent that any such
loss of perfection or priority results from the failure of TCO (or it lenders) to maintain
possession of certificates representing Equity Interests pledged under the Guarantee and Collateral
Agreement;

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

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

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

then, and in every such event (other than an event with respect to Tensar Holdings or Tensar
described in clause (g) or (h) above), and at any time thereafter during the continuance of such
event TCO or the Administrative Agent may exercise the Default Option and require Tensar to
purchase (and upon such exercise Tensar shall be obligated to purchase and pay for) all of the
Leased Assets and terminate this Agreement with respect to such Leased Assets in accordance with
the terms of the Put Option Letter and all other liabilities of Tensar accrued hereunder and under
any other Lease Document shall become forthwith due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly waived by Tensar and
Tensar Holdings, anything contained herein or in any other Lease Document to the contrary
notwithstanding, and TCO and the Administrative Agent shall have the right to take all or any
actions and exercise any remedies available to a secured party under the Security Documents or
applicable law or in equity; and in any event with respect to Tensar Holdings or Tensar described
in clause (g) or (h) above, this Agreement will automatically terminate and Tensar will be
obligated to purchase all of the Leased Assets in accordance with the terms of the Put Option
Letter and all other liabilities of Tensar and Tensar Holdings accrued hereunder and under any
other Lease Document shall automatically become due and payable, without presentment, demand,
protest or any other notice of any kind, all of which are hereby expressly waived by Tensar
Holdings and Tensar, anything contained herein or in any other Lease Document to the contrary
notwithstanding, and TCO and the Administrative Agent shall have the right to take all or any
actions and exercise any remedies available to a secured party under the Security Documents or
applicable law or in equity.

Schedule 5, Events of Default

3

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