Document:

Credit Agreement

    Exhibit
      10.1

    

    

    

     

    
      

      

    

     

    CREDIT
      AGREEMENT

     

    Dated
      as
      of December 19, 2006

     

    by
      and
      among

     

    MILACRON
      INC. AND EACH OF THE

    OTHER
      BORROWERS SIGNATORY HERETO,

     

    as
      Borrowers,

     

    CERTAIN
      OTHER SUBSIDIARIES OF MILACRON INC. SIGNATORY HERETO,

     

    as
      Credit
      Parties,

     

    THE
      LENDERS SIGNATORY HERETO FROM TIME TO TIME,

     

    as
      Lenders,

     

    and

     

    GENERAL
      ELECTRIC CAPITAL CORPORATION,

     

    as
      Administrative Agent,

     

    and

     

    GE
      CAPITAL MARKETS, INC.,

     

    as
      Lead
      Arranger

     

    
 

    
      

      

    

     

     

     

     

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    TABLE
      OF CONTENTS

     

    
      

        
          	 	 	Page 
	 	 	 
	
                  1.

                	
                  AMOUNT
                    AND TERMS OF
                    CREDIT

                	
                  2

                
	 	
                  1.1

                	
                  Credit
                    Facilities

                	
                  2

                
	 	
                  1.2

                	
                  Letters
                    of Credit

                	
                  7

                
	 	
                  1.3

                	
                  Prepayments

                	
                  9

                
	 	
                  1.4

                	
                  Use
                    of Proceeds

                	
                  11

                
	 	
                  1.5

                	
                  Interest
                    and Applicable Margins

                	
                  11

                
	 	
                  1.6

                	
                  Eligible
                    Accounts

                	
                  15

                
	 	
                  1.7

                	
                  Eligible
                    Inventory

                	
                  18

                
	 	
                  1.8

                	
                  Cash
                    Management Systems

                	
                  21

                
	 	
                  1.9

                	
                  Fees

                	
                  21

                
	 	
                  1.10

                	
                  Receipt
                    of Payments

                	
                  22

                
	 	
                  1.11

                	
                  Application
                    and Allocation of Payments

                	
                  22

                
	 	
                  1.12

                	
                  Loan
                    Account and Accounting

                	
                  23

                
	 	
                  1.13

                	
                  Indemnity

                	
                  24

                
	 	
                  1.14

                	
                  Intentionally
                    Omitted

                	
                  25

                
	 	
                  1.15

                	
                  Taxes

                	
                  25

                
	 	
                  1.16

                	
                  Capital
                    Adequacy; Increased Costs; Illegality

                	
                  26

                
	 	
                  1.17

                	
                  Single
                    Loan

                	
                  27

                
	 	 	 
	
                  2.

                	
                  CONDITIONS
                    PRECEDENT

                	
                  28

                
	 	 	 	 
	 	
                  2.1

                	
                  Conditions
                    to the Initial Loans

                	
                  28

                
	 	
                  2.2

                	
                  Further
                    Conditions to Each Loan

                	
                  28

                
	 	
                  2.3

                	
                  Further
                    Conditions to Each
                    Export-Related Advance

                	
                  29

                
	 	 	 
	
                  3.

                	
                  REPRESENTATIONS
                    AND
                    WARRANTIES

                	
                  30

                
	 	 	 	 
	 	
                  3.1

                	
                  Organization,
                    Good Standing, Etc.

                	
                  30

                
	 	
                  3.2

                	
                  Authorization,
                    Etc.

                	
                  30

                
	 	
                  3.3

                	
                  Governmental
                    Approvals

                	
                  31

                
	 	
                  3.4

                	
                  Enforceability
                    of Loan
                    Documents

                	
                  31

                
	 	
                  3.5

                	
                  Subsidiaries

                	
                  31

                
	 	
                  3.6

                	
                  Litigation;
                    Commercial Tort
                    Claims

                	
                  31

                
	 	
                  3.7

                	
                  Financial
                    Condition

                	
                  31

                
	 	
                  3.8

                	
                  Compliance
                    with Law, Etc.

                	
                  32

                
	 	
                  3.9

                	
                  ERISA

                	
                  32

                
	 	
                  3.10

                	
                  Taxes,
                    Etc.

                	
                  33

                
	 	
                  3.11

                	
                  Regulations
                    T, U and
                    X

                	
                  33

                
	 	
                  3.12

                	
                  Nature
                    of Business

                	
                  33

                
	 	
                  3.13

                	
                  Adverse
                    Agreements,
                    Etc.

                	
                  34

                
	 	
                  3.14

                	
                  Permits,
                    Etc.

                	
                  34

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	 	
                  3.15

                	
                  Properties

                	
                  34

                
	 	
                  3.16

                	
                  Full
                    Disclosure

                	
                  35

                
	 	
                  3.17

                	
                  Operating
                    Lease
                    Obligations

                	
                  35

                
	 	
                  3.18

                	
                  Environmental
                    Matters

                	
                  35

                
	 	
                  3.19

                	
                  Insurance

                	
                  36

                
	 	
                  3.20

                	
                  Use
                    of Proceeds

                	
                  37

                
	 	
                  3.21

                	
                  Location
                    of Bank
                    Accounts

                	
                  37

                
	 	
                  3.22

                	
                  Intellectual
                    Property

                	
                  37

                
	 	
                  3.23

                	
                  Material
                    Contracts

                	
                  38

                
	 	
                  3.24

                	
                  Holding
                    Company and Investment
                    Company Acts

                	
                  38

                
	 	
                  3.25

                	
                  Employee
                    and Labor
                    Matters

                	
                  38

                
	 	
                  3.26

                	
                  Customers
                    and
                    Suppliers

                	
                  38

                
	 	
                  3.27

                	
                  Name;
                    Jurisdiction of
                    Organization; Organizational ID Number; Chief Place of Business;
                    Chief
                    Executive Office; FEIN

                	
                  39

                
	 	
                  3.28

                	
                  Tradenames

                	
                  39

                
	 	
                  3.29

                	
                  Locations
                    of
                    Collateral

                	
                  39

                
	 	
                  3.30

                	
                  Security
                    Interests

                	
                  39

                
	 	
                  3.31

                	
                  [Intentionally
                    Omitted]

                	40
	 	
                  3.32

                	
                  Schedules

                	
                  40

                
	 	
                  3.33

                	
                  Canadian
                    Pension and Benefit Plan Matters

                	
                  40

                
	 	 	 
	
                  4.

                	
                  FINANCIAL
                    STATEMENTS AND
                    INFORMATION

                	
                  40

                
	 	 	 	 
	 	
                  4.1

                	
                  Reports
                    and Notices

                	
                  40

                
	 	
                  4.2

                	
                  Communication
                    with Accountants

                	
                  40

                
	 	 	 
	
                  5.

                	
                  AFFIRMATIVE
                    COVENANTS

                	
                  41

                
	 	 	 
	 	
                  5.1

                	
                  Additional
                    Guaranties and Collateral
                    Security

                	
                  41

                
	 	
                  5.2

                	
                  Compliance
                    with Laws, Etc.

                	
                  42

                
	 	
                  5.3

                	
                  Preservation
                    of Existence, Etc.

                	
                  42

                
	 	
                  5.4

                	
                  Keeping
                    of Records and Books of Account.

                	
                  42

                
	 	
                  5.5

                	
                  Inspection
                    Rights

                	
                  43

                
	 	
                  5.6

                	
                  Maintenance
                    of Properties, Etc.

                	
                  43

                
	 	
                  5.7

                	
                  Maintenance
                    of
                    Insurance

                	
                  43

                
	 	
                  5.8

                	
                  Obtaining
                    of Permits, Etc.

                	
                  44

                
	 	
                  5.9

                	
                  Environmental

                	
                  44

                
	 	
                  5.10

                	
                  Further
                    Assurances

                	
                  45

                
	 	
                  5.11

                	
                  Change
                    in Collateral; Collateral
                    Records

                	
                  46

                
	 	
                  5.12

                	
                  Landlord
                    Waivers; Collateral Access Agreements

                	
                  46

                
	 	
                  5.13

                	
                  Fiscal
                    Year

                	
                  46

                
	 	
                  5.14

                	
                  Borrowing
                    Base

                	
                  47

                
	 	
                  5.15

                	
                  Use
                    of Proceeds

                	
                  47

                
	 	
                  5.16

                	
                  Conference
                    Calls

                	
                  47

                
	 	
                  5.17

                	
                  Misplaced
                    Notes

                	
                  47

                
	 	
                  5.18

                	
                  Canadian
                    Pension and Benefit Plans

                	
                  47

                
	 	
                  5.19

                	
                  After
                    Acquired Real
                    Property

                	
                  48

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

         

         

        
          	 	
                  5.20

                	
                  Senior
                    Secured Priority
                    Collateral

                	
                  48

                
	 	
                  5.21

                	
                  Intentionally
                    Omitted

                	
                  49

                
	 	
                  5.22

                	
                  Accounts
                    Documentation

                	
                  49

                
	 	
                  5.23

                	
                  Status
                    of Accounts and Other Collateral

                	
                  49

                
	 	
                  5.24

                	
                  Collateral
                    Custodian

                	
                  50

                
	 	
                  5.25

                	
                  Accounts
                    Covenants

                	
                  50

                
	 	
                  5.26

                	
                  Inventory
                    Covenants

                	
                  51

                
	 	 	 
	
                  6.

                	
                  NEGATIVE
                    COVENANTS

                	
                  52

                
	 	 	 
	 	
                  6.1

                	
                  Liens,
                    Etc.

                	
                  52

                
	 	
                  6.2

                	
                  Indebtedness

                	
                  52

                
	 	
                  6.3

                	
                  Fundamental
                    Changes;
                    Dispositions

                	
                  52

                
	 	
                  6.4

                	
                  Change
                    in Nature of
                    Business

                	
                  54

                
	 	
                  6.5

                	
                  Loans,
                    Advances, Investments, Etc.

                	
                  54

                
	 	
                  6.6

                	
                  Intentionally
                    Omitted

                	
                  56

                
	 	
                  6.7

                	
                  Restricted
                    Payments

                	
                  56

                
	 	
                  6.8

                	
                  Federal
                    Reserve
                    Regulations

                	
                  57

                
	 	
                  6.9

                	
                  Transactions
                    with
                    Affiliates

                	
                  57

                
	 	
                  6.10

                	
                  Limitations
                    on Dividends and Other
                    Payment Restrictions Affecting Subsidiaries

                	
                  58

                
	 	
                  6.11

                	
                  Limitation
                    on Issuance of
                    Stock

                	
                  59

                
	 	
                  6.12

                	
                  Modifications
                    of Indebtedness, Organizational Documents and Certain Other Agreements;
                    Etc.

                	
                  59

                
	 	
                  6.13

                	
                  Investment
                    Company Act of
                    1940

                	
                  61

                
	 	
                  6.14

                	
                  Compromise
                    of
                    Accounts

                	
                  61

                
	 	
                  6.15

                	
                  ERISA

                	
                  61

                
	 	
                  6.16

                	
                  Environmental

                	
                  62

                
	 	
                  6.17

                	
                  Certain
                    Agreements

                	
                  62

                
	 	
                  6.18

                	
                  Misplaced
                    Notes

                	
                  62

                
	 	
                  6.19

                	
                  Wholly-Owned
                    Subsidiaries

                	
                  62

                
	 	
                  6.20

                	
                  Restrictions
                    in Organizational
                    Documents

                	
                  62

                
	 	
                  6.21

                	
                  Financial
                    Covenants

                	
                  62

                
	 	 	 
	
                  7.

                	
                  TERM

                	
                  62

                
	 	 	 
	 	
                  7.1

                	
                  Termination

                	
                  62

                
	 	
                  7.2

                	
                  Survival
                    of Obligations Upon Termination of Financing
                    Arrangements

                	
                  62

                
	 	 	 
	
                  8.

                	
                  EVENTS
                    OF DEFAULT; RIGHTS AND
                    REMEDIES

                	
                  63

                
	 	 	 
	 	
                  8.1

                	
                  Events
                    of Default

                	
                  63

                
	 	
                  8.2

                	
                  Remedies

                	
                  66

                
	 	
                  8.3

                	
                  Waivers
                    by Credit Parties

                	
                  67

                

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

           

           

        

        
          	
                  9.

                	
                  ASSIGNMENT
                    AND PARTICIPATIONS; APPOINTMENT
                    OF AGENT

                	
                  67

                
	 	 	 
	 	
                  9.1

                	
                  Assignment
                    and Participations

                	
                  67

                
	 	
                  9.2

                	
                  Appointment
                    of Agent

                	
                  70

                
	 	
                  9.3

                	
                  Agent’s
                    Reliance, Etc.

                	
                  70

                
	 	
                  9.4

                	
                  GE
                    Capital and Affiliates

                	
                  71

                
	 	
                  9.5

                	
                  Lender
                    Credit Decision

                	
                  71

                
	 	
                  9.6

                	
                  Indemnification

                	
                  71

                
	 	
                  9.7

                	
                  Successor
                    Agent

                	
                  72

                
	 	
                  9.8

                	
                  Setoff
                    and Sharing of Payments

                	
                  72

                
	 	
                  9.9

                	
                  Advances;
                    Payments; Non-Funding Lenders; Information; Actions in
                    Concert

                	
                  73

                
	 	 	 
	
                  10.

                	
                  SUCCESSORS
                    AND
                    ASSIGNS

                	
                  77

                
	 	 	 
	 	
                  10.1

                	
                  Successors
                    and Assigns

                	
                  77

                
	 	 	 
	
                  11.

                	
                  MISCELLANEOUS

                	
                  77

                
	 	 	 
	 	
                  11.1

                	
                  Complete
                    Agreement; Modification of Agreement

                	
                  77

                
	 	
                  11.2

                	
                  Amendments
                    and Waivers

                	
                  77

                
	 	
                  11.3

                	
                  Fees
                    and Expenses

                	
                  79

                
	 	
                  11.4

                	
                  No
                    Waiver

                	
                  80

                
	 	
                  11.5

                	
                  Remedies

                	
                  81

                
	 	
                  11.6

                	
                  Severability

                	
                  81

                
	 	
                  11.7

                	
                  Conflict
                    of Terms

                	
                  81

                
	 	
                  11.8

                	
                  Confidentiality

                	
                  81

                
	 	
                  11.9

                	
                  GOVERNING
                    LAW

                	
                  81

                
	 	
                  11.10

                	
                  Notices

                	
                  82

                
	 	
                  11.11

                	
                  Section
                    Titles

                	
                  83

                
	 	
                  11.12

                	
                  Counterparts

                	
                  83

                
	 	
                  11.13

                	
                  WAIVER
                    OF JURY TRIAL

                	
                  83

                
	 	
                  11.14

                	
                  Press
                    Releases and Related Matters

                	
                  84

                
	 	
                  11.15

                	
                  Reinstatement

                	
                  84

                
	 	
                  11.16

                	
                  Advice
                    of Counsel

                	
                  84

                
	 	
                  11.17

                	
                  No
                    Strict Construction

                	
                  84

                
	 	 	 
	
                  12.

                	
                  CROSS-GUARANTY

                	
                  84

                
	 	 	 
	 	
                  12.1

                	
                  Cross-Guaranty

                	
                  84

                
	 	
                  12.2

                	
                  Waivers
                    by Borrowers

                	
                  85

                
	 	
                  12.3

                	
                  Benefit
                    of Guaranty

                	
                  85

                
	 	
                  12.4

                	
                  Subrogation,
                    Etc.

                	
                  85

                
	 	
                  12.5

                	
                  Election
                    of Remedies

                	
                  86

                
	 	
                  12.6

                	
                  Limitation

                	
                  86

                
	 	
                  12.7

                	
                  Contribution
                    with Respect to Guaranty Obligations

                	
                  87

                
	 	
                  12.8

                	
                  Liability
                    Cumulative

                	
                  87

                

        

      

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

    INDEX
      OF APPENDICES

    

    

    
      	
              Annex
                A (Recitals)

            	
              -

            	
              Definitions

            
	
              Annex
                B (Section
                1.2)

            	
              -

            	
              Letters
                of Credit

            
	
              Annex
                C (Section
                1.8)

            	
              -

            	
              Cash
                Management System

            
	
              Annex
                D (Section
                2.1(a))

            	
              -

            	
              Closing
                Checklist

            
	
              Annex
                E (Section
                4.1(a))

            	
              -

            	
              Financial
                Statements and Projections -- Reporting

            
	
              Annex
                F (Section
                4.1(b))

            	
              -

            	
              Collateral
                Reports

            
	
              Annex
                G (Section
                6.10)

            	
              -

            	
              Financial
                Covenants

            
	
              Annex
                H (Section
                9.9(a))

            	
              -

            	
              Lenders’
                Wire Transfer Information

            
	
              Annex
                I (Section
                11.10)

            	
              -

            	
              Notice
                Addresses

            
	
              Annex
                J (from Annex A -

              Commitments
                definition)

            	
              -

            	
              Commitments
                as of Closing Date

            

    

    

    
      	
              Exhibit
                1.1(a)(i)

            	
              -

            	
              Form
                of Notice of Revolving Credit Advance

            
	
              Exhibit
                1.1(a)(ii)

            	
              -

            	
              Form
                of Revolving Note

            
	
              Exhibit
                1.1(a)(iii)

            	
              -

            	
              Form
                of Notice of Permitted Overadvance

            
	
              Exhibit
                1.1(c)(ii)

            	
              -

            	
              Form
                of Swing Line Note

            
	
              Exhibit
                1.1(d)(i)

            	
              -

            	
              Form
                of Notice of Export-Related Advance

            
	
              Exhibit
                1.1(d)(ii)

            	
              -

            	
              Form
                of Export-Related Loan Note

            
	
              Exhibit
                1.5(e)

            	
              -

            	
              Form
                of Notice of Conversion/Continuation

            
	
              Exhibit
                1.6

            	
              -

            	
              Bill
                and Hold Policy

            
	
              Exhibit
                4.1(b)

            	
              -

            	
              Form
                of Borrowing Base Certificate

            
	
              Exhibit
                9.1(a)

            	
              -

            	
              Form
                of Assignment Agreement

            
	
              Exhibit
                A-1

            	
              -

            	
              Form
                of Ex-Im Bank Borrower Agreement

            
	
              Exhibit
                A-2

            	
              -

            	
              Form
                of Intercompany Subordination Agreement

            
	
              Exhibit
                B-1

            	
              -

            	
              Application
                for Standby Letter of Credit

            

    

    

    
      	
              Schedule
                A-1

            	
              -

            	
              Designated
                Real Property and Assets

            
	
              Schedule
                1.1

            	
              -

            	
              Agent’s
                Representatives

            
	
              Schedule
                1.4

            	
              -

            	
              Sources
                and Uses; Funds Flow Memorandum

            
	
              Schedule
                2.1

            	
              -

            	
              Required
                Consents and Approvals

            
	
              Schedule
                3.5

            	
              -

            	
              Subsidiaries

            
	
              Schedule
                3.6

            	
              -

            	
              Litigation;
                Commercial Tort Claims

            
	
              Schedule
                3.9

            	
              -

            	
              ERISA

            
	
              Schedule
                3.15

            	
              -

            	
              Real
                Property

            
	
              Schedule
                3.17

            	
              -

            	
              Operating
                Lease Obligations

            
	
              Schedule
                3.18

            	
              -

            	
              Environmental
                Matters

            
	
              Schedule
                3.19

            	
              -

            	
              Insurance

            
	
              Schedule
                3.21

            	
              -

            	
              Bank
                Accounts

            
	
              Schedule
                3.22

            	
              -

            	
              Intellectual
                Property

            
	
              Schedule
                3.23

            	
              -

            	
              Material
                Contracts

            
	
              Schedule
                3.27

            	
              -

            	
              Name;
                Jurisdiction of Organization; Organizational ID Number; Chief Place
                of
                Business; Chief Executive Office;
                FEIN

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      	
              Schedule
                3.28

            	
              -

            	
              Tradenames

            
	
              Schedule
                3.29

            	
              -

            	
              Collateral
                Locations

            
	
              Schedule
                6.1

            	
              -

            	
              Existing
                Liens

            
	
              Schedule
                6.2

            	
              -

            	
              Existing
                Indebtedness

            
	
              Schedule
                6.5

            	
              -

            	
              Existing
                Investments

            
	
              Schedule
                6.10

            	
              -

            	
              Limitations
                on Dividends and Other Payment
                Restrictions

            

    

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    

      This
        CREDIT AGREEMENT (this “Agreement”),
        dated
        as of December 19, 2006, by and among MILACRON INC., a Delaware corporation
        (“Parent”),
        CIMCOOL INDUSTRIAL PRODUCTS INC., a Delaware corporation (“Cimcool”),
        D-M-E
        MANUFACTURING INC., a Delaware corporation (“D-M-E
        Manufacturing”),
        D-M-E
        U.S.A. Inc., a Michigan corporation (“D-M-E
        USA”),
        MILACRON INDUSTRIAL PRODUCTS, INC., a Michigan corporation (“Industrial
        Products”),
        MILACRON MARKETING COMPANY, an Ohio corporation (“Marketing”),
        MILACRON PLASTICS TECHNOLOGIES GROUP INC., a Delaware corporation (“Plastics”),
        NICKERSON MACHINERY CHICAGO INC., an Illinois corporation (“Nickerson”),
        NORTHERN SUPPLY COMPANY, INC., a Minnesota corporation (“Northern”),
        OAK
        INTERNATIONAL, INC., a Michigan corporation (“Oak
        International”),
        PLIERS INTERNATIONAL INC., a Delaware corporation (“Pliers”),
        UNILOY MILACRON INC., a Delaware corporation (“Uniloy”),
        UNILOY MILACRON U.S.A. INC., a Michigan corporation (“Uniloy
        USA”),
        and
        D-M-E COMPANY, a Delaware corporation (“D-M-E
        Company”)
        (Parent, Cimcool, D-M-E Manufacturing, D-M-E USA, Industrial Products,
        Marketing, Plastics, Nickerson, Northern, Oak International, Pliers, Uniloy,
        Uniloy USA and D-M-E Company are collectively referred to herein as the
“Borrowers”
and
        individually as a “Borrower”);
        the
        other Credit Parties signatory hereto as Guarantors; GENERAL ELECTRIC CAPITAL
        CORPORATION, a Delaware corporation (in its individual capacity, “GE
        Capital”),
        for
        itself, as Lender, and as administrative agent for Lenders (“Agent”),
        and
        the other Lenders signatory hereto from time to time.

       

      

      RECITALS

       

      WHEREAS,
        Borrowers have requested that Lenders extend revolving credit facilities
        to
        Borrowers of up to One Hundred Five Million Dollars ($105,000,000) in the
        aggregate for the purpose of refinancing certain indebtedness of the Credit
        Parties, to pay fees and expenses related thereto and to provide (a) working
        capital financing for the Credit Parties, (b) funds for other general corporate
        purposes of the Credit Parties (including in the form of Letters of Credit)
        and
        (c) funds for other purposes permitted hereunder; and for these purposes,
        Lenders are willing to make certain loans and other extensions of credit
        to
        Borrowers of up to such amount upon the terms and conditions set forth herein;
        and

       

      WHEREAS,
        Borrowers have agreed to secure all of their Obligations under the Loan
        Documents by granting to Agent, for the benefit of Agent and Lenders, a security
        interest in and lien upon their existing and after-acquired Collateral (as
        defined herein); and

       

      WHEREAS,
        capitalized terms used in this Agreement shall have the meanings ascribed
        to
        them in Annex
        A
        and, for
        purposes of this Agreement and the other Loan Documents, the rules of
        construction set forth in Annex A
        shall
        govern. All Annexes, Schedules, Exhibits and other attachments (collectively,
        “Appendices”)
        hereto, or expressly identified to this Agreement, are incorporated herein
        by
        reference, and taken together with this Agreement, shall constitute but a
        single
        agreement. These Recitals shall be construed as part of the
        Agreement.

       

       

      
        
          
          

        

        
          
          

          
            

          

        

        
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      NOW,
        THEREFORE, in consideration of the premises and the mutual covenants hereinafter
        contained, and for other good and valuable consideration, the parties hereto
        agree as follows:

       

      1. 
        AMOUNT
        AND TERMS OF CREDIT

       

      1.1    Credit
        Facilities.

       

      (a)    Revolving
        Credit Facility.

       

      (i)    Subject
        to the terms and conditions hereof, each Revolving Lender agrees to make
        available to Borrowers at any time and from time to time on and after the
        Closing Date until the Commitment Termination Date its Pro Rata Share of
        advances (each, a “Revolving
        Credit Advance”).
        The
        Pro Rata Share of the Revolving Loan of any Revolving Lender shall not at
        any
        time exceed its separate Revolving Loan Commitment (less its Pro Rata Share
        of
        the Export-Related Credit Participations). The obligations of each Revolving
        Lender hereunder shall be several and not joint. Until the Commitment
        Termination Date, Borrowers may borrow, repay and reborrow under this
Section
        1.1(a);
        provided;
        however,
        except
        as set forth in Section
        1.1(a)(iii),
        the
        amount of any Revolving Credit Advance to be made at any time shall not exceed
        Primary Borrowing Availability at such time. Primary Borrowing Availability
        may
        be reduced by Reserves imposed by Agent in its Permitted Discretion. Each
        Revolving Credit Advance shall be made on notice by Borrower Representative
        on
        behalf of the applicable Borrower to one of the representatives of Agent
        identified in Schedule
        1.1
        at the
        address specified therein. Any such notice must be given no later than (1)
        noon
        (New York time) on the Business Day of the proposed Revolving Credit Advance,
        in
        the case of an Index Rate Loan, or (2) noon (New York time) on the date which
        is
        three (3) Business Days prior to the proposed Revolving Credit Advance, in
        the
        case of a LIBOR Loan. Each such notice (a ”Notice
        of Revolving Credit Advance”)
        must
        be given in writing (by telecopy or overnight courier) substantially in the
        form
        of Exhibit
        1.1(a)(i),
        and
        shall include the information required in such Exhibit. If any Borrower desires
        to have the Revolving Credit Advances bear interest by reference to a LIBOR
        Rate, Borrower Representative must comply with Section
        1.5(e).

       

      (ii)    Each
        Borrower shall, if requested by a Revolving Lender, jointly execute and deliver
        to such Revolving Lender a note to evidence the Revolving Loan Commitment
        of
        that Revolving Lender. Each note shall be in the principal amount of the
        Revolving Loan Commitment of the applicable Revolving Lender, dated the Closing
        Date (or such “effective date” as set forth under any Assignment Agreement) and
        substantially in the form of Exhibit
        1.1(a)(ii)
        (each a
“Revolving
        Note”
and,
        collectively, the “Revolving
        Notes”).
        Each
        Revolving Note shall represent the obligation of the applicable Borrower
        to pay
        the amount of the applicable Revolving Lender’s Revolving Loan Commitment or, if
        less, such Revolving Lender’s Pro Rata Share of the aggregate unpaid principal
        amount of all Revolving Credit Advances to such Borrower together with interest
        thereon as prescribed in Section
        1.5.
        The
        entire unpaid balance of the aggregate Revolving Loan and all other
        non-contingent Obligations shall be immediately due and payable in full in
        immediately available funds on the Commitment Termination Date.

       

       

      
        
          
          

        

        
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      (iii)    Subject
        to the terms and conditions hereof, at the request of Borrower Representative,
        each Revolving Lender agrees to make at any time and from time to time on
        and
        after the Closing Date until the Commitment Termination Date its Pro Rata
        Share
        of  Revolving
        Credit Advances to Borrowers notwithstanding that any such Revolving Credit
        Advance will cause the outstanding balance of the aggregate Revolving Loans
        to
        exceed the Primary Borrowing Availability (any such excess Revolving Credit
        Advances are herein referred to collectively as “Permitted
        Overadvances”);
        provided,
        however,
        the
        amount of all Permitted Overadvances outstanding at any time shall not exceed
        the Maximum Overadvance Amount at such time. The Pro Rata Share of the Permitted
        Overadvances plus all other Revolving Loans of any Revolving Lender shall
        not at
        any time exceed its separate Revolving Loan Commitment (less its Pro Rata
        Share
        of the Export-Related Credit Participations and Swing Line Loans). The
        obligations of each Revolving Lender to make Permitted Overadvances hereunder
        shall be several and not joint. Until the Commitment Termination Date, Borrowers
        may borrow, repay and reborrow under this Section
        1.1(a)(iii).
        Each
        Permitted Overadvance shall be made on notice by Borrower Representative
        on
        behalf of the applicable Borrower to one of the representatives of Agent
        identified in Schedule
        1.1
        at the
        address specified therein. Any such notice must be given no later than (1)
        noon
        (New York time) on the Business Day of the proposed Permitted Overadvance,
        in
        the case of an Index Rate Loan, or (2) noon (New York time) on the date which
        is
        three (3) Business Days prior to the proposed Permitted Overadvance, in the
        case
        of a LIBOR Loan. Each such notice (a ”Notice
        of Permitted Overadvance”)
        must
        be given in writing (by telecopy or overnight courier) substantially in the
        form
        of Exhibit
        1.1(a)(iii),
        and
        shall include the information required in such Exhibit. If any Borrower desires
        to have a Permitted Overadvance bear interest by reference to a LIBOR Rate,
        Borrower Representative must comply with Section
        1.5(e).

       

      (b)    Intentionally
        Omitted.

       

      (c)    Swing
        Line Facility.

       

      (i)    Agent
        shall notify the Swing Line Lender promptly upon Agent’s receipt of any Notice
        of Revolving Credit Advance. Subject to the terms and conditions hereof,
        the
        Swing Line Lender may, in its discretion, make available from time to time
        on
        and after the Closing Date until the Commitment Termination Date advances
        (each,
        a “Swing
        Line Advance”)
        in
        accordance with any such notice. The provisions of this Section
        1.1(c)
        shall
        not relieve Revolving Lenders of their obligations to make Revolving Credit
        Advances under Section
        1.1(a);
        provided
        that if
        the Swing Line Lender makes a Swing Line Advance pursuant to any such notice,
        such Swing Line Advance shall be in lieu of any Revolving Credit Advance
        that
        otherwise may be made by Revolving Credit Lenders pursuant to such notice.
        The
        aggregate amount of Swing Line Advances outstanding shall not exceed at any
        time
        the lesser of (A) the Swing Line Commitment and (B) the lesser of the Maximum
        Amount and (except for Permitted Overadvances) the Aggregate Borrowing Base,
        in
        each case, less the outstanding balance of the Revolving Loan and the
        Export-Related Loan at such time (“Swing
        Line Availability”).
        Until
        the Commitment Termination Date, Borrowers may from time to time borrow,
        repay
        and reborrow under this Section
        1.1(c).
        Each
        Swing Line Advance shall be made pursuant to a Notice of Revolving Credit
        Advance delivered to Agent by Borrower Representative on behalf of the
        applicable Borrower in accordance with Section
        1.1(a).
        Any
        such notice must be given no later than noon (New York time) on the Business
        Day
        of the proposed Swing Line Advance. 

       

       

      
        
          
          

        

        
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      Unless
        the Swing Line Lender has received at least one Business Day’s prior written
        notice from Requisite Revolving Lenders instructing it not to make a Swing
        Line
        Advance, the Swing Line Lender shall, notwithstanding the failure of any
        condition precedent set forth in Sections
        2.2,
        be
entitled
        to fund that Swing Line Advance, and to have each Revolving Lender make
        Revolving Credit Advances in accordance with Section
        1.1(c)(iii)
        or
        purchase participating interests in accordance with Section
        1.1(c)(iv).
        Notwithstanding any other provision of this Agreement or the other Loan
        Documents, the Swing Line Loan shall constitute an Index Rate Loan. As provided
        in Section 1.1(c)(iii), Agent may cause the aggregate outstanding principal
        amount of the Swing Line Loan to be repaid from the proceeds of a Revolving
        Credit Advance.

       

      (ii)    Each
        Borrower shall, if requested by the Swing Line Lender, jointly execute and
        deliver to the Swing Line Lender a promissory note to evidence the Swing
        Line
        Commitment. Such note shall be in the principal amount of the Swing Line
        Commitment of the Swing Line Lender, dated the Closing Date and substantially
        in
        the form of Exhibit
        1.1(c)(ii)
        (the
“Swing
        Line Note”).
        The
        Swing Line Note shall represent the obligation of each Borrower to pay the
        amount of the Swing Line Commitment or, if less, the aggregate unpaid principal
        amount of all Swing Line Advances made to such Borrower together with interest
        thereon as prescribed in Section
        1.5.
        The
        entire unpaid balance of the Swing Line Loan and all other non-contingent
        Obligations shall be immediately due and payable in full in immediately
        available funds on the Commitment Termination Date if not sooner paid in
        full.

       

      (iii)    The
        Swing
        Line Lender, at any time and from time to time no less frequently than once
        weekly shall on behalf of any Borrower (and each Borrower hereby irrevocably
        authorizes the Swing Line Lender to so act on its behalf) request each Revolving
        Lender (including the Swing Line Lender) to make a Revolving Credit Advance
        to
        each Borrower (which shall be an Index Rate Loan) in an amount equal to that
        Revolving Lender’s Pro Rata Share of the principal amount of the applicable
        Borrower’s Swing Line Loan (the “Refunded
        Swing Line Loan”)
        outstanding on the date such notice is given. Unless any of the events described
        in Section
        8.1(i)
        or
8.1(j)
        has
        occurred (in which event the procedures of Section
        1.1(c)(iv)
        shall
        apply) and regardless of whether the conditions precedent set forth in this
        Agreement to the making of a Revolving Credit Advance are then satisfied,
        each
        Revolving Lender shall disburse directly to Agent, its Pro Rata Share of
        a
        Revolving Credit Advance on behalf of the Swing Line Lender prior to 3:00
        p.m.
        (New York time) in immediately available funds on the Business Day next
        succeeding the date that notice is given. The proceeds of those Revolving
        Credit
        Advances shall be immediately paid to the Swing Line Lender and applied to
        repay
        the Refunded Swing Line Loan of the applicable Borrower.

       

      (iv)    If,
        prior
        to refunding a Swing Line Loan with a Revolving Credit Advance pursuant to
        Section
        1.1(c)(iii),
        one of
        the events described in Section
        8.1(i)
        or
8.1(j)
        has
        occurred, then, subject to the provisions of Section
        1.1(c)(v),
        each
        Revolving Lender shall, on the date such Revolving Credit Advance was to
        have
        been made for the benefit of the applicable Borrower, purchase from the Swing
        Line Lender an undivided participation interest in the Swing Line Loan to
        such
        Borrower in an amount equal to its Pro Rata Share of such Swing Line Loan.
        Upon
        request, each Revolving Lender shall promptly transfer to the Swing Line
        Lender,
        in immediately available funds, the amount of its participation
        interest.

       

       

      
        
          
          

        

        
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      (v)    Each
        Revolving Lender’s obligation to make Revolving Credit Advances in accordance
        with Section
        1.1(c)(iii)
        and to
        purchase participation interests in accordance with Section
        1.1(c)(iv)
        shall be
        absolute and unconditional and shall not be affected by any circumstance,
        including (A) any setoff, counterclaim, recoupment, defense or other right
        that
        such
        Revolving Lender may have against the Swing Line Lender, any Borrower or
        any
        other Person for any reason whatsoever; (B) the occurrence or continuance
        of any
        Default or Event of Default; (C) any inability of any Borrower to satisfy
        the
        conditions precedent to borrowing set forth in this Agreement at any time
        or (D)
        any other circumstance, happening or event whatsoever, whether or not similar
        to
        any of the foregoing. If any Revolving Lender does not make available to
        Agent
        or the Swing Line Lender, as applicable, the amount required pursuant to
        Section
        1.1(c)(iii) or 1.1(c)(iv),
        as the
        case may be, the Swing Line Lender shall be entitled to recover such amount
        on
        demand from such Revolving Lender, together with interest thereon for each
        day
        from the date of non-payment until such amount is paid in full at the Federal
        Funds Rate for the first two (2) Business Days and at the Index Rate
        thereafter.

       

      (d)    Export-Related
        Loan.

       

      (i)    Subject
        to the terms and conditions hereof, the Export-Related Loan Lender agrees
        to
        make available to Borrowers at any time and from time to time on and after
        the
        Export-Related Loan Commitment Date until the Export-Related Loan Termination
        Date export-related advances (each, an “Export-Related
        Advance”)
        in
        accordance with any notice provided as set forth below. Until the Export-Related
        Loan Termination Date, Borrowers may from time to time borrow, repay and
        reborrow under this Section
        1.1(d)(i);
        provided,
        that
        (A) the amount of any Export-Related Advance to be made at any time shall
        not
        exceed the Export-Related Borrowing Availability at such time, and (B) the
        aggregate amount of Export-Related Advances outstanding shall not exceed
        at any
        time the lesser of (i) the Export-Related Loan Commitment or (ii) the Maximum
        Amount less the outstanding balances of the Revolving Loan and the
        Export-Related Loan at such time. Export-Related Borrowing Availability may
        be
        further reduced by Reserves imposed by Agent in its Permitted Discretion.
        Each
        Export-Related Advance shall be made on notice by Borrower Representative
        to one
        of the representatives of Agent identified in Schedule
        1.1
        at the
        address specified therein. Any such notice must be given no later than: (1)
        noon
        (New York time) on the Business Day of the proposed Export-Related Advance,
        in
        the case of an Index Rate Loan; or (2) noon (New York time) on the date
        which is three (3) Business Days prior to the proposed Export-Related Advance,
        in the case of a LIBOR Loan. Each such notice (a “Notice
        of Export-Related Advance”)
        must
        be given in writing (by telecopy or overnight courier) substantially in the
        form
        of Exhibit
        1.1(d)(i),
        and
        shall include the information required in such Exhibit). If Borrowers desire
        to
        have the Export-Related Advances bear interest by reference to a LIBOR Rate,
        Borrowers must comply with Section
        1.5(e).
        Agent
        shall notify the Export-Related Loan Lender promptly upon Agent’s receipt of any
        Notice of Export-Related Advance. Unless the Export-Related Loan Lender has
        received at least one Business Day’s prior written notice from Requisite
        Revolving Lenders instructing it not to make an Export-Related Advance, the
        Export-Related Loan Lender shall, notwithstanding the failure of any condition
        precedent set forth in Section
        2.2
        and
        Section 2.3,
        be
        entitled to fund that Export-Related Advance, and to have each Revolving
        Lender
        purchase participating interests in accordance with Section
        1.1(d)(iii).
        The
        Export-Related Loan Lender, subject to the terms hereof, shall make the
        requested Export-Related Advance to Borrowers not later than 4:00 p.m. (New
        York
        time) on the requested funding date.

       

       

      
        
          
          

        

        
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      (ii)    Each
        Borrower shall, if requested by the Export-Related Loan Lender, jointly execute
        and deliver to the Export-Related Loan Lender a promissory note to evidence
        the
        Export-Related Loan Commitment. Such note shall be in the principal amount
        of  the
        Export-Related Loan Commitment of the Export-Related Loan Lender, dated the
        Export-Related Loan Commitment Date and substantially in the form of
Exhibit
        1.1(d)(ii)
        (the
“Export-Related
        Loan Note”).
        The
        Export-Related Loan Note shall represent the obligation of Borrowers to pay
        the
        amount of the Export-Related Loan Commitment or, if less, the aggregate unpaid
        principal amount of all Export-Related Advances made to Borrowers together
        with
        interest thereon as prescribed in Section
        1.5.
        The
        entire unpaid balance of the Export-Related Loan and all other non-contingent
        Obligations related thereto shall be immediately due and payable in full
        in
        immediately available funds on the Export-Related Loan Termination Date if
        not
        sooner paid in full.

       

      (iii)    Immediately
        upon the making of any Export-Related Advance by the Export-Related Loan
        Lender,
        each Revolving Lender (including the Export-Related Loan Lender) shall be
        deemed
        to have irrevocably and unconditionally purchased from the Export-Related
        Loan
        Lender an undivided interest and participation in such Export-Related Advance
        in
        an amount equal to its Pro Rata Share of the principal amount of such
        Export-Related Advance (each an “Export-Related
        Credit Participation”
and
        collectively, the “Export-Related
        Credit Participations”).
        Each
        Revolving Lender shall fund its participation in such Export-Related Advance
        in
        the same manner as provided in this Agreement with respect to Revolving Credit
        Advances, regardless of whether the conditions precedent set forth in this
        Agreement to the making of a Revolving Credit Advance are then satisfied,
        and as
        set forth in this Section
        1.1(d).
        The
        Export-Related Loan Lender, at any time and from time to time in its sole
        and
        absolute discretion, but not less frequently than weekly, shall request each
        Revolving Lender (including the Export-Related Loan Lender) to fund its
        participation in outstanding Export-Related Advances which have not been
        previously funded in an amount equal to its Pro Rata Share of the principal
        amount of such Export-Related Advances (a “Funded
        Export-Related Credit Participation”),
        regardless, among other things, of whether the conditions precedent set forth
        in
        this Agreement to the making of a Revolving Credit Advance are then satisfied.
        Each Revolving Lender shall disburse directly to Agent such amount prior
        to 4:00
        p.m. (New York time) in immediately available funds on the Business Day next
        succeeding the date that such request is given, and Agent shall immediately
        pay
        such amount to the Export-Related Loan Lender.

       

      (iv)    Each
        Revolving Lender’s obligation to purchase participation interests in accordance
        with Section
        1.1(d)(iii)
        shall be
        absolute and unconditional and shall not be affected by any circumstance,
        including (A) any setoff, counterclaim, recoupment, defense or other right
        that
        such Revolving Lender may have against the Export-Related Loan Lender, Borrowers
        or any other Person for any reason whatsoever; (B) the occurrence or continuance
        of any Default or Event of Default; (C) any inability of Borrowers to satisfy
        the conditions precedent to borrowing set forth in this Agreement at any
        time;
        or (D) any other circumstance, happening or event whatsoever, whether or
        not
        similar to any of the foregoing. If any Revolving Lender does not make available
        to Agent the amount required pursuant to Section
        1.1(d)(iii),
        the
        Export-Related Loan Lender shall be entitled to recover such amount on demand
        from such Revolving Lender, together with interest thereon for each day from
        the
        date of non payment until such amount is paid in full at the Federal Funds
        Rate
        for the first two (2) Business Days and at the Index Rate
        thereafter.

       

       

      
        
          
          

        

        
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      (v)    Any
        principal or interest received by Agent in respect of any Export-Related
        Advance
        shall be promptly paid by Agent to the Revolving Lenders which have
        a Funded
        Export-Related Credit Participation in such Export-Related Advance in an
        amount
        equal to their respective Pro Rata Shares of such principal or interest (and
        to
        the Export-Related Loan Lender with respect to any such Export-Related Advance
        as to which a Funded Export-Related Credit Participation does not
        exist).

       

      (e)    Reliance
        on Notices; Appointment of Borrower Representative.
        Agent
        shall be entitled to rely upon, and shall be fully protected in relying upon,
        any Notice of Revolving Credit Advance, Notice of Export-Related Advance,
        Notice
        of Conversion/Continuation or similar notice believed by Agent to be genuine.
        Agent may assume that each Person executing and delivering any notice in
        accordance herewith was duly authorized, unless the responsible individual
        acting thereon for Agent has actual knowledge to the contrary. Each Borrower
        hereby designates Parent as its representative and agent on its behalf for
        the
        purposes of issuing Notices of Revolving Credit Advances, Notice of
        Export-Related Advances and Notices of Conversion/Continuation, giving
        instructions with respect to the disbursement of the proceeds of the Loans,
        selecting interest rate options, requesting Letters of Credit, giving and
        receiving all other notices and consents hereunder or under any of the other
        Loan Documents and taking all other actions (including in respect of compliance
        with covenants) on behalf of any Borrower or Borrowers under the Loan Documents.
        Borrower Representative hereby accepts such appointment. Agent and each Lender
        may regard any notice or other communication pursuant to any Loan Document
        from
        Borrower Representative as a notice or communication from all Borrowers,
        and may
        give any notice or communication required or permitted to be given to any
        Borrower or Borrowers hereunder to Borrower Representative on behalf of such
        Borrower or Borrowers. Each Borrower agrees that each notice, election,
        representation and warranty, covenant, agreement and undertaking made on
        its
        behalf by Borrower Representative shall be deemed for all purposes to have
        been
        made by such Borrower and shall be binding upon and enforceable against such
        Borrower to the same extent as if the same had been made directly by such
        Borrower.

       

      1.2    Letters
        of Credit.
        Subject
        to and in accordance with the terms and conditions contained herein and in
        Annex
        B,
        Borrower Representative, on behalf of the applicable Borrower, shall have
        the
        right to request, and Revolving Lenders agree to incur, or purchase
        participations in, Letter of Credit Obligations in respect of each
        Borrower.

       

      1.2A  Swap
        Related Reimbursement Obligations.

       

      (a)    Borrowers
        agree to reimburse GE Capital in immediately available funds in the amount
        of
        any payment made by GE Capital under a Swap Related L/C (such reimbursement
        obligation, whether contingent upon payment by GE Capital under the Swap
        Related
        L/C or otherwise, being herein called a “Swap
        Related Reimbursement Obligation”).
        No
        Swap Related Reimbursement Obligation for any Swap Related L/C may exceed
        the
        amount of the payment obligations owed by Borrowers under the interest rate
        protection or hedging agreement or transaction supported by the Swap Related
        L/C.

       

       

      
        
          
          

        

        
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      (b)    A
        Swap
        Related Reimbursement Obligation shall be due and payable by Borrowers within
        one (1) Business Day after the date on which a related payment was made by
        GE
        Capital under the Swap Related L/C.

       

      (c)    Any
        Swap
        Related Reimbursement Obligation shall, during the period in which it is
        unpaid,
        bear interest at the rate per annum equal to the LIBOR Rate plus one percent
        (1%), as if the unpaid amount of the Swap Related Reimbursement Obligation
        were
        a LIBOR Loan, and not at any otherwise applicable Default Rate. Such interest
        shall be payable upon demand. The following additional provisions apply to
        the
        calculation and charging of interest by reference to the LIBOR
        Rate:

       

      (i)    The
        LIBOR
        Rate shall be determined for each successive one-month LIBOR Period during
        which
        the Swap Related Reimbursement Obligation is unpaid, notwithstanding the
        occurrence of any Event of Default and even if the LIBOR Period were to extend
        beyond the Commitment Termination Date.

       

      (ii)    If
        a Swap
        Related Reimbursement Obligation is paid during a monthly period for which
        the
        LIBOR Rate is determined, interest shall be pro-rated and charged for the
        portion of the monthly period during which the Swap Related Reimbursement
        Obligation was unpaid. Section
        1.13(b)
        shall
        not apply to any payment of a Swap Related Reimbursement Obligation during
        the
        monthly period.

       

      (iii)    Notwithstanding
        the last paragraph of the definition of “LIBOR Rate”, if the LIBOR Rate is no
        longer available from Telerate News Service, the LIBOR Rate shall be determined
        by GE Capital from such financial reporting service or other information
        available to GE Capital as in GE Capital’s reasonable discretion indicates GE
        Capital’s cost of funds.

       

      (d)    Except
        as
        provided in the foregoing provisions of this Section
        1.2A
        and in
Section
        11.3,
        Borrowers shall not be obligated to pay to GE Capital or any of its Affiliates
        any Letter of Credit Fee, or any other fees, charges or expenses, in respect
        of
        a Swap Related L/C or arranging for any interest rate protection or hedging
        agreement or transaction supported by the Swap Related L/C. GE Capital and
        its
        Affiliates shall look to the beneficiary of a Swap Related L/C for payment
        of
        any such letter of credit fees or other fees, charges or expenses and such
        beneficiary may factor such fees, charges, or expenses into the pricing of
        any
        interest rate protection or hedging arrangement or transaction supported
        by the
        Swap Related L/C.

       

      (e)    If
        any
        Swap Related L/C is revocable prior to its scheduled expiry date, GE Capital
        agrees not to revoke the Swap Related L/C unless the Commitment Termination
        Date
        or an Event of Default has occurred.

       

      (f)    GE
        Capital or any of its Affiliates shall be permitted to (i) provide confidential
        or other information furnished to it by any of the Credit Parties (including,
        without limitation, copies of any documents and information in or referred
        to in
        the Closing Checklist, Financial Statements and Compliance Certificates)
        to a
        beneficiary or potential beneficiary of a Swap Related L/C and (ii) receive
        confidential or other information from the beneficiary or potential beneficiary
        relating to any agreement or transaction supported or to be supported by
        the
        Swap Related L/C. However, no confidential information shall be provided
        to any
        Person under this paragraph unless the Person has agreed to comply with the
        covenant substantially as contained in Section
        11.8.

       

       

      
        
          
          

        

        
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      1.3    Prepayments.

       

      (a)    Voluntary
        Prepayments; Reductions in Revolving Loan Commitments.
        Borrowers may at any time pursuant to written notice (or telephonic notice
        promptly confirmed in writing by telecopy or overnight delivery) by Borrower
        Representative to Agent (i) voluntarily prepay, without penalty or premium,
        all
        or part of the Revolving Loans and/or (ii) permanently reduce (but not
        terminate) the Revolving Loan Commitment; provided
        that (A)
        any such prepayments or reductions shall be in a minimum amount of $500,000
        and
        integral multiples of $100,000 in excess of such amount (unless the outstanding
        principal balance of the Revolving Loans immediately prior to such reduction
        is
        less than $500,000 or any such integral multiple, in which case the prepayment
        shall be in the entire amount of such outstanding principal balance), (B)
        the
        Revolving Loan Commitment shall not be reduced to an amount less than the
        greater of (i) the amount of the Revolving Loan then outstanding and (ii)
        $75,000,000, and (C) after giving effect to such reductions, Borrowers shall
        comply with Section
        1.3(b)(i).
        Notwithstanding any of the foregoing, Borrowers may, without penalty or premium
        except as set forth in the GE Capital Fee Letter, at any time on at least
        five
        (5) Business Days’ prior written notice by Borrower Representative to Agent
        terminate the Revolving Loan Commitment; provided
        that
        upon such termination, all Loans and other non-contingent Obligations shall
        be
        immediately due and payable in full and all Letter of Credit Obligations
        shall
        be cash collateralized or otherwise satisfied in accordance with Annex
        B.
        Any
        voluntary prepayment and any reduction or termination of the Revolving Loan
        Commitment must be accompanied by payment of the Fees required by the GE
        Capital
        Fee Letter, if any, plus the payment of any LIBOR funding breakage costs
        in
        accordance with Section
        1.13(b).
        Upon
        any such reduction or termination of the Revolving Loan Commitment, each
        Borrower’s right to request Revolving Credit Advances, or request that Letter of
        Credit Obligations be incurred on its behalf, or request Swing Line Advances
        or
        Export-Related Advances, shall simultaneously be permanently reduced or
        terminated, as the case may be; provided
        that a
        permanent reduction of the Revolving Loan Commitment shall not require a
        corresponding pro rata reduction in the L/C Sublimit. Each notice of partial
        prepayment shall designate the Loans or other Obligations to which such
        prepayment is to be applied.

       

      (b)    Mandatory
        Prepayments.

       

      (i)    If
        at any
        time the aggregate outstanding balances of the Revolving Loan plus the
        Export-Related Loan exceed the lesser of (A) the Maximum Amount and (B) the
        sum
        of the Aggregate Borrowing Base plus the Maximum Overadvance Amount, Borrowers
        shall immediately repay the aggregate outstanding Permitted Overadvances
        to the
        extent required to eliminate such excess. If any such excess remains after
        repayment in full of the aggregate outstanding Permitted Overadvances, Borrowers
        shall immediately repay the aggregate outstanding Revolving Credit Advances
        to
        the extent required to eliminate such excess. If any such excess remains
        after
        repayment in full of the aggregate outstanding Permitted Overadvances and
        Revolving Credit Advances, Borrowers shall immediately repay the aggregate
        outstanding Export-Related Advances to the extent required to eliminate such
        excess.

       

       

      
        
          
          

        

        
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      If
        any
        such excess remains after repayment in full of the aggregate outstanding
        Permitted Overadvances, Revolving Credit Advances and Export-Related Loans,
        Borrowers shall provide cash collateral for the Letter of Credit Obligations
        in
        the manner set forth in Annex
        B
        to the
        extent required to eliminate such excess. If no Event of Default shall have
        occurred and be continuing, all or a portion
        of such cash collateral shall be returned to Borrowers at such time as the
        aggregate outstanding balances of the Revolving Loan plus the Export-Related
        Loan no longer exceed the lesser of (A) the Maximum Amount and (B) the sum
        of
        the Aggregate Borrowing Base plus the Maximum Overadvance Amount. If on any
        day
        the outstanding balance of the Export-Related Loan exceeds the lesser of
        (A) the
        Export-Related Loan Commitment and (B) the Export-Related Borrowing Base,
        Borrowers shall on such day repay the aggregate outstanding Export-Related
        Advances to the extent required to eliminate such excess.

       

      (ii)    Subject
        to the terms of the Intercreditor Agreement and the Senior Secured Notes
        Indenture (as in effect on the Closing Date or as amended in accordance with
        the
        terms hereof), upon receipt by any Credit Party of any Net Cash Proceeds
        of any
        asset Disposition, Borrowers shall promptly (and, in no event, later than
        one
        (1) Business Day after any such Disposition) prepay the Loans in an amount
        equal
        to all such Net Cash Proceeds. Any such prepayment shall be applied in
        accordance with Section
        1.3(c).
        The
        following shall not be subject to mandatory prepayment under this clause
        (ii):
        (1) Net
        Cash Proceeds from asset Dispositions of less than $5,000,000 in the aggregate
        during the term of this Agreement, (2) Net Cash Proceeds from asset Dispositions
        that are reinvested in Equipment, Fixtures, real property or other assets
        useful
        in the businesses of the Credit Parties within one year following receipt
        thereof (the “Permitted
        Reinvestment Period”)
        or are
        committed in writing to be invested in Equipment, Fixtures, real property
        or
        other assets useful in the businesses of the Credit Parties within the Permitted
        Reinvestment period to the extent such Net Cash Proceeds are actually reinvested
        within six months of the expiration of the Permitted Reinvestment Period;
        provided
        that
        such Borrower notifies Agent of its intent to reinvest within 60 days of
        the
        time such proceeds are received and when such reinvestment occurs and (3)
        Net
        Cash Proceeds which, with the prior approval of Agent and the Requisite Lenders,
        are applied by a Credit Party to pay contributions to an Employee Plan which
        is
        subject to Title IV of ERISA, including any contributions not currently required
        under Section 412 of the IRC that are made for future funding purposes; provided
        that the Credit Party notifies Agent of its intent to make such contributions
        within 60 days before the time such contributions occur.

       

      (iii)    If
        Parent
        issues Stock, or if any Credit Party issues any Indebtedness that is not
        otherwise permitted hereunder, no later than the Business Day following the
        date
        of receipt of the Net Cash Proceeds thereof, Parent shall prepay the Loans
        in an
        amount equal to all such Net Cash Proceeds. Any such prepayment shall be
        applied
        in accordance with Section
        1.3(c).

       

      (c)    Application
        of Certain Mandatory Prepayments.
        Subject
        to Section 1.11, any prepayments made by any Borrower pursuant to Section
        1.3(b)(ii) or (b)(iii)
        above
        shall be applied as follows: first,
        to Fees
        and reimbursable expenses of Agent then due and payable pursuant to any of
        the
        Loan Documents, until the same has been paid in full; second,
        to
        interest then due and payable on any Permitted Overadvance, until the same
        has
        been paid in full; third,
        to the
        principal balance of any Permitted Overadvance outstanding, until the same
        has
        been repaid in full; fourth,
        to
        interest then due and payable on Swing Line Loans, until
        the
        same has been paid in full; fifth,
        to the
        principal balance of the Swing Line Loan outstanding, until the same has
        been
        repaid in full; sixth,
        to
        interest then due and payable on Revolving Credit Advances, until the same
        has
        been paid in full; seventh,
        to the
        principal balance of Revolving Credit Advances outstanding, until the same
        has
        been repaid in full; eighth,
        to
interest
        then due and payable on the Export-Related Loan, until the same has been
        paid in
        full; and last,
        to the
        principal balance of Export-Related Advances outstanding, until the same
        has
        been repaid in full. None of the Revolving Loan Commitment, the Export-Related
        Loan Commitment or the Swing Line Commitment shall be permanently reduced
        by the
        amount of any such payments.

       

       

      
        
          
          

        

        
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      (d)    Application
        of Prepayments from Insurance and Condemnation Proceeds.
        Prepayments from Net Cash Proceeds of insurance or condemnation events in
        accordance with Section
        5.7
        and the
        Mortgage(s), respectively, shall be applied, first,
        to the
        Permitted Overadvances, second,
        to the
        Swing Line Loans, third,
        to the
        Revolving Credit Advances, and last,
        to the
        Export-Related Advances; provided,
        that
        prior to the Discharge of Term Obligations, proceeds of Senior Secured Priority
        Collateral to the extent payable to the holders of the Senior Secured Notes
        or
        to be held as Senior Secured Priority Collateral or otherwise shall be applied,
        in each case, in accordance with the terms of the Senior Secured Notes Indenture
        and the Intercreditor Agreement, provided further
        that (1)
        the Borrower Representative shall certify to Agent that all such proceeds
        of
        Senior Secured Priority Collateral have been deposited into a Senior Secured
        Priority Account in accordance with Section
        5.20
        and
        otherwise as required by the Senior Secured Notes Indenture, the Intercreditor
        Agreement or the Loan Documents and (2) the Borrower Representative shall
        notify
        Agent in accordance with Section
        5.20
        prior to
        any withdrawal from or deposits to any such account. None of the Revolving
        Loan
        Commitment, Export-Related Loan Commitment or the Swing Line Loan Commitment
        shall be permanently reduced by the amount of any such prepayments.

       

      (e)    No
        Implied Consent.
        Nothing
        in this Section
        1.3
        shall be
        construed to constitute Agent’s or any Lender’s consent to any transaction that
        is not permitted by other provisions of this Agreement or the other Loan
        Documents.

       

      1.4    Use
        of
        Proceeds.
        Borrowers shall utilize the proceeds of the Loans solely for the Refinancing
        (and to pay any related transaction fees and expenses), and for the financing
        of
        Borrowers’ working capital, capital expenditures and other general corporate
        purposes. Schedule
        (1.4)
        contains
        a description of Borrowers’ sources and uses of funds as of the Closing Date,
        including Loans and Letter of Credit Obligations to be made or incurred on
        that
        date, and a funds flow memorandum detailing how funds from each source are
        to be
        transferred to particular uses.

       

      1.5    Interest
        and Applicable Margins.

       

      (a)    Borrowers
        shall pay interest to Agent, for the ratable benefit of Lenders in accordance
        with the various Loans being made by each Lender, in arrears on each applicable
        Interest Payment Date, at the following rates: (i) with respect to the Revolving
        Credit Advances, the Index Rate plus the Applicable Revolver Index Margin
        per
        annum or, at the election of Borrower Representative, the applicable LIBOR
        Rate
        plus the Applicable Revolver LIBOR Margin per annum; (ii) with respect to
        the
        Export-Related Advances, the Index Rate plus
        the
        Applicable Export-Related Index Margin per annum or, at the election of Borrower
        Representative, the applicable LIBOR Rate plus the Applicable Export-Related
        LIBOR Margin per annum; (iii) with respect to the Permitted Overadvance,
        the
        Index Rate plus the Applicable Overadvance Loan Index Margin per annum or,
        at
        the election of Borrower Representative, the applicable
        LIBOR Rate plus the Applicable Overadvance Loan LIBOR Margin per annum; and
        (iv)
        with respect to the Swing Line Loan, the Index Rate plus the Applicable Revolver
        Index Margin per annum.

       

       

      
        
          
          

        

        
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      As
        of the
        Closing Date, the Applicable Margins are as follows:

       

    

    
      	
                          Applicable
                Revolver Index Margin

               

            	
              0.50%

               

            
	
                          Applicable
                Revolver LIBOR Margin

               

            	
              1.50%

               

            
	
                          Applicable
                Export-Related Index Margin

               

            	
              0.50%

               

            
	
                          Applicable
                Export-Related LIBOR Margin

               

            	
              1.50%

               

            
	
                          Applicable
                Overadvance Loan Index Margin

               

            	
              3.50%

               

            
	
                          Applicable
                Overadvance Loan LIBOR Margin

               

            	
              4.50%

               

            
	
                          Applicable
                L/C
                Margin

               

            	
              1.50%

               

            
	
                          Applicable
                Unused Line Fee Margin

               

            	
              0.30%

               

            

    

    

    The
      Applicable Margins may be adjusted by reference to the following
      grids:

     

                                    

     

     

     

    
      	 	
              Applicable
                Margins

            
	 	
              Level
                I

            	
              Level
                II

            	
              Level
                III

            	
              Level
                IV

            	
              Level
                V

            
	
              Applicable
                Revolver

              Index
                Margin

            	
              0.50%

            	
              0.75%

            	
              1.00%

            	
              1.25%

            	
              1.50%

            
	
              Applicable
                Revolver LIBOR Margin

            	
              1.50%

            	
              1.75%

            	
              2.00%

            	
              2.25%

            	
              2.50%

            
	
              Applicable
                Export-Related

              Index
                Margin

            	
              0.50%

            	
              0.75%

            	
              1.00%

            	
              1.25%

            	
              1.50%

            

    

     

     

    
      
        
        

      

      
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              Applicable
                Margins

            
	 	
              Level
                I

            	
              Level
                II

            	
              Level
                III

            	
              Level
                IV

            	
              Level
                V

            

    

    
      	
              Applicable
                Export-Related LIBOR Margin

            	
              1.50%

            	
              1.75%

            	
              2.00%

            	
              2.25%

            	
              2.50%

            
	
              Applicable
                Overadvance Loan Index Margin

            	
              3.50%

            	
              3.50%

            	
              3.50%

            	
              3.50%

            	
              3.50%

            
	
              Applicable
                Overadvance Loan LIBOR Margin

            	
              4.50%

            	
              4.50%

            	
              4.50%

            	
              4.50%

            	
              4.50%

            
	
              Applicable
                L/C Margin

            	
              1.50%

            	
              1.75%

            	
              2.00%

            	
              2.25%

            	
              2.50%

            
	
              Applicable
                Unused Line Fee Margin

            	
              0.30%

            	
              0.30%

            	
              0.30%

            	
              0.30%

            	
              0.30%

            

    

    

    Adjustments
      in the Applicable Margins shall commence with the delivery of the first
      Borrowing Base Certificate after the Closing Date, and thereafter shall be
      adjusted upon delivery of the Borrowing Base Certificate as of the end of each
      Fiscal Quarter, any such adjustment shall be implemented quarterly, on a
      prospective basis, for each Fiscal Quarter commencing five (5) days after the
      date of delivery to Agent of the applicable Borrowing Base Certificate
      evidencing the need for an adjustment. Failure to deliver such Borrowing Base
      Certificate within five (5) Business Days after the date such Borrowing Base
      Certificate was required to be delivered pursuant to Section
      4.1(b)
      and
Annex
      F
      shall,
      in addition to any other remedy provided for in this Agreement, result in an
      increase in the Applicable Margins to the highest level set forth in the
      foregoing grid from the day next succeeding such fifth Business Day until the
      date that is five (5) Business Days after delivery of a Borrowing Base
      Certificate demonstrating that such an increase is not required. In
      the
      event that the information contained in any Borrowing Base Certificate is shown
      by Agent to Borrower Representative to be inaccurate or if Borrower
      Representative shall become aware of any inaccuracy, and such inaccuracy, if
      corrected, would have led to the application of higher Applicable Margins for
      any period (an “Applicable
      Period”)
      than
      the Applicable Margins actually applied for such Applicable Period, then (i)
      Borrowers shall promptly (and in any event, within five (5) Business Days)
      deliver to Agent a correct Borrowing Base Certificate for such Applicable
      Period, (ii) the Applicable Margins shall be re-determined by Agent based on
      the
      corrected Borrowing Base Certificate in accordance with the foregoing grid
      for
      such Applicable Period, and (iii) Borrowers shall promptly following receipt
      of
      such re-determination (and in any event, within five (5) Business Days after
      such receipt) deliver to Agent full payment in respect of the accrued additional
      interest on the Loans as a result of any such increased Applicable Margins
      for
      such Applicable Period, which payment shall be promptly applied by Agent in
      accordance with Section
      1.11
      (it
      being understood that this Section
      1.5(a)
      shall in
      no way limit the rights of Agent and the Lenders to exercise their rights under
      Section
      1.5(d)
      or
Section
      8.2;
      provided,
      however,
      Agent
      and Lenders agree that they shall not implement the Default Rate for such
      Applicable Period if the implementation of such Default Rate is permitted solely
      because of the inaccuracy in the information contained in such Borrowing Base
      Certificate). If an Event of Default has occurred and is continuing at the
      time
      any reduction in the Applicable Margins is to be implemented, that reduction
      shall be deferred until the first day of the first calendar month following
      the
      date on which such Event of Default is waived or cured.

     

    
      (b)    If
        any
        payment on any Loan becomes due and payable on a day other than a Business
        Day,
        the maturity thereof will be extended to the next succeeding Business Day
        (except as set forth in the definition of LIBOR Period) and, with respect
        to
        payments of principal, interest thereon shall be payable at the then applicable
        rate during such extension.

       

       

      
        
          
          

        

        
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      (c)    All
        computations of Fees calculated on a per annum basis and interest shall be
        made
        by Agent on the basis of a 360-day year (except that Loans that bear interest
        based on the Index Rate shall be calculated on the basis of a 365-day year),
        in
        each case for the actual
        number of days occurring in the period for which such interest and Fees are
        payable. The Index Rate is a floating rate determined for each day. Each
        determination by Agent of an interest rate and Fees hereunder shall be
        presumptive evidence of the correctness of such rates and Fees.

       

      (d)    So
        long
        as an Event of Default has occurred and is continuing under Section
        8.1(a)
        with
        respect to any payment of principal or interest, Section
        8.1(i)
        or
Section
        8.1(j)
        or so
        long as any other Event of Default has occurred and is continuing and at
        the
        election of Agent (or upon the written request of Requisite Lenders) confirmed
        by written notice from Agent to Borrower Representative, to the fullest extent
        permitted by applicable law, the interest rates applicable to the Loans and
        the
        Letter of Credit Fees shall be increased by two percentage points (2%) per
        annum
        above the rates of interest or the rate of such Fees otherwise applicable
        hereunder unless Agent or Requisite Lenders elect to impose a smaller increase
        (the “Default
        Rate”),
        and
        all outstanding Obligations shall bear interest at the Default Rate applicable
        to such Obligations. Interest and Letter of Credit Fees at the Default Rate
        shall accrue from the initial date of such Event of Default until that Event
        of
        Default is cured or waived (or such notice is rescinded) and shall be payable
        upon demand.

       

      (e)    Borrower
        Representative shall have the option to (i) request that any Revolving Credit
        Advance be made as a LIBOR Loan, (ii) convert at any time all or any part
        of
        outstanding Loans (other than the Swing Line Loan) from Index Rate Loans
        to
        LIBOR Loans, (iii) convert any LIBOR Loan to an Index Rate Loan subject to
        payment of LIBOR breakage costs in accordance with Section
        1.13(b)
        if such
        conversion is made prior to the expiration of the LIBOR Period applicable
        thereto, or (iv) continue all or any portion of any Loan (other than the
        Swing
        Line Loan) as a LIBOR Loan upon the expiration of the applicable LIBOR Period,
        and the succeeding LIBOR Period of that continued Loan shall commence on
        the
        first day after the last day of the LIBOR Period of the Loan to be continued.
        Any Loan or group of Loans having the same proposed LIBOR Period to be made
        or
        continued as, or converted into, a LIBOR Loan must be in a minimum amount
        of
        $1,000,000 and
        integral multiples of $100,000 in excess of such amount. Any such election
        must
        be made by noon (New York time) on
        the
        third Business Day prior to (1) the date of any proposed Advance which is
        to bear interest at the LIBOR Rate, (2) the end of each LIBOR Period with
        respect to any LIBOR Loans to be continued as such, or (3) the date on
        which Borrower Representative wishes to convert any Index Rate Loan to a
        LIBOR
        Loan for a LIBOR Period designated by Borrower Representative in such election.
        If no election is received with respect to a LIBOR Loan by noon (New York
        time)
        on the third Business Day prior to the end of the LIBOR Period with respect
        thereto (or if a Default or an Event of Default has occurred and is continuing),
        that LIBOR Loan shall be converted to an Index Rate Loan at the end of its
        LIBOR
        Period. Any election to convert any LIBOR Loan or portion thereof into an
        Index
        Rate Loan must be made by noon (New York time) on the day of the proposed
        conversion. Borrower Representative must make all such elections by notice
        to
        Agent in writing, by telecopy or overnight courier. In the case of any
        conversion or continuation, such election must be made pursuant to a written
        notice (a “Notice
        of Conversion/Continuation”)
        substantially in the form of Exhibit
        1.5(e).

       

       

      
        
          
          

        

        
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      (f)    Notwithstanding
        anything herein to the contrary, if at any time the interest rate applicable
        to
        any Loan, together with all fees, charges and other amounts which are treated
        as
        interest on such Loan under applicable law (collectively the “Interest
        Charges”),
        shall
        exceed the maximum lawful rate (the “Maximum
        Rate”)
        which
        may be contracted for, charged, taken, received or intentionally omitted
        by the
        Lender holding such Loan in accordance with applicable law, the rate of interest
        payable in respect of such Loan hereunder, together with all Interest Charges
        payable in respect thereof, shall be limited to the Maximum Rate and, to
        the
        extent lawful, the interest and Interest Charges that would have been payable
        in
        respect of such Loan but were not payable as a result of the operation of
        this
        Section shall be cumulated and the interest and Interest Charges payable
        to such
        Lender in respect of other Loans or periods shall be increased (but not above
        the Maximum Rate therefor) until such cumulated amount, together with interest
        thereon at the Federal Funds Rate to the date of repayment, shall have been
        received by such Lender.

       

      1.6    Eligible
        Accounts.
        All of
        the Accounts owned by each Borrower Party (other than Export-Related Accounts)
        and reflected in the most recent Borrowing Base Certificate delivered by
        Borrower Representative, on behalf of itself and each other Borrower Party,
        to
        Agent shall be “Eligible
        Accounts”
for
        purposes of this Agreement, except any Account to which any of the exclusionary
        criteria set forth below applies. Agent (i) shall have the right to establish,
        modify or eliminate Reserves against Eligible Accounts from time to time
        in its
        Permitted Discretion and (ii) reserves the right, at any time and from time
        to
        time after the Closing Date, to adjust any of the criteria set forth below
        and
        to establish new criteria under this clause (ii) in its Permitted Discretion,
        reflecting changes in the collectibility or realization values of such Accounts
        arising or discovered by Agent after the Closing Date subject to the approval
        of
        Requisite Lenders in the case of adjustments or new criteria under this clause
        (ii) which have the effect of making more credit available (unless such
        adjustment restores the amount of credit available to a previously obtained
        amount). Eligible Accounts shall not include any Export-Related Account or
        any
        Account of any Borrower Party:

       

      (a)    that
        does
        not arise from the sale of goods or the performance of services by such Borrower
        Party in the ordinary course of its business;

       

      (b)    (i)
        upon
        which such Borrower Party’s right to receive payment is not absolute or is
        contingent upon the fulfillment of any condition whatsoever or (ii) that
        is the
        obligation of an Account Debtor located in a state or jurisdiction (e.g.,
        New
        Jersey, Minnesota and West Virginia) that requires, as a condition to access
        to
        the courts of such jurisdiction, that a creditor qualify to transact business,
        file a business activities report or other report or form, or take one or
        more
        other actions, unless the applicable Borrower Party has so qualified, filed
        such
        reports or forms, or taken such actions (and, in each case, paid any required
        fees or other charges), except to the extent that such Borrower Party may
        qualify subsequently as a foreign entity authorized to transact business
        in such
        state or jurisdiction and gain access to such courts, without incurring any
        cost
        or penalty reasonably viewed by Agent to be material in amount, and such
        later
        qualification cures any access to such courts to enforce payment of such
        Account
        or (iii) if the Account represents a progress billing consisting of an invoice
        for goods sold or used or services rendered pursuant to a contract under
        which
        the Account Debtor’s obligation to pay that invoice is subject to such Borrower
        Party’s completion of further performance under such contract or is subject to
        the equitable lien of a surety bond issuer;

       

       

      
        
          
          

        

        
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(c)    in
        the
        event that any defense, counterclaim, setoff or dispute is asserted as to
        such
        Account; provided that the portion of such Account not subject to such defense,
        counterclaim, setoff or dispute will not be excluded solely because of this
        clause (c);

       

      (d)    that
        is
        not a true and correct statement of a bona fide obligation incurred in the
        amount of the Account for merchandise sold to or services rendered and accepted
        by the applicable Account Debtor;

       

      (e)    with
        respect to which an invoice (in form and substance consistent with current
        practices or in such other form and with such other terms as are reasonably
        acceptable to Agent) has not been sent to the applicable Account
        Debtor;

       

      (f)    that
        (i)
        is not owned by such Borrower Party or (ii) is subject to any Lien of any
        other
        Person, other than Liens in favor of Agent, on behalf of itself and Lenders,
        and
        Liens permitted under the Loan Documents;

       

      (g)    that
        arises from a sale to any director (other than in the case of a director
        that
        serves on the board of the applicable Borrower Party and the applicable Account
        Debtor), officer, other employee or controlled affiliate of any Credit
        Party;

       

      (h)    that
        is
        the obligation of an Account Debtor that is the United States government
        or a
        political subdivision thereof, or department, agency or instrumentality thereof
        unless such Borrower Party has complied with the steps reasonably requested
        by
        Agent, including notice to the United States government under the Federal
        Assignment of Claims Act of 1940 or any action under any state statute
        comparable to the Federal Assignment of Claims Act of 1940; provided,
however, the aggregate amount of all such governmental Accounts
        included
        in Eligible Accounts shall not exceed $5,000,000;

       

      (i)    that
        is
        the obligation of an Account Debtor located in a country other than the United
        States or Canada (a “Foreign Account Debtor”) unless payment thereof is assured
        by a letter of credit, export insurance or other similar coverage on terms
        and
        conditions reasonably satisfactory to Agent; provided, however,
        the aggregate amount of all Accounts owing from Foreign Account Debtors
        supported by letters of credit, export insurance or other similar coverage
        included in Eligible Accounts shall not exceed (i) $5,000,000 at any time
        prior
        to the earlier of (A) the Export-Related Loan Commitment Date or (B) January
        31,
        2007 if the Parent and GE Capital have failed to submit the Ex-Im Bank Waiver
        Request to Ex-Im Bank on or prior to such date, or (ii) $2,000,000 at any time
        thereafter (such Dollar amount may be increased after the Closing Date by
        Agent,
        but any such increase shall be in Agent’s sole discretion); provided,
further, no Accounts of any Blocked Person as determined by Agent
        in its
        sole discretion shall be included in Eligible Accounts; provided,
further, that this clause (i) shall in no way limit the amount of
        any
        Export-Related Advances so long as any Eligible Account from a Foreign Account
        Debtor is not also included in Eligible Export-Related Accounts;

       

       

      
        
          
          

        

        
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      (j)    to
        the
        extent such Borrower Party or any Subsidiary thereof is liable for goods
        sold or
        services rendered by the applicable Account Debtor to such Borrower Party
        or
any
        Subsidiary thereof (unless such Account Debtor has executed a no-offset letter
        satisfactory to Agent in its Permitted Discretion) but only to the extent
        of the
        potential offset;

       

      (k)    that
        arises with respect to goods that are delivered on a bill and hold, cash
        on
        delivery basis or placed on consignment, guaranteed sale or other terms by
        reason of which the payment by the Account Debtor is or may be conditional,
        except as to bill and hold invoices with respect to the sale of finished
        goods
        in the ordinary course of business, if (i) Agent shall have received an
        agreement in writing from the Account Debtor, in form and substance reasonably
        satisfactory to Agent, confirming the unconditional obligation of the Account
        Debtor to take the goods related thereto and pay such invoice, (ii) the finished
        goods that are the subject of such bill and hold invoices are not included
        in
        the Primary Borrowing Base as Eligible Inventory, (iii) such bill and hold
        Accounts were originated in compliance with the Borrower Parties’ “bill and hold
        policy” dated as of July 31, 2006 (in the form attached hereto as Exhibit
        1.6), as may be subsequently amended on terms that would provide no more
        availability under the Primary Borrowing Base than in existence immediately
        prior to such amendment and as approved by Agent in its Permitted Discretion,
        (iv) the duration of the bill and hold period for such invoice shall not
        exceed
        forty-five (45) days, (v) the amount of any such bill and hold invoice included
        in Eligible Accounts shall be net of any customer deposit received by the
        applicable Borrower Party in connection with such bill and hold arrangement
        and
        (vi) the aggregate amount of all bill and hold invoices included in Eligible
        Accounts shall not exceed $3,000,000;

       

      (l)    (i)
        that
        is not paid within the earlier of: sixty (60) days following its due date
        or one
        hundred and fifty (150) days following its original invoice date; (ii) that
        is
        the obligation of an Account Debtor that suspends business, makes a general
        assignment for the benefit of creditors or fails to pay its debts generally
        as
        they come due; or (iii) that is the obligation of an Account Debtor that
        has
        filed or had filed against it a petition under any bankruptcy law or any
        other
        federal, state or foreign (including any provincial) receivership, insolvency
        relief or other law or laws for the relief of Debtors, except with respect
        to
        post-petition Accounts owing by creditworthy Account Debtors which have filed
        for bankruptcy protection under Chapter 11 of the Bankruptcy Code, as Agent
        may
        approve in writing from time to time in its Permitted Discretion;

       

                   (m)    that
        is
        the obligation of an Account Debtor if more than fifty percent (50%) of the
        Dollar amount of all Accounts owing by that Account Debtor are ineligible
        under
        the other criteria set forth herein;

       

                      (n)    as
        to
        which Agent’s lien thereon, on behalf of itself and Lenders, is not a first
        priority perfected Lien;

       

                    (o)    that
        fails to conform in all material respects (to the extent such representation
        or
        warranty does not contain a materiality qualifier) with any of the
        representations or warranties pertaining to Accounts in the Loan
        Documents;

       

       

      
        
          
          

        

        
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                     (p)    to
        the
        extent such Account is evidenced by a judgment, instrument or chattel
        paper;

       

                  
        (q)    to
        the
        extent that such Account, together with all other Accounts owing by such
        Account
        Debtor and its controlled Affiliates as of any date of determination exceed
        ten
        percent (10%) of all Eligible Accounts; or

       

                  
        (r)    that
        is
        payable in any currency other than U.S. Dollars, Canadian Dollars or Japanese
        Yen (provided that (i) Eligible Accounts attributable to Accounts payable
        in
        Canadian Dollars shall not exceed the U.S. Dollar equivalent of $10,000,000
        and
        (ii) Eligible Accounts attributable to Accounts payable in Japanese Yen shall
        be
        included up to the U.S.-Dollar equivalent of $5,000,000 subject to documentation
        and operational mechanics reasonably acceptable to Agent).

       

                     1.6A  Eligible
        Export-Related Accounts. All of the Export-Related Accounts of the Borrower
        Parties reflected in the most recent Borrowing Base Certificate delivered
        by
        Borrower Representative, on behalf of itself and each other Borrower Party,
        to
        Agent shall be “Eligible Export-Related Accounts” for purposes of this
        Agreement, except any excluded Export-Related Account referred to in the
        last
        sentence of this Section 1.6A. Agent (i) shall have the right to establish,
        modify or eliminate Reserves against Eligible Export-Related Accounts from
        time
        to time in its Permitted Discretion and (ii) reserves the right, at any time
        and
        from time to time after the Closing Date, to adjust any of the criteria set
        forth below and to establish new criteria under this clause (ii) in its
        Permitted Discretion, reflecting changes in the collectibility or realization
        values of such Accounts arising or discovered by Agent after the Closing
        Date
        subject to the approval of Requisite Lenders in the case of adjustments or
        new
        criteria under this clause (ii) which have the effect of making more credit
        available (unless such adjustment restores the amount of credit available
        to a
        previously obtained amount). Eligible Export-Related Accounts shall not include
        any Export-Related Account of any Borrower Party that (i) does not satisfy
        the
        criteria set forth in the definition of “Eligible Export-Related Accounts
        Receivable” contained in the Ex-Im Bank Borrower Agreement, (ii) does not
        satisfy the criteria of Eligible Accounts except solely with respect to the
        fact
        that such Export-Related Accounts are owed by non-U.S. or non-Canadian Account
        Debtors or (iii) does not secure an Export-Related Advance that has been
        guaranteed by the Ex-Im Bank, without recourse to such Borrower Party or
        their
        assets (other than an assignment of rights in the Account guaranteed as a
        condition to payment on such guarantee), and the terms of such guarantees
        and
        the security interest of the Lenders therein are reasonably acceptable to
        Agent.

         

        
          1.7    Eligible
            Inventory.  All
            of
            the Inventory owned by the Borrower Parties (other than Eligible
            Machinery-in-Process) and reflected in the most recent Borrowing Base
            Certificate delivered by Borrower Representative, on behalf of itself
            and each
            other Borrower Party, to Agent shall be “Eligible
            Inventory”
for
            purposes of this Agreement, except any Inventory to which any of the
            exclusionary criteria set forth below applies. Agent (i) shall have the
            right to
            establish, modify or eliminate Reserves against Eligible Inventory from
            time to
            time in its Permitted Discretion and (ii) reserves the right, at any
            time and
            from time to time after the Closing Date, to adjust the criteria set
            forth below
            and to establish new criteria under this clause (ii) with respect to
            Eligible
            Inventory in its Permitted Discretion reflecting changes in the salability
            or
            realization values of Inventory arising or discovered by Agent after
            the Closing
            Date, subject to the approval of Requisite Lenders in the case of adjustments
            or
            new criteria under this clause (ii) which have the effect of making more
            credit
            available (unless such adjustment restores the amount of credit available
            to a
            previously obtained amount). Eligible Inventory shall not include any
            Inventory
            of any Borrower Party that:

        

         

         

        
          
            
            

          

          
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                                (a)    is
          not
          owned by such Borrower Party free and clear of all Liens and rights of
          any other
          Person (including the rights of a purchaser that has made progress payments
          and
          the rights of a surety that has issued a bond to assure such Borrower Party’s
          performance with respect to that Inventory), except the Liens in favor
          of Agent,
          on behalf of itself and Lenders, and permitted encumbrances in favor of
          landlords and bailees to the extent permitted hereunder (subject to Reserves
          established by Agent) and other Liens permitted hereunder;

         

                                (b)    (i)
          is
          not located on premises owned, leased or rented by such Borrower Party
          and set
          forth in Schedule
          3.29,
          or (ii)
          is stored at a leased location, unless Agent has given its prior consent
          thereto
          (such consent not to be unreasonably withheld by Agent in its Permitted
          Discretion) and unless either (x) a reasonably satisfactory landlord waiver
          has
          been delivered to Agent, or (y) Reserves reasonably satisfactory to Agent
          have
          been established with respect thereto or (iii) is stored with a bailee
          or
          warehouseman unless a reasonably satisfactory, acknowledged bailee letter
          has
          been received by Agent or Reserves reasonably satisfactory to Agent have
          been
          established with respect thereto, or (iv) is located at an owned location
          subject to a mortgage in favor of a lender other than Agent unless a reasonably
          satisfactory mortgagee waiver has been delivered to Agent; provided,
          however,
          clauses
          (i) through (iv) above shall not apply to Inventory located at (a) the
          Rite-Tech
          location in Quebec, Canada and (b) the Progress Precision location in
          Mississuaga, Ontario, Canada; provided,
          further,
          Inventory located at any site where the aggregate Book Value of all Inventory
          at
          such location is less than $100,000 shall not be Eligible Inventory hereunder
          (except with respect to Inventory located at (a) the Rite Tech location
          in
          Quebec, Canada and (b) the Progress Precision location in Mississuaga,
          Ontario,
          Canada);

         

                                (c)    is
          placed
          on consignment with the applicable Borrower Party from its supplier or
          is in
          transit, except for Inventory in transit between domestic locations of
          the
          Credit Parties as to which Agent’s Liens have been perfected at origin and
          destination;

         

                                (d)    is
          covered by a negotiable document of title, unless such document has been
          delivered to Agent with all necessary endorsements, free and clear of all
          Liens
          except those in favor of Agent and Lenders and other Liens permitted
          hereunder;

         

                                (e)    consists
          of display items or packing or shipping materials, manufacturing supplies,
          work-in-process Inventory or machines-in-process Inventory, provided,
          however,
          that
          the amount of machines-in-process more than ninety-five percent (95%) complete
          (in terms of time or dollars) will be adjusted to reflect their value as
          if such
          machines-in-process were converted to finished goods and such value shall
          be
          Eligible Inventory to the extent that the amount is reduced by expenses
          required
          to complete such machines-in-process into finished goods;

         

         

        
          
            
            

          

          
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                                (f)    consists
          of goods which have been returned by the buyer (other than goods that are
          undamaged and resalable in the normal course of business);

         

                                (g)    is
          not of
          a type held for sale in the ordinary course of such Borrower Party’s
          business;

         

                                (h)    is
          not
          subject to a first priority Lien in favor of Agent on behalf of itself
          and
          Lenders;

         

                                (i)    that
          fails to conform in all material respects (to the extent such representation
          or
          warranty does not contain a materiality qualifier) with any of the
          representations or warranties pertaining to Inventory set forth in the
          Loan
          Documents;

         

                                (j)    consists
          of any costs associated with “freight in” charges that are not specifically
          ascribed to an individual item of Inventory;

         

                                (k)    consists
          of Hazardous Materials or goods that can be transported or sold only with
          licenses that are not readily available and for which licensed third-party
          transporters are not readily available; 

         

                                (l)    is
          not
          covered by property insurance that is commercially reasonable insurance
          protection for the Borrower Parties’ industry, size and risk and Agent’s
          collateral protection as in effect on the Closing Date provided that any
          changes
          to such insurance protection that are material and adverse to the Lenders
          shall
          be reasonably acceptable to Agent in its Permitted Discretion;

         

                                (m)    is
          subject to any patent or trademark license requiring the payment of royalties
          or
          fees (other than with respect royalties or fees that are (i) payable solely
          after the sale of such Inventory and (ii) constitute unsecured claims against
          the applicable Borrower Party) or requiring the consent of the licensor
          for a
          sale thereof by Agent, unless Agent shall have entered into a waiver of
          such
          licensing requirement pursuant to a written agreement in form and substance
          reasonably satisfactory to Agent; or

         

                                (n)    has
          been
          consigned to a Borrower Party’s customer, unless (i) such consigned Inventory
          with such customer at a particular location has an aggregate Book Value
          in
          excess of $100,000, (ii) such consigned Inventory has been delivered to
          a
          customer location in respect of which a satisfactory access agreement has
          been
          executed in favor of and received by Agent, (iii) such consigned Inventory
          is
          segregated or otherwise separately identifiable from any goods of any other
          person at the applicable customer location, (iv) a UCC-1 or Personal Property
          Security Act (as applicable) financing statement has been filed in the
          jurisdiction of the applicable customer’s organization, which names such
          customer as debtor, the applicable Borrower Party as secured party and
          Agent as
          assignee of secured party and which identifies such consigned Inventory
          in the
          possession of such customer as the collateral; (v) a notice that complies
          with
          the terms of Section 9-324 of the Code (or Section 33 of the Personal Property
          Security Act, as applicable) has been delivered to the secured creditors,
          if
          any, of the applicable customer that have a perfected Lien in the Inventory
          of
          such customer; and (vi) the aggregate amount of all such consigned Inventory
          included in Eligible Inventory shall not exceed $3,000,000.

         

         

        
          
            
            

          

          
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    1.7A  Eligible
      Machinery-in-Process.
      All of
      the Machinery-in-Process of the Borrower Parties reflected in the most recent
      Borrowing Base Certificate delivered by Borrower Representative, on behalf
      of
      itself and each other Borrower Party, to Agent shall be “Eligible
      Machinery-in-Process”
for
      purposes of this Agreement, except any excluded Machinery-in-Process referred
      to
      in the last sentence of this Section
      1.7A.
      Agent
      (i) shall have the right to establish, modify or eliminate Reserves against
      Eligible Machinery-in-Process from time to time in its Permitted Discretion
      and
      (ii) reserves the right, at any time and from time to time after the Closing
      Date, to adjust any of the criteria set forth below and to establish new
      criteria under this clause (ii) in its Permitted Discretion, reflecting changes
      in the collectibility or realization values of such Machinery-in-Process arising
      or discovered by Agent after the Closing Date
      subject to the approval of Requisite Lenders in the case of adjustments or
      new
      criteria under this clause (ii) which have the effect of making more credit
      available (unless such adjustment restores the amount of credit available to
      a
      previously obtained amount). Eligible Machinery-in-Process shall not include
      any
      Machinery-in-Process of any Borrower Party (i) the value of which is not
      supported by the most recent appraisal delivered in accordance with paragraph
      (h) of Annex
      F,
      in form
      and substance reasonably satisfactory to Agent, and (ii) that does not satisfy
      the criteria set forth in the definition of Eligible Inventory in all respects
      except for the fact that such Eligible Machinery-in-Process consists of
      work-in-progress or machinery-in-progress.

     

    1.8    Cash
      Management Systems.
      Borrowers will establish and will maintain until the Termination Date, the
      cash
      management systems described in Annex C (the “Cash Management
      Systems”) on the terms and subject to the limitations set forth
      therein.

     

    1.9    Fees.

     

    (a)    Borrowers
      shall pay to GE Capital, individually, the Fees specified in the GE Capital
      Fee
      Letter.

     

    (b)    As
      additional compensation for the Revolving Lenders, Borrowers shall pay to Agent,
      for the ratable benefit of such Lenders, in arrears, on the first Business
      Day
      of each month prior to the Commitment Termination Date and on the Commitment
      Termination Date, a Fee for Borrowers’ non-use of available funds in an amount
      equal to the Applicable Unused Line Fee Margin per annum (calculated on the
      basis of a 360-day year for actual days elapsed) multiplied by the difference
      between (x) the Maximum Amount (as it may be reduced from time to time) and
      (y)
      the average for the period of the daily closing balances of the aggregate
      Revolving Loan, the Export-Related Loan and the Swing Line Loan outstanding
      during the period for which such Fee is due.

     

    (c)    Borrowers
      shall pay to Agent, for the ratable benefit of Revolving Lenders, the Letter
      of
      Credit Fee as provided in Annex B.

     

     

    
      
        
        

      

      
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    (d)    On
      the
      Export-Related Loan Commitment Date and each annual anniversary thereof,
      Borrowers shall pay to Agent annual fees for the Export-Related Loan
      Commitment as follows (from which all fees due to Ex-Im Bank from Borrowers
      will
      be paid by Agent on behalf of Borrowers):

     

    (i)    an
      annual
      Ex-Im Facility Fee in an amount equal to the sum of (x) 0.25% of the first
      $2,000,000 of the Export-Related Loan Commitment plus, (y) 0.75% of the
      Export-Related Loan Commitment in excess of $2,000,000; and

     

    (ii)    an
      annum
      Compliance/Admin Support Fee in an amount equal to 0.25% of the Export-Related
      Loan Commitment.

     

    1.10    Receipt
      of Payments.
      Borrowers shall make each payment under this Agreement not later than 2:00
      p.m.
      (New York time) on the day when due in immediately available funds in Dollars
      to
      the Collection Account. For purposes of computing interest and Fees and
      determining Primary Borrowing Availability and/or Export-Related Borrowing
      Availability, as the case may be, as of any date, all payments shall be deemed
      received on the Business Day on which immediately available funds therefor
      are
      received in the Collection Account prior to 2:00 p.m. New York time. Payments
      received after 2:00 p.m. New York time on any Business Day or on a day that
      is
      not a Business Day shall be deemed to have been received on the following
      Business Day.

     

    1.11    Application
      and Allocation of
      Payments.

     

    (a)    So
      long
      as no Event of Default has occurred and is continuing, (i) payments consisting
      of proceeds of Accounts (other than Export-Related Accounts) received in the
      ordinary course of business shall be applied, first, to the Permitted
      Overadvance, second, to the Swing Line Loan, third, the Revolving
      Loan; and fourth, to the Export-Related Advances, (ii) payments
      consisting of proceeds of Export-Related Accounts received in the ordinary
      course of business shall be applied, first, to the Export-Related Advances,
      second, to the Permitted Overadvance, third, to the Swing Line
      Loan, fourth, the Revolving Loan; (iii) payments matching specific
      scheduled payments then due shall be applied to those scheduled payments; (iv)
      voluntary prepayments shall be applied in accordance with the provisions of
      Section 1.3(a); and (v) mandatory prepayments shall be applied as set
      forth in Sections 1.3(c) and 1.3(d). All payments and prepayments
      applied to a particular Loan shall be applied ratably to the portion thereof
      held by each Lender as determined by its Pro Rata Share. Any other payment
      shall be applied as directed by the Borrower Representative. As to all payments
      made when an Event of Default has occurred and is continuing or following the
      Commitment Termination Date, each Borrower hereby irrevocably waives the right
      to direct the application of any and all payments received from or on behalf
      of
      such Borrower, and each Borrower hereby irrevocably agrees that Agent shall
      have
      the continuing exclusive right to apply any and all such payments against the
      Obligations of Borrowers as Agent may deem advisable notwithstanding any
      previous entry by Agent in the Loan Account or any other books and records;
      provided, that (i) Agent shall apply payments first to amounts that are
      then due and payable and (ii) to the extent any payment received by Agent
      following an Event of Default is applied (x) to interest on the Loans (other
      than the Swing Line Loan), a pro rata portion of such payment shall be applied
      to interest on Swap Related Reimbursement Obligations based upon the
      aggregate unpaid amounts owing to each holder thereof, and (y) to principal
      on
      the Loans (other
      than the Swing Line Loan), a pro rata portion of such payment shall be applied
      to unpaid Swap Related Reimbursement Obligations based upon the aggregate unpaid
      amounts owing to each holder thereof. In all circumstances, after acceleration
      or maturity of the Obligations, all payments and proceeds of Collateral shall
      be
      applied to amounts then due and payable in the following order: (1) to reimburse
      the L/C Issuer for all unreimbursed draws or payments made by it under Letters
      of Credit, (2) to Fees and Agent’s expenses reimbursable hereunder; (3) to
      interest on the Swing Line Loan; (4) to principal payments on the Swing Line
      Loan; (5) to interest on the other Loans and unpaid Swap Related Reimbursement
      Obligations, ratably in proportion to the interest accrued as to each Loan
      and
      unpaid Swap Related Reimbursement Obligation, as applicable; (6) to principal
      payments on the other Loans and unpaid Swap Related Reimbursement Obligations
      and to provide cash collateral for contingent Letter of Credit Obligations
      in
      the manner described in Annex B, ratably to the aggregate, combined
      principal balance of the other Loans, unpaid Swap Related Reimbursement
      Obligations and outstanding Letter of Credit Obligations; (7) to all other
      Obligations, including expenses of Lenders to the extent reimbursable under
      Section 11.3; and (8) any remainder shall be remitted to Borrowers or any
      other Person legally entitled thereto.

     

     

    
      
        
        

      

      
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    (b)    Agent
      is
      authorized to, and at its sole election may, charge to the Revolving Loan
      balance on behalf of each Borrower and cause to be paid all Fees, expenses,
      Charges, costs (including insurance premiums in accordance with Section
      5.7) and interest and principal, other than principal of the Revolving Loan,
      owing by Borrowers under this Agreement or any of the other Loan Documents
      if
      and to the extent Borrowers fail to pay promptly any such amounts as and when
      due, even if the amount of such charges would exceed the Aggregate Borrowing
      Availability at such time. At Agent’s option and to the extent permitted by law,
      any charges so made shall constitute part of the Revolving Loan hereunder.
      Agent
      will give Borrower Representative notice of any such charge promptly after
      such
      charge is made.

     

    1.12    Loan
      Account and
      Accounting.
      Agent
      shall maintain a loan account (the “Loan Account”) on its books to
      record: all Advances, all payments made by Borrowers, and all other debits
      and
      credits as provided in this Agreement with respect to the Loans or any other
      Obligations. All entries in the Loan Account shall be made in accordance with
      Agent’s customary accounting practices as in effect from time to time. The
      balance in the Loan Account, as recorded on Agent’s most recent printout or
      other written statement, shall, absent manifest error, be presumptive evidence
      of the amounts due and owing to Agent and Lenders by each Borrower;
provided that any failure to so record or any error in so recording shall
      not limit or otherwise affect any Borrower’s duty to pay the Obligations. Agent
      shall render to Borrower Representative a monthly accounting of transactions
      with respect to the Loans setting forth the balance of the Loan Account as
      to
      each Borrower for the immediately preceding month. Unless Borrower
      Representative notifies Agent in writing of any objection to any such accounting
      (specifically describing the basis for such objection), within thirty (30)
      days
      after the date thereof, each and every such accounting shall be presumptive
      evidence of all matters reflected therein. Only those items expressly objected
      to in such notice shall be deemed to be disputed by Borrowers.

     

     

    
      
        
        

      

      
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    1.13    Indemnity.

     

    (a)    Each
      Credit Party that is a signatory hereto shall jointly and severally indemnify
      and hold harmless each of Agent, Lenders and their respective Affiliates, and
      each such Person’s respective officers, directors, employees, attorneys,
      advisors (financial or otherwise), agents and representatives (each, an
“Indemnified Person”), from and against any and all suits, actions,
      proceedings, claims, damages, losses, liabilities and related reasonable
      out-of-pocket expenses (including reasonable attorneys’ fees and disbursements
      and other costs of investigation or defense, including those incurred upon
      any
      appeal) that may be instituted or asserted against or incurred by any such
      Indemnified Person as the result of credit having been extended, suspended
      or
      terminated under this Agreement and the other Loan Documents and the
      administration of such credit, and in connection with or arising out of the
      transactions contemplated hereunder and thereunder and any actions or failures
      to act in connection therewith, including any and all Environmental Liabilities
      (collectively, “Indemnified Liabilities”); provided, that no such
      Credit Party shall be liable for any indemnification to an Indemnified Person
      to
      the extent that any such suit, action, proceeding, claim, damage, loss,
      liability or expense, including any and all Environmental Liabilities, results
      from that Indemnified Person’s gross negligence or willful misconduct. NO
      INDEMNIFIED PERSON SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO ANY
      LOAN
      DOCUMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON
      ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE,
      EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A RESULT OF CREDIT
      HAVING BEEN EXTENDED, SUSPENDED OR TERMINATED UNDER ANY LOAN DOCUMENT OR AS
      A
      RESULT OF ANY OTHER TRANSACTION CONTEMPLATED HEREUNDER OR
      THEREUNDER.

     

    (b)    To
      induce
      Lenders to provide the LIBOR Rate option on the terms provided herein, if (i)
      any LIBOR Loans are repaid in whole or in part prior to the last day of any
      applicable LIBOR Period (whether that repayment is made pursuant to any
      provision of this Agreement or any other Loan Document or occurs as a result
      of
      acceleration, by operation of law or otherwise); (ii) any Borrower shall refuse
      to accept any borrowing of, or shall request a termination of, any borrowing
      of,
      conversion into or continuation of, LIBOR Loans after Borrower Representative
      has given notice requesting the same in accordance herewith; or (iii) any
      Borrower shall fail to make any prepayment of a LIBOR Loan after Borrower
      Representative has given a notice thereof in accordance herewith, then Borrowers
      shall jointly and severally indemnify and hold harmless each Lender from and
      against all losses, costs and expenses (excluding loss of margin) resulting
      from
      or arising from any of the foregoing. Such indemnification shall include any
      loss (excluding loss of margin) or expense arising from the reemployment of
      funds obtained by it or from fees payable to terminate deposits from which
      such
      funds were obtained. For the purpose of calculating amounts payable to a Lender
      under this subsection, each Lender shall be deemed to have actually funded
      its
      relevant LIBOR Loan through the purchase of a deposit bearing interest at the
      LIBOR Rate in an amount equal to the amount of that LIBOR Loan and having a
      maturity comparable to the relevant LIBOR Period; provided, that each
      Lender may fund each of its LIBOR Loans in any manner it sees fit, and the
      foregoing assumption shall be utilized only for the calculation of amounts
      payable under this subsection. This covenant shall survive the termination
      of
      this Agreement and the payment of the Notes and all other amounts payable
      hereunder. As promptly as practicable under
      the
      circumstances, each Lender shall provide Borrower Representative with its
      written calculation of all amounts payable pursuant to this Section
      1.13(b), and such calculation shall be binding on the parties hereto unless
      Borrower Representative shall object in writing within ten (10) Business Days
      of
      receipt thereof, specifying the basis for such objection in
      detail.

     

     

    
      
        
        

      

      
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    1.14    Intentionally
      Omitted.

     

    1.15    Taxes.

     

    (a)    Any
      and
      all payments by each Borrower hereunder (including any payments made pursuant
      to
Section 12) or under the Notes shall be made, in accordance with this
Section 1.15, free and clear of and without deduction for any and all
      present or future Taxes. If any Borrower shall be required by law to deduct
      any
      Taxes from or in respect of any sum payable hereunder (including any sum payable
      pursuant to Section 12) or under the Notes, (i) the sum payable shall be
      increased as much as shall be necessary so that after making all required
      deductions (including deductions applicable to additional sums payable under
      this Section 1.15) Agent or Lenders, as applicable, receive an amount
      equal to the sum they would have received had no such deductions been made,
      (ii)
      such Borrower shall make such deductions, and (iii) such Borrower shall pay
      the
      full amount deducted to the relevant taxing or other authority in accordance
      with applicable law. Within thirty (30) days after the date of any payment
      of
      Taxes, Borrower Representative shall furnish to Agent the original or a
      certified copy of a receipt evidencing payment thereof.

     

    (b)    Each
      Credit Party that is a signatory hereto shall jointly and severally indemnify
      and, within ten (10) days of demand therefore, pay Agent and each Lender for
      the
      full amount of Taxes (including any Taxes imposed by any jurisdiction on amounts
      payable under this Section 1.15) paid by Agent or such Lender, as
      appropriate, and any liability (including penalties, interest and expenses)
      arising therefrom or with respect thereto, whether or not such Taxes were
      correctly or legally asserted.

     

    (c)    Each
      Lender organized under the laws of a jurisdiction outside the United States
      (a
“Foreign Lender”) as to which payments to be made under this Agreement or
      under the Notes are exempt from United States withholding tax under an
      applicable statute or tax treaty shall provide to Borrower Representative and
      Agent a properly completed and executed IRS Form W-8ECI or Form W-8BEN or other
      applicable form, certificate or document prescribed by the IRS or the United
      States certifying as to such Foreign Lender’s entitlement to such exemption (a
“Certificate of Exemption”). Any foreign Person that seeks to become a
      Lender under this Agreement shall provide a Certificate of Exemption to Borrower
      Representative and Agent prior to becoming a Lender hereunder. No foreign Person
      may become a Lender hereunder if such Person fails to deliver a Certificate
      of
      Exemption in advance of becoming a Lender.

     

    (d)    If
      Agent
      or a Lender determines, in its sole discretion, that it has received a refund
      of
      any Taxes as to which it has been indemnified by Borrowers or with respect
      to
      which any Borrower has paid additional amounts pursuant to this Section
      1.15, so long as no Default or Event of Default has occurred and is
      continuing, it shall pay over such refund to Borrowers (but only to the extent
      of payments made, or additional amounts paid, by Borrowers
      under this Section 1.15 with respect to Taxes giving rise to such a
      refund), net of all reasonable out-of-pocket expenses of Agent or such Lender
      and without interest (other than any interest paid by the relevant Governmental
      Authority with respect to such a refund); provided, that Borrowers, upon
      the request of Agent or such Lender, agree to repay the amount paid over to
      Borrowers (plus any penalties, interest or other charges, imposed by the
      relevant Governmental Authority, other than such penalties, interest or other
      charges imposed as a result of the willful misconduct or gross negligence of
      Agent hereunder) to Agent or Lender in the event Agent or Lender is required
      to
      repay such refund to such Governmental Authority. Except as expressly provided
      for in this Section 1.15, this Section shall not be construed to require
      Agent or any Lender to make available its tax returns (or any other information
      relating to its taxes which it deems confidential) to the Borrowers or any
      other
      Person.

     

     

    
      
        
        

      

      
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    1.16    Capital
      Adequacy; Increased Costs;
      Illegality.

     

    (a)    If
      any
      law, treaty, governmental (or quasi-governmental) rule, regulation, guideline
      or
      order regarding capital adequacy, reserve requirements or similar requirements
      or compliance by any Lender with any request or directive regarding capital
      adequacy, reserve requirements or similar requirements (whether or not having
      the force of law), in each case, adopted after the Closing Date, from any
      central bank or other Governmental Authority increases or would have the effect
      of increasing the amount of capital, reserves or other funds required to be
      maintained by such Lender and thereby reducing the rate of return on such
      Lender’s capital as a consequence of its obligations hereunder, then Borrowers
      shall from time to time upon demand by such Lender (with a copy of such demand
      to Agent) pay to Agent, for the account of such Lender, additional amounts
      sufficient to compensate such Lender for such reduction. Any such demand shall
      be accompanied by a certificate as to the amount of that reduction, showing
      the
      basis of the computation thereof, submitted by such Lender to Borrower
      Representative and to Agent, and shall be presumptive evidence of the matters
      set forth therein.

     

    (b)    If,
      due
      to either (i) the introduction of or any change in any law or regulation
      (or any change in the interpretation thereof) or (ii) the compliance with
      any guideline or request from any central bank or other Governmental Authority
      (whether or not having the force of law), in each case adopted after the Closing
      Date, there shall be any increase in the cost to any Lender of agreeing to
      make
      or making, funding or maintaining any Loan, then Borrowers shall from time
      to
      time, upon demand by such Lender (with a copy of such demand to Agent), pay
      to
      Agent for the account of such Lender additional amounts sufficient to compensate
      such Lender for such increased cost. Any such demand shall be accompanied by
      a
      certificate as to the amount of such increased cost, submitted to Borrower
      Representative and to Agent by such Lender, and shall be presumptive evidence
      of
      the matters set forth therein. Each Lender agrees that, as promptly as
      practicable after it becomes aware of any circumstances referred to above which
      would result in any such increased cost, the affected Lender shall, to the
      extent not inconsistent with such Lender’s internal policies of general
      application, use reasonable commercial efforts to minimize costs and expenses
      incurred by it and payable to it by Borrowers pursuant to this Section
      1.16(b).

     

     

    
      
        
        

      

      
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    (c)    Notwithstanding
      anything to the contrary contained herein, if the introduction of or any change
      in any law or regulation (or any change in the interpretation thereof)
      shall make it unlawful, or any central bank or other Governmental Authority
      shall assert that it is unlawful, for any Lender to agree to make or to make
      or
      to continue to fund or maintain any LIBOR Loan, then, unless that Lender is
      able
      to make or to continue to fund or to maintain such LIBOR Loan at another branch
      or office of that Lender without, in that Lender’s reasonable opinion,
      materially adversely affecting it or its Loans or the income obtained therefrom,
      on notice thereof and demand therefor by such Lender to Borrower Representative
      through Agent, (i) the obligation of such Lender to agree to make or to
      make or to continue to fund or maintain LIBOR Loans shall terminate and
      (ii) each Borrower shall forthwith prepay in full all outstanding LIBOR
      Loans owing by such Borrower to such Lender, together with interest accrued
      thereon, unless Borrower Representative on behalf of such Borrower, within
      five
      (5) Business Days after the delivery of such notice and demand, converts all
      LIBOR Loans into Index Rate Loans.

     

    (d)    Within
      thirty (30) days after receipt by Borrower Representative of written notice
      and
      demand from any Lender (an “Affected Lender”) for payment of additional
      amounts or increased costs as provided in Section 1.15(a), 1.16(a)
      or 1.16(b), Borrower Representative may, at its option, notify Agent and
      such Affected Lender of its intention to replace the Affected Lender. Borrower
      Representative, with the consent of Agent (such consent not to be unreasonably
      withheld), may obtain, at Borrowers’ expense, a replacement Lender
      (“Replacement Lender”) for the Affected Lender, which Replacement Lender
      must be reasonably satisfactory to Agent. If Borrowers obtain a Replacement
      Lender, the Affected Lender must sell and assign its Loans and Commitments
      to
      such Replacement Lender for an amount equal to the principal balance of all
      Loans held by the Affected Lender and all accrued interest and Fees with respect
      thereto through the date of such sale and such assignment shall not require
      the
      payment of an assignment fee to Agent; provided, that Borrowers shall
      have reimbursed such Affected Lender for the additional amounts or increased
      costs that it is entitled to receive under this Agreement through the date
      of
      such sale and assignment.

     

    (e)    Notwithstanding
      anything to the contrary contained in Section 1.15(a), 1.16(a) or
1.16(b), no Borrower shall be required to compensate a Lender
      or L/C
      Issuer pursuant to this Section for any increased costs or reductions incurred
      more than 180 days prior to the date that such Lender or L/C Issuer, as the
      case
      may be, notifies such Borrower of the change in law or regulation giving rise
      to
      such increased costs or reductions and of such Lender’s or L/C Issuer’s
      intention to claim compensation therefore; provided, however, that
      if the change in law or regulation (or any interpretation thereof) giving rise
      to such increased costs or reductions is retroactive, then such 180-day period
      shall be extended to include the period of such retroactive effect.

     

    1.17    Single
      Loan.
      All
      Loans to each Borrower and all of the other Obligations of each Borrower arising
      under this Agreement and the other Loan Documents shall constitute one general
      obligation of that Borrower secured, until the Termination Date, by all of
      the
      Collateral.

     

     

    
      
        
        

      

      
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    2. 
      CONDITIONS
      PRECEDENT

     

    2.1    Conditions
      to the Initial
      Loans.
      No
      Lender shall be obligated to make any Loan or incur any Letter of Credit
      Obligations on the Closing Date, or to take, fulfill, or perform any other
      action hereunder, until the following conditions have been satisfied or provided
      for in a manner reasonably satisfactory to Agent, or waived in writing by
      Agent:

     

    (a)    Credit
      Agreement; Loan Documents. This Agreement or counterparts hereof shall have
      been duly executed by Borrowers, each other Credit Party, Agent and Lenders,
      and
      delivered to Agent; and Agent shall have received the documents, instruments,
      agreements and legal opinions as listed in the Closing Checklist attached hereto
      as Annex D, each in form and substance reasonably satisfactory to
      Agent.

     

    (b)    Repayment
      of Prior Lender Obligations; Satisfaction of Outstanding L/Cs. (i) Agent
      shall have received a fully executed pay-off letter reasonably satisfactory
      to
      Agent confirming that all of the Prior Lender Obligations will be repaid in
      full
      from the proceeds of the initial Advances and all Liens upon any of the property
      of Borrowers or any of their Subsidiaries in favor of Prior Lenders shall be
      terminated by Prior Lenders immediately upon such payment; and (ii) all letters
      of credit issued or guaranteed by Prior Lenders shall have been cancelled,
      cash
      collateralized, supported by a guaranty of Agent or supported by a Letter of
      Credit issued pursuant to Annex B, as mutually agreed upon by Agent,
      Borrowers and Prior Lenders.

     

    (c)    Approvals.
      Agent shall have received (i) reasonably satisfactory evidence that the Credit
      Parties have obtained all required consents and approvals of all Persons
      including all requisite Governmental Authorities, to the execution, delivery
      and
      performance of this Agreement and the other Loan Documents and the consummation
      of the Related Transactions (other than those set forth on Schedule 2.1
      attached hereto) or (ii) an officer’s certificate in form and substance
      reasonably satisfactory to Agent affirming that no such consents or approvals
      are required.

     

    (d)    Opening
      Availability. On the Closing Date, after giving effect to the initial
      Advances made to Borrowers, the incurrence of any initial Letter of Credit
      Obligations and the consummation of the Related Transactions (on a pro forma
      basis, with trade payables being paid in accordance with historical practices),
      Borrowers shall have Excess Availability of at least $20,000,000.

     

    (e)    Payment
      of Fees. Borrowers shall have paid the Fees required to be paid on the
      Closing Date in the respective amounts specified in Section 1.9
      (including the Fees specified in the GE Capital Fee Letter), and shall have
      reimbursed Agent for all fees, costs and expenses of closing required to be
      reimbursed in accordance with the Loan Documents and presented prior to the
      Closing Date.

     

    2.2    Further
      Conditions to Each Loan.
      Except
      as otherwise expressly provided herein, the obligation of any Lender to fund
      any
      Advance or incur any Letter of
      Credit
      Obligation is subject to the fulfillment, in a manner satisfactory to the Agent,
      of each of the following conditions precedent:

     

     

    
      
        
        

      

      
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    (a)    (i)
      the
      representations or warranties by any Credit Party contained herein or in any
      other Loan Document are true and correct as of such date, except to the extent
      that such representation or warranty expressly relates to an earlier date and
      except for changes therein expressly permitted or expressly contemplated by
      this
      Agreement and (ii) Agent or Requisite Revolving Lenders have not determined
      not
      to make such Advance or incur such Letter of Credit Obligation as a result
      of
      the fact that such warranty or representation is untrue or
      incorrect;

     

    (b)    (i)
      no
      Default or Event of Default has occurred and is continuing or would result
      after
      giving effect to any Advance (or the incurrence of any Letter of Credit
      Obligation), and (ii) Agent or Requisite Revolving Lenders shall not have
      determined not to make any Advance or incur any Letter of Credit Obligation
      as a
      result of any Default or Event of Default; or

     

    (c)    after
      giving effect to any Advance (or the incurrence of any Letter of Credit
      Obligations), (i) the outstanding principal amount of all Loans would not exceed
      the lesser of (A) the sum of (1) the Aggregate Borrowing Base plus (2) the
      Maximum Overadvance Amount, and (B) the Maximum Amount, (ii) the outstanding
      principal amount of the aggregate Revolving Loan would not exceed the lesser
      of
      (A) the sum of (1) the Primary Borrowing Base plus (2) the Maximum Overadvance
      Amount, and (B) the Maximum Amount, (iii) the outstanding principal amount
      of
      the Export-Related Loan would not exceed the lesser of (A) the Export-Related
      Borrowing Availability and (B) the Export-Related Loan Commitment and (iv)
      the
      outstanding principal amount of all Permitted Overadvances would not exceed
      the
      Maximum Overadvance Amount.

     

    The
      request and acceptance by any Borrower of the proceeds of any Advance or the
      incurrence of any Letter of Credit Obligations shall be deemed to constitute,
      as
      of the date thereof, (i) a representation and warranty by Borrowers that the
      conditions in this Section 2.2 have been satisfied and (ii) a
      reaffirmation by Borrowers of the cross-guaranty provisions set forth in
Section 12 and of the granting and continuance of Agent’s Liens, on
      behalf of itself and Lenders, pursuant to the Collateral Documents.

     

    2.3    Further
      Conditions to Each Export-Related
      Advance. Except as otherwise expressly provided herein, no Revolving
      Lender shall be obligated to fund any Export-Related Advance, unless, as of
      the
      date thereof:

     

    (a)    Agent
      has
      received reasonably satisfactory evidence that Borrowers (i) have obtained
      all
      necessary consents and approvals from Ex-Im Bank and (ii) are in compliance
      with
      the terms and conditions of the Ex-Im Bank Working Capital Guarantee program
      plus any special approvals by Ex-Im Bank, if applicable;

     

    (b)    Agent
      has
      received duly executed copies of all Ex-Im Bank Documents, each in form and
      substance reasonably satisfactory to Agent and signed by each party
      thereto;

     

    (c)    Borrowers
      have duly executed any necessary application forms required by Ex-Im
      Bank;

     

    (d)    each
      Ex-Im Bank Document is in full force and effect;

     

     

    
      
        
        

      

      
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    (e)    with
      respect to any Export-Related Advance requested after the date of any scheduled
      termination of any Ex-Im Bank Guarantee, Agent has received written notice
      at
      least ninety (90) days prior to such scheduled termination (or such lesser
      time
      as may be reasonably agreed to by Agent) that the Ex-Im Bank Guarantee has
      been
      renewed; and

     

    (f)    the
      conditions set forth in Section 2.2 have been satisfied.

     

    The
      request and acceptance by Borrowers of the proceeds of any Export-Related
      Advance shall be deemed to constitute, as of the date thereof, (i) a
      representation and warranty by Borrowers that the conditions in this Section
      2.3 have been satisfied and (ii) a reaffirmation by Borrowers of the
      cross-guaranty provisions set forth in Section 12 and of the granting and
      continuance of Agent’s Liens, on behalf of itself and Lenders, pursuant to the
      Collateral Documents.

     

     

    3. 
      REPRESENTATIONS
      AND WARRANTIES

     

    To
      induce
      Lenders to make the Loans and to incur Letter of Credit Obligations, the Credit
      Parties executing this Agreement, jointly and severally, make the following
      representations and warranties to Agent and each Lender with respect to all
      Credit Parties, each and all of which shall survive the execution and delivery
      of this Agreement.

     

    3.1    Organization,
      Good Standing,
      Etc.
      Each
      Credit Party (i) is a corporation, limited liability company or limited
      partnership duly organized, validly existing and in good standing under the
      laws
      of the state, province or other applicable jurisdiction of its organization,
      (ii) has all requisite corporate power and authority to conduct its business
      as
      now conducted and as presently contemplated and, in the case of the Borrowers,
      to make the borrowings hereunder, and to execute and deliver each Loan Document
      to which it is a party, and to consummate the transactions contemplated thereby,
      and (iii) is duly qualified to do business and is in good standing in each
      jurisdiction in which the character of the properties owned or leased by it
      or
      in which the transaction of its business makes such qualification necessary,
      except where the absence of any such qualification could not reasonably be
      expected to result in a Material Adverse Effect.

     

    3.2    Authorization,
      Etc.  The
      execution, delivery and performance by each Credit Party of each Loan Document
      to which it is or will be a party, (i) have been duly authorized by all
      necessary action, (ii) do not and will not contravene its (x) charter or
      by-laws, its limited liability company or operating agreement or its certificate
      of partnership or partnership agreement, as applicable, or (y) any material
      applicable law, rule or regulation, any applicable order, judgment or decree
      of  any
      Governmental Authority or any material contractual restriction binding on or
      otherwise affecting it or any of its properties (including, without limitation,
      the Senior Secured Notes Documents), (iii) do not and will not result in or
      require the creation of any Lien (other than pursuant to any Loan Document)
      upon
      or with respect to any of its properties, other than Liens securing obligations
      in an aggregate amount not exceeding $100,000, and (iv) do not and will not
      result in any default, noncompliance, suspension, revocation, impairment,
      forfeiture or nonrenewal of any material permit, license, authorization or
      approval applicable to its operations or any of its properties.

     

     

    
      
        
        

      

      
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    3.3    Governmental
      Approvals. No
      authorization or approval or other action by, and no notice to or filing with,
      any Governmental Authority is required in connection with the due execution,
      delivery and performance by any Credit Party of any Loan Document to which
      it is
      or will be a party, other than (i) those that have been obtained or made and
      are
      in full force and effect and (ii) filings necessary to perfect Liens on the
      Collateral.

     

    3.4    Enforceability
      of Loan Documents.
      This
      Agreement is, and each other Loan Document to which any Credit Party is or
      will
      be a party, when delivered hereunder, will be, a legal, valid and binding
      obligation of such Person, enforceable against such Person in accordance with
      its terms, except as may be limited by applicable bankruptcy, insolvency,
      reorganization, moratorium or other similar laws and subject to general
      principles of equity, regardless of whether considered in a proceeding in equity
      or at law.

     

    3.5    Subsidiaries.
      Schedule 3.5 is a complete and correct description of the name,
      jurisdiction of organization and ownership of the outstanding Stock of the
      Subsidiaries of Parent in existence on the date of this Agreement. Except as
      described in Schedule 3.5, all of the issued and outstanding shares of
      Stock of such Subsidiaries have been validly issued and are fully paid and
      nonassessable, and the holders thereof are not entitled to any preemptive,
      first
      refusal or other similar rights. Except as indicated on such Schedule, all
      such
      Stock is owned by Parent or one or more of its wholly-owned Subsidiaries, free
      and clear of all Liens and there are no outstanding debt or equity securities
      of
      Parent or any of its Subsidiaries and no outstanding obligations of Parent
      or
      any of its Subsidiaries convertible into or exchangeable for, or warrants,
      options or other rights for the purchase or acquisition from Parent or any
      of
      its Subsidiaries, or other obligations of any Subsidiary to issue, directly
      or
      indirectly, any shares of Stock of any Subsidiary of Parent.

     

    3.6    Litigation;
      Commercial Tort Claims.
      Except
      as set forth in Schedule 3.6, (i) there is no pending or, to the
      best knowledge of any Credit Party, threatened action, suit or proceeding
      affecting any Credit Party or its properties before any court or other
      Governmental Authority or any arbitrator (except with respect to any action,
      suit or proceeding expressly addressed in Section 3.18) that (A)
      could reasonably be expected to have a Material Adverse Effect or
      (B) relates to this Agreement or any other
      Loan Document or any transaction contemplated hereby or thereby and (ii) as
      of the Closing Date, none of the Credit Parties holds any commercial tort
      claims, with a claim exceeding $100,000, in respect of which a claim has been
      filed in a court of law or a written notice by an attorney has been given to
      a
      potential defendant.

     

    3.7    Financial
      Condition.

     

    (a)    The
      Financial Statements for the Fiscal Quarter ended September 30, 2006, copies
      of
      which have been delivered to each of Agent and each Lender, fairly present,
      in
      all material respects, the consolidated financial condition of Parent and its
      Subsidiaries as at the date thereof and the consolidated results of operations
      of Parent and its Subsidiaries for the fiscal period ended on such date, all
      in
      accordance with GAAP, and since September 30, 2006, no event or development
      has
      occurred that has had or could reasonably be expected to have a Material Adverse
      Effect provided, however, notwithstanding anything to the contrary
      contained herein, the pension liabilities incurred by the Credit Parties prior
      to the Closing Date or under the Pension
      Protection Act of 2006, the payments made by the Credit Parties for pension
      liabilities prior to the Closing Date of approximately $30,000,000, the
      borrowing under the Prior Credit Agreement related thereto and any accounting
      changes under SFAS 158 shall not be deemed to have a Material Adverse Effect
      for
      the purposes of this Section.

     

     

    
      
        
        

      

      
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    (b)    Parent
      has heretofore furnished to each Agent and each Lender (A) projected
      monthly balance sheets, income statements and statements of cash flows of Parent
      and its Subsidiaries for the period from October 2006 through December 2007,
      and
      (B) projected annual balance sheets, income statements and statements of cash
      flows of Parent and its Subsidiaries for the Fiscal Year ending in 2008. Such
      projections were believed by the Credit Parties at the time furnished to be
      reasonable, were prepared in good faith by the Credit Parties, and were based
      on
      assumptions, methods and tests stated therein which were believed by the Credit
      Parties to be reasonable at the time prepared and upon information believed
      by
      the Credit Parties to have been accurate based upon the information available
      to
      the Credit Parties at the time such projections were prepared, and Parent is
      not
      aware of any facts or information that would lead it to believe that such
      projections are incorrect or misleading in any material respect.

     

    3.8    Compliance
      with Law, Etc. No
      Credit
      Party is in violation of its organizational documents, any law, rule,
      regulation, judgment or order of any Governmental Authority applicable to it
      or
      any of its property or assets, or any material term of any material agreement
      or
      instrument (excluding any agreement or instrument in respect of Indebtedness
      but
      including any agreement or instrument in respect of Indebtedness in excess
      of
      $4,000,000 and any other Material Contract) binding on or otherwise affecting
      it
      or any of its properties, and no Default or Event of Default has occurred and
      is
      continuing. Notwithstanding the foregoing, this Section shall not be deemed
      to address any matters expressly addressed in Sections 3.9, 3.10,
3.11, 3.14 or 3.18, such matters being subject solely
      to
      such Sections.

     

    3.9    ERISA.
      Except
      as set forth on Schedule 3.9, (i) each Employee Plan is in
      substantial compliance in all substantial respects with ERISA and the IRC,
      (ii) no Termination Event has occurred nor is reasonably expected to occur
      with respect to any Employee Plan, (iii) since the date of the most recent
      annual report (Form 5500 Series) with respect to each Employee Plan, including
      any required Schedule B (Actuarial Information) thereto, copies of which
      have been filed with the Internal Revenue Service and delivered or made
      available upon request to Agent, there has been no material adverse change
      in
      such funding status, (iv) copies of each agreement entered into with the
      PBGC, the U.S. Department of Labor or the Internal Revenue Service with respect
      to any Employee Plan have been delivered to Agent, (v) no Employee Plan had
      an accumulated funding deficiency (whether or not waived) or has applied for
      an
      extension of any amortization period within the meaning of Section 412 of
      the IRC at any time during the previous 60 months, and (vi) no Lien
      imposed under Section 412(n) of the IRC or Section 4068 of ERISA
      exists or is reasonably expected to arise on account of any Employee Plan.
      Except as set forth on Schedule 3.9, no Credit Party or any of its ERISA
      Affiliates has incurred any withdrawal liability under ERISA with respect to
      any
      Multiemployer Plan, or is reasonably expected in the future to incur any such
      withdrawal liability. No Credit Party or any of its ERISA Affiliates or any
      fiduciary of any Employee Plan has (i) engaged in a nonexempt prohibited
      transaction described in Sections 406 of ERISA or 4975 of the IRC, (ii) failed
      to pay any required installment or other payment required under Section 412
      of the IRC on or before the due date for such required installment or payment,
      (iii) engaged in a transaction 

     

     

    
      
        
        

      

      
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    within
      the meaning of Section 4069 of ERISA or (iv) incurred any material
      liability to the PBGC which remains outstanding other than the payment of
      premiums, and there are no such premium payments which have become due which
      are
      unpaid. There are no pending or, to the best knowledge of any Credit Party,
      threatened material claims, actions, proceedings or lawsuits (other than claims
      for benefits in the normal course) asserted or instituted against (i) any
      Employee Plan or its assets, (ii) any fiduciary with respect to any Employee
      Plan, or (iii) any Credit Party or any of its ERISA Affiliates with respect to
      any Employee Plan. Except as set forth on Schedule 3.9 and except as
      required by Section 4980B of the IRC, no Credit Party or any of its ERISA
      Affiliates maintains an employee welfare benefit plan (as defined in
      Section 3(1) of ERISA) which provides health or welfare benefits (through
      the purchase of insurance or otherwise) for any retired or former employee
      of
      any Credit Party or any of its ERISA Affiliates or coverage after a
      participant’s termination of employment. Notwithstanding the preceding
      provisions of this Section 3.9, if approved in advance in writing by
      Agent and the Requisite Lenders in accordance with Section 6.15, the
      minimum funding waiver application described in Section 6.15 shall not be
      considered a Termination Event, nor result in a Lien, nor constitute a material
      adverse change in funding status, nor considered the failure to pay a required
      installment or other payment, nor considered a violation of any other plan
      funding requirement, for purposes of this Section 3.9.

     

    3.10    Taxes,
      Etc.
      All
      Federal and material foreign, state, provincial and local tax returns and other
      reports required by applicable law to be filed by any Credit Party have been
      filed, or extensions have been obtained, and all taxes, assessments and other
      governmental charges imposed upon any Credit Party or any property of any Credit
      Party and which have become due and payable have been paid, except such taxes,
      assessments and governmental charges in an aggregate amount not exceeding
      $100,000 or to the extent contested in good faith by proper proceedings
      which stay the imposition of any penalty, fine or Lien resulting from the
      non-payment thereof and with respect to which adequate reserves, if any, have
      been set aside for the payment thereof on the most recently available
      consolidated financial statements of Parent to the extent required by and in
      accordance with GAAP.

     

    3.11    Regulations
      T, U and X.
      No
      Credit Party is or will be engaged in the business of extending credit for
      the
      purpose of purchasing or carrying margin stock (within the meaning of Regulation
      T, U or X), and no proceeds of any Loan will be used to purchase or carry any
      margin stock or to extend credit to others for the purpose of purchasing or
      carrying any margin stock.

     

    3.12    Nature
      of Business.

     

    (a)    As
      of the
      Closing Date, no Credit Party is engaged in any business other than as described
      in Parent’s Form 10-K for the period ending December 31, 2005 with the
      SEC.

     

    (b)    As
      of the
      Closing Date, with respect to the Domestic Subsidiaries that are not a Credit
      Party, (x) no such Domestic Subsidiary conducts or engages in any business
      or
      operations, and (y) the aggregate Book Value of their assets and properties
      is
      not greater than $0, the aggregate amount of their liabilities is not greater
      than $0 and (z) the aggregate amount of their revenues for the four Fiscal
      Quarters ending immediately prior to the Closing Date is not greater than
      $0.

     

     

    
      
        
        

      

      
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    (c)    As
      of the
      Closing Date, Milacron Assurance has no assets or liabilities other than those
      associated with the provision of self-insurance to Parent and its other
      Subsidiaries and services related thereto, and does not conduct and is not
      engaged in any business or operations other than such business and operations
      related to the provision of such insurance and services related thereto all
      of
      which insurance and related services are provided solely for the benefit of
      Parent or its Subsidiaries.

     

    3.13    Adverse
      Agreements, Etc.
      No
      Credit Party is a party to any agreement or instrument, or subject to any
      charter, limited liability company agreement, partnership agreement or other
      corporate, partnership or limited liability company restriction or any judgment,
      order, regulation, ruling or other requirement of a court or other Governmental
      Authority, which has, or in the future could reasonably be expected to have,
      a
      Material Adverse Effect.

     

    3.14    Permits,
      Etc. Each
      Credit Party has, and is in compliance with all permits, licenses,
      authorizations, approvals, entitlements and accreditations required for such
      Person lawfully to own, lease, manage or operate, or to acquire, each business
      currently owned, leased, managed or operated, or to be acquired, by such Person,
      which, if not obtained, could not reasonably be expected to have a Material
      Adverse Effect. No condition exists or event has occurred which, in itself
      or
      with the giving of notice or lapse of time or both, would result in the
      suspension, revocation, impairment, forfeiture or non-renewal of any such
      permit, license, authorization, approval,
      entitlement or accreditation, and there is no claim that any thereof is not
      in
      full force and effect, except, to the extent any such condition, event or claim
      could not be reasonably be expected to have a Material Adverse
      Effect.

     

    3.15    Properties.

     

    (a)    Each
      Credit Party has good and marketable title to, valid leasehold interests in,
      or
      valid licenses to use, all property and assets material to its business, free
      and clear of all Liens, except Permitted Liens. All such properties and assets
      are in working order and condition, ordinary wear and tear
      excepted.

     

    (b)    Schedule
      3.15 sets forth a complete and accurate list, as of the Closing Date, of the
      location, by state and street address, of all real property owned or leased
      by
      each Credit Party. As of the Closing Date, each Credit Party has valid leasehold
      interests in the Leases described on Schedule 3.15 to which it is a
      party. Schedule 3.15 sets forth with respect to each such Lease,
      termination date and annual base rents. Each such Lease is valid and enforceable
      in accordance with its terms in all material respects and is in full force
      and
      effect. No consent or approval of any landlord or other third party in
      connection with any such Lease is necessary for any Credit Party to enter into
      and execute the Loan Documents to which it is a party, except as set forth
      on
Schedule 3.15. To the best knowledge of any Credit Party, no other party
      to any such Lease is in default of its material obligations thereunder, and
      no
      Credit Party (or any other party to any such Lease) has at any time delivered
      or
      received any notice of default which remains uncured under any such Lease and,
      as of the Closing Date, no event has occurred which, with the giving of notice
      or the passage of time or both, would constitute a default under any such
      Lease.

     

     

    
      
        
        

      

      
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    (c)    Except
      with respect to transfers made in compliance with this Agreement and other
      than
      a Permitted Lien that is an inchoate Lien securing obligations for the payment
      of money not overdue or not otherwise due and payable, Milacron Marketing
      Company (the “Misplaced Note Holder”) is the legal and beneficial owner
      of certain originals of notes identified by an asterisk as missing in Schedule
      I
      to the Pledge Agreement (the “Misplaced Notes”) free and clear of all
      Liens, except for the Lien created by the Loan Documents. As of the Closing
      Date, the Misplaced Notes are lost, destroyed or misplaced through inadvertence
      or otherwise and after conducting a diligent search of its records, no Credit
      Party has been able to locate the Misplaced Notes.

     

    3.16    Full
      Disclosure.
      Each
      Credit Party has disclosed to Agent all agreements, instruments and corporate
      or
      other restrictions to which it is subject, and all other matters known to it,
      that, individually or in the aggregate, could reasonably be expected to result
      in a Material Adverse Effect. None of the other reports, financial statements,
      certificates or other information furnished by or on behalf of any Credit Party
      to Agent or any Lender in connection with the negotiation of this Agreement
      or
      delivered hereunder (as modified or supplemented by other information so
      furnished) contains any material misstatement of fact or omits to state any
      material fact necessary to make the statements therein, in the light of the
      circumstances under which it was made, not misleading; provided that, with
      respect to Projections, each Credit Party represents only
      that
      such information was prepared in good faith based upon assumptions believed
      to
      be reasonable at the time prepared. There is no contingent liability or fact
      that could reasonably be expected to have a Material Adverse Effect which has
      not been set forth in a footnote included in the Financial Statements or a
      Schedule hereto.

     

    3.17    Operating
      Lease Obligations.
      On the
      Closing Date, none of the Credit Parties has any Operating Lease Obligations
      with annual payments exceeding $100,000 other than the Operating Lease
      Obligations set forth on Schedule 3.17.

     

    3.18    Environmental
      Matters.
      Except
      as set forth on Schedule 3.18, specific to each of the following
      subsections:

     

    (a)    each
      Credit Party’s businesses, Facilities, operations, properties and assets are in
      material compliance with all Environmental Laws;

     

    (b)    each
      Credit Party has obtained and is in material compliance with all material
      Environmental Permits necessary to operate, use or occupy all of such Credit
      Party’s businesses, Facilities, operations, properties and assets;

     

    (c)    each
      Credit Party is in material compliance with any applicable financial assurance
      requirements under RCRA and any similar Environmental Law, as specifically
      set
      forth but not limited to 40 C.F.R. 264 and 265, necessary, to operate, use
      or
      occupy all of such Credit Party’s businesses, or occupy all of such Credit
      Party’s Facilities and properties;

     

    (d)    each
      Credit Party is in material compliance with all applicable and binding writs,
      orders, consent decrees, judgments, and injunctions, decrees, informational
      requests or demands issued by any Governmental Authority or Person pursuant
      to,
      or under, any Environmental Laws;

     

     

    
      
        
        

      

      
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    (e)    there
      are
      no material Environmental Liens associated or, to the knowledge of each Credit
      Party, threatened to be associated with any Credit Parties’ businesses,
      Facilities, operations, properties and assets;

     

    (f)    there
      has
      been no Release at any of the properties currently or, during the period of
      ownership or operation by any Credit Party, previously owned or operated by
      any
      Credit Party or a predecessor in interest which could reasonably be expected
      to
      have a Material Adverse Effect;

     

    (g)    to
      the
      knowledge of any Credit Party, there has been no Release at any disposal or
      treatment facility which received Hazardous Materials Handled by any Credit
      Party or any predecessor in interest which could reasonably be expected to
      have
      a Material Adverse Effect;

     

    (h)    no
      Environmental Action has been asserted against any Credit Party or any
      predecessor in interest nor does any Credit Party have knowledge or notice
      of
      any threatened or pending Environmental Action against any Credit Party or
      any
      predecessor in interest which, in any case, could reasonably be expected to
      have
      a Material Adverse Effect;

     

    (i)    to
      the
      knowledge of any Credit Party, no Environmental Actions have been asserted
      against any facilities that may have received Hazardous Materials Handled by
      any
      Credit Party or any predecessor in interest which could reasonably be expected
      to have a Material Adverse Effect;

     

    (j)    no
      property now or, during the period of ownership or operation by any Credit
      Party, formerly owned or operated by a Credit Party has been used as a
      treatment, storage or disposal site for any Hazardous Material, except as could
      not reasonably be expected to have a Material Adverse Effect;

     

    (k)    during
      the past three (3) years, no Credit Party has failed to report to the proper
      Governmental Authority any Release which is required to be so reported by any
      Environmental Laws, except as could not reasonably be expected to have a
      Material Adverse Effect; and

     

    (l)    except,
      in each case, as could not reasonably be expected to have a Material Adverse
      Effect, no Credit Party has received any written notification pursuant to any
      Environmental Laws that (A) any work, repairs, construction or Capital
      Expenditures are required to be made in respect as a condition of continued
      compliance with any Environmental Law or Environmental Permit or (B) any
      Environmental Permit referred to above is about to be reviewed, made, subject
      to
      limitations or conditions, revoked, withdrawn or terminated.

     

    3.19    Insurance.
      Each
      Credit Party keeps its property adequately insured and maintains
      (i) insurance to such extent and against such risks, including fire, as is
      customary with
      companies of similar size and in the same or similar businesses,
      (ii)
      workmen’s compensation insurance in the amount required by applicable law, (iii)
      public liability insurance, which shall include product liability insurance,
      in
      the amount customary with companies of similar size and in the same or similar
      business against claims for personal injury or death on properties owned,
      occupied or controlled by it, and (iv) such other insurance as may be required
      by law. Schedule 3.19 sets forth a list of all insurance maintained by
      each Credit Party on the Closing Date.

     

     

    
      
        
        

      

      
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    3.20    Use
      of Proceeds.

     

    (a)    On
      the
      Closing Date, the proceeds of the Loans, together with cash and cash equivalents
      of Parent and its Subsidiaries in the United States, shall be used to (A)
      refinance the Prior Lender Obligations, and (B) pay fees and expenses in
      connection with the transactions contemplated hereby.

     

    (b)    After
      the
      Closing Date, the proceeds of the Loans will be used to fund working capital,
      capital expenditures and other general corporate purposes of the Credit Parties
      and their Subsidiaries, including without limitation to pay interest on the
      Senior Secured Notes, provided,
      however, no proceeds of any Loan or proceeds of any ABL Priority
      Collateral shall be used to repay, acquire, redeem, or retire any Senior Secured
      Notes except as specifically provided in Section 6.12(b). The Letters of
      Credit will be used for general corporate and working capital purposes of the
      Credit Parties and their Subsidiaries.

     

    3.21    Location
      of Bank Accounts.
      Schedule 3.21, as amended from time to time by Borrower Representative
      (by delivery of a revised Schedule 3.21 to Agent), sets forth a complete
      and accurate list of all deposit, checking and other bank accounts, all
      securities and other accounts maintained with any broker dealer and all other
      similar accounts maintained by each Credit Party, together with a description
      thereof (i.e., the bank or broker dealer at which such deposit or other account
      is maintained and the account number and the purpose thereof). No Credit Party
      maintains any other accounts other than those set forth on Schedule
      3.21.

     

    3.22    Intellectual
      Property.

     

    (a)    Except
      as
      set forth on Schedule 3.22 each Credit Party owns or licenses or
      otherwise has the right to use all material licenses, permits, patents, patent
      applications, trademarks, trademark applications, service marks, tradenames,
      trade secrets, copyrights, copyright applications, franchises, authorizations
      and other intellectual property rights that are necessary for the operation
      of
      its business, without infringement upon or conflict with the rights of any
      other
      Person with respect thereto. Set forth on Schedule 3.22 is a complete and
      accurate list as of the Closing Date of all material licenses, patents, patent
      applications, trademark and servicemark registrations and applications,
      tradenames, copyright registrations and applications and internet domain names.
      Except as set forth on Schedule 3.22, no slogan or other advertising
      device, product, process, method, substance, part or other material now
      employed, or now contemplated to be employed, by any Credit Party infringes
      upon
      or conflicts with any rights owned by any other Person, and no claim or
      litigation regarding any of the foregoing is pending or threatened in writing.
      To the best knowledge of each Credit Party, no third-party intellectual
      property, statute, law, rule, regulation, standard or code is pending or
      proposed, which, individually or in the aggregate, could have a Material Adverse
      Effect.

     

    (b)    Each
      Credit Party has taken reasonable measures to protect the secrecy,
      confidentiality and value of all trade secrets used in its business
      (collectively, the “Business Trade Secrets”). To the best knowledge of
      any Credit Party, none of the Business Trade Secrets have been disclosed
      to any Person other than employees or contractors of the Credit Parties who
      had
      a need to know and use such Business Trade Secrets in the ordinary course of
      employment or contract performance and who executed appropriate confidentiality
      agreements prohibiting the unauthorized use or disclosure of such Business
      Trade
      Secrets and containing other terms reasonably necessary or appropriate for
      the
      protection and maintenance of such Business Trade Secrets. To the best knowledge
      of any Credit Party, no unauthorized disclosure of any Business Trade Secrets
      has been made.

     

    
      
        
        

      

      
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    3.23    Material
      Contracts.
      Set
      forth on Schedule 3.23 is a complete and accurate list as of the Closing
      Date of all Material Contracts of each Credit Party, showing the parties and
      subject matter thereof and amendments and modifications thereto. As of the
      Closing Date, each such Material Contract (i) is in full force and effect
      and is binding upon and enforceable against each Credit Party that is a party
      thereto and, to the best knowledge of such Credit Party, all other parties
      thereto in accordance with its terms, (ii) has not been otherwise amended
      or modified, and (iii) is not in default due to the action of any Credit Party
      or, to the best knowledge of any Credit Party, any other party
      thereto.

     

    3.24    Holding
      Company and Investment Company Acts.
      None of
      the Credit Parties is an “investment company” as such terms are defined in the
      Investment Company Act of 1940, as amended.

     

    3.25    Employee
      and Labor Matters.
      Except
      in each case, as could not reasonably be expected to result in material
      liability to any Credit Party, there is (i) no unfair labor practice complaint
      pending or, to the best knowledge of any Credit Party, threatened against any
      Credit Party before any Governmental Authority and no grievance or arbitration
      proceeding pending or, to the best knowledge of any Credit Party, threatened
      against any Credit Party which arises out of or under any collective bargaining
      agreement that would affect a material portion of the business of any Credit
      Party, (ii) no strike, labor dispute, slowdown, stoppage or similar action
      pending or threatened against any Credit Party or (iii) to the best knowledge
      of
      any Credit Party, no union representation question existing with respect to
      the
      employees of any Credit Party and no union organizing activity taking place
      with
      respect to any of the employees of any Credit Party. No Credit Party or any
      of
      its ERISA Affiliates has incurred any material liability or obligation under
      the
      Worker Adjustment and Retraining Notification Act (“WARN”) or similar state or
      foreign law, which remains unpaid or unsatisfied. To the knowledge of any Credit
      Party, the hours worked and payments made to employees of any Credit Party
      have
      not been in violation of the Fair Labor Standards Act or any other applicable
      legal requirements other than violations of immaterial obligations of any Credit
      Party resulting in immaterial liability incurred by any Credit Party. All
      material payments due from any Credit Party 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 Credit Party.

     

    3.26    Customers
      and Suppliers.
      There
      exists no actual or threatened termination, cancellation or limitation of,
      or
      modification to or change in, the business relationship between (i) any Credit
      Party, on the one hand, and any customer or any group thereof, on the other
      hand, whose agreements with any Credit Party are individually or in the
      aggregate material to the business or operations of the Credit Parties taken
      as
      a whole, or (ii) any Credit Party, on the one hand, and any supplier
      thereof, on the other hand, whose agreements with
      any
      Credit Party are individually or in the aggregate material to the business
      or
      operations of the Credit Parties taken as a whole, and there exists no present
      state of facts or circumstances that could give rise to or result in any
such
      termination, cancellation, limitation, modification or change which would,
      individually or in the aggregate, be material to the business or operations
      of
      the Credit Parties taken as a whole.

     

     

    
      
        
        

      

      
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    3.27    Name;
      Jurisdiction of Organization; Organizational ID Number; Chief Place of Business;
      Chief Executive Office; FEIN.
      Schedule 3.27 sets forth a complete and accurate list as of the Closing
      Date of (i) the full and correct legal name of each Credit Party,
      (ii) the jurisdiction of organization of each Credit Party, (iii) the
      organizational identification number of each Credit Party (or indicates that
      such Credit Party has no organizational identification number), (iv) each
      place of business of each Credit Party, (v) the chief executive office of
      each Credit Party and (vi) the federal employer identification number of
      each Credit Party.

     

    3.28    Tradenames.
      Schedule 3.28 hereto sets forth a complete and accurate list as of the
      Closing Date of all tradenames, business names or similar appellations used
      by
      each Credit Party or any of its divisions or other business units during the
      past five years.

     

    3.29    Locations
      of Collateral.
      There
      is no location at which any Credit Party has any Collateral (except for
      Inventory in transit and Inventory in locations not within the United States
      with an aggregate Book Value not exceeding $650,000) other than (i) those
      locations listed on Schedule 3.29 and (ii) any other locations
      approved in writing by Agent (and with respect to Inventory, Agent) from time
      to
      time. Schedule 3.29 hereto contains a true, correct and complete list, as
      of the Closing Date, of the legal names and addresses of each warehouse at
      which
      Collateral of each Credit Party is stored. None of the receipts received by
      any
      Credit Party from any warehouse states that the goods covered thereby are to
      be
      delivered to bearer or to the order of a named Person or to a named Person
      and
      such named Person’s assigns.

     

    3.30    Security
      Interests.
      Each
      Collateral Document creates in favor of Agent, for the benefit of Agent and
      the
      Lenders, a legal, valid and enforceable security interest in the Collateral
      secured thereby. To the extent governed by the Code, upon the filing of the
      UCC
      financing statements described in paragraph E of Annex D and, to the
      extent governed by United States federal law, upon the recording of the Patent
      Security Agreements, Trademark Security Agreements and Copyright Security
      Agreements in the United States Patent and Trademark Office and the United
      States Copyright Office, as applicable, such security interests in and Liens
      on
      the Collateral granted thereby that may be perfected by such aforementioned
      filings or recordings shall be perfected, first priority security interests
      (subject, as to priority, only to the Permitted Liens that, as a matter of
      law
      (including, without limitation, the priority rules of the Code), would be prior
      to the Liens of Agent and, with respect to Senior Secured Priority Collateral
      only, Liens in favor of the Senior Secured Notes), and no further recordings
      or
      filings are or will be required in connection with the creation, perfection
      or
      enforcement of such security interests and Liens, other than (i) the filing
      of continuation statements in accordance with applicable law, (ii) the
      recording of the Collateral Assignments for Security pursuant to the Patent
      Security Agreement, Trademark
      Security Agreement and Copyright Security Agreement in the United States Patent
      and Trademark Office and the United States Copyright Office, as applicable,
      with respect to after-acquired U.S. patent, trademark and copyright
      applications and registrations and (iii) the recordation of appropriate
      evidence of the security interest in the appropriate foreign registry with
      respect to all foreign intellectual property.

     

     

    
      
        
        

      

      
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    3.31.    [Intentionally
      Omitted].

     

    3.32    Schedules.
      All of
      the information which is required to be scheduled to this Agreement is set
      forth
      on the Schedules attached hereto, is correct and accurate and does not omit
      to
      state any information material thereto.

     

    3.33    Canadian
      Pension and Benefit Plan Matters.
      The
      Canadian Pension Plans are duly registered under the ITA and all other
      applicable laws which require registration and no event has occurred which
      is
      reasonably likely to cause the loss of such registered status. All material
      statutory obligations of any Credit Party (including fiduciary, funding,
      investment and administration obligations) required to be performed in
      connection with the Canadian Pension Plans and the funding agreements therefor
      have been performed in a timely fashion. There are no outstanding suits
      concerning the assets of the Canadian Pension Plans or the Canadian Benefit
      Plans. Each of the Canadian Pension Plans is fully funded on a solvency basis
      (using actuarial methods and assumptions which are consistent with the
      valuations last filed with the applicable Governmental Authorities and which
      are
      consistent with generally accepted actuarial principles). None of the Canadian
      Borrowing Base Guarantors employs any employees outside of Canada.

     

     

    4. 
      FINANCIAL
      STATEMENTS AND INFORMATION

     

    4.1    Reports
      and Notices.

     

    (a)    Each
      Credit Party executing this Agreement hereby agrees that from and after the
      Closing Date and until the Termination Date, it shall deliver to Agent or to
      Agent and Lenders, as required herein, the Financial Statements, notices,
      Projections and other information at the times, to the Persons and in the manner
      set forth in Annex E.

     

    (b)    Each
      Credit Party executing this Agreement hereby agrees that, from and after the
      Closing Date and until the Termination Date, it or the Borrower Representative,
      as provided in Annex F, shall deliver to Agent or to Agent and Lenders,
      as required herein, the various Collateral Reports (including Borrowing Base
      Certificates in the form of Exhibit 4.1(b)) at the times, to the Persons
      and in the manner set forth in Annex F.

     

    4.2    Communication
      with
      Accountants.
      Each
      Credit Party executing this Agreement authorizes (a) Agent and (b) so long
      as an
      Event of Default has occurred and is continuing, each Lender, to communicate
      directly with its independent certified public accountants, including Ernst
      & Young LLP, and authorizes and shall instruct those accountants to
      communicate to Agent and each Lender information relating to any Credit Party
      with respect to the business, results of operations and financial condition
      of
      any Credit Party.

     

     

    
      
        
        

      

      
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    5. 
      AFFIRMATIVE
      COVENANTS

     

    Each
      Credit Party executing this Credit Agreement jointly and severally agrees as
      to
      all Credit Parties that from and after the Closing Date and until the
      Termination Date it will:

     

    5.1    Additional
      Guaranties and Collateral Security.
      Cause:

     

    (a)    each
      wholly owned Subsidiary of any Credit Party not in existence on the Closing
      Date, to execute and deliver to Agent promptly and in any event within three
      (3) Business Days after the formation, acquisition or change in status
      thereof (A) a Guaranty guaranteeing the Obligations, (B) a joinder to the
      Security Agreement substantially in the form attached as Annex I to the Security
      Agreement, (C) if such Subsidiary has any Subsidiaries, joinder to the Pledge
      Agreement substantially in the form attached as Annex I to the Pledge Agreement
      together with (x) certificates evidencing all of the Stock of any Person owned
      by such Subsidiary (other than a Foreign Subsidiary) and, in the case of a
      Foreign Subsidiary, all of the non-voting Stock and sixty-five percent (65%)
      of
      the voting Stock of such Foreign Subsidiary, (y) undated stock powers executed
      in blank with signature guaranteed, and (z) such opinion of counsel and such
      approving certificate of such Subsidiary as Agent may reasonably request in
      respect of complying with any legend on any such certificate or any other matter
      relating to such shares; provided that (i) the provisions contained in
      clauses (x) and (y) of this clause (C) shall not apply until the date upon
      which
      the Discharge of Term Obligations has occurred, and (ii) until the date upon
      which the Discharge of Term Obligations has occurred, the opinion and
      certificate referred to in clause (z) of this clause (C) shall be, in each
      case,
      limited in scope and substance to the opinion and certificate, if any, delivered
      to the trustee for the holders of the Senior Secured Notes in connection with
      such Subsidiary becoming party to any Senior Secured Notes Document, (D) (1)
      prior to the Discharge of Term Obligations, to the extent mortgages are
      delivered creating on the owned real property of such Subsidiary a perfected
      first priority security interest securing the Senior Secured Notes, one or
      more
      Mortgages creating on such real property a perfected second priority Lien on
      such property, and thereafter, at the request of Agent, one or more Mortgages
      creating on such real property a perfected, first priority Lien on such real
      property and (2) prior to the Discharge of Term Obligations, to the extent
      delivered to the trustee for the holders of the Senior Secured Notes, and
      thereafter, at the request of Agent, a Title Insurance Policy covering such
      real
      property, a current ALTA survey thereof and a surveyor’s certificate, each in
      form and substance reasonably satisfactory to Agent, together with such other
      agreements, instruments and documents
      as Agent may require whether comparable to the documents required under
Section 5.19 or otherwise, (E) such other agreements, instruments,
      approvals, legal opinions or other documents reasonably requested by Agent
      in
      order to create, perfect, establish the first priority of or otherwise protect
      any Lien purported to be covered by any such Security Agreement or Pledge
      Agreement or otherwise to effect the intent that such Subsidiary shall become
      bound by all of the terms, covenants and agreements contained in the Loan
      Documents and that all property and assets of such Subsidiary shall become
      Collateral for the Obligations; provided, however, that in no
      event shall (i) any Credit Party be required to grant a Lien on any Excluded
      Assets or (ii) any Foreign Subsidiary be required to guaranty the Obligations
      or
      grant a Lien on any of its assets to secure the Obligations if such guaranty
      or
      Lien may result in a “deemed dividend” to any of the Credit Parties;
      and

     

     

    
      
        
        

      

      
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    (b)    each
      owner of the Stock of any such Subsidiary to execute and deliver promptly and
      in
      any event within three (3) Business Days after the formation or acquisition
      of
      such Subsidiary a joinder to the Pledge Agreement substantially in the form
      attached as Annex I to the Pledge Agreement, together with (A) certificates
      evidencing, (x) in the case such Subsidiary is a Domestic Subsidiary, all of
      the
      Stock of such Subsidiary, and (y) in the case such Subsidiary is a directly
      owned Foreign Subsidiary, all of the non-voting Stock and sixty-five percent
      (65%) of the voting Stock of such Subsidiary, (B) undated stock powers or
      other appropriate instruments of assignment executed in blank with signature
      guaranteed, (C) such opinion of counsel and such approving certificate of
      such Subsidiary as Agent may reasonably request in respect of complying with
      any
      legend on any such certificate or any other matter relating to such
      shares, and (D) prior to the Discharge of Term Obligations, to the extent
      delivered to the trustee for the holders of the Senior Secured Notes, and
      thereafter, at the request of Agent, such other agreements, instruments,
      approvals, legal opinions or other documents reasonably requested by Agent;
      provided that (i) the provisions contained in clauses (A) and (B) of this
      paragraph shall not apply until the date upon which the Discharge of Term
      Obligations has occurred, (ii) until the date upon which the Discharge of Term
      Obligations has occurred, the opinion and certificate referred to in clause
      (C)
      of this paragraph shall be, in each case, limited in scope and substance to
      the
      opinion and certificate, if any, delivered to the trustee for the holders of
      the
      Senior Secured Notes in connection with any pledge of such Subsidiary pursuant
      to the Senior Secured Notes Documents and (iii) in no event shall any Credit
      Party be required to grant a Lien on any Excluded Assets.

     

    5.2    Compliance
      with Laws, Etc. Comply,
      and cause each of its Subsidiaries to comply, in all material respects, with
      all
      applicable laws, rules, regulations and orders (including, without limitation,
      all Environmental Laws) and with all material agreements, (excluding agreements
      in respect of Indebtedness), such compliance to include, without limitation,
      (i)
      paying before the same become delinquent all taxes, assessments and governmental
      charges or levies imposed upon it or upon its income or profits or upon any
      of
      its properties, and (ii) paying all lawful claims which if unpaid might
      become a Lien or charge upon any of its properties, except to the extent
      contested in good faith by proper proceedings which stay the imposition of
      any
      penalty, fine or Lien resulting from the non-payment thereof and with respect
      to
      which adequate reserves have been set aside for the payment thereof in
      accordance with GAAP, other than in the case of clauses (i) and
      (ii)
      above, taxes, assessments and governmental charges and levies and other lawful
      claims described therein, the aggregate amount of which does not at any time
      exceed $100,000.

     

    5.3    Preservation
      of Existence, Etc.
Except
      as
      permitted by Section 6.3, maintain and preserve, and cause each of its
      Subsidiaries to maintain and preserve, its existence, rights and privileges
      in
      all material respects, and become or remain, and cause each of its Subsidiaries
      to become or remain, duly qualified and in good standing in each jurisdiction
      in
      which the character of the properties owned or leased by it or in which the
      transaction of its business makes such qualification necessary, except where
      the
      absence of any such qualification could not reasonably be expected to result
      in
      a Material Adverse Effect.

     

    5.4    Keeping
      of Records and Books of Account.
Keep,
      and cause each of its Subsidiaries to keep, adequate records and books of
      account, with adequate and sufficient entries made to permit the preparation
      by
      Parent of its financial statements in accordance with GAAP.

     

     

    
      
        
        

      

      
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    5.5    Inspection
      Rights.
      Permit,
      and cause each of its Subsidiaries to permit, the agents and representatives
      of
      Agent (and, at any time during the continuance of an Event of Default, the
      agents and representatives of each Lender) at any time and from time to time
      during normal business hours, at the expense of the Borrowers, to examine and
      make copies of and abstracts from its records and books of account, to visit
      and
      inspect its properties, to verify materials, leases, notes, Accounts, deposit
      accounts, Inventory and its other assets, to conduct audits, physical counts,
      valuations, appraisals, Phase I Environmental Site Assessments reasonably
      necessary to determine compliance with or liabilities under Environmental Laws
      or examinations and to discuss its affairs, finances and accounts with any
      of
      its directors, officers, managerial employees, independent accountants or any
      of
      its other representatives. In furtherance of the foregoing, each Credit Party
      hereby authorizes its independent accountants, and the independent accountants
      of each of its Subsidiaries, to discuss the affairs, finances and accounts
      of
      such Person (independently or together with representatives of such Person)
      with
      the agents and representatives of Agent in accordance with this
Section 5.5. Furthermore, so long as any Event of Default has
      occurred and is continuing, Borrowers shall provide Agent with reasonable access
      to their suppliers and customers.

     

    5.6    Maintenance
      of Properties, Etc.
Maintain
      and preserve, and cause each of its Subsidiaries to maintain and preserve,
      all
      of its properties which are, in any material respects, necessary or useful
      in
      the proper conduct of its business in working order and condition, ordinary
      wear
      and tear excepted, and comply, and cause each of its Subsidiaries to comply,
      at
      all times with the provisions of all material leases to which it is a party
      as
      lessee or under which it occupies property, so as to prevent any loss or
      forfeiture thereof or thereunder.

     

    5.7    Maintenance
      of Insurance.
      Maintain, and cause each of its Subsidiaries to maintain, as in effect on the
      Closing Date, insurance with responsible and reputable insurance companies
      or
      associations (including, without limitation, comprehensive general liability,
      hazard, rent and business interruption insurance) with respect to its properties
      (including all real properties leased or owned by it) and business, in such
      amounts and covering such risks as is required by any Governmental Authority
      having jurisdiction with respect thereto or as is carried generally in
      accordance with sound business practice by companies of similar size and in
      similar businesses similarly situated; provided, however, that any
      changes to the amount, adequacy and scope of the insurance in effect on the
      Closing Date that are material and adverse to the Lenders must be reasonably
      acceptable to Agent in its Permitted Discretion; provided,
further, Parent and its Subsidiaries may maintain self-insurance (which
      shall include insurance maintained through Milacron Assurance) in connection
      with the insurance requirements set forth above to the extent reasonably prudent
      and consistent with past practices. All policies covering the Collateral are
      to
      be made payable to Agent for the benefit of Agent and the Lenders, as its
      interests may appear, in case of loss, under a standard non-contributory
“lender” or “secured party” clause and are to contain such other provisions as
      Agent may require to fully protect the Lenders’ interest in the Collateral and
      to any payments to be made under such policies. All certificates of insurance
      are to be delivered to Agent and the policies are to be premium prepaid, with
      the loss payable and additional insured endorsement in favor of Agent and such
      other Persons as Agent may designate from time to time, and shall use reasonable
      efforts
      to cause its insurance providers to provide for not less than thirty (30) days’
prior written notice to Agent of the exercise of any right of cancellation.
      If
      any Credit Party or any of its Subsidiaries fails to maintain such insurance,
      Agent may arrange for such insurance, but at the Borrowers’ expense and without
      any responsibility on Agent’s part for obtaining the insurance, the solvency of
      the insurance companies, the adequacy of the coverage, or the collection of
      claims. Upon the occurrence and during the continuance of an Event of Default,
      Agent shall have the sole right, in the name of the Lenders, any Credit Party
      and its Subsidiaries, to file claims under any insurance policies, to receive,
      receipt and give acquittance for any payments that may be payable thereunder,
      and to execute any and all endorsements, receipts, releases, assignments,
      reassignments or other documents that may be necessary to effect the collection,
      compromise or settlement of any claims under any such insurance
      policies.

     

     

    
      
        
        

      

      
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    5.8    Obtaining
      of Permits, Etc. Obtain,
      maintain and preserve, and cause each of its Subsidiaries to obtain, maintain
      and preserve, and take all necessary action to timely renew, all material
      permits, licenses, authorizations, approvals, entitlements and accreditations
      which are necessary or useful in the proper conduct of its
      business.

     

    5.9    Environmental.
      (i)  Keep any property either owned or operated by it or any of its
      Subsidiaries free of any Environmental Liens; (ii) comply, and cause each
      of its Subsidiaries to comply, in all material respects with Environmental
      Laws
      and provide to Agent any documentation of such compliance which Agent may
      reasonably request; (iii) provide Agent timely
      written notice (and in any event, within ten (10) days of any Credit Party
      obtaining knowledge of such event) of any Release of a Hazardous Material in
      excess of any reportable quantity from or onto property currently or during
      the
      period of ownership or operation by any Credit Party, formerly owned or operated
      by it or any of its Subsidiaries and take any Remedial Actions required under
      Environmental Laws to abate said Release; provided, however, that
      no Credit Party shall be required to undertake any Remedial Action required
      by
      Environmental Laws to the extent that its obligation to do so is being contested
      in good faith and by proper proceedings which stay the imposition of any
      penalty, fine or Lien resulting from the non-performance thereof and adequate
      reserves, if any, are being maintained with respect to such circumstances in
      accordance with GAAP; (iv) provide Agent with written notice within ten
      (10) days of the receipt of any of the following: (A) notice that an
      Environmental Lien has been filed against any property of any Credit Party
      or
      any of its Subsidiaries; (B) commencement of any Environmental Action, or
      written notice that an Environmental Action will be filed, against any Credit
      Party or any of its Subsidiaries which, if adversely determined, could be
      reasonably expected to have a Material Adverse Effect; and (C) notice of a
      violation, citation or other administrative order which could reasonably be
      expected to have a Material Adverse Effect; (v) maintain and preserve, in
      all material respects, all Environmental Permits necessary to operate, use
      or
      occupy each of the Credit Parties’ businesses, Facilities, operations,
      properties and assets; (vi) maintain and comply, in all material respects,
      with
      any applicable financial assurance requirements under RCRA and any similar
      Environmental Law, as specifically set forth but not limited to 40 C.F.R. 264
      and 265, necessary to operate, use or occupy each of the Credit Parties’
businesses, Facilities, operations, properties and assets; (vii) comply, in
      all material respects, with all applicable writs, orders, consent decrees,
      judgments, injunctions, communications by any Governmental Authority, decrees,
      informational requests or demands issued pursuant to, or arising under, any
      Environmental Laws; (viii) provide Agent with prompt written notice in the
      event
      any Credit Party is required to spend more than $100,000 individually or
      $500,000 in the aggregate to comply with any Environmental Laws that have been
      promulgated and enacted by a Governmental Authority throughout the term of
      this
      Agreement; and (ix) file and submit truthful and complete representations,
      including, without limitation, applications, warranty statements and
      accompanying materials provided in support of such representations, submitted
      by
      the Credit Parties to obtain insurance.

     

     

    
      
        
        

      

      
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    Without
      limiting the generality of the foregoing, whenever Agent reasonably determines
      that there is non-compliance, or any condition which requires any action by
      or
      on behalf of any Credit Party in order to avoid any material non-compliance,
      with any Environmental Law which could reasonably be expected to result in
      the
      imposition of material fines or penalties or otherwise materially and adversely
      affect the business, assets or prospects of the Credit Parties on a consolidated
      basis, and Credit Parties have not contested such non-compliance in good faith
      and by proper proceedings with the appropriate Governmental Authority, the
      Credit Parties shall, at Agent’s request and Borrowers’ expense: (i) cause an
      independent environmental engineer reasonably acceptable to Agent to conduct,
      as
      applicable, such reasonable assessments, investigations or tests of the site
      where any Credit Party’s non-compliance or alleged non-compliance with such
      Environmental Laws has occurred as to such non-compliance and prepare and
      deliver to Agent a report as to such non-compliance setting forth the results
      of
      such assessments, investigations or tests, a proposed plan for responding to
      any
      environmental problems described therein, and an estimate of the costs thereof
      and (ii) provide to Agent a supplemental report of such engineer whenever the
      scope of such non-compliance,
      or the applicable Credit Party’s response thereto or the estimated costs
      thereof, shall change in any material respect.

     

    The
      Credit Parties acknowledge and agree that neither the Loan Documents nor the
      actions of Agent or any Lender pursuant thereto, taken alone, shall operate
      or
      be deemed (i) to place upon Agent or any Lender any responsibility for the
      operation, control, care, service, management, maintenance or repair of property
      or facilities of the Credit Parties or (ii) to make Agent or any Lender the
      “owner” or “operator” of any property or facilities of the Credit Parties or a
“responsible party” within the meaning of applicable Environmental
      Laws.

     

    5.10    Further
      Assurances.
      Take
      such action and execute, acknowledge and deliver, and cause each of its
      Subsidiaries to take such action and execute, acknowledge and deliver, at its
      sole cost and expense, such agreements, instruments or other documents as Agent
      may reasonably require from time to time in order (i) to carry out more
      effectively the purposes of this Agreement and the other Loan Documents,
      (ii) to subject to valid and perfected first priority Liens any of the
      Collateral or any other property of any Credit Party and its Subsidiaries for
      which a Lien is required to be granted under the Loan Documents (subject to
      the
      limitations contained in Section 5.1 and the Intercreditor
      Agreement, but excluding the Excluded Assets), but, in the case of the Stock
      of
      a Foreign Subsidiary, such Liens shall be limited to all of the non-voting
      Stock
      and sixty-five percent (65%) of the voting Stock of such Foreign Subsidiary,
      (iii) to establish and maintain the validity and effectiveness of any of
      the Loan Documents and the validity, perfection and priority of the Liens
      intended to be created thereby, and (iv) to better assure, convey, grant,
      assign, transfer and confirm unto Agent, each Lender and the L/C Issuer the
      rights now or hereafter intended to be granted to it under this Agreement or
      any
      other Loan Document. In furtherance of the foregoing, to the maximum extent
      permitted by applicable law, each Credit Party (i) authorizes Agent to
      execute any such agreements, instruments or other documents
      in such Credit Party’s name and to file such agreements, instruments or other
      documents in any appropriate filing office and, (ii) authorizes Agent to file
      any financing statement required hereunder or under any other Loan Document,
      and
      any continuation statement or amendment with respect thereto, in any appropriate
      filing office without the signature of such Credit Party (including, without
      limitation, any such financing statements that indicate the Collateral as “all
      assets” or words of similar import).

     

     

    
      
        
        

      

      
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    5.11    Change
      in Collateral; Collateral Records.
      (i)
      Give Agent not less than thirty (30) days’ prior written notice of any
      change in the location of any Collateral with an aggregate Book Value exceeding
      $500,000, other than to locations set forth on Schedule 3.29 and
      with respect to which Agent has filed financing statements and otherwise fully
      perfected its Liens thereon, (ii) advise Agent promptly, in sufficient
      detail, of any material adverse change relating to the type, quantity or quality
      of the Collateral or the Lien granted thereon and (iii) execute and
      deliver, and cause each of its Subsidiaries to execute and deliver, to Agent
      for
      the benefit of Agent and the Lenders from time to time, solely for Agent’s
      convenience in maintaining a record of Collateral, such written statements
      and
      schedules as Agent may reasonably require, designating, identifying or
      describing the Collateral.

     

    5.12    Landlord
      Waivers; Collateral Access
      Agreements.

     

    (a)    At
      any
      time any Collateral with a Book Value in excess of $300,000 (when aggregated
      with all other Collateral at the same location) is located on any real property
      of a Credit Party (whether such real property is now existing or acquired after
      the Closing Date) which is not owned by a Credit Party, use reasonable efforts
      to obtain a Landlord Waiver; provided, that in the event the Credit
      Parties (i) are unable to obtain any such Landlord Waiver or (ii) maintain
      Collateral with a Book Value in excess of $100,000 but less than or equal to
      $300,000 at any location that is not subject to Landlord Waiver, then Agent
      may
      establish Reserves to the Primary Borrowing Base and/or the Export-Related
      Borrowing Base as it deems necessary in its Permitted Discretion with respect
      to
      any such Collateral that is included in the Primary Borrowing Base and/or the
      Export-Related Borrowing Base; and

     

    (b)    Use
      reasonable efforts to obtain Bailee Letters or similar collateral access
      agreements, in form and substance reasonably satisfactory to Agent, providing
      access to Collateral located on any premises not owned by a Credit Party in
      order to remove such Collateral from such premises during an Event of Default;
      provided, that in the event the Credit Parties are unable to obtain any
      such written access agreements, Agent may establish Reserves to the Primary
      Borrowing Base and/or the Export-Related Borrowing Base as it deems necessary
      in
      its Permitted Discretion with respect to any such Collateral that is included
      in
      the Primary Borrowing Base and/or the Export-Related Borrowing
      Base.

     

    5.13    Fiscal
      Year.
      Cause
      the Fiscal Year of Parent and its Subsidiaries to end on December 31 of each
      calendar year unless Agent consents to a change in such Fiscal Year (and
      appropriate related changes to this Agreement), such consent not to be
      unreasonably withheld.

     

     

    
      
        
        

      

      
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    5.14    Borrowing
      Base.
      Maintain (i) all Loans in compliance with the then current Aggregate Borrowing
      Base, subject to any Permitted Overadvance and (ii) all Export-Related Loans
      in
      compliance with the then current Export-Related Borrowing Base.

     

    5.15    Use
      of
      Proceeds.
      Use the
      proceeds of the Loans and the Letters of Credit in accordance with Section
      3.20.

     

    5.16    Conference
      Calls.
      If
      requested by Agent upon reasonable advance notice, conduct a monthly conference
      call to update Agent and the Lenders on the Borrowers’ and their Subsidiaries’
consolidated financial condition, operations, prospects and respective
      businesses.

     

    5.17    Misplaced
      Notes.
      If
      found, the Misplaced Note Holder agrees to promptly pledge, or cause to be
      pledged, the Misplaced Notes in favor of Agent, for the benefit of Lenders,
      as
      required under the Pledge Agreement.

     

    5.18    Canadian
      Pension and Benefit
      Plans.

     

    (a)    For
      each
      existing Canadian Pension Plan of any Canadian Borrowing Base Guarantor, such
      Canadian Borrowing Base Guarantor shall ensure that such plan retains its
      registered status under and is administered in all material respects in
      accordance with the applicable pension plan text, funding agreement, the ITA
      and
      all other applicable laws.

     

    (b)    For
      each
      Canadian Pension Plan hereafter adopted by any Canadian Borrowing Base Guarantor
      that is required to be registered under the ITA or any other applicable laws,
      that Canadian Borrowing Base Guarantor shall use its best efforts to seek and
      receive confirmation in writing from the applicable Governmental Authorities
      to
      the effect that such plan is unconditionally registered under the ITA and such
      other applicable laws.

     

    (c)    For
      each
      existing and hereafter adopted Canadian Pension Plan and Canadian Benefit Plan
      of any Canadian Borrowing Base Guarantor, such Canadian Borrowing Base Guarantor
      shall in a timely fashion perform in all material respects all statutory
      obligations (including fiduciary, funding, investment and administration
      obligations) required to be performed in connection with such plan and the
      funding media therefor.

     

    (d)    Each
      Canadian Borrowing Base Guarantor shall deliver to Agent if requested by Agent,
      promptly after the filing thereof by such Canadian Borrowing Base Guarantor
      with
      any applicable governmental authority, (i) copies of each annual and other
      return, report or valuation with respect to each Canadian Pension Plan of such
      Canadian Borrowing Base Guarantor; (ii) promptly after receipt thereof, a copy
      of any direction, order, notice, ruling or opinion that such Canadian Borrowing
      Base Guarantor may receive from any applicable governmental authority with
      respect to any Canadian Pension Plan of such Canadian Borrowing Base Guarantor;
      and (iii) notification within thirty (30) days of any increases having a cost
      to
      such Canadian Borrowing Base Guarantor in excess of Cdn.$250,000 per annum,
      in
      the benefits of any existing Canadian Pension Plan or Canadian Benefit Plan,
      or
      the establishment of any new Canadian Pension Plan or Canadian Benefit Plan,
      or
      the commencement of contributions to any such plan to which such Canadian
      Borrowing Base Guarantor was not previously contributing.

     

     

    
      
        
        

      

      
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    5.19    After
      Acquired Real Property.
      Upon
      the acquisition by it or any of its Domestic Subsidiaries after the Closing
      Date
      of any interest (whether fee or leasehold) in any real property wherever
      located, but excluding any Excluded Assets, (each such interest being an
“After Acquired Property”) (x) with a Current Value (as defined below) in
      excess of $750,000 in the case of a fee interest, or (y) requiring the payment
      of annual rent exceeding in the aggregate $100,000 in the case of a leasehold
      interest, promptly so notify Agent, setting forth with specificity a description
      of the interest acquired, the location of the real property, any structures
      or
      improvements thereon and either an appraisal or such Credit Party’s good-faith
      estimate of the current value of such real property
      (for purposes of this Section, the “Current Value”). Agent shall notify
      such Credit Party whether it intends to require a Mortgage and the other
      documents referred to below (subject to the limitations contained in Section
      5.1) or in the case of leasehold, a leasehold Mortgage or Landlord’s Waiver
      (pursuant to Section 5.12). Upon receipt of such notice requesting a
      Mortgage, the Person which has acquired such After Acquired Property shall
      promptly furnish to Agent the following, in each case, prior to the Discharge
      of
      Term Obligations, to the extent delivered to the trustee for the holders of
      the
      Senior Secured Notes, and thereafter, at the request of Agent, and each in
      form
      and substance reasonably satisfactory to Agent: (i) a Mortgage with respect
      to
      such real property and related assets located at the After Acquired Property,
      each duly executed by such Person and in recordable form, (ii) evidence of
      the
      recording of the Mortgage referred to in clause (i) above in such office or
      offices as may be necessary or, in the opinion of Agent, desirable to create
      and
      perfect a valid and enforceable second priority (or, in the event that the
      Senior Secured Notes have been paid in full, first priority) lien on the
      property purported to be covered thereby or to otherwise protect the rights
      of
      Agent and the Lenders thereunder, (iii) a Title Insurance Policy, (iv) a survey
      of such real property, certified to Agent and to the issuer of the Title
      Insurance Policy by a licensed professional surveyor reasonably satisfactory
      to
      Agent, (v) at Agent’s reasonable request, Phase I Environmental Site
      Assessments, or such other non-intrusive and non-Phase II environmental
      assessment as Agent may reasonably request, with respect to such real property,
      by a consultant reasonably satisfactory to Agent, provided that any consultant
      engaged by a Credit Party in connection with the acquisition of real property
      shall be presumptively satisfactory to Agent, (vi) in the case of a leasehold
      interest, a certified copy of the lease between the landlord and such Person
      with respect to such real property in which such Person has a leasehold
      interest, and the certificate of occupancy with respect thereto, (vii) in the
      case of a leasehold interest, an attornment and nondisturbance agreement between
      the landlord (and any fee mortgagee) with respect to such real property and
      Agent, and (viii) such other documents or instruments (including guarantees
      and
      opinions of counsel) as Agent may reasonably require. The Borrowers shall pay
      all reasonable fees and expenses, including reasonable attorneys’ fees
      (excluding any allocated costs of in-house counsel) and out-of-pocket expenses,
      and all title insurance charges and premiums, in connection with each Credit
      Party’s obligations under this Section 5.19.

     

    5.20    Senior
      Secured Priority Collateral.
      (i)
      Cause any and all proceeds of a Sale of Senior Secured Note Priority Collateral
      (as defined in the Senior Secured Notes Indenture) received by such Credit
      Party
      or any of its Subsidiaries or any other amounts payable to the holders of the
      Senior Secured Notes or required to be held as Senior Secured Priority
      Collateral or otherwise applied in accordance with the Senior Secured Notes
      Indentures to be deposited into a Senior Secured Priority Account in accordance
      with the terms of Section 4.10(3) of the Senior Secured Notes Indenture, (ii)
      promptly after such deposit, deliver (or cause to be delivered) to Agent an
      officer’s certificate of an Authorized Officer of Borrower Representative
      certifying that all such amounts have been deposited into a Senior Secured
      Priority Account, provided that, at no time shall any of such amounts be
      deposited to any other deposit or securities account maintained by the Credit
      Parties and (iii) within five (5) Business Days after the date upon which the
      Discharge of Term Obligations has occurred, transfer (or cause to be
      transferred) all amounts deposited to any Senior Secured Priority Account to
      a
      Blocked Account. Borrower Representative shall give Agent prompt written notice
      of any withdrawal from any Senior Secured Priority Account.

     

     

    
      
        
        

      

      
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    5.21    Intentionally
      Omitted.

     

    5.22    Accounts
      Documentation. The Borrower
      Parties will at such intervals as Agent may reasonably require, execute and
      deliver confirmatory written assignments of the Accounts to Agent and furnish
      such further schedules and/or information as Agent may reasonably require
      relating to the Accounts, including, without limitation, sales invoices or
      the
      equivalent, credit memos issued, remittance advices, reports and copies of
      deposit slips and copies of original shipping or delivery receipts for all
      merchandise sold. In addition, the Borrower Parties shall notify Agent of any
      non-compliance in respect of the representations, warranties and covenants
      contained in Section 5.23. The items to be provided under this Section
      5.22 are to be in form reasonably satisfactory to Agent and are to be
      executed and delivered to Agent from time to time solely for its convenience
      in
      maintaining records of the Collateral. The Borrower Parties’ failure to give any
      of such items to Agent shall not affect, terminate, modify or otherwise limit
      Agent’s Lien on the Collateral. The Borrower Parties shall not re-date any
      invoice or sale or make sales on extended dating beyond that customary in such
      Credit Parties’ industry, and shall not re-bill any Accounts without promptly
      disclosing the same to Agent and providing Agent with a copy of such re-billing,
      identifying the same as such. If the Borrower Parties become aware of anything
      materially detrimental to any of such Borrower Parties’ material customers’
credit, such Borrower Parties will promptly advise Agent thereof.

     

    5.23    Status
      of Accounts and Other Collateral.
      With respect to any Account of any Borrower Party that is included by the
      Borrower Parties as an Eligible Account or Eligible Export-Related Account
      in
      the calculation of the Aggregate Borrowing Base, each Borrower Party covenants,
      represents and warrants: (a) such Borrower Party shall be the sole owner, free
      and clear of all Liens (except for the Liens granted in the favor of Agent
      for
      the benefit of Agent and the Lenders and Permitted Liens), and shall be fully
      authorized to sell, transfer, pledge and/or grant a security interest in each
      and every item of said Collateral; (b) each such Account shall be a good and
      valid account representing an undisputed bona fide indebtedness incurred or
      an
      amount indisputably owed by the Account Debtor therein named, for a fixed sum
      as
      set forth in the invoice relating thereto with respect to an absolute sale
      and
      delivery upon the specified terms of goods sold or services rendered by such
      Borrower Party; (c) no such Account shall be subject to any defense, offset,
      counterclaim, discount or allowance except as may be stated in the invoice
      relating thereto, discounts and allowances as may be customary in such Borrower
      Party’s business and as otherwise disclosed to Agent; (d) none of the
      transactions underlying or giving rise to any such Account shall violate any
      applicable state or federal laws or regulations, and all documents relating
      thereto shall be legally sufficient under such laws or regulations and shall
      be
      legally enforceable in accordance with their terms; (e) no agreement under
      which
      any deduction or offset of any kind, other than normal trade discounts, may
      be
      granted or shall have been made by such Borrower Party at or before the time
      such Account is created; (f) all agreements, instruments
      and other documents relating to any Account shall be true and correct and in
      all
      material respects what they purport to be; (g) such Borrower Party shall
      maintain books and records pertaining to said Collateral in such detail, form
      and scope as Agent shall reasonably require; (h) such Borrower Party shall
      promptly notify Agent if any Account arises out of contracts with any
      Governmental Authority, and will execute any instruments and take any steps
      reasonably required by Agent in order that all monies due or to become due
      under
      any such contract shall be assigned to Agent and notice thereof given to such
      Governmental Authority under
      the
      Federal Assignment of Claims Act or any similar state or local law; (i) such
      Borrower Party will, immediately upon learning thereof, report to Agent any
      material loss or destruction of, or substantial damage to, any of the
      Collateral, and any other matters affecting the value, enforceability or
      collectibility of any of the Collateral; (j) if any amount payable under or
      in
      connection with any such Account is evidenced by a promissory note or other
      instrument, such promissory note or instrument shall be promptly pledged,
      endorsed, assigned and delivered to Agent for the benefit of Agent and the
      Lenders as additional Collateral; and (k) such Borrower Party is not and shall
      not be entitled to pledge Agent’s or any Lender’s credit on any purchases or for
      any purpose whatsoever.

     

     

    
      
        
        

      

      
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    5.24    Collateral
      Custodian. Upon the occurrence
      and during the continuance of any Default or Event of Default, Agent may at
      any
      time and from time to time employ and maintain on the premises of any Credit
      Party a custodian selected by Agent who shall have full authority to do all
      acts
      necessary to protect Agent’s and the Lenders’ interests. Each Credit Party
      hereby agrees to, and to cause its Subsidiaries to, cooperate with any such
      custodian and to do whatever Agent may reasonably request to preserve the
      Collateral. All reasonable costs and expenses incurred by Agent by reason of
      the
      employment of the custodian shall be the responsibility of the Borrowers and
      charged to the Loan Account.

     

    5.25    Accounts
      Covenants.

     

    (a)    With
      respect to any Account of any Borrower Party that is included by the Borrower
      Parties as an Eligible Account or an Eligible Export-Related Account in the
      calculation of the Aggregate Borrowing Base, the Borrowers shall notify Agent
      promptly of: (i) any material delay in any Borrower Party’s performance of any
      of its material obligations to any Account Debtor or the assertion of any
      material claims, offsets, defenses or counterclaims by any Account Debtor,
      or
      any material disputes with Account Debtors, or any settlement, adjustment or
      compromise thereof, (ii) all material adverse information known to any Borrower
      or Guarantor relating to the financial condition of any Account Debtor if the
      aggregate amount of all Accounts owing by such Account Debtor is greater than
      $250,000 and (iii) any event or circumstance which, to the best of any Borrower
      Party’s knowledge, would cause Agent to consider any then existing Accounts as
      no longer constituting Eligible Accounts or Eligible Export-Related Accounts.
      No
      credit, discount, allowance or extension or agreement for any of the foregoing
      shall be granted to any Account Debtor without Agent’s consent (which consent
      shall not be unreasonably withheld), except as provided in Section 6.14.
      Subject to Section 6.14, as long as no Event of Default has occurred and
      is continuing, Borrower Parties shall settle, adjust or compromise any claim,
      offset, counterclaim or dispute with any Account Debtor. At any time that an
      Event of Default has occurred and is continuing, Agent shall, at its option,
      have the exclusive 

    right
      to
      settle, adjust or compromise any claim, offset, counterclaim or dispute with
      Account Debtors or grant any credits, discounts or allowances.

     

     

    
      
        
        

      

      
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    (b)    With
      respect to each Account of any Borrower Party that is included by the Borrower
      Representative as an Eligible Account or Eligible Export-Related Account in
      the
      calculation of the Aggregate Borrowing Base: (i) the amounts shown on any
      invoice delivered to Agent or schedule thereof delivered to Agent shall be
      true
      and complete in all material respects, (ii) any payments made thereon shall
      be
      promptly delivered to Agent pursuant to the terms of this
      Agreement, (iii) no credit, discount, allowance or extension or agreement for
      any of the foregoing shall be granted to any Account Debtor except as provided
      in Section 6.14, (iv) there shall be promptly reported to Agent in
      accordance with the terms of this Agreement any setoffs, deductions, contras,
      defenses, counterclaims or disputes existing or asserted with respect thereto
      and (v) none of the transactions giving rise thereto will violate any applicable
      foreign, Federal, state or local laws or regulations, all documentation relating
      thereto will be legally sufficient under such laws and regulations and all
      such
      documentation will be legally enforceable in accordance with its
      terms.

     

    (c)    Agent
      shall have the right at any time or times, in Agent’s name or in the name of a
      nominee of Agent, to verify the validity, amount or any other matter relating
      to
      any Inventory or Accounts, by mail, telephone, facsimile transmission or
      otherwise.

     

    5.26    Inventory
      Covenants. With respect to the
      Inventory of any Borrower Party that is included by the Borrower Representative
      as Eligible Inventory or Eligible Machinery-in-Process in the calculation of
      the
      Aggregate Borrowing Base: (a) each such Borrower Party shall at all times
      maintain inventory records reasonably satisfactory to Agent (it being
      acknowledged that Agent is not aware of any inventory records that are not
      reasonably satisfactory), keeping correct and accurate records itemizing and
      describing the kind, type, quality and quantity of such Inventory, such Borrower
      Party’s cost therefor and daily withdrawals therefrom and additions thereto; (b)
      such Borrower Parties shall conduct a physical count of such Inventory at any
      time Agent may reasonably request, and promptly following such physical
      inventory shall supply Agent with a report in the form and with such specificity
      as may be reasonably satisfactory to Agent concerning such physical count (it
      being acknowledged that Agent is not aware of any current practices that are
      not
      reasonably satisfactory); (c) such Borrower Parties shall not remove any such
      Inventory from the locations set forth or permitted herein, without the prior
      written consent of Agent, except for sales of such Inventory in the ordinary
      course of its business and except to move such Inventory directly from one
      location set forth or permitted herein to another such location and except
      for
      such Inventory shipped from the manufacturer thereof to such Borrower Party
      which is in transit to the locations set forth or permitted herein; (d) upon
      Agent’s request, the Borrower Parties shall, at their expense, deliver or cause
      to be delivered to Agent written appraisals as to such Inventory in form, scope
      and methodology reasonably acceptable to Agent (and consistent with the
      methodology used by AccuVal) by AccuVal or an appraiser reasonably acceptable
      to
      Agent, addressed to Agent and Lenders and upon which Agent and Lenders are
      expressly permitted to rely; (e) such Borrower Parties shall produce, use,
      store
      and maintain such Inventory with all reasonable care and caution and in
      accordance with applicable standards of any insurance and in conformity with
      applicable laws (including the requirements of the Federal Fair Labor Standards
      Act of 1938, as amended and all rules, regulations and orders related thereto);
      (f) none of such Inventory shall constitute farm
      products or the proceeds thereof; (g) each such Borrower Party assumes all
      responsibility and liability arising from or relating to the production, use,
      sale or other disposition of such Inventory; (h) such Borrower Parties shall
      not
      sell such Inventory to any customer on approval, or any other basis which
      entitles the customer to return or may obligate any such Borrower Party to
      repurchase such Inventory (unless such Inventory may be returned only if it
      is
      not damaged and is resalable in the normal course of business); (i) such
      Borrower Parties shall keep such Inventory in good and marketable condition;
      and
      (j) such Borrower Parties shall not, without prior written notice to Agent
      or
      the specific identification of such Inventory in a report with respect
      thereto provided by Borrower Representative to Agent pursuant to paragraph
      (a)
      of Annex F hereof, acquire or accept any such Inventory on consignment or
      approval outside the ordinary course of business.

     

     

    
      
        
        

      

      
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    6. 
      NEGATIVE
      COVENANTS

     

    Each
      Credit Party executing this Agreement jointly and severally agrees as to all
      Credit Parties that from and after the date hereof until the Termination Date
      it
      shall not:

     

    6.1    Liens,
      Etc.  Create,
      incur, assume or suffer to exist, or permit any of its Subsidiaries to create,
      incur, assume or suffer to exist, any Lien upon or with respect to any of its
      properties, whether now owned or hereafter acquired; file or suffer to exist
      under the Code or any similar law or statute of any jurisdiction, an effective
      financing statement (or the equivalent thereof) creating an effective Lien
      thereto that names it or any of its Subsidiaries as debtor; sign or suffer
      to
      exist any security agreement authorizing any secured party thereunder to file
      such financing statement (or the equivalent thereof); sell any of its property
      or assets subject to an understanding or agreement, contingent or otherwise,
      to
      repurchase such property or assets (including sales of Accounts) with recourse
      to it or any of its Subsidiaries or assign or otherwise transfer, or permit
      any
      of its Subsidiaries to assign or otherwise transfer, any account or other right
      to receive income; other than, as to all of the above, Permitted
      Liens.

     

    6.2    Indebtedness.
      Create,
      incur, assume, guarantee or suffer to exist, or otherwise become or remain
      liable with respect to, or permit any of its Subsidiaries to create, incur,
      assume, guarantee or suffer to exist or otherwise become or remain liable with
      respect to, any Indebtedness other than Permitted Indebtedness.

     

    6.3    Fundamental
      Changes; Dispositions.
      Wind-up, liquidate or dissolve, or merge, consolidate or amalgamate with any
      Person, or convey, sell, lease or sublease, license or sublicense, transfer
      or
      otherwise dispose of, whether in one transaction or a series of related
      transactions, all or any part of its business, property or assets, whether
      now
      owned or hereafter acquired (or agree to do any of the foregoing), or purchase
      or otherwise acquire, whether in one transaction or a series of related
      transactions, all or substantially all of the assets of any Person (or any
      division thereof) (or agree to do any of the foregoing), or permit any of its
      Subsidiaries to do any of the foregoing; provided, however,
      that

     

    (a)    any
      Credit Party and its Subsidiaries may (A) sell Inventory in the ordinary
      course of business, (B) dispose of excess, obsolete or worn-out equipment in
      the
      ordinary course of business, (C) sell or otherwise dispose of other property
      or
      assets (excluding Accounts and Inventory) for cash in an aggregate amount not
      less than the fair market value of such property or assets, (D) sell or
      otherwise dispose of the Designated Real Property and Assets to
      a
      third party, (E) dispose of cash or sell or liquidate Permitted Investments
      or other cash equivalents, (F) enter, in the ordinary course of business
      and consistent with past practices, into operating leases and subleases or
      licenses or sublicenses of any property, (G) sell or otherwise dispose of assets
      consisting of accounts receivable and related assets in connection with
      Permitted European Receivables Financing, (H) sell or otherwise dispose of
      accounts receivables and related assets in an aggregate face amount not to
      exceed $500,000 per fiscal year and (I) sell or otherwise dispose of notes
      receivables and related assets in an aggregate face amount not to exceed
      $850,000 per fiscal year; provided that the Net Cash Proceeds of any
      disposition (x) in the case of clause (B) above, do not exceed $3,000,000 in
      the
      aggregate, (y) in the case of clause (C) above, do not exceed $10,000,000 in
      the
      aggregate and (z) in all cases, are paid to Agent for the benefit of Agent
      and
      the Lenders to be applied, to the extent required, pursuant to the terms of
      Section 1.3; and provided, further however, that in
      the case of any Sale of Senior Secured Note Priority Collateral (as defined
      in
      the Senior Secured Notes Indenture), the Credit Parties shall (1) give Agent
      prior notice of all such sales or dispositions, (2) certify that all proceeds
      thereof shall be deposited into a Senior Secured Priority Account in accordance
      with Section 5.20 and as otherwise required by the Senior Secured Notes
      Indenture, the Intercreditor Agreement or the Loan Documents and (3) notify
      Agent in accordance with Section 5.20 prior to any withdrawals from or
      deposits to any such account.

     

     

    
      
        
        

      

      
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    (b)    any
      Guarantor or Borrower (x) may be merged into any Credit Party, or may be
      consolidated or amalgamated with another Credit Party, so long as (A) no
      other provision of this Agreement would be violated thereby, (B) such
      Guarantor or Borrower gives Agent at least thirty (30) days’ prior written
      notice of such merger, consolidation or amalgamation, (C) no Default or
      Event of Default shall have occurred and be continuing either before or after
      giving effect to such transaction, (D) the Lenders’ rights in any
      Collateral, including, without limitation, the existence, perfection and
      priority of any Lien thereon, are not adversely affected by such merger,
      consolidation or amalgamation, (E) if a Borrower is involved in any such merger,
      consolidation or amalgamation, then the survivor of such transaction shall
      be a
      Borrower, and (F) the surviving Person’s Stock (unless such Person is
      Parent) is the subject of a Pledge Agreement, in each case, which is in full
      force and effect on the date of and immediately after giving effect to such
      merger, consolidation or amalgamation, or (y) may sell or otherwise dispose
      of,
      all or any part of its business, property or assets, whether now owned or
      hereafter acquired to any other Credit Party so long as (A) no other provision
      of this Agreement would be violated thereby, (B) no Default or Event of Default
      shall have occurred and be continuing either before or after giving effect
      to
      such transaction and (C) the Lenders’ rights in any Collateral, including,
      without limitation, the existence, perfection and priority of any Lien thereon,
      are not adversely affected by such sale or other disposition;

     

    (c)    any
      wholly-owned Domestic Subsidiary that is not a Credit Party (x) may be merged
      into any other wholly-owned Domestic Subsidiary, or may be consolidated or
      amalgamated with another wholly-owned Domestic Subsidiary, so long as (A) no
      other provision of this Agreement would be violated thereby, (B) a Credit Party
      gives Agent at least thirty (30) days’ prior written notice of such merger,
      consolidation or amalgamation, (C) no Default or Event of Default shall have
      occurred and be continuing either before or after giving effect to such
      transaction, (D) Agent’s rights in any Collateral, including, without
      limitation, the existence,
      perfection and priority of any Lien thereon, are not adversely affected by
      such
      merger, consolidation or amalgamation and (E) if either Domestic Subsidiary
      was
      a Credit Party, the surviving
      Domestic Subsidiary, if any, is joined as a Credit Party hereunder and is a
      party to a Guaranty and the Security Agreement and the Stock of such surviving
      Domestic Subsidiary is the subject of the Pledge Agreement, in each case, which
      is in full force and effect on the date of and immediately after giving effect
      to such merger, consolidation or amalgamation, or (y) may sell or otherwise
      dispose of (including by way of liquidation and dissolution), all or any part
      of
      its business, property or assets, whether now owned or hereafter acquired to
      any
      other wholly-owned Domestic Subsidiary so long as (A) no other provision of
      this
      Agreement would be violated thereby, (B) no Default or Event of Default shall
      have occurred and be continuing either before or after giving effect to such
      transaction and (C) Agent’s rights in any Collateral, including, without
      limitation, the existence, perfection and priority of any Lien thereon, are
      not
      adversely affected by such sale or other disposition; and

     

     

    
      
        
        

      

      
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    (d)    any
      Foreign Subsidiary (x) may be merged into any other Foreign Subsidiary, or
      may
      be consolidated or amalgamated with another Foreign Subsidiary, so long as
      (A)
      no other provision of this Agreement would be violated thereby, (B) no Default
      or Event of Default shall have occurred and be continuing either before or
      after
      giving effect to such transaction, and (C) to the extent such Foreign Subsidiary
      is owned directly by a Credit Party, all of the non-voting Stock and sixty-five
      percent (65%) of the voting Stock of the surviving Foreign Subsidiary is the
      subject of the Pledge Agreement, which is in full force and effect on the date
      of and immediately after giving effect to such merger, consolidation or
      amalgamation or (y) may sell or otherwise dispose of, all or any part of its
      business, property or assets, whether now owned or hereafter acquired to any
      other Foreign Subsidiary so long as (A) no other provision of this Agreement
      would be violated thereby, and (B) no Default or Event of Default shall have
      occurred and be continuing either before or after giving effect to such
      transaction.

     

    6.4    Change
      in Nature of Business.
      Make,
      or permit any of its Subsidiaries to make, any change in the nature of its
      business as described in Section 3.12.

     

    6.5    Loans,
      Advances, Investments, Etc. Make
      or
      commit or agree to make any loan, advance, guarantee of obligations, other
      extensions of credit or capital contributions to, or hold or invest in or commit
      or agree to hold or invest in, or purchase or otherwise acquire or commit or
      agree to purchase or otherwise acquire any shares of the Stock, bonds, notes,
      debentures or other securities of, or make or commit or agree to make any other
      investment in, any other Person, or purchase or own any futures contract or
      otherwise become liable for the purchase or sale of currency or other
      commodities at a future date in the nature of a futures contract, or permit
      any
      of its Subsidiaries to do any of the foregoing, except for:

     

    (a)    investments
      existing on the Closing Date, as set forth on Schedule 6.5 hereto,
      but not any increase in the amount thereof as set forth in such Schedule or
      any
      other material modification of the terms thereof, provided that Borrowers
      may acquire, directly or indirectly in one or more transactions, all outstanding
      Stock of Ferromatik Milacron India Ltd. not owned by Borrowers on the Closing
      Date so long as immediately before and immediately after
      giving effect to such acquisition Borrowers shall have Excess Availability
      of
      more than $25,000,000,

     

     

    
      
        
        

      

      
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    (b)    investments
      permitted under clause (j) of the definition of “Permitted
      Indebtedness”,

     

    (c)    Permitted
      Investments,

     

    (d)    investments
      not constituting loans or advances by (A) any Domestic Credit Party in any
      other
      Domestic Credit Party and (B) any Foreign Subsidiary in any other Foreign
      Subsidiary,

     

    (e)    loans
      and
      advances to directors, officers and employees of Parent and its Subsidiaries
      in
      the ordinary course of business in an aggregate principal amount not to exceed
      $1,000,000 at any one time outstanding,

     

    (f)    investments
      under Hedging Agreements entered into in the ordinary course of financial
      management and not for speculative purposes,

     

    (g)    pledges
      and deposits permitted under clause (f) of the definition of Permitted
      Liens,

     

    (h)    investments
      in deposit accounts in the ordinary course of business,

     

    (i)    investments
      received in connection with an insolvency proceeding of any supplier, customer
      or other Person having an obligation in favor of any Credit Party as a result
      of
      a settlement of delinquent accounts and deposits with, such customers, suppliers
      or other Persons arising in the ordinary course of business,

     

    (j)    investments
      existing on the Closing Date not constituting loans or advances in the
      Subsidiaries of the Credit Parties and the creation of new Subsidiaries by
      any
      Credit Party so long as such creation is in compliance with
Section 5.1,

     

    (k)    investments
      by Parent the consideration of which consists solely of the issuance of Parent’s
      common Stock to the third party to the extent (A) the aggregate market value
      of
      all such issuances (measured at the time of each such issuance) does not exceed
      $5,000,000, (B) immediately before and after the making of any such investment,
      there shall exist no Event of Default, (C) the Credit Parties do not incur
      any
      material liabilities related to such investment, (D) the rights of Agent
      and the Lenders are not adversely affected by any such investment, (E) Agent
      shall have received at least fifteen (15) days’ prior written notice of such
      investment and (F) on the date of consummation of such investment, Agent shall
      have received a certificate of an Authorized Officer of Parent certifying,
      as of
      such date, that the conditions set forth in the foregoing clauses (A) through
      (D) of this subsection (xi) have been satisfied,

     

    (l)    investments
      in China JV made after the Closing Date in an aggregate amount not to exceed
      $3,000,000 so long as immediately before and immediately after giving effect
      to
      such investment no Event of Default shall have occurred and be continuing;
      provided, however, investments in an aggregate amount not to
      exceed $1,500,000 shall be permitted notwithstanding
      the occurrence and continuence of an Event of Default so long as Agent or the
      Requisite Lenders have not accelerated payment of all or any part of the
      Obligations under Section 8.2 as of the date of any such
      investment,

     

     

    
      
        
        

      

      
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    (m)    investments
      in any joint venture to which the Parent or any of its Subsidiaries is a party
      (other than the China JV) by the Parent or any of its Subsidiaries to the extent
      that such investment will not involve, require, result in or otherwise obligate
      any cash or cash consideration made or to be made by the Loan Parties in an
      aggregate amount not exceeding $3,500,000; provided that any such
      investment by a Credit Party shall only be permitted if immediately before
      and
      immediately after giving effect to such investment Borrowers shall have Excess
      Availability of more than $25,000,000,

     

    (n)    other
      investments not otherwise permitted under clauses (a) through (l) above or
      clauses (o) through (q) below in an aggregate amount not exceeding $2,000,000
      so
      long as immediately before and immediately after giving effect to any such
      investment Borrowers shall have Excess Availability of more than
      $25,000,000,

     

    (o)    investments
      constituting Contingent Obligations to the extent permitted under clause (m)
      of
      the definition of Permitted Indebtedness,

     

    (p)    investments
      constituting Accounts arising in the ordinary course of business,

     

    (q)    the
      acquisition by D-M-E Company of all the shares of Stock owned by D-M-E U.S.A.
      Inc. in (x) Amalgamated Diemold D-M-E Pty. Ltd. (Australia), (y) D-M-E Company
      (India) Pvt. Ltd. and (z) D-M-E Engineering Pty. Ltd. (Singapore) so long as
      immediately before and immediately after giving effect to any such acquisition
      Borrowers shall have Excess Availability of more than $25,000,000,
      and

     

    (r)    with
      the
      prior written approval of Agent and the Requisite Lenders before any such
      payment, the payment to an Employee Plan which is subject to Title IV of ERISA
      of any contributions not currently required under Section 412 of the IRC that
      are made for future funding purposes, subject to the requirements of applicable
      law.

     

    6.6    Intentionally
      Omitted.

     

    6.7    Restricted
      Payments.  (i) Declare
      or pay any dividend or other distribution, direct or indirect, on account of
      any
      Stock of any Credit Party or any of its Subsidiaries, now or hereafter
      outstanding, (ii) make any repurchase, redemption, retirement, defeasance,
      sinking fund or similar payment, purchase or other acquisition for value, direct
      or indirect, of any Stock of any Credit Party or any direct or indirect parent
      of any Credit Party, now or hereafter outstanding, (iii) make any payment to
      retire, or to obtain the surrender of, any outstanding warrants, options or
      other rights for the purchase or acquisition of shares of any class of Stock
      of
      any Credit Party, now or hereafter outstanding, (iv) return any Stock to any
      shareholders or other equity holders of any
      Credit Party or any of its Subsidiaries, or make any other distribution of
      property, assets, shares of Stock, warrants, rights, options, obligations or
      securities thereto as such or (v) pay any management fees or any other fees
      or
      expenses (including the reimbursement thereof by any Credit Party or any of
      its
      Subsidiaries) pursuant to any management, consulting or other services agreement
      to any of the shareholders or other equityholders of any Credit Party or any
      of
      its Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates
      of any Credit Party; provided, however, (A) any Subsidiary of

     

     

    
      
        
        

      

      
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    any
      Credit Party may pay dividends or make other distributions to any Credit Party,
      (B) Parent may pay dividends or make other distributions (including
      pursuant to the Shareholder Rights Plan) in the form of common Stock, (C) Parent
      may pay dividends or other payments (including in the form of additional shares
      of such preferred stock) on its preferred stock issued and outstanding on the
      Closing Date (and on shares of such preferred stock issued as dividends
      thereunder), (D) any Subsidiary that is not a Credit Party may pay dividends
      or
      make other distributions to any Credit Party or any Subsidiary of a Credit
      Party, (E) any non-wholly owned Subsidiary of a Credit Party may pay dividends
      or make other distributions to its shareholders generally so long as the Credit
      Party or its respective Subsidiary which owns Stock in the Subsidiary paying
      such dividends or making such other distributions receives at least its
      proportionate share thereof (based upon its relative holdings of Stock in the
      Subsidiary paying such dividends and taking into account relative preferences,
      if any, of the various classes of Stock in such Subsidiary), (F) Parent may
      retire, acquire or terminate any warrant, option or other right in its Stock
      upon exercise in a transaction in which neither Parent nor any of its
      Subsidiaries makes any cash payment in respect of such exercise, (G) Parent
      may
      at any time redeem or repurchase shares of its preferred stock issued and
      outstanding on the Closing Date (plus any preferred stock issued as dividends
      thereunder), so long as (i) immediately before and after consummation of such
      redemption or repurchase, no Default or Event of Default shall have occurred
      and
      be continuing, (ii) immediately before and after consummation of such redemption
      or repurchase, the Credit Parties shall have pro forma Excess Availability
      of
      not less than $30,000,000 for the 90-day period preceding such transaction
      and
      no later than the date that is five (5) Business Days prior to the date on
      which
      such redemption or repurchase is to be consummated, the Borrower Representative
      shall submit a certificate of the chief financial officer of the Borrower
      Representative setting forth reasonably detailed calculations demonstrating
      compliance with such required pro forma Excess Availability for the 90-day
      period immediately following such redemption or acquisition, and certifying
      that
      the other conditions set forth in this clause (G) have been satisfied and (iii)
      the aggregate purchase price paid for all redemptions and repurchases pursuant
      to this clause (G) shall not exceed $6,300,000 (plus the amount of any dividends
      paid in preferred stock) and (H) Parent may upon the occurrence of a “Change of
      Control” (as defined in the Series B Certificate of Designation) make any
      mandatory redemption required under Section 9 of the Series B Certificate of
      Designation for all or part of its outstanding Series B Preferred Stock so
      long
      as any such redemption payment shall not be from the proceeds of the Loans
      or
      the proceeds of any Collateral.

     

    6.8    Federal
      Reserve Regulations.
      Permit
      any Loan or the proceeds of any Loan under this Agreement to be used for any
      purpose that would cause such Loan to be a margin loan under the provisions
      of
      Regulation T, U or X of the Federal Reserve Board.

     

    6.9    Transactions
      with Affiliates.
      Enter
      into, renew, extend or be a party to, or permit any of its Subsidiaries to
      enter
      into, renew, extend or be a party to, any transaction or series of related
      transactions (including, without limitation, the purchase, sale, lease, transfer
      or exchange of property or assets of any kind or the rendering of services
      of
      any kind) with any Affiliate, except (i) in the ordinary course of business
      in a manner and to an extent consistent with past practice and necessary or
      desirable for the prudent operation of its business, for fair consideration
      and
      on terms no less favorable to it or its Subsidiaries than would be obtainable
      in
      a comparable arm’s length transaction with a Person that is not an Affiliate
      thereof, (ii) transactions with another Credit Party, (iii) transactions
      permitted by Sections 6.1, 6.2,
      6.3, 6.5, 6.7 and/or 6.10, (iv) the Mizuho/Glencore
      Transactions (including any Rights Offering as defined therein),
      (v) compensation, retirement, expense reimbursement and indemnification
      arrangements with directors, officers, employees or consultants in the ordinary
      course of business, including the issuance of securities, or other payments,
      awards or grants in cash, securities or otherwise pursuant to, or the funding
      of
      employment arrangements, stock options, retirement plans, welfare plans and
      stock ownership plans approved by the Board of Directors of Parent made in
      the
      ordinary course of business consistent with past practices including, but not
      limited to, the contribution of common Stock of Parent to the Milacron
      Retirement Savings Plan in accordance with applicable law, and (vi) with the
      prior written approval of Agent and the Requisite Lenders in accordance with
      Section 6.15, any plan pre-funding described in Section 6.5(r) or
      the minimum funding waiver application described in Section
      6.15.

     

     

    
      
        
        

      

      
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    6.10    Limitations
      on Dividends and Other Payment Restrictions Affecting
      Subsidiaries.
      Create
      or otherwise cause, incur, assume, suffer or permit to exist or become effective
      any consensual encumbrance or restriction of any kind on the ability of any
      Credit Party or any Subsidiary of any Credit Party (i) to pay dividends or
      to make any other distribution on any shares of Stock of such Subsidiary owned
      by any Credit Party or any of its Subsidiaries, (ii) to pay or prepay or to
      subordinate any Indebtedness owed to any Credit Party or any of its
      Subsidiaries, (iii) to make loans or advances to any Credit Party or any of
      its Subsidiaries or (iv) to transfer any of its property or assets to any
      Credit Party or any of its Subsidiaries, or permit any of its Subsidiaries
      to do
      any of the foregoing; provided, however, that nothing in any of
      clauses (i) through (iv) of this Section 6.10 shall prohibit or
      restrict compliance with:

     

    (a)    this
      Agreement and the other Loan Documents;

     

    (b)    any
      agreements in effect on the date of this Agreement and described on
Schedule 6.10 and any renewal, extension, refinance or replacement
      thereof that does not expand the scope of any such encumbrance or
      restriction;

     

    (c)    any
      applicable law, rule or regulation (including, without limitation, applicable
      currency control laws and applicable state corporate statutes restricting the
      payment of dividends in certain circumstances);

     

    (d)    in
      the
      case of clause (iv), any agreement setting forth customary restrictions on
      the
      subletting, assignment or transfer of any property or asset that is a lease,
      license, conveyance or similar contract in respect of such property or
      assets;

     

    (e)    in
      the
      case of clause (iv), any agreement, instrument or other document evidencing
      a
      Permitted Lien described in clause (e)(i) of the definition of
“Permitted Lien” from restricting on customary terms the transfer of any
      property or assets subject thereto;

     

    (f)    agreements
      related to the Indebtedness permitted under clause (i) of the definition of
      “Permitted Indebtedness” to the extent any such restrictions are limited to the
      Foreign Subsidiaries that are parties to such agreements;

     

     

    
      
        
        

      

      
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    (g)    the
      governing agreement and other agreements, instruments or documents entered
      into
      in connection with the formation of (i) the China JV or (ii) any other joint
      venture to which Parent or any of its Subsidiaries is a party and which is
      permitted pursuant to Section 6.5(m) and, in each case, any renewal,
      extension, refinancing or replacement thereof that does not expand the scope
      of
      any such encumbrance or restriction; or

     

    (h)    the
      Mizuho/Glencore Transaction Documents.

     

    6.11    Limitation
      on Issuance of Stock.
      Issue
      or sell or enter into any agreement or arrangement for the issuance or sale
      of,
      or permit any of its Subsidiaries to issue or sell or enter into any agreement
      or arrangement for the issuance or sale of, any shares of its Stock, any
      securities convertible into or exchangeable for its Stock or any warrants other
      than (w) the issuance of common Stock of Parent or warrants or options to
      acquire any such common Stock to the extent such issuances are permitted
      pursuant to Section 6.5(k), Section 6.9(v) or Section
      6.12(d) (including issuances pursuant to the Mizuho/Glencore Transaction
      Documents); (x) issuances of Stock permitted by Section 6.7; (y)
      issuances by any joint venture permitted by Section 6.5(l) or (m)
      of Stock to the owners of such joint venture; and (z) the issuance of rights
      and
      of Stock of Parent pursuant to and in accordance with the terms of the
      Shareholder Rights Plan.

     

    6.12    Modifications
      of Indebtedness,
      Organizational Documents and Certain Other Agreements; Etc.

     

    (a)    Amend,
      modify or otherwise change (or permit the amendment, modification or other
      change in any manner of) any of the provisions of any of its or its
      Subsidiaries’ Indebtedness or of any instrument or agreement (including, without
      limitation, any purchase agreement, indenture, loan agreement, guaranty or
      security agreement) relating to any such Indebtedness if such amendment,
      modification or change would shorten the final maturity or average life to
      maturity of, or require any payment to be made earlier than the date originally
      scheduled on, such Indebtedness, would increase the interest rate applicable
      to
      such Indebtedness, would change the subordination provision, if any, of such
      Indebtedness, or would otherwise be adverse to Agent or the Lenders or the
      issuer of such Indebtedness in any respect, provided that, in the case of the
      Senior Secured Notes Indenture and the Senior Secured Notes, any amendment,
      modification or other change may be made to any of such documents, if after
      giving effect to such amendment, modification or change (A) such Indebtedness
      shall require no amortization,
      sinking fund payment or any other scheduled maturity of the principal amount
      thereof on any date which is earlier than the date occurring six months after
      the then latest Commitment Termination Date, (B) the interest rate applicable
      to
      the Senior Secured Notes shall not be higher than such interest rate as in
      effect on the Closing Date, (C) the definition of the terms “Credit Facility
      Document,” “Credit Facility Liens,” “Credit Facility Priority Collateral,”
“Discharge of Credit Facility Obligations,” and “Discharge of Senior Secured
      Note Obligations,” appearing in the Senior Secured Notes Indenture and Section
      4.10(3) of the Senior Secured Notes Indenture shall not be changed, in each
      case, from those appearing in the Senior Secured Notes Indenture as in effect
      as
      of the Closing Date and (D) the terms governing any such Indebtedness shall
      not
      contain any provision (including, without limitation, covenants, mandatory
      redemptions or offers to purchase or prepay, defaults and remedies) which,
      in
      the reasonable judgment of Agent is materially more adverse to Agent or the
      Lenders than the provisions in the Senior Secured Notes Documents as of the
      Closing Date;

     

     

    
      
        
        

      

      
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    (b)    except
      for the Obligations and Indebtedness permitted under clause (j) of the
      definition Permitted Indebtedness, make any voluntary or optional payment,
      prepayment, redemption, defeasance, sinking fund payment or other acquisition
      for value of, or otherwise voluntarily satisfy prior to the scheduled maturity
      thereof in any manner, any of its or its Subsidiaries’ Indebtedness (including,
      without limitation, by way of depositing money or securities with the trustee
      therefor before the date required for the purpose of paying any portion of
      such
      Indebtedness when due), or refund, refinance, replace or exchange any other
      Indebtedness for any such Indebtedness (except to the extent any such optional
      payment, prepayment, redemption, defeasance, sinking fund payment, acquisition,
      refund, refinancing, replacement or exchange is pursuant to Section 3.07 of
      the
      Senior Secured Notes Indenture or is otherwise expressly permitted by the
      definition of Permitted Indebtedness, the Intercreditor Agreement or referred
      to
      in Section 1.3(b) (whether or not requiring a prepayment of the
      Loans pursuant to either such section), or contemplated by the Mizuho/Glencore
      Transactions, or make any payment, prepayment, redemption, defeasance, sinking
      fund payment or repurchase of any outstanding Indebtedness as a result of any
      asset sale, change of control, issuance and sale of debt or equity securities
      or
      similar event, or give any notice with respect to any of the foregoing;
provided, however, (i) prior to the Early Termination Date, Credit
      Parties shall be permitted to make such payments in respect of the Senior
      Secured Notes from the proceeds of the Loans in an aggregate amount of such
      payments not to exceed $5,000,000 if (A) Excess Availability (with trade
      payables being paid in accordance with historical practices) would be more
      than
      $25,000,000 before and after any such payment and (B) the Credit Parties have
      a
      Fixed Charge Coverage Ratio of not less than 1.00 to 1.00 immediately prior
      to
      any such payment and provide evidence reasonably satisfactory to Agent that
      they
      will have a pro forma Fixed Charge Coverage Ratio of not less than 1.00 to
      1.00
      for the six-month period immediately following any such payment and (ii) if
      $25,000,000 or less of the Senior Secured Notes remain outstanding following
      the
      Early Termination Date, Credit Parties shall be permitted to make such payments
      of the obligations under the Senior Secured Note Documents after the Early
      Termination Date from the proceeds of the Loans if after giving effect to any
      such payment Excess Availability would be more than $15,000,000;

     

    (c)    except
      as
      permitted by Section 6.3, amend, modify or otherwise change its
      name, jurisdiction of organization, organizational identification number or
      FEIN; or

     

    (d)    amend,
      modify or otherwise change its certificate of incorporation or bylaws (or other
      similar organizational documents), including, without limitation, by the filing
      or modification of any certificate of designation, or any agreement or
      arrangement entered into by it, with respect to any of its Stock (including
      any
      shareholders’ agreement), or enter into any new agreement with respect to any of
      its Stock, except any such amendments, modifications or changes or any such
      new
      agreements or arrangements pursuant to this paragraph (d) that either
      individually or in the aggregate, could not reasonably be expected to have
      a
      Material Adverse Effect (it being acknowledged that a change in the number
      of
      outstanding shares of any class of Parent’s Stock solely as a result of a stock
      split or reverse stock split effected by Parent shall not have a Material
      Adverse Effect); provided, however, that, in no event shall Parent
      permit any Subsidiaries’ certificate of incorporation, bylaws or other similar
      organizational document (other than D-M-E U.S.A. INC. or Uniloy Milacron U.S.A.
      Inc.) to contain any provision of the type, or having the purpose of, clause
      Ninth of Parent’s certificate of incorporation as in effect on the Closing
      Date.

     

     

    
      
        
        

      

      
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    6.13    Investment
      Company Act of 1940.
      Engage
      in any business, enter into any transaction, use any securities or take any
      other action or permit any of its Subsidiaries to do any of the foregoing,
      that
      would cause it or any of its Subsidiaries to become subject to the registration
      requirements of the Investment Company Act of 1940, as amended, by virtue of
      being an “investment company” or a company “controlled” by an “investment
      company” not entitled to an exemption within the meaning of such
      Act.

     

    6.14    Compromise
      of Accounts.
      Compromise or adjust any Account (or extend the time of payment thereof) or
      grant any discounts, allowances or credits or permit any of its Subsidiaries
      to
      do so unless (i) no Default or Event of Default has occurred and is
      continuing and (ii) such compromise, adjustment or grant is made in the
      ordinary course of its business in accordance with its practices and
      policies.

     

    6.15    ERISA.
      (i)
      Engage, or permit any ERISA Affiliate to intentionally engage, in any
      transaction described in Section 4069 of ERISA; (ii) engage, or permit
      any ERISA Affiliate to intentionally engage, in any prohibited transaction
      described in Section 406 of ERISA or 4975 of the IRC for which a statutory
      or class exemption is not available or a private exemption has not previously
      been obtained from the U.S. Department of Labor; (iii) adopt or permit any
      ERISA
      Affiliate to adopt any employee welfare benefit plan within the meaning of
      Section 3(1) of ERISA which provides benefits to employees after
      termination of employment other than as (x) set forth in Schedule 3.9 in
      accordance with the terms of such plans, (y) provided to certain employees
      upon
      the termination of employment of any such employee in the ordinary course of
      business, or (z) required by Section 601 of ERISA, Section 4980B of
      the IRC or applicable law; (iv) fail to make any contribution or payment to
      any
      Multiemployer Plan which it or any ERISA Affiliate may be required to make
      under
      any agreement relating to such Multiemployer Plan, or any law pertaining
      thereto; or (v) fail, or permit any ERISA Affiliate to fail, to pay any required
      installment
      or any other payment required under Section 412 of the IRC on or before the
      due date for such installment or other payment, except, in the case of clauses
      (i), (ii), (iii), (iv) and (v), as could not reasonably be expected to have
      a
      Material Adverse Effect or result in the imposition of a Lien under Section
      412(n) of the IRC or under ERISA. With the prior written approval of Agent
      and
      the Requisite Lenders before taking any of the actions specified in the
      following clauses (i), (ii) and (iii), the Credit Parties and their ERISA
      Affiliates, so long as they comply with clause (h) of Annex E hereto,
      may, subject to applicable law, (i) apply to the IRS for, and obtain, a pension
      funding waiver pursuant to Section 412(d) of the IRC regarding their pension
      funding obligations to the Milacron Retirement Plan for a plan year or years
      (which year or years shall be specified in the approval request submitted to
      Agent and the Requisite Lenders), (ii) act in reliance on such a funding waiver
      (when and if received) regarding its funding obligations to such Plan, including
      regarding the making of any required installments or payments and (iii) take
      all
      other actions otherwise permitted under this Agreement as appropriate in
      connection with such funding waiver application. Notwithstanding any other
      provision of this Section 6.15 or this Agreement, if the Requisite
      Lenders shall have approved in advance a Credit Party’s funding waiver
      application as contemplated hereby, then, solely for purposes of this Agreement,
      any such funding waiver application shall not be considered a Termination Event,
      nor result in a Lien, nor constitute a material adverse change in funding
      status, nor be considered the failure to pay a required installment or other
      payment, nor the violation of any other plan funding requirements, regarding
      or
      to such Plan for purposes of this Section 6.15.

     

     

    
      
        
        

      

      
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    6.16    Environmental.
      Permit
      Handling, Release or disposal of Hazardous Materials at any property owned
      or
      leased by it or any of its Subsidiaries, except in compliance with Environmental
      Laws and except for such Handling, Release or disposal of Hazardous Materials
      that could not reasonably be expected to result in a Material Adverse
      Effect.

     

    6.17    Certain
      Agreements.
      Agree
      to any material amendment or other material change to or material waiver of
      any
      of its rights under any Material Contract if such amendment, change or waiver is
      adverse to the interests of any Credit Party.

     

    6.18    Misplaced
      Notes.
      Create
      or suffer to exist any Lien upon or with respect to any of the Misplaced Notes
      except for the Lien created by the Loan Documents.

     

    6.19    Wholly-Owned
      Subsidiaries.
      Permit
      any Subsidiary that is a wholly-owned, directly or indirectly, by Parent or
      any
      of its other Subsidiaries as of the Closing Date to cease to be wholly-owned,
      directly or indirectly, by Parent or any of such other
      Subsidiaries.

     

    6.20    Restrictions
      in Organizational Documents.
      None of
      Parent, D-M-E U.S.A. INC. or Uniloy Milacron U.S.A. Inc. shall invoke or
      otherwise apply the provisions of (i) in the case of Parent, clause Ninth of
      its
      certificate of incorporation, (ii) in the case of D-M-E U.S.A. INC., Article
      VI
      of its restated articles of incorporation or (iii) in the case of Uniloy
      Milacron U.S.A. Inc., Article VI of its articles of incorporation, in each
      case,
      as in effect on the Closing Date, in any manner that would impair, compromise
      or
      diminish the rights of Agent, the L/C Issuer and the Lenders under the Loan
      Documents.

     

    6.21    Financial
      Covenants. Borrowers shall not
      breach or fail to comply with any of the Financial Covenants.

     

     

    7. 
      TERM

     

    7.1    Termination.
      The
      financing arrangements contemplated hereby shall be in effect until the
      Commitment Termination Date, and the Loans and all other non-contingent
      Obligations shall be automatically due and payable in full on such
      date.

     

    7.2    Survival
      of Obligations Upon Termination
      of Financing Arrangements.
      Except
      as otherwise expressly provided for in the Loan Documents, no termination or
      cancellation (regardless of cause or procedure) of any financing arrangement
      under this Agreement shall in any way affect or impair the obligations, duties
      and liabilities of the Credit Parties or the rights of Agent and Lenders
      relating to any unpaid portion of the Loans or any other Obligations, due or
      not
      due, liquidated, contingent or unliquidated, or any 

     

     

    
      
        
        

      

      
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    transaction
      or event occurring prior to such termination, or any transaction or event,
      the
      performance of which is required after the Commitment Termination Date. Except
      as otherwise expressly provided herein or in any other Loan Document, all
      undertakings, agreements, covenants, warranties and representations of or
      binding upon the Credit Parties, and all rights of Agent and each Lender, all
      as
      contained in the Loan Documents, shall not terminate or expire, but rather
      shall
      survive any such termination or cancellation and shall continue in full force
      and effect until the Termination Date; provided, that the provisions of
Section 11.3, the payment obligations under Sections 1.15 and
1.16, and the indemnities contained in the Loan
      Documents shall survive
      the Termination Date.

     

     

    8. 
      EVENTS
      OF
      DEFAULT; RIGHTS AND REMEDIES

     

    8.1    Events
      of Default.
      The
      occurrence of any one or more of the following events (regardless of the reason
      therefor) shall constitute an “Event of Default” hereunder:

     

    (a)    Any
      Borrower (i) fails to make any payment of principal of, or interest on, or
      Fees
      owing in respect of, the Loans or any of the other Obligations when due and
      payable, or (ii) fails to pay or reimburse Agent or Lenders for any expense
      reimbursable hereunder
      or under any other Loan Document within ten (10) days following Agent’s demand
      for such reimbursement or payment of expenses;

     

    (b)    Any
      Credit Party fails or neglects to perform, keep or observe any of the provisions
      of Sections 1.4, 1.8, 5.3, 5.7, 5.14,
5.15, 5.22, 5.23, 5.24, 5.25,
5.26,
      or
6, or any of the provisions set forth in Annexes C or G,
      respectively, or any Credit Party shall fail to perform or comply with any
      covenant or agreement contained in any Security Agreement to which it is a
      party
      or any Pledge Agreement to which it is a party;

     

    (c)    Any
      Borrower fails or neglects to perform, keep or observe any of the provisions
      set
      forth in paragraph (a) of Annex F (at any time when the Borrowing Base
      Certificates are to be delivered on a monthly basis) and paragraphs (e), (g),
      (h), (i), (j), (k), (l) and (m) of Annex E, and the same shall remain
      unremedied for three (3) Business Days or more;

     

    (d)    Any
      Borrower fails or neglects to perform, keep or observe any of the provisions
      set
      forth in paragraphs (a), (b), (c), (d) and (f) of Annex E and the same
      shall remain unremedied for five (5) Business Days or more; provided that
      no Event of Default shall exist as a result of Borrowers’ failure to deliver
      copies of the reports described in paragraph (b) of Annex E to Agent
      or any Lender if (i) Borrowers’ independent public accountants require, as a
      condition to Agent’s or such Lender’s receipt of such reports, that Agent and/or
      such Lender execute a release or similar agreement and (ii) Agent or such Lender
      refuses to execute such agreement;

     

    (e)    Any
      Credit Party fails or neglects to perform, keep or observe any of the provisions
      of Section 5.9, and such failure shall continue for more than ten
      (10) days without any Credit Party commencing activities reasonably likely
      to
      cure the environmental matter which is the subject of such failure, provided
      that, in the case of any Credit Party commencing such activities, such
      Credit Party shall provide Agent, as and to the extent Agent reasonably
      requests, with regular updates or other supporting documentation regarding
      such
      activities for so long as such activities are conducted or until such
      environmental matter is otherwise cured or resolved;

     

     

    
      
        
        

      

      
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    (f)    Any
      Credit Party fails or neglects to perform, keep or observe any other provision
      of this Agreement or of any of the other Loan Documents (other than any
      provision embodied in or covered by any other clause of this Section
      8.1), and such failure, if capable of being remedied, shall remain
      unremedied for fifteen (15) days after the earlier of the date a senior officer
      of any Credit Party becomes aware of such failure and the date written notice
      of
      such default shall have been given by Agent to Borrower
      Representative;

     

    (g)    A
      default
      or breach occurs under any other agreement, document or instrument to which
      any
      Credit Party is a party that is not cured within any applicable grace period
      therefor, and such default or breach (i) involves the failure to make any
      principal or interest payment when due in respect of any Indebtedness in excess
      of $3,000,000 in the aggregate, or (ii) causes, or permits any holder of such
      Indebtedness or a trustee to cause, Indebtedness or a portion thereof in excess
      of $3,000,000 in the aggregate to become due prior to its stated maturity or
      prior to its regularly scheduled dates of payment;

     

    (h)    Any
      information contained in any Borrowing Base Certificate is untrue or incorrect
      as of the date of such Borrowing Base Certificate and has the effect of
      overstating the Aggregate Borrowing Base by more than the greater of (i)
      $1,500,000 and (ii) five percent (5%) of Excess Availability as of the date
      of
      such Borrowing Base Certificate, or any representation or warranty herein or
      in
      any Loan Document or in any written statement, report, financial statement
      or
      certificate (other than a Borrowing Base Certificate) made or delivered to
      Agent
      or any Lender by any Credit Party is untrue or incorrect in any material respect
      as of the date when made or deemed made;

     

    (i)    A
      case or
      proceeding is commenced against any Credit Party seeking a decree or order
      in
      respect of such Credit Party (i) under the Bankruptcy Code, or any other
      applicable federal, state or foreign bankruptcy or other similar law, (ii)
      appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator
      (or similar official) for such Credit Party or for any substantial part of
      any
      such Credit Party’s assets, or (iii) ordering the winding-up or liquidation of
      the affairs of such Credit Party, and such case or proceeding shall remain
      undismissed or unstayed for sixty (60) days or more or a decree or order
      granting the relief sought in such case or proceeding is granted by a court
      of
      competent jurisdiction;

     

    (j)    Any
      Credit Party (i) files a petition seeking relief under the Bankruptcy Code,
      or
      any other applicable federal, state or foreign bankruptcy or other similar
      law,
      (ii) consents to or fails to contest in a timely and appropriate manner the
      institution of proceedings thereunder or the filing of any such petition or
      the
      appointment of or taking possession by a custodian, receiver, liquidator,
      assignee, trustee or sequestrator (or similar official) for such Credit Party
      or
      for any substantial part of any such Credit Party’s assets, (iii) makes a
      general assignment for the benefit of creditors, (iv) takes any corporate action
      to authorize or effect any of the foregoing, or (v) admits in writing its
      inability generally to, or is generally unable to, pay its debts as such debts
      become due;

     

     

    
      
        
        

      

      
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    (k)    A
      final
      judgment or judgments for the payment of money in excess of $3,000,000 in the
      aggregate at any time are outstanding against one or more of the Credit Parties
      (excluding amounts covered by insurance policies as to which liability has
      not
      been disputed by the insurance carrier), and the same are not, for a period
      of
      thirty (30) consecutive days after the entry thereof (or if the applicable
      jurisdiction allows sixty (60) days for appeals, then sixty (60) consecutive
      days after the entry thereof), discharged or execution thereof stayed or bonded
      pending appeal, or such judgments are not discharged prior to the expiration
      of
      any such stay;

     

    (l)    Any
      material provision of any Loan Document for any reason ceases to be valid,
      binding and enforceable in accordance with its terms (or any Credit Party shall
      challenge the enforceability of any Loan Document or shall assert in writing,
      or
      engage in any action or inaction based on any such assertion, that any provision
      of any of the Loan Documents has ceased to be or otherwise is not valid, binding
      and enforceable in accordance with its terms), or any Lien created under any
      Loan Document ceases to be a valid and perfected first priority Lien (except
      as
      otherwise permitted herein or therein) in any of the Collateral with an
      aggregate fair market value of $3,000,000 or more purported to be covered
      thereby;

     

    (m)    Any
      Change of Control occurs;

     

    (n)    Any
      Credit Party or any of its ERISA Affiliates shall have made a complete or
      partial withdrawal from a Multiemployer Plan, and, as a result of such complete
      or partial withdrawal, any Credit Party or any of its ERISA Affiliates incurs
      a
      withdrawal liability in an annual amount exceeding $1,000,000; or a
      Multiemployer Plan enters reorganization status under Section 4241 of
      ERISA, and, as a result thereof any Credit Party’s or any of its ERISA
      Affiliates’ annual contribution requirements with respect to such Multiemployer
      Plan increases in an annual amount exceeding $1,000,000;

     

    (o)    (i) Any
      Termination Event with respect to any Employee Plan shall have occurred which
      could reasonably be expected to have a Material Adverse Effect or
      (ii) there exists any fact or circumstance that reasonably could be
      expected to result in the imposition of a Lien under Section 412(n) of the
      IRC or under ERISA; provided, however, that regarding the
      foregoing clause (i) or (ii), the minimum funding waiver application described
      in Section 6.15, if approved in advance in writing by Agent and the
      Requisite Lenders in accordance with Section 6.15, and any associated
      Reportable Event and Lien under Section 412(n) of the IRC or under ERISA, shall
      not be first considered whether to constitute an event which could reasonably
      be
      expected to have a Material Adverse Effect or otherwise constitute an Event
      of
      Default under this subsection (o) or this Agreement until such application
      is
      fully or partially denied by the IRS or other adverse action is taken by the
      IRS
      or PBGC with respect thereto;

     

    (p)    An
      event
      or development occurs which could reasonably be expected to have a Material
      Adverse Effect;

     

     

    
      
        
        

      

      
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    (q)    After
      the
      Export-Related Loan Commitment Date, (i) The Ex-Im Bank Guarantee is terminated
      (other than as a result of the scheduled maturity of the Ex-Im Bank Guarantee)
      or any material provision of the Ex-Im Bank Guarantee for any reason ceases
      to
      be valid, binding and enforceable in accordance with its terms (or Ex-Im Bank
      shall challenge the enforceability of the Ex-Im Bank Guarantee or shall assert
      in writing, or engage in any action or inaction based on any such assertion,
      that any provision of the Ex-Im Bank Guarantee has ceased to be or otherwise
      is
      not valid, binding and enforceable in accordance with its terms) and (ii) any
      Export-Related Advances remain outstanding as of 5:00 p.m. (New York time)
      on
      the Business Day next succeeding any event referred to in the preceding clause
      (i) shall occur; or

     

    (r)    (i) Any
      of the Obligations of any Credit Party under the Loan Documents for any reason
      shall cease to qualify as a part of a “Qualified Credit Facility” (or any
      similar term) under, and as defined in, the Senior Secured Notes Indenture
      or in
      any agreement evidencing any refinancing thereof as permitted under the terms
      of
      the Loan Documents, other than as a result, directly or indirectly, of any
      acts
      or omissions of Agent or the Lenders or (ii) the Intercreditor Agreement
      shall, in whole or in part, cease to be effective or cease to be legally valid,
      binding and enforceable against the holders of the Senior Secured Notes or
      any
      refinanced Indebtedness thereof as permitted under the terms of the Loan
      Documents other than as a result, directly or indirectly, of any acts or
      omissions of Agent.

     

    8.2    Remedies.

     

    (a)    If
      any
      Event of Default has occurred and is continuing, Agent may (and at the written
      request of the Requisite Revolving Lenders shall), by notice to the Borrower
      Representative, suspend the Revolving Loan facility with respect to additional
      Advances and/or the incurrence of additional Letter of Credit Obligations,
      whereupon any additional Advances and additional Letter of Credit Obligations
      shall be made or incurred in Agent’s sole discretion (or in the sole discretion
      of the Requisite Revolving Lenders, if such suspension occurred at their
      direction) so long as such Event of Default is continuing. If any Event of
      Default has occurred and is continuing, Agent may (and at the written request
      of
      Requisite Lenders shall), without notice except as otherwise expressly provided
      herein, increase the rate of interest applicable to the Loans and the Letter
      of
      Credit Fees to the Default Rate.

     

    (b)    If
      any
      Event of Default has occurred and is continuing, Agent may (and at the written
      request of the Requisite Lenders shall), without notice: (i) terminate the
      Revolving Loan facility with respect to further Advances or the incurrence
      of
      further Letter of Credit Obligations; (ii) reduce the Revolving Loan Commitment
      from time to time; (iii) declare all or any portion of the Obligations,
      including all or any portion of any Loan to be forthwith due and payable, and
      require that the Letter of Credit Obligations be cash collateralized in the
      manner set forth in Annex B, all without presentment, demand, protest or
      further notice of any kind, all of which are expressly waived by Borrowers
      and
      each other Credit Party; or (iv) exercise any rights and remedies provided
      to
      Agent under the Loan Documents or at law or equity, including all remedies
      provided under the Code; provided, that upon the occurrence of an Event
      of Default specified in Section 8.1(i) or (j), the Commitments
      shall be immediately terminated and all of the Obligations, including the
      aggregate Revolving Loan, shall become immediately due and payable without
      declaration, notice or demand by any Person.

     

     

    
      
        
        

      

      
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    8.3    Waivers
      by Credit
      Parties.
      Except
      as otherwise provided for in this Agreement or by applicable law, each Credit
      Party waives (including for purposes of Section 12): (a) presentment,
      demand and protest and notice of presentment, dishonor, notice of intent to
      accelerate, notice of acceleration, protest, default, nonpayment, maturity,
      release, compromise, settlement, extension or renewal of any or all commercial
      paper, accounts, contract rights, documents, instruments, chattel paper and
      guaranties at any time held by Agent on which any Credit Party may in any way
      be
      liable, and hereby ratifies and confirms whatever Agent may do in this regard,
      (b) all rights to notice and a hearing prior to Agent’s taking possession or
      control of, or to Agent’s replevy, attachment or levy upon, the Collateral or
      any bond or security that might be required by any court prior to allowing
      Agent
      to exercise any of its remedies, and (c) the benefit of all valuation,
      appraisal, marshaling and exemption laws.

     

     

    9. 
      ASSIGNMENT
      AND PARTICIPATIONS; APPOINTMENT OF AGENT

     

    9.1    Assignment
      and
      Participations.

     

    (a)    Subject
      to the terms of this Section 9.1, any Lender may make an assignment of,
      or sell participations in, at any time or times, the Loan Documents, Loans,
      Letter
      of
      Credit Obligations and any Commitment or any portion thereof or interest
      therein, including any Lender’s rights, title, interests, remedies, powers or
      duties thereunder. Any assignment by a Lender (other than to an Affiliate of
      such Lender) shall: (i) require the consent of Agent and (so long as no Event
      of
      Default has occurred and is continuing) Borrower (such consent not to be
      unreasonably withheld or delayed) and the execution of an assignment agreement
      (an “Assignment Agreement”) substantially in the form attached hereto as
Exhibit 9.1(a) and otherwise in form and substance reasonably
      satisfactory to, and acknowledged by, Agent; (ii) be conditioned on such
      assignee Lender representing to the assigning Lender and Agent that it is
      purchasing the applicable Loans to be assigned to it for its own account, for
      investment purposes and not with a view to the distribution thereof; (iii)
      after
      giving effect to any such partial assignment, the assignee Lender shall have
      Commitments in an amount at least equal to $5,000,000 and the assigning Lender
      shall have retained Commitments in an amount at least equal to $5,000,000;
      (iv)
      include a payment to Agent of an assignment fee of $3,500; and (v) so long
      as no
      Event of Default has occurred and is continuing, require the consent of Borrower
      Representative, which shall not be unreasonably withheld or delayed. In the
      case
      of an assignment by a Lender under this Section 9.1, the assignee shall
      have, to the extent of such assignment, the same rights, benefits and
      obligations as all other Lenders hereunder. The assigning Lender shall be
      relieved of its obligations hereunder with respect to its Commitments or
      assigned portion thereof from and after the date of such assignment. Each
      Borrower hereby acknowledges and agrees that any assignment shall give rise
      to a
      direct obligation of Borrowers to the assignee and that the assignee shall
      be
      considered to be a “Lender”. In all instances, each Lender’s liability to make
      Loans hereunder shall be several and not joint and shall be limited to such
      Lender’s Pro Rata Share of the applicable Commitment. In the event Agent or any
      Lender assigns or otherwise transfers all or any part of the Obligations, Agent
      or any such Lender shall so notify Borrowers and Borrowers shall, upon the
      request of Agent or such Lender, execute new Notes in exchange for the Notes,
      if
      any, being assigned. Notwithstanding the foregoing provisions of this Section
      9.1(a), any Lender may at any time pledge
      the Obligations held by it and such Lender’s rights under this Agreement and the
      other Loan Documents to a Federal Reserve Bank, and any Lender that is an
      investment fund may assign the Obligations held by it and such Lender’s rights
      under this Agreement and the other Loan Documents to another investment fund
      managed by the same investment advisor; provided, that no such pledge to
      a Federal Reserve Bank shall release such Lender from such Lender’s obligations
      hereunder or under any other Loan Document.

     

     

    
      
        
        

      

      
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    (b)    Any
      participation by a Lender of all or any part of its Commitments shall be made
      with the understanding that all amounts payable by Borrowers hereunder shall
      be
      determined as if that Lender had not sold such participation, and that the
      holder of any such participation shall not be entitled to require such Lender
      to
      take or omit to take any action hereunder except actions directly affecting
      (i)
      any reduction in the principal amount of, or interest rate or Fees payable
      with
      respect to, any Loan in which such holder participates, (ii) any extension
      of
      the scheduled amortization of the principal amount of any Loan in which such
      holder participates or the final maturity date thereof, and (iii) any release
      of
      all or substantially all of the Collateral (other than in accordance with the
      terms of this Agreement, the Collateral Documents or the other Loan Documents).
      Solely for purposes of Sections 1.13, 1.15, 1.16 and
9.8, each Borrower acknowledges and agrees that
      a participation shall
      give rise to a direct obligation of Borrowers to the participant and the
      participant shall be considered to be a “Lender”; provided, (i) a
      participant shall not be entitled to receive any greater payment under
Sections
      1.13, 1.15, 1.16 or 9.8 than the applicable Lender
      would have been entitled to receive with respect to the participation sold
      to
      such participant, and such participant must comply with the provisions of
      Sections 1.13, 1.15, 1.16 and 9.8 as though it were a Lender and
      (ii) a participant that would be a Foreign Lender if it were a Lender shall
      not be entitled to the benefits of Section 1.15(c) unless Borrower
      Representative is notified of the participation sold to such participant and
      such participant agrees, for the benefit of Borrowers, to comply with
      Section 1.15(c) as though it were a Lender. Except as set forth in the
      preceding sentence no Borrower or Credit Party shall have any obligation or
      duty
      to any participant. Neither Agent nor any Lender (other than the Lender selling
      a participation) shall have any duty to any participant and may continue to
      deal
      solely with the Lender selling a participation as if no such sale had
      occurred.

     

    (c)    Except
      as
      expressly provided in this Section 9.1, no Lender shall, as between
      Borrowers and that Lender, or Agent and that Lender, be relieved of any of
      its
      obligations hereunder as a result of any sale, assignment, transfer or
      negotiation of, or granting of participation in, all or any part of the Loans,
      the Notes or other Obligations owed to such Lender.

     

    (d)    If
      GE
      Capital should seek a primary syndication of the Loans and Commitments under
      this Agreement to Lenders reasonably acceptable to Borrowers, then at the
      request of GE Capital, Borrower Representative agrees to actively assist, and
      cooperate with (and cause its Subsidiaries and use reasonable efforts to cause
      Borrower Representative’s advisors to actively assist and cooperate with), GE
      Capital in effecting and completing such syndication, including, participating
      in bank and other relevant meetings, preparing and providing to GE Capital
      information relating to the syndication reasonably requested by GE Capital,
      using commercially reasonable efforts to use its existing banking relationships
      to assist with GE Capital’s syndication efforts, and assisting GE Capital in the
      preparation of a
      confidential
      information memorandum, presentations and other offering materials to be used
      in
      connection with the syndication and confirming that all materials made available
      to GE Capital by Borrower Representative or any of its representatives, taken
      as
      a whole and after giving effect to all written updates thereto, do not contain
      any untrue statement of a material fact or omit to state a material fact
      necessary in order to make the statements contained therein not materially
      misleading in light of the circumstances under which such statements are made.
      GE Capital will, in consultation with Borrower Representative, manage and
      control all aspects of any such syndication.

     

    
      
        
        

      

      
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    (e)    Any
      Lender may furnish any information concerning Credit Parties in the possession
      of such Lender from time to time to assignees and participants (including
      prospective assignees and participants); provided that such Lender shall
      obtain from assignees or participants confidentiality covenants substantially
      equivalent to those contained in Section 11.8.

     

    (f)    So
      long
      as no Event of Default has occurred and is continuing, no Lender shall assign
      or
      sell participations in any portion of its Loans or Commitments to a potential
      Lender or participant, if, as of the date of the proposed assignment or sale,
      the assignee Lender or participant would be subject to capital adequacy or
      similar requirements under Section 1.16(a), increased costs under
Section 1.16(b), an inability to
      fund
      LIBOR Loans under Section 1.16(c), or withholding taxes in accordance
      with Section 1.15(a).

     

    (g)    Notwithstanding
      anything to the contrary contained herein, any Lender (a “Granting
      Lender”), may grant to a special purpose funding vehicle (an “SPC”),
      identified as such in writing by the Granting Lender to Agent and Borrowers,
      the
      option to provide to Borrowers all or any part of any Loans that such Granting
      Lender would otherwise be obligated to make to Borrowers pursuant to this
      Agreement; provided that (i) nothing herein shall constitute a commitment
      by any SPC to make any Loan; and (ii) if an SPC elects not to exercise such
      option or otherwise fails to provide all or any part of such Loan, the Granting
      Lender shall be obligated to make such Loan pursuant to the terms hereof. The
      making of a Loan by an SPC hereunder shall utilize the Commitment of the
      Granting Lender to the same extent, and as if such Loan were made by such
      Granting Lender. No SPC shall be liable for any indemnity or similar payment
      obligation under this Agreement (all liability for which shall remain with
      the
      Granting Lender). Any SPC may (i) with notice to, but without the prior written
      consent of, Borrowers and Agent and without paying any processing fee therefor
      assign all or a portion of its interests in any Loans to the Granting Lender
      or
      to any financial institutions (consented to by Borrowers and Agent) providing
      liquidity and/or credit support to or for the account of such SPC to support
      the
      funding or maintenance of Loans and (ii) disclose on a confidential basis any
      non-public information relating to its Loans to any rating agency, commercial
      paper dealer or provider of any surety, guarantee or credit or liquidity
      enhancement to such SPC. This Section 9.1(g) may not be amended without
      the prior written consent of each Granting Lender, all or any of whose Loans
      are
      being funded by an SPC at the time of such amendment. For the avoidance of
      doubt, the Granting Lender shall for all purposes, including without limitation,
      the approval of any amendment or waiver of any provision of any Loan Document
      or
      the obligation to pay any amount otherwise payable by the Granting Lender under
      the Loan Documents, continue to be the Lender of record hereunder.

     

     

    
      
        
        

      

      
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    (h)    Nothing
      contained in this Section 9 shall require the consent of any party for GE
      Capital to assign any of its rights in respect of any Swap Related Reimbursement
      Obligation.

     

    9.2    Appointment
      of Agent.
      GE
      Capital is hereby appointed to act on behalf of all Lenders as Agent under
      this
      Agreement and the other Loan Documents. The provisions of this Section
      9.2 are solely for the benefit of Agent and Lenders and no Credit Party nor
      any other Person shall have any rights as a third party beneficiary of any
      of
      the provisions hereof. In performing its functions and duties under this
      Agreement and the other Loan Documents, Agent shall act solely as an agent
      of
      Lenders and does not assume and shall not be deemed to have assumed any
      obligation toward or relationship of agency or trust with or for any Credit
      Party or any other Person. Agent shall have no duties or responsibilities except
      for those expressly set forth in this Agreement and the other Loan Documents.
      The duties of Agent shall be mechanical and administrative in nature and Agent
      shall not have, or be deemed to have, by reason of this Agreement, any other
      Loan Document or otherwise a fiduciary relationship in respect of any Lender.
      Except as expressly set forth in this Agreement and
      the
      other Loan Documents, Agent shall not have any duty to disclose, and shall
      not
      be liable for failure to disclose, any information relating to any Credit Party
      or any of their respective Subsidiaries or any Account Debtor that is
      communicated to or obtained by GE Capital or any of its Affiliates in any
      capacity. Neither Agent nor any of its Affiliates nor any of their respective
      officers, directors, employees, agents or representatives shall be liable to
      any
      Lender for any action taken or omitted to be taken by it hereunder or under
      any
      other Loan Document, or in connection herewith or therewith, except for damages
      caused by its or their own gross negligence or willful misconduct.

     

    If
      Agent
      shall request instructions from Requisite Lenders, Requisite Revolving Lenders
      or all affected Lenders with respect to any act or action (including failure
      to
      act) in connection with this Agreement or any other Loan Document, then Agent
      shall be entitled to refrain from such act or taking such action unless and
      until Agent shall have received instructions from Requisite Lenders, Requisite
      Revolving Lenders or all affected Lenders, as the case may be, and Agent shall
      not incur liability to any Person by reason of so refraining. Agent shall be
      fully justified in failing or refusing to take any action hereunder or under
      any
      other Loan Document (a) if such action would, in the opinion of Agent, be
      contrary to law or the terms of this Agreement or any other Loan Document,
      (b)
      if such action would, in the reasonable opinion of Agent, expose Agent to
      Environmental Liabilities or (c) if Agent shall not first be indemnified to
      its
      satisfaction against any and all liability and expense which may be incurred
      by
      it by reason of taking or continuing to take any such action. Without limiting
      the foregoing, no Lender shall have any right of action whatsoever against
      Agent
      as a result of Agent acting or refraining from acting hereunder or under any
      other Loan Document in accordance with the instructions of Requisite Lenders,
      Requisite Revolving Lenders or all affected Lenders, as applicable.

     

    9.3    
Agent’s
      Reliance, Etc. 
      Neither Agent nor any of its Affiliates nor any of their respective directors,
      officers, agents or employees shall be liable for any action taken or omitted
      to
      be taken by it or them under or in connection with this Agreement or the other
      Loan Documents, except for damages caused by its or their own gross negligence
      or willful misconduct. Without limiting the generality of the foregoing, Agent:
      (a) may treat the payee of any Note as the holder thereof until Agent receives
      written notice of the assignment or transfer thereof signed by such payee and
      in
      form reasonably satisfactory to Agent; (b) may consult with legal counsel,
      independent public accountants and other experts selected by it and shall not
      be
      liable for any action taken or omitted to be taken by it in good faith in
      accordance with the advice of such counsel, accountants or experts; (c) makes
      no
      warranty or representation to any Lender and shall not be responsible to any
      Lender for any statements, warranties or representations made in or in
      connection with this Agreement or the other Loan Documents; (d) shall not have
      any duty to ascertain or to inquire as to the performance or observance of
      any
      of the terms, covenants or conditions of this Agreement or the other Loan
      Documents on the part of any Credit Party or to inspect the Collateral
      (including the books and records) of any Credit Party; (e) shall not be
      responsible to any Lender for the due execution, legality, validity,
      enforceability, genuineness, sufficiency or value of this Agreement or the
      other
      Loan Documents or any other instrument or document furnished pursuant hereto
      or
      thereto; and (f) shall incur no liability under or in respect of this Agreement
      or the other Loan Documents by acting upon
      any
      notice, consent, certificate or other instrument or writing (which may be by
      telecopy, telegram, cable or telex) believed by it to be genuine and signed
      or
      sent by the proper party or parties.

     

     

    
      
        
        

      

      
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    9.4  GE
      Capital and
      Affiliates.
      With
      respect to its Commitments hereunder, GE Capital shall have the same rights
      and powers under this Agreement and the other Loan Documents as any other Lender
      and may exercise the same as though it were not Agent; and the term “Lender” or
“Lenders” shall, unless otherwise expressly indicated, include GE Capital in its
      individual capacity. GE Capital and its Affiliates may lend money to, invest
      in,
      and generally engage in any kind of business with, any Credit Party, any of
      their Affiliates and any Person who may do business with or own securities
      of
      any Credit Party or any such Affiliate, all as if GE Capital were not Agent
      and
      without any duty to account therefor to Lenders. GE Capital and its Affiliates
      may accept fees and other consideration from any Credit Party for services
      in
      connection with this Agreement or otherwise without having to account for the
      same to Lenders. Each Lender acknowledges the potential conflict of interest
      between GE Capital as a Lender holding disproportionate interests in the Loans
      and GE Capital as Agent.

     

    9.5  Lender
      Credit Decision.
      Each
      Lender acknowledges that it has, independently and without reliance upon Agent
      or any other Lender and based on the Financial Statements referred to in
Section 3.7 and such other documents and information as it has deemed
      appropriate, made its own credit and financial analysis of the Credit Parties
      and its own decision to enter into this Agreement. Each Lender also acknowledges
      that it will, independently and without reliance upon Agent or any other Lender
      and based on such documents and information as it shall deem appropriate at
      the
      time, continue to make its own credit decisions in taking or not taking action
      under this Agreement. Each Lender acknowledges the potential conflict of
      interest of each other Lender as a result of Lenders holding disproportionate
      interests in the Loans, and expressly consents to, and waives any claim based
      upon, such conflict of interest.

     

    9.6  Indemnification.
      Lenders
      agree to indemnify Agent (to the extent not reimbursed by Credit Parties and
      without limiting the obligations of Credit Parties hereunder), ratably according
      to their respective Pro Rata Shares, from and against any and all liabilities,
      obligations, losses, damages, penalties, actions, judgments, suits, costs,
      expenses or disbursements of any kind or nature whatsoever that may be imposed
      on, incurred by, or asserted against Agent in any way relating to or arising
      out
      of this Agreement or any other Loan Document or any action taken or omitted
      to
      be taken by Agent in connection therewith; provided, that no Lender shall
      be liable for any portion of such liabilities, obligations, losses, damages,
      penalties, actions, judgments, suits, costs, expenses or disbursements resulting
      from Agent’s gross negligence or willful misconduct. Without limiting the
      foregoing, each Lender agrees to reimburse Agent promptly upon demand for its
      ratable share of any out-of-pocket expenses (including reasonable counsel fees)
      incurred by Agent in connection with the preparation, execution, delivery,
      administration, modification, amendment or enforcement (whether through
      negotiations, legal proceedings or otherwise) of, or legal advice in respect
      of
      rights or responsibilities under, this Agreement and each other Loan
      Document, to the extent that Agent is not reimbursed for such expenses by Credit
      Parties.

     

     

     

    
      
        
        

      

      
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    9.7  Successor
      Agent.
      Agent
      may resign at any time by giving not less than thirty (30) days’ prior written
      notice thereof to Lenders and Borrower Representative. Upon giving such notice
      of resignation, the Requisite Lenders shall have the right to appoint a
      successor Agent. If no successor Agent shall have been so appointed by the
      Requisite Lenders and shall have accepted such appointment within thirty (30)
      days after the resigning Agent’s giving notice of resignation, then the
      resigning Agent may, on behalf of Lenders, appoint a successor Agent, which
      shall be a Lender, if a Lender is willing to accept such appointment, or
      otherwise shall be a commercial bank or financial institution or a subsidiary
      of
      a commercial bank or financial institution if such commercial bank or financial
      institution is organized under the laws of the United States of America or
      of
      any State thereof and has a combined capital and surplus of at least
      $300,000,000. If no successor Agent has been appointed pursuant to the
      foregoing, within one hundred twenty (120) days after the date such notice
      of
      resignation was given by the resigning Agent, such resignation shall become
      effective and the Requisite Lenders shall thereafter perform all the duties
      of
      Agent hereunder until such time, if any, as the Requisite Lenders appoint a
      successor Agent as provided above. Any successor Agent appointed by Requisite
      Lenders or the resigning Agent hereunder shall be subject to the approval of
      Borrower Representative, such approval not to be unreasonably withheld or
      delayed; provided that such approval shall not be required if an Event of
      Default has occurred and is continuing. Upon the acceptance of any appointment
      as Agent hereunder by a successor Agent, such successor Agent shall succeed
      to
      and become vested with all the rights, powers, privileges and duties of the
      resigning Agent. Upon the earlier of the acceptance of any appointment as Agent
      hereunder by a successor Agent or the effective date of the resigning Agent’s
      resignation, the resigning Agent shall be discharged from its duties and
      obligations under this Agreement and the other Loan Documents, except that
      any
      indemnity rights or other rights in favor of such resigning Agent shall
      continue. After any resigning Agent’s resignation hereunder, the provisions of
      this Section 9 shall inure to its benefit as to any actions taken or
      omitted to be taken by it while it was acting as Agent under this Agreement
      and
      the other Loan Documents.

     

    9.8  Setoff
      and Sharing of Payments.
      In
      addition to any rights now or hereafter granted under applicable law and not
      by
      way of limitation of any such rights, upon the occurrence and during the
      continuance of any Event of Default and subject to Section 9.9(f), each
      Lender is hereby authorized at any time or from time to time, without prior
      notice to any Credit Party or to any Person other than Agent, (any such notice
      being hereby expressly waived), and to the fullest extent permitted by law,
      to
      offset and to appropriate and to apply any and all balances held by it at any
      of
      its offices for the account of any Borrower or Guarantor (regardless of whether
      such balances are then due to such Borrower or Guarantor) and any other
      properties or assets at any time held or owing by that Lender or that holder
      to
      or for the credit or for the account of any Borrower or Guarantor against and
      on
      account of any of the Obligations that are not paid when due; provided
      that the Lender exercising such offset rights shall give notice thereof to
      the
      affected Credit Party promptly after exercising such rights. Any
      Lender exercising a right of setoff or otherwise receiving any payment on
      account of the Obligations in excess of its Pro Rata Share thereof shall
      purchase for cash (and the other Lenders or holders shall sell) such
      participations in each such other Lender’s or holder’s Pro Rata Share of the
      Obligations as would be necessary to cause such Lender to share the amount
      so
      offset or otherwise received with each other Lender or holder in accordance
      with
      their respective Pro Rata Shares (other than offset rights exercised by any
      Lender with respect to Section 1.13, 1.15 or 1.16). Each Lender’s
      obligation under this Section 9.8 shall be in addition to and not in
      limitation of its obligations to purchase a participation in an amount equal
      to
      its Pro Rata Share of the Swing Line Loans under Section 1.1(c). and to
      purchase a participation in an amount equal to its Pro Rata Share (based on
      Revolving Loan Commitments) of the Export-Related Loan under Section
      1.1(d). Each Credit Party that is a Borrower or Guarantor agrees, to the
      fullest extent permitted by law, that (a) any Lender may exercise its right
      to
      offset with respect to amounts in excess of its Pro Rata Share of the
      Obligations and may sell participations in such amounts so offset to other
      Lenders and holders and (b) any Lender so purchasing a participation in the
      Loans made or other Obligations held by other Lenders or holders may exercise
      all rights of offset, bankers’ lien, counterclaim or similar rights with respect
      to such participation as fully as if such Lender or holder were a direct holder
      of the Loans and the other Obligations in the amount of such participation.
      Notwithstanding the foregoing, if all or any portion of the offset amount or
      payment otherwise received is thereafter recovered from the Lender that has
      exercised the right of offset, the purchase of participations by that Lender
      shall be rescinded and the purchase price restored without
      interest.

     

     

    
      
        
        

      

      
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    9.9  Advances;
      Payments; Non-Funding Lenders; Information;
      Actions in Concert.

     

    (a)  Advances;
      Payments.

     

    (i)  Revolving
      Lenders shall refund or participate in the Swing Line Loan in accordance with
      clauses (iii) and (iv) of Section 1.1(c). If the Swing Line
      Lender declines to make a Swing Line Loan or if Swing Line Availability is
      zero,
      Agent shall notify Revolving Lenders, promptly after receipt of a Notice of
      Revolving Credit Advance and in any event prior to 1:00 p.m. (New York time)
      on
      the date such Notice of Revolving Advance is received, by telecopy, telephone
      or
      other similar form of transmission. Each Revolving Lender shall make the amount
      of such Lender’s Pro Rata Share of such Revolving Credit Advance available to
      Agent in same day funds by wire transfer to Agent’s account as set forth in
Annex H not later than 3:00 p.m. (New York time) on the requested funding
      date, in the case of an Index Rate Loan, and not later than noon (New York
      time)
      on the requested funding date, in the case of a LIBOR Loan. After receipt of
      such wire transfers (or, in Agent’s sole discretion, before receipt of such wire
      transfers), subject to the terms hereof, Agent shall make the requested
      Revolving Credit Advance to Borrower designated by Borrower Representative
      in
      the Notice of Revolving Credit Advance. All payments by each Revolving Lender
      shall be made without setoff, counterclaim or deduction of any
      kind.

     

     

    
      
        
        

      

      
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    (ii)  Not
      less
      than once during each calendar week or more frequently at Agent’s election
      (each, a “Settlement Date”), Agent shall advise each Lender by telephone,
      or telecopy
      of the amount of such Lender’s Pro Rata Share of principal, interest and Fees
      paid for the benefit of Lenders with respect to each applicable Loan. Provided
      that each Lender has funded all payments or Advances required to be made by
      it
      and has purchased all participations required to be purchased by it under this
      Agreement and the other Loan Documents as of such Settlement Date, Agent shall
      pay to each Lender such Lender’s Pro Rata Share of principal, interest and Fees
      paid by Borrowers since the previous Settlement Date for the benefit of such
      Lender on the Loans held by it. To the extent that any Lender (a “Non-Funding
      Lender”) has failed to fund all such payments and Advances or failed to fund
      the purchase of all such participations, Agent shall be entitled to set off
      the
      funding short-fall against that Non-Funding Lender’s Pro Rata Share of all
      payments received from Borrowers. Such payments shall be made by wire transfer
      to such Lender’s account (as specified by such Lender in Annex H or the
      applicable Assignment Agreement) not later than 2:00 p.m. (New York time) on
      the
      next Business Day following each Settlement Date.

     

    (b)  Availability
      of Lender’s Pro Rata Share. Agent may assume that each Revolving Lender will
      make its Pro Rata Share of each Revolving Credit Advance available to Agent
      on
      each funding date. If such Pro Rata Share is not, in fact, paid to Agent by
      such
      Revolving Lender when due, Agent will be entitled to recover such amount on
      demand from such Revolving Lender without setoff, counterclaim or deduction
      of
      any kind. If any Revolving Lender fails to pay the amount of its Pro Rata Share
      forthwith upon Agent’s demand, Agent shall promptly notify Borrower
      Representative and Borrowers shall immediately repay such amount to Agent.
      Nothing in this Section 9.9(b) or elsewhere in this Agreement or the
      other Loan Documents shall be deemed to require Agent to advance funds on behalf
      of any Revolving Lender or to relieve any Revolving Lender from its obligation
      to fulfill its Commitments hereunder or to prejudice any rights that Borrowers
      may have against any Revolving Lender as a result of any default by such
      Revolving Lender hereunder. To the extent that Agent advances funds to any
      Borrower on behalf of any Revolving Lender and is not reimbursed therefor on
      the
      same Business Day as such Advance is made, Agent shall be entitled to retain
      for
      its account all interest accrued on such Advance until reimbursed by the
      applicable Revolving Lender.

     

    (c)  Return
      of Payments.

     

    (i)  If
      Agent
      pays an amount to a Lender under this Agreement in the belief or expectation
      that a related payment has been or will be received by Agent from Borrowers
      and
      such related payment is not received by Agent, then Agent will be entitled
      to
      recover such amount from such Lender on demand without setoff, counterclaim
      or
      deduction of any kind.

     

    (ii)  If
      Agent
      determines at any time that any amount received by Agent under this Agreement
      must be returned to any Borrower or paid to any other Person pursuant to any
      insolvency law or otherwise, then, notwithstanding any other term or condition
      of this Agreement or any other Loan Document, Agent will not be required to
      distribute any portion thereof to any Lender. In addition, each Lender will
      repay to Agent on demand any portion of such amount that Agent has distributed
      to such Lender, together with interest at such rate, if any, as Agent is
      required to pay to any Borrower or such other Person, without setoff,
      counterclaim or deduction of any kind.

     

    

     

    
      
        
        

      

      
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    (d)  Non-Funding
      Lenders. The failure of any Non-Funding Lender to make any Advance or any
      payment required by it hereunder or to purchase any participation in any Swing
      Line Loan or Export-Related Loan to be made or purchased by it on the date
      specified therefor shall not relieve any other Lender (each such other Revolving
      Lender, an “Other Lender”) of its obligations to make such Advance or
      purchase such participation on such date, but neither any Other Lender nor
      Agent
      shall be responsible for the failure of any Non-Funding Lender to make an
      Advance, purchase a participation or make any other payment required hereunder.
      Notwithstanding anything set forth herein to the contrary, a Non-Funding Lender
      shall not have any voting or consent rights under or with respect to any Loan
      Document or constitute a “Lender” or a “Revolving Lender” (or be included in the
      calculation of “Requisite Lenders” or “Requisite Revolving Lenders” hereunder)
      for any voting or consent rights under or with respect to any Loan Document.
      At
      Borrower Representative’s request, Agent, in Agent’s sole discretion (but
      without any obligation), or a Person reasonably acceptable to Agent shall have
      the right to purchase from any Non-Funding Lender, and each Non-Funding Lender
      agrees that it shall, at Borrower Representative’s request, sell and assign to
      Agent or such Person, as the case may be, all of the Commitments of that
      Non-Funding Lender for an amount equal to the principal balance of all Loans
      held by such Non-Funding Lender and all accrued interest and fees with respect
      thereto through the date of sale, such purchase and sale to be consummated
      pursuant to an executed Assignment Agreement.

     

    (e)  Dissemination
      of Information. Agent shall use reasonable efforts to provide Lenders with
      any notice of Default or Event of Default received by Agent from, or delivered
      by Agent to, any Credit Party, with notice of any Event of Default of which
      Agent has actually become aware and with notice of any action taken by Agent
      following any Event of Default; provided, that Agent shall not be liable
      to any Lender for any failure to do so, except to the extent that such failure
      is attributable to Agent’s gross negligence or willful misconduct.

     

    (f)  Actions
      in Concert. Anything in this Agreement to the contrary notwithstanding, each
      Lender hereby agrees with each other Lender that no Lender shall take any action
      to protect or enforce its rights arising out of this Agreement or the Notes
      (including exercising any rights of setoff) without first obtaining the prior
      written consent of Agent and Requisite Lenders, it being the intent of Lenders
      that any such action to protect or enforce rights under this Agreement and
      the
      Notes shall be taken in concert and at the direction or with the consent of
      Agent or Requisite Lenders.

     

    9.10  Quebec
      Security
      Documents.

     

    (a)  For
      greater certainty, and without limiting the powers of Agent, or any other Person
      acting as an agent or mandatary for Agent hereunder or under any other Loan
      Documents, the Borrowers, the Credit Parties and the Canadian Borrowing Base
      Guarantors hereby acknowledge that, for purposes of holding any hypothecs and
      security granted by any of the Borrowers, Credit Parties or Canadian Borrowing
      Base Guarantors on property pursuant to the laws of the Province of Quebec
      to
      secure obligations of any of the Borrowers, Credit Parties or the Canadian
      Borrowing Base Guarantors under any debenture or bond issued by any of the
      Borrowers, Credit Parties or the Canadian Borrowing Base Guarantors, Agent
      shall
      be the holder of an irrevocable power of attorney (“fondé de pouvoir”)
      (within the meaning of the Civil
      Code of Quebec) for the Lenders, any L/C Issuer or any of their Affiliates,
      and
      in particular for all present and future holders of any such debenture or bond.
      The Lenders, any L/C Issuer and any of their Affiliates hereby: (i) irrevocably
      constitute, to the extent necessary, Agent as the holder of an irrevocable
      power
      of attorney (“fondé de pouvoir”) (within the meaning of Article 2692 of
      the Civil Code of Quebec) in order to hold hypothecs and security
      granted by the Borrowers, the Credit Parties and the Canadian Borrowing Base
      Guarantors on property pursuant to the laws of the Province of Quebec to secure
      the obligations of the Borrowers, the Credit Parties and the Canadian Borrowing
      Base Guarantors under any debenture or bond issued by the Borrowers, the Credit
      Parties and the Canadian Borrowing Base Guarantors; and (ii)  appoint and
      agree that Agent may act as the bondholder and mandatary (i.e. agent) with
      respect to any debenture or bond that may be issued by any of the Borrowers,
      Credit Parties or Canadian Borrowing Base Guarantors and pledged in its favour
      from time to time.

     

     

    
      
        
        

      

      
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    (b)  Notwithstanding
      the provisions of Section 32 of An Act respecting thespecial powers
      of legal persons (Quebec), Agent may acquire and be the holder of any
      debenture or bond issued by any of the Borrowers, Credit Parties or Canadian
      Borrowing Base Guarantors (i.e. the “fondé de pouvoir” may acquire and
      hold the first debenture or bond issued under any deed of hypothec by the
      Borrowers, the Credit Parties or the Canadian Borrowing Base Guarantors). The
      Borrowers, the Credit Parties and the Canadian Borrowing Base Guarantors hereby
      acknowledge that such debenture or bond constitutes a title of indebtedness,
      as
      such term is used in Article 2692 of the Civil Code of
      Quebec.

     

    (c)  The
      constitution of Agent as “fondé de pouvoir” and as bondholder and
      mandatary with respect to any bond that may be issued and pledged from time
      to
      time to Agent for the benefit of the Lenders, any L/C Issuer and any of their
      Affiliates, shall be deemed to have been ratified and confirmed by each Person
      accepting an assignment of, a participation in or an arrangement in respect
      of,
      all or any portion of an assignor’s rights and obligations under this Agreement
      by the execution of an assignment agreement, including an Assignment Agreement
      or other agreement pursuant to which it becomes such assignee or participant,
      and by each successor Agent by the execution of an Assignment Agreement or
      other
      agreement, or by the compliance with other formalities, as the case may be,
      pursuant to which it becomes a successor Agent under this
      Agreement.

     

    (d)  Agent,
      acting as “fondé de pouvoir” for the benefit of the Lenders, any L/C
      Issuer and any of their Affiliates, shall have the same rights, powers and
      immunities as Agent as stipulated herein, including under this Section 9,
      which shall apply mutatis mutandis. Without limitation, the provisions
      of Section 9.7 shall apply mutatis mutandis to the resignation
      and appointment of a successor Agent acting as “fondé de
      pouvoir”.

     

     

    
      
        
        

      

      
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    (e)  Agent,
      acting as bondholder, shall have the same rights, powers and immunities as
      Agent
      as stipulated herein, including under this Section 9, which shall apply
mutatis mutandis. Without limitation, the provisions of Section
      9.7 shall apply mutatis mutandis to the resignation and appointment
      of a successor Agent acting as bondholder and mandatary for the benefit of
      the
      Lenders, any L/C Issuer and any of their Affiliates.

     

    10. SUCCESSORS
      AND ASSIGNS

     

    10.1  Successors
      and Assigns.
      This
      Agreement and the other Loan Documents shall be binding on and shall inure
      to
      the benefit of each Credit Party, Agent, Lenders and their respective successors
      and permitted assigns (including, in the case of any Credit Party, a
      debtor-in-possession on behalf of such Credit Party), except as otherwise
      provided herein or therein. No Credit Party may assign, transfer, hypothecate
      or
      otherwise convey its rights, benefits, obligations or duties hereunder or under
      any of the other Loan Documents without the prior express written consent of
      Agent and Lenders. Any such purported assignment, transfer, hypothecation or
      other conveyance by any Credit Party without the prior express written consent
      of Agent and Lenders shall be void. A Lender may not assign, transfer,
      hypothecate or otherwise convey its rights, benefits, obligations or duties
      hereunder or under any of the other Loan Documents except in accordance with
      Section 9.1, and any other purported assignment, transfer, hypothecation
      or conveyance shall be void. The terms and provisions of this Agreement are
      for
      the purpose of defining the relative rights and obligations of each Credit
      Party, Agent and Lenders with respect to the transactions contemplated hereby
      and no Person shall be a third party beneficiary of any of the terms and
      provisions of this Agreement or any of the other Loan Documents.

     

     

    11. MISCELLANEOUS

     

    11.1  Complete
      Agreement; Modification of
      Agreement.  The
      Loan Documents constitute the complete agreement between the parties with
      respect to the subject matter thereof and may not be modified, altered or
      amended except as set forth in Section 11.2. Any letter of interest,
      commitment letter, fee letter or confidentiality agreement, if any, between
      any
      Credit Party and Agent or any Lender or any of their respective Affiliates,
      predating this Agreement and relating to a financing of substantially similar
      form, purpose or effect shall be superseded by this Agreement. Notwithstanding
      the foregoing, the GE Capital Fee Letter and any market flex provisions
      contained in the final commitment letter between Agent and Borrower shall
      survive the execution and delivery of this Agreement and shall continue to
      be
      binding obligations of the parties.

     

    11.2   Amendments
      and Waivers.

     

    (a)   Except
      for actions expressly permitted to be taken by Agent, no amendment,
      modification, elimination or waiver of any provision of this Agreement or any
      other Loan Document, or any consent to any departure by any Credit Party
      therefrom, shall in any event be effective unless the same shall be in writing
      and signed by Agent and Borrowers, and by Requisite Lenders, Requisite Revolving
      Lenders or all affected Lenders, as applicable. Except as set forth in
clauses (b) and (c) below, all such amendments, modifications,
      eliminations or waivers requiring the consent of any Lenders shall require
      the
      written consent of Requisite Lenders.

     

     

    
 

    
      
        
        

      

      
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    (b)   No
      amendment, modification, elimination or waiver of or consent with respect to
      any
      provision of this Agreement that increases the percentage advance rates set
      forth in the definition of the Primary Borrowing Base or Export-Related
      Borrowing Base (other than an increase to a previous level), or that makes
      less
      restrictive the nondiscretionary criteria for exclusion from Eligible Accounts,
      Eligible Export-Related Accounts, Eligible Inventory and Eligible
      Machinery-in-Process set forth in Sections 1.6, 1.6A, 1.7 and 1.7A
      (except to restore nondiscretionary criteria that previously were available)
      shall be effective unless the same shall be in writing and signed by Agent,
      Requisite Revolving Lenders and Borrowers. No amendment, modification,
      elimination or waiver of or consent with respect to any provision of this
      Agreement that waives compliance with the conditions precedent set forth in
      Section 2.2 to the making of any Loan or the incurrence of any Letter of
      Credit Obligations shall be effective unless the same shall be in writing and
      signed by Agent, Requisite Revolving Lenders and Borrowers. Notwithstanding
      anything contained in this Agreement to the contrary, no waiver or consent
      with
      respect to any Default or any Event of Default shall be effective for purposes
      of the conditions precedent to the making of Loans or the incurrence of Letter
      of Credit Obligations set forth in Section 2.2 and Section 2.3
      unless the same shall be in writing and signed by Agent, Requisite Revolving
      Lenders and Borrowers.

     

    (c)  No
      amendment, modification, elimination or waiver shall, unless in writing and
      signed by Agent and each Lender and L/C Issuer directly affected thereby:
      (i) increase the principal amount of any Lender’s Commitment (which action
      shall be deemed only to affect those Lenders whose Commitments are increased
      and
      may be approved by Requisite Lenders including those Lenders whose Commitments
      are increased); (ii) reduce the principal of, rate of interest on or Fees
      payable with respect to any Loan or Letter of Credit Obligations of any affected
      Lender; (iii) extend any scheduled payment date (other than payment dates of
      mandatory prepayments under Section 1.3(b)(ii)-(iv)) or final maturity
      date of the principal amount of any Loan of any affected Lender; (iv) waive,
      forgive, defer, extend or postpone any payment of interest or Fees as to any
      affected Lender; (v) except as otherwise permitted herein or in the other Loan
      Documents, release any Guarantor or release all or substantially all of the
      Collateral (which action shall be deemed to directly affect all Lenders and
      the
      L/C Issuer); (vi) change the percentage of the Commitments or of the
      aggregate unpaid principal amount of the Loans that shall be required for
      Lenders or any of them to take any action hereunder; and (vii) amend or waive
      this Section 11.2 or the definitions of the terms “Requisite Lenders” or
“Requisite Revolving Lenders” insofar as such definitions affect the substance
      of this Section 11.2. Furthermore, no amendment, modification,
      elimination or waiver affecting the rights or duties of Agent or L/C Issuer,
      or
      of GE Capital in respect of any Swap Related Reimbursement Obligations, under
      this Agreement or any other Loan Document, including any increase in the L/C
      Sublimit or any release of any Guaranty or Collateral requiring a writing signed
      by all Lenders, shall be effective unless in writing and signed by Agent or
      L/C
      Issuer or GE Capital, as the case may be, in addition to Lenders required
      hereinabove to take such action. Each amendment, modification, elimination
      or
      waiver shall be effective only in the specific instance and for the specific
      purpose for which it was given. No amendment, modification, elimination or
      waiver shall be required for Agent to take additional Collateral pursuant to
      any
      Loan Document. No amendment, modification, elimination or waiver of any
      provision of any Note shall be effective without the written concurrence of
      the
      holder of that Note. No notice to or demand on any Credit Party in any case
      shall entitle such Credit Party or any other Credit Party to any other or
      further notice or demand
      in
      similar or other circumstances. Any amendment, modification, elimination, waiver
      or consent effected in accordance with this Section 11.2 shall be binding
      upon each holder of the Notes at the time outstanding and each future holder
      of
      the Notes.

     

     

    
      
        
        

      

      
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    (d)  If,
      in
      connection with any proposed amendment, modification, waiver or elimination
      (a
“Proposed Change”) requiring the consent of all affected Lenders, the
      consent of Requisite Lenders is obtained, but the consent of other Lenders
      whose
      consent is required is not obtained (any such Lender whose consent is not
      obtained as described in this clause (d) being referred to as a
“Non-Consenting Lender”), then, so long as Agent is not a Non-Consenting
      Lender, at Borrower Representative’s request, Agent, in its sole discretion (but
      without any obligation), or a Person reasonably acceptable to Agent shall have
      the right to purchase from such Non-Consenting Lenders, and such Non-Consenting
      Lenders agree that they shall, upon Borrower Representative’s request, sell and
      assign to Agent or such Person, all of the Commitments of such Non-Consenting
      Lenders for an amount equal to the principal balance of all Loans held by the
      Non-Consenting Lenders and all accrued interest and Fees with respect thereto
      through the date of sale, such purchase and sale to be consummated pursuant
      to
      an executed Assignment Agreement.

     

    (e)  Upon
      payment in full in cash and performance of all of the Obligations (other than
      indemnification and other contingent Obligations), termination of the
      Commitments and so long as no suits, actions, proceedings or claims are pending
      or threatened against any Indemnified Person asserting any damages, losses
      or
      liabilities that are Indemnified Liabilities, Agent shall deliver to Borrowers
      termination statements, mortgage releases and other documents necessary or
      appropriate to evidence the termination of the Liens securing payment of the
      Obligations.

     

    11.3  Fees
      and Expenses.
      Borrowers shall reimburse (i) Agent for all reasonable out-of-pocket costs
      and
      expenses and (ii) Agent (and, with respect to clauses (d) and (e) below, all
      Lenders) for all reasonable out-of-pocket costs and expenses incurred in
      connection with the negotiation, preparation and filing and/or recordation
      of
      the Loan Documents incurred in connection with:

     

    (a)  the
      negotiation, preparation and filing and/or recordation of the Loan
      Documents;

     

    (b)  any
      amendment, modification or waiver of, consent with respect to, or termination
      of, any of the Loan Documents or Related Transactions Documents or advice in
      connection with the syndication and administration of the Loans made pursuant
      hereto or its rights hereunder or thereunder;

     

    (c)  any
      litigation, contest, dispute, suit, proceeding or action in any way relating
      to
      the Collateral, any of the Loan Documents or any other agreement to be executed
      or delivered in connection herewith or therewith, including any such litigation,
      contest, dispute, suit, proceeding or action arising in connection with any
      work-out or restructuring of the Loans during the pendency of one or more Events
      of Default; provided, that no Person shall be entitled to reimbursement
      under this clause (b) in respect of any litigation, contest, dispute,
suit,
      proceeding or action to the extent any of the foregoing results from such
      Person’s gross negligence or willful misconduct;

     

     

    
      
        
        

      

      
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    (d)  
      any
      attempt to enforce any remedies of Agent against any or all of the Credit
      Parties or any other Person that may be obligated to Agent or any Lender by
      virtue of any of the Loan Documents, including any such attempt to enforce
      any
      such remedies in the course of any work-out or restructuring of the Loans during
      the pendency of one or more Events of Default; provided, that in the case
      of reimbursement of counsel for Lenders other than Agent, such reimbursement
      shall be limited to one counsel for all such Lenders;

     

    (e)    any
      workout or restructuring of the Loans during the pendency of one or more Events
      of Default, provided, that in the case of reimbursement of counsel for
      Lenders other than Agent, such reimbursement shall be limited to one counsel
      for
      all such Lenders; and

     

    (f)    
      efforts
      to (i) monitor the Loans or any of the other Obligations, (ii) evaluate, observe
      or assess any of the Credit Parties or their respective affairs, and (iii)
      verify, protect, evaluate, assess, appraise, collect, sell, liquidate or
      otherwise dispose of any of the Collateral; provided that only one
      Inventory appraisal per fiscal year shall be reimbursed (unless an Event of
      Default shall have occurred and be continuing at the time of any additional
      Inventory appraisal);

     

    including,
      as to each of clauses (a) through (f) above, all reasonable out-of-pocket
      attorneys’ and other professional and service providers’ fees arising from such
      services and other advice, assistance or other representation, including those
      in connection with any appellate proceedings, and all reasonable expenses,
      costs, charges and other fees incurred by such counsel and others in connection
      with or relating to any of the events or actions described in this Section
      11.3, all of which shall be payable on the Closing Date (in the case of
clause (a)) and otherwise within 10 Business Days of receipt by Borrower
      Representative of a written request therefor documenting such expense. Without
      limiting the generality of the foregoing, such out-of-pocket expenses, costs,
      charges and fees may include to the extent reasonable: fees and reasonable
      out-of-pocket costs and expenses of accountants, environmental advisors,
      appraisers, investment bankers, management and other consultants (financial
      or
      otherwise) and paralegals; court costs and expenses; photocopying and
      duplication expenses; court reporter fees, costs and expenses; long distance
      telephone charges; air express charges; telegram or telecopy charges;
      secretarial overtime charges; and reasonable expenses for travel, lodging and
      food paid or incurred in connection with the performance of such legal or other
      advisory services.

     

    11.4  No
      Waiver. 
      Agent’s or any Lender’s failure, at any time or times, to require strict
      performance by the Credit Parties of any provision of this Agreement or any
      other Loan Document shall not waive, affect or diminish any right of Agent
      or
      such Lender thereafter to demand strict compliance and performance herewith
      or
      therewith. Any suspension or waiver of an Event of Default shall not suspend,
      waive or affect any other Event of Default whether the same is prior or
      subsequent thereto and whether the same or of a different type. Subject to
      the
      provisions of Section 11.2, none of the undertakings, agreements,
      warranties, covenants and representations of any Credit Party contained in
      this
      Agreement or any of the other Loan Documents and no Default or Event of Default
      by any Credit Party shall be deemed to have been suspended
      or waived by Agent or any Lender, unless such waiver or suspension is by an
      instrument in writing signed by an officer of or other authorized employee
      of
      Agent and the applicable required Lenders, and directed to Borrowers specifying
      such suspension or waiver.

     

     

    
      
        
        

      

      
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    11.5  Remedies.
      Agent’s
      and Lenders’ rights and remedies under this Agreement shall be cumulative and
      nonexclusive of any other rights and remedies that Agent or any Lender may
      have
      under any other agreement, including the other Loan Documents, by operation
      of
      law or otherwise. Recourse to the Collateral shall not be required.

     

    11.6  Severability.
      Wherever
      possible, each provision of this Agreement and the other Loan Documents shall
      be
      interpreted in such a manner as to be effective and valid under applicable
      law,
      but if any provision of this Agreement or any other Loan Document shall be
      prohibited by or invalid under applicable law, such provision shall be
      ineffective only to the extent of such prohibition or invalidity without
      invalidating the remainder of such provision or the remaining provisions of
      this
      Agreement or such other Loan Document.

     

    11.7  Conflict
      of Terms.
      Except
      as otherwise provided in this Agreement or any of the other Loan Documents
      by
      specific reference to the applicable provisions of this Agreement, if any
      provision contained in this Agreement conflicts with any provision in any of
      the
      other Loan Documents, the provision contained in this Agreement shall govern
      and
      control.

     

    11.8  Confidentiality.
      Agent
      and each Lender agree to use commercially reasonable efforts (equivalent to
      the
      efforts Agent or such Lender applies to maintaining the confidentiality of
      its
      own confidential information) to maintain as confidential all information
      provided to them by the Credit Parties and, with respect to information provided
      after the Closing Date, designated as confidential for a period of two (2)
      years
      following the termination of this Agreement, except that Agent and any Lender
      may disclose such information (a) to Persons employed or engaged by Agent or
      such Lender on a confidential and need-to-know basis; (b) to any bona fide
      assignee or participant or potential assignee or participant that has agreed
      to
      comply with the covenant contained in this Section 11.8 (and any such
      bona fide assignee or participant or potential assignee or participant may
      disclose such information to Persons employed or engaged by them as described
      in
clause (a) above); (c) as required or requested by any Governmental
      Authority having jurisdiction over Agent and such Lender or compelled by any
      court decree, subpoena or legal or administrative order or process; (d) as,
      on
      the advice of Agent’s or such Lender’s counsel, is required by law; (e) in
      connection with the exercise of any right or remedy under the Loan Documents
      or
      in connection with any litigation to which Agent or such Lender is a party;
      or
      (f) that becomes publicly available through no fault of Agent or any
      Lender.

     

    11.9  GOVERNING
      LAW. 
      EXCEPT AS OTHERWISE EXPRESSLY PROVIDED IN ANY OF THE LOAN DOCUMENTS,
      IN
      ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND
PERFORMANCE,
      THE LOAN DOCUMENTS AND THE OBLIGATIONS SHALL BE GOVERNED BY, AND CONSTRUED
      AND
      ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK
      APPLICABLE TO CONTRACTS MADE AND PERFORMED IN THAT STATE AND ANY APPLICABLE
      LAWS
      OF THE UNITED STATES OF AMERICA. EACH CREDIT PARTY HEREBY CONSENTS AND AGREES
      THAT THE STATE OR FEDERAL COURTS LOCATED IN NEW YORK COUNTY, CITY OF NEW YORK,
      NEW YORK SHALL HAVE NON-EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS
      OR DISPUTES BETWEEN THE CREDIT PARTIES, AGENT AND LENDERS PERTAINING TO THIS
      AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANY MATTER ARISING OUT OF
      OR
      RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS; PROVIDED
      FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO
      PRECLUDE AGENT FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER
      JURISDICTION TO REALIZE ON THE COLLATERAL OR ANY OTHER SECURITY FOR THE
      OBLIGATIONS, OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF AGENT.
      EACH CREDIT PARTY EXPRESSLY SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION
      IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH CREDIT PARTY HEREBY
      WAIVES ANY OBJECTION THAT SUCH CREDIT PARTY MAY HAVE BASED UPON LACK OF PERSONAL
      JURISDICTION, IMPROPER VENUE OR FORUM 
NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH
      LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH CREDIT
      PARTY HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS
      ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS,
      COMPLAINTS AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL
      ADDRESSED TO SUCH CREDIT PARTY AT THE ADDRESS SET FORTH IN ANNEX I AND
      THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH CREDIT
      PARTY’S ACTUAL RECEIPT THEREOF OR THREE (3) DAYS AFTER DEPOSIT IN THE UNITED
      STATES MAILS, PROPER POSTAGE PREPAID.

     

     

    
      
        
        

      

      
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    11.10  Notices.

     

    (a)  Addresses. 
      All notices, demands, requests, directions and other communications required
      or
      expressly authorized to be made by this Agreement shall, whether or not
      specified to be in writing but unless otherwise expressly specified to be given
      by any other means, be given in writing and (i) addressed to (A) the party
      to be
      notified and sent to the address or facsimile number indicated in Annex I,
      or
      (B)
      otherwise to the party to be notified at its address specified on the signature
      page of any applicable Assignment Agreement, (ii) posted to Intralinks® (to the
      extent such system is available and set up by or at the direction of Agent
      prior
      to posting) in an appropriate location by uploading such notice, demand,
      request, direction or other communication to www.intralinks.com, faxing it
      to
      866-545-6600 with an appropriate bar-coded fax coversheet or using such other
      means of posting to Intralinks® as may be available and reasonably acceptable to
      Agent prior to such posting, (iii) posted to any other E-System set up
      by or
      at the direction of Agent in an appropriate location or (iv) addressed to such
      other address as shall be notified in writing (A) in the case of Borrower
      Representative, Agent and Swing Line Lender, to the other parties hereto and
      (B)
      in the case of all other parties, to Borrower Representative and Agent.
      Transmission by electronic mail (including E-Fax, even if transmitted to the
      fax
      numbers set forth in clause (i) above) shall not be sufficient or
      effective to transmit any such notice under this clause (a) unless such
      transmission is an available means to post to any E-System.

     

     

    
      
        
        

      

      
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    (b)  Effectiveness. 
      All communications described in clause (a) above and all other notices, demands,
      requests and other communications made in connection with this Agreement shall
      be effective and be deemed to have been received (i) if delivered by hand,
      upon
      personal delivery, (ii) if delivered by overnight courier service, one Business
      Day after delivery to such courier service, (iii) if delivered by mail, when
      deposited in the mails, (iv) if delivered by facsimile (other than to post
      to an
      E-System pursuant to clause (a)(ii) or (a)(iii) above), upon sender’s receipt of
      confirmation of proper transmission, and (v) if delivered by posting to any
      E-System, on the later of the date of such posting in an appropriate location
      and the date access to such posting is given to the recipient thereof in
      accordance with the standard procedures applicable to such E-System. Failure
      or
      delay in delivering copies of any notice, demand, request, consent, approval,
      declaration or other communication to any Person (other than Borrower
      Representative or Agent) designated in Annex I to receive copies shall in
      no way adversely affect the effectiveness of such notice, demand, request,
      consent, approval, declaration or other communication. The giving of any notice
      required hereunder may be waived in writing by the party entitled to receive
      such notice.

     

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

     

    11.12  Counterparts. 
      This Agreement may be executed in any number of separate counterparts, each
      of
      which shall collectively and separately constitute one agreement.

     

    11.13  WAIVER
      OF JURY TRIAL.BECAUSE
      DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST
      QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE
      PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION
      RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING
      SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS
      OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT
      TO
      TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE,
      WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, AMONG AGENT, LENDERS AND ANY
      CREDIT PARTY ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE
      RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH, THIS
AGREEMENT
      OR ANY OF THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS RELATED
      THERETO.

     

     

    
      
        
        

      

      
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                 11.14  Press
      Releases and Related
      Matters.  Each
      Credit Party executing this Agreement agrees that neither it nor its Affiliates
      will in the future issue any press releases or other public disclosure using
      the
      name of GE Capital or its affiliates or referring to this Agreement, the other
      Loan Documents or the Related Transactions Documents without at least two (2)
      Business Days’ prior notice to GE Capital and without the prior written consent
      of GE Capital (such consent not to be unreasonably withheld or delayed) unless
      (and only to the extent that) such Credit Party or Affiliate is required to
      do
      so under law or the requirements of any securities exchange and then, in any
      event, such Credit Party or Affiliate will consult with GE Capital before
      issuing such press release or other public disclosure. With at least two (2)
      Business Days’ prior notice to Borrower Representative and subject to Borrower
      Representative’s prior written consent (such consent not to be unreasonably
      withheld or delayed), Agent or any Lender may publish advertising materials
      relating to the financing transactions contemplated by this Agreement using
      Borrowers’ name, product photographs, logo or trademark. Agent reserves the
      right to provide to industry trade organizations information necessary and
      customary for inclusion in league table measurements.

     

    11.15  Reinstatement. 
      This Agreement shall remain in full force and effect and continue to be
      effective should any petition be filed by or against any Credit Party for
      liquidation or reorganization, should any Credit Party become insolvent or
      make
      an assignment for the benefit of any creditor or creditors or should a receiver
      or trustee be appointed for all or any significant part of any Credit Party’s
      assets, and shall continue to be effective or to be reinstated, as the case
      may
      be, if at any time payment and performance of the Obligations, or any part
      thereof, is, pursuant to applicable law, rescinded or reduced in amount, or
      must
      otherwise be restored or returned by any obligee of the Obligations, whether
      as
      a “voidable preference,” “fraudulent conveyance,” or otherwise, all as though
      such payment or performance had not been made. In the event that any payment,
      or
      any part thereof, is rescinded, reduced, restored or returned, the Obligations
      shall be reinstated and deemed reduced only by such amount paid and not so
      rescinded, reduced, restored or returned.

     

    11.16  Advice
      of Counsel. 
      Each of the parties represents to each other party hereto that it has discussed
      this Agreement and, specifically, the provisions of Sections 11.9 and
11.13, with its counsel.

     

    11.17  No
      Strict Construction. 
      The parties hereto have participated jointly in the negotiation and drafting
      of
      this Agreement. In the event an ambiguity or question of intent or
      interpretation arises, this Agreement shall be construed as if drafted jointly
      by the parties hereto and no presumption or burden of proof shall arise favoring
      or disfavoring any party by virtue of the authorship of any provisions of this
      Agreement.

     

     

    12. CROSS-GUARANTY

     

    12.1  Cross-Guaranty.  
      Each Borrower hereby agrees that such Borrower is jointly and severally liable
      for, and hereby absolutely and unconditionally guarantees to Agent and Lenders
      and their respective successors and assigns, the full and prompt payment
      (whether at stated maturity, by acceleration or otherwise) and performance
      of,
      all Obligations owed or hereafter owing to Agent and Lenders by each other
      Borrower. Each Borrower agrees that its guaranty obligation hereunder is a
      continuing guaranty of payment and performance and not of collection, that
      its
      obligations under this Section 12 shall not be discharged until
      payment and performance, in full, of the Obligations has occurred, and that
      its
      obligations under this Section 12 shall be absolute and unconditional,
      irrespective of, and unaffected by,

    
       

      
        
          
          

        

        
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    (a)  the
      genuineness, validity, regularity, enforceability or any future amendment of,
      or
      change in, this Agreement, any other Loan Document or any other agreement,
      document or instrument to which any Borrower is or may become a
      party;

     

    (b)  the
      absence of any action to enforce this Agreement (including this Section
      12) or any other Loan Document or the waiver or consent by Agent and Lenders
      with respect to any of the provisions thereof;

     

    (c)  the
      existence, value or condition of, or failure to perfect its Lien against, any
      security for the Obligations or any action, or the absence of any action, by
      Agent and Lenders in respect thereof (including the release of any such
      security);

     

    (d)  the
      insolvency of any Credit Party; or

     

    (e)  any
      other
      action or circumstances that might otherwise constitute a legal or equitable
      discharge or defense of a surety or guarantor.

     

    Each
      Borrower shall be regarded, and shall be in the same position, as principal
      debtor with respect to the Obligations guaranteed hereunder.

     

    12.2  Waivers
      by Borrowers. 
To
      the extent permitted by law, each Borrower expressly waives all rights it may
      have now or in the future under any statute, or at common law, or at law or
      in
      equity, or otherwise, to compel Agent or Lenders to marshal assets or to proceed
      in respect of the Obligations guaranteed hereunder against any other Credit
      Party, any other party or against any security for the payment and performance
      of the Obligations before proceeding against, or as a condition to proceeding
      against, such Borrower. It is agreed among each Borrower, Agent and Lenders
      that
      the foregoing waivers are of the essence of the transaction contemplated by
      this
      Agreement and the other Loan Documents and that, but for the provisions of
      this
Section 12 and such waivers, Agent and Lenders would decline to enter
      into this Agreement.

    

    12.3  Benefit
      of Guaranty. 
      Each Borrower agrees that the provisions of this Section 12 are for the
      benefit of Agent and Lenders and their respective successors and permitted
      assigns, and nothing herein contained shall impair, as between any other
      Borrower and Agent or Lenders, the obligations of such other Borrower under
      the
      Loan Documents.

     

    12.4  Subrogation,
      Etc. 
      Notwithstanding anything to the contrary in this Agreement or in any other
      Loan
      Document, and except as set forth in Section 12.7, to the extent
      permitted by applicable law, each Borrower hereby expressly and irrevocably
      agrees that it shall not exercise any of its rights at law or in equity to
      subrogation, reimbursement, exoneration, contribution, indemnification or set
      off and waives any and all defenses available to a surety, guarantor or
      accommodation co-obligor. Each Borrower acknowledges and agrees that this waiver
      is intended to benefit Agent and Lenders and shall not limit or otherwise affect
      such Borrower’s liability hereunder or the enforceability of this
Section 12, and that Agent, Lenders and their respective successors
      and permitted assigns are intended third party beneficiaries of the waivers
      and
      agreements set forth in this Section 12.4.

     

     

    
      
        
        

      

      
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    12.5  Election
      of Remedies. 
If
      Agent or any Lender may, under applicable law, proceed to realize its benefits
      under any of the Loan Documents giving Agent or such Lender a Lien upon any
      Collateral, whether owned by any Borrower or by any other Person, either by
      judicial foreclosure or by non-judicial sale or enforcement, Agent or any Lender
      may, at its sole option, determine which of its remedies or rights it may pursue
      without affecting any of its rights and remedies under this Section 12.
      If, in the exercise of any of its rights and remedies, Agent or any Lender
      shall
      forfeit any of its rights or remedies, including its right to enter a deficiency
      judgment against any Borrower or any other Person, whether because of any
      applicable laws pertaining to “election of remedies” or the like, each Borrower
      hereby consents to such action by Agent or such Lender and, to the extent
      permitted by law, waives any claim based upon such action, even if such action
      by Agent or such Lender shall result in a full or partial loss of any rights
      of
      subrogation that each Borrower might otherwise have had but for such action
      by
      Agent or such Lender. Any election of remedies that results in the denial or
      impairment of the right of Agent or any Lender to seek a deficiency judgment
      against any Borrower shall not impair any other Borrower’s obligation to pay the
      full amount of the Obligations. In the event Agent or any Lender shall bid
      at
      any foreclosure or trustee’s sale or at any private sale permitted by law or the
      Loan Documents, Agent or such Lender may bid all or less than the amount of
      the
      Obligations and the amount of such bid need not be paid by Agent or such Lender
      but shall be credited against the Obligations. The amount of the successful
      bid
      at any such sale, whether Agent, Lender or any other party is the successful
      bidder, shall be conclusively deemed to be the fair market value of the
      Collateral and the difference between such bid amount and the remaining balance
      of the Obligations shall be conclusively deemed to be the amount of the
      Obligations guaranteed under this Section 12, notwithstanding that any
      present or future law or court decision or ruling may have the effect of
      reducing the amount of any deficiency claim to which Agent or any Lender might
      otherwise be entitled but for such bidding at any such sale.

    

    12.6  Limitation.
 Notwithstanding
      any provision herein contained to the contrary, each Borrower’s liability under
      this Section 12 (which liability is in any event in addition to amounts
      for which such Borrower is primarily liable under Section 1) shall be
      limited to an amount not to exceed as of any date of determination the greater
      of:

     

    (a)  the
      net
      amount of all Loans advanced to any other Borrower under this Agreement and
      then
      re-loaned or otherwise transferred to, or for the benefit of, such Borrower;
      and

     

    (b)  the
      amount that could be claimed by Agent and Lenders from such Borrower under
      this
Section 12 without rendering such claim voidable or avoidable under
      Section 548 of Chapter 11 of the Bankruptcy Code or under any applicable state
      Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance Act or similar
      statute or common law after taking into account, among other things, such
      Borrower’s right of contribution and indemnification from each other Borrower
      under Section 12.7.

     

     

    
      
        
        

      

      
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    12.7  Contribution
      with Respect to Guaranty
      Obligations.

     

    (a)  To
      the
      extent that any Borrower shall make a payment under this Section 12
      of all or any of the Obligations (other than Loans made to that Borrower for
      which it is primarily liable) (a “Guarantor Payment”) that, taking into
      account all other Guarantor Payments then previously or concurrently made by
      any
      other Borrower, exceeds the amount that such Borrower would otherwise have
      paid
      if each Borrower had paid the aggregate Obligations satisfied by such Guarantor
      Payment in the same proportion that such Borrower’s “Allocable Amount” (as
      defined below) (as determined immediately prior to such Guarantor Payment)
      bore
      to the aggregate Allocable Amounts of each of Borrowers as determined
      immediately prior to the making of such Guarantor Payment, then, following
      payment in full in cash of the Obligations (other than contingent Obligations)
      and termination of the Commitments, such Borrower shall be entitled to receive
      contribution and indemnification payments from, and be reimbursed by, each
      other
      Borrower for the amount of such excess, pro rata based upon their respective
      Allocable Amounts in effect immediately prior to such Guarantor
      Payment.

     

    (b)  As
      of any
      date of determination, the “Allocable Amount” of any Borrower shall be
      equal to the maximum amount of the claim that could then be recovered from
      such
      Borrower under this Section 12 without rendering such claim voidable or
      avoidable under Section 548 of Chapter 11 of the Bankruptcy Code or under any
      applicable state Uniform Fraudulent Transfer Act, Uniform Fraudulent Conveyance
      Act or similar statute or common law.

     

    (c)  This
      Section 12.7 is intended only to define the relative rights of Borrowers
      and nothing set forth in this Section 12.7 is intended to or shall impair
      the obligations of Borrowers, jointly and severally, to pay any amounts as
      and
      when the same shall become due and payable in accordance with the terms of
      this
      Agreement, including Section 12.1. Nothing contained in this Section
      12.7 shall limit the liability of any Borrower to pay
      the
      Loans made directly or indirectly to that Borrower and accrued interest, Fees
      and expenses with respect thereto for which such Borrower shall be primarily
      liable.

     

    (d)  The
      parties hereto acknowledge that the rights of contribution and indemnification
      hereunder shall constitute assets of the Borrower to which such contribution
      and
      indemnification is owing.

     

    (e)  The
      rights of the indemnifying Borrowers against other Credit Parties under this
      Section 12.7 shall be exercisable upon the full payment in cash of the
      Obligations and the termination of the Commitments.

     

    12.8  Liability
      Cumulative. 
      The liability of Borrowers under this Section 12 is in addition to and
      shall be cumulative with all liabilities of each Borrower to Agent and Lenders
      under this Agreement and the other Loan Documents to which such Borrower is
      a
      party or in respect of any Obligations or obligation of the other Borrower,
      without any limitation as to amount, unless the instrument or agreement
      evidencing or creating such other liability specifically provides to the
      contrary.

     

    

    [remainder
      of this page intentionally left blank]

     

    

     

    
      
        
        

      

      
        87

        
          

        

      

      
        
        

      

    

     

     

     

    

    IN
      WITNESS WHEREOF, this Agreement has been duly executed as of the date first
      written above.

     

    
      	
              BORROWERS:

            	
              MILACRON
                INC.

               

              By:
                /s/ Ross A. Anderson                          

              Name: Ross
                A. Anderson

              Title:   
                Senior Vice President - Finance and Chief Financial
                Officer

            
	 	 
	 	
              CIMCOOL
                INDUSTRIAL PRODUCTS INC.

               

              By:
                /s/ Ross A. Anderson                          

              Name: Ross
                A. Anderson

              Title:   
                Treasurer

            
	 	 
	 	
              D-M-E
                MANUFACTURING INC.

               

              
                By:
                  /s/ Ross A. Anderson                          

              

              Name: Ross
                A. Anderson

              Title:   
                Treasurer

            
	 	 
	 	
              D-M-E
                U.S.A. INC.

               

               

              
                By:
                  /s/ Ross A. Anderson                          

                Name: Ross
                  A. Anderson

              

              Title:   
                Treasurer

            
	 	 
	 	
              MILACRON
                INDUSTRIAL PRODUCTS, INC.

               

               

              By:
                /s/ Ross A. Anderson                           

              Name: Ross
                A. Anderson

              Title:   
                Treasurer

            
	 	 
	 	
              MILACRON
                MARKETING COMPANY

               

               

              By:
                /s/ Ross A. Anderson                           

              Name: Ross
                A. Anderson

              Title:   
                Vice President - Finance, Chief Financial

              Officer
                and Controller

            

    

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    
 

     

    
 

    

    
      	 	
              MILACRON
                PLASTICS TECHNOLOGIES GROUP INC.

               

              By:
                /s/ Ross A. Anderson                            

              Name: Ross
                A. Anderson

              Title: 
                Treasurer

            
	 	 
	 	
              NICKERSON
                MACHINERY CHICAGO INC.

               

              By:
                /s/ Ross A. Anderson                           

              Name: Ross
                A. Anderson

              Title: 
                Treasurer

            
	 	 
	 	
              NORTHERN
                SUPPLY COMPANY, INC.

               

              By:
                /s/ Ross A. Anderson                           

              Name: Ross
                A. Anderson

              Title: 
                Treasurer

            
	 	 
	 	
              OAK
                INTERNATIONAL, INC.

               

               

              By:
                /s/ Ross A. Anderson                           

              Name: Ross
                A. Anderson

              Title: 
                Treasurer

            
	 	
               

            
	 	
              PLIERS
                INTERNATIONAL INC.

               

               

              By: /s/ Ross A. Anderson                          

              Name: Ross
                A. Anderson

              Title: 
                Treasurer

            
	 	 
	 	
              UNILOY
                MILACRON INC.

               

               

              By:
                /s/ Ross A. Anderson                           

              Name: Ross
                A. Anderson

              Title: 
                Treasurer

            

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    

    

    
      	 	
              UNILOY
                MILACRON U.S.A. INC.

               

              By:
                /s/ Ross A. Anderson                            

              Name: Ross
                A. Anderson

              Title:   
                Treasurer

            
	 	 
	 	
              D-M-E
                COMPANY

               

              By:
                /s/ Ross A. Anderson                            

              Name: Ross
                A. Anderson

              Title:   
                Vice President

            
	 	 

    

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    The
      following Persons are signatories to this Agreement in their capacity as Credit
      Parties or Canadian Borrowing Base Guarantors, as the case may be, and not
      as
      Borrowers.

     

    
      	 	
              MILACRON
                INTERNATIONAL

              MARKETING
                COMPANY

               

              By:
                /s/ Ross A. Anderson                             

              Name: Ross
                A. Anderson

              Title:   
                Treasurer and Assistant Secretary

            
	 	 
	 	
              PROGRESS
                PRECISION INC.

               

              By:
                /s/ Ross A. Anderson                             

              Name: Ross
                A. Anderson

              Title:   
                Treasurer

            
	 	 
	 	
              450500
                ONTARIO LIMITED

               

              By: /s/
                D.E. Lawrence             
                

              Name: D.E.
                Lawrence

              Title:   
                President

            
	 	 
	 	
              528650
                ONTARIO LIMITED

               

               

              By: /s/
                D.E. Lawrence                              

              Name: D.E.
                Lawrence

              Title:   
                President

            
	 	 
	 	
              2913607
                CANADA LIMITED

               

               

              By: /s/
                D.E. Lawrence                              

              Name: D.E.
                Lawrence

              Title: 
                President

            

    

    

     

     

     

    
 

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

     

    
      

      
        	 	
                MILACRON
                  CANADA INC.

                 

                By: /s/
                  R.C. McKee                                        
                   

                Name: R.C.
                  McKee

                Title: 
                  President

              
	 	 
	 	
                D-M-E
                  OF CANADA LIMITED

                 

                By:
                  /s/ D. E. Lawrence                   
                   

                Name: D.E.
                  Lawrence

                Title: 
                  President

              

      

      

    

    
 

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              AGENT
                AND LENDERS:

            	
              GENERAL
                ELECTRIC CAPITAL CORPORATION,

              as
                Agent and Lender

               

              By: /s/
                Michael Lustbader                            

              Duly
                Authorized Signatory

            
	 	 
	 	
              GE
                CAPITAL FINANCIAL INC.

              as
                L/C Issuer

               

              By: /s/
                Craig Winslow                               

              Duly
                Authorized Signatory

            

    

    

    

    
      
        
          
          

        

        
          
          

          
            

          

        

        
          
          

        

      

    

    

     

    

    ANNEX
      A (Recitals)

    to

    CREDIT
      AGREEMENT

     

    DEFINITIONS

     

    Capitalized
      terms used in the Loan Documents shall have (unless otherwise provided elsewhere
      in the Loan Documents) the following respective meanings, and all references
      to
      Sections, Exhibits, Schedules or Annexes in the following definitions shall
      refer to Sections, Exhibits, Schedules or Annexes of or to the
      Agreement:

     

    “ABL
      Priority Collateral”
has
      the
      meaning specified therefor in the Intercreditor Agreement.

     

    “Account
      Debtor”
means
      any Person obligated to any Credit Party under, with respect to, or on account
      of, an Account, Chattel Paper or General Intangibles (including a payment
      intangible).

     

    “Accounting
      Changes”
has
      the
      meaning ascribed thereto in Annex
      G.

     

    “Accounts”
means
      all “accounts,” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, including (a) all accounts receivable, other
      receivables, book debts and other forms of obligations (other than forms of
      obligations evidenced by Chattel Paper, or Instruments), (including any such
      obligations that may be characterized as an account or contract right under
      the
      Code), (b) all of each Credit Party’s rights in, to and under all purchase
      orders or receipts for goods or services, (c) all of each Credit Party’s rights
      to any goods represented by any of the foregoing (including unpaid sellers’
rights of rescission, replevin, reclamation and stoppage in transit and rights
      to returned, reclaimed or repossessed goods), (d) all rights to payment due
      to
      any Credit Party for property sold, leased, licensed, assigned or otherwise
      disposed of, for a policy of insurance issued or to be issued, for a secondary
      obligation incurred or to be incurred, for energy provided or to be provided,
      for the use or hire of a vessel under a charter or other contract, arising
      out
      of the use of a credit card or charge card, or for services rendered or to
      be
      rendered by such Credit Party or in connection with any other transaction
      (whether or not yet earned by performance on the part of such Credit Party)
      and
      (e) all collateral security of any kind, given by any Account Debtor or any
      other Person with respect to any of the foregoing.

     

    “AccuVal”
means
      AccuVal Associates, Incorporated.

     

    “Advance”
means
      any Revolving Credit Advance, Export-Related Advance, Permitted Overadvance
      or
      Swing Line Advance, as the context may require.

     

    “Affiliate”
means,
      with respect to any Person, (a) each Person that directly or indirectly
      controls, is controlled by or is under common control with such Person and
      (b)
      each of such Person’s officers, directors, joint venturers and partners. For the
      purposes of this definition, “control”
of
      a
      Person shall mean the possession, directly or indirectly, of the power to either
      (i) direct or cause the direction of its management and policies, whether
      through the ownership of voting securities, by contract or otherwise or (ii)
      to
      vote 10% or more of the Stock having ordinary voting power for the election
      of
      directors of such Person; provided,
      however,
      that
      Agent and each Lender shall not be considered an “Affiliate” of any Credit
      Party.

     

     

     

    
      
        
        

      

      
        A-1

        
          

        

      

      
        
        

      

    

     

     

    “Agent”
means
      GE Capital in its capacity as Agent for Lenders or its successor appointed
      pursuant to Section
      9.7.

     

    “Aggregate
      Borrowing Base”
means
      as of any date of determination, an amount equal to (i) the sum of the Primary
      Borrowing Base and the Export-Related Borrowing Base; less
      (ii) any
      Reserves established by Agent in its Permitted Discretion, including, without
      limitation, the Export-Related Loan Reserve and the Availability Reserve, except
      to the extent already deducted therefrom.

     

    “Aggregate
      Borrowing Availability”
means
      the sum of (i) the Primary Borrowing Availability and (ii) the Export-Related
      Borrowing Availability.

     

    “Agreement”
means
      the Credit Agreement by and among Borrowers, the other Credit Parties party
      thereto, GE Capital, as Agent and Lender and the other Lenders from time to
      time
      party thereto, as the same may be amended, supplemented, restated or otherwise
      modified from time to time.

     

    “Anti-Terrorism
      Laws”
means
      any anti-terrorism or money laundering Laws, including, without limitation,
      the
      Anti-Terrorism Order, the USA PATRIOT Act, the Laws comprising or implementing
      the U.S. Bank Secrecy Act and the Laws administered by OFAC.

     

    “Anti-Terrorism
      Order”
means
      Executive Order No. 13,224 of September 23, 2001, Blocking Property and
      Prohibiting Transactions with Persons Who Commit, Threaten to Commit or Support
      Terrorism, 66 U.S. Fed. Reg. 49079 (2001), as amended.

     

    “Appendices”
has
      the
      meaning ascribed to it in the recitals to the Agreement.

     

    “Applicable
      Export-Related Loan Index Margin”
means
      the per annum interest rate from time to time in effect and payable in addition
      to the Index Rate applicable to the Export-Related Loan, as determined by
      reference to Section
      1.5(a).

     

    “Applicable
      Export-Related Loan LIBOR Margin”
means
      the per annum interest rate from time to time in effect and payable in addition
      to the LIBOR Rate applicable to the Export-Related Loan, as determined by
      reference to Section
      1.5(a).

     

    “Applicable
      L/C Margin”
means
      the per annum fee, from time to time in effect, payable with respect to
      outstanding Letter of Credit Obligations as determined by reference to
Section
      1.5(a).

     

    “Applicable
      Margins”
means
      collectively the Applicable L/C Margin, the Applicable Unused Line Fee Margin,
      the Applicable Revolver Index Margin, the Applicable Overadvance
      Loan Index Margin, the Applicable Export-Related Loan Index Margin, the
      Applicable Revolver LIBOR Margin, the Applicable Overadvance Loan LIBOR Margin
      and the Applicable Export-Related Loan LIBOR Margin.

     

     

    
      
        
        

      

      
        A-2

        
          

        

      

      
        
        

      

    

     

     

    “Applicable
      Overadvance Loan Index Margin”
means
      the per annum interest rate from time to time in effect and payable in addition
      to the Index Rate applicable to Permitted Overadvances, as determined by
      reference to Section
      1.5(a).

     

    “Applicable
      Overadvance Loan LIBOR Margin”
means
      the per annum interest rate from time to time in effect and payable in addition
      to the LIBOR Rate applicable to Permitted Overadvances, as determined by
      reference to Section
      1.5(a).

     

    “Applicable
      Revolver Index Margin”
means
      the per annum interest rate margin from time to time in effect and payable
      in
      addition to the Index Rate applicable to the Revolving Loan, as determined
      by
      reference to Section
      1.5(a).

     

    “Applicable
      Revolver LIBOR Margin”
means
      the per annum interest rate from time to time in effect and payable in addition
      to the LIBOR Rate applicable to the Revolving Loan, as determined by reference
      to Section
      1.5(a).

     

    “Applicable
      Unused Line Fee Margin”
means
      the per annum fee, from time to time in effect, payable in respect of Borrowers’
non-use of committed funds pursuant to Section
      1.9(b),
      which
      fee is determined by reference to Section
      1.5(a).

     

    “Assignment
      Agreement”
has
      the
      meaning ascribed to it in Section
      9.1(a).

     

    “Authorized
      Officer”
means,
      with respect to any Person, the chief executive officer, the chief financial
      officer, the president, any executive vice president, the treasurer, any
      assistant treasurer, any vice president, the secretary or the general counsel
      of
      such Person.

     

    “Availability
      Reserve”
means
      $10,000,000, or such lesser amount as Agent may determine from time to time
      in
      its sole discretion.

     

    “Bailee’s
      Letter”
means
      a
      letter in form and substance reasonably acceptable to Agent and executed by
      any
      Person (other than a Credit Party) that is in possession of any Collateral
      on
      behalf of such Credit Party pursuant to which such Person acknowledges the
      Lien
      of Agent for the benefit of Agent and the Lenders with respect
      thereto.

     

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

     

    “Blocked
      Accounts”
has
      the
      meaning ascribed to it in Annex
      C.

     

    “Blocked
      Person”
means
      any Person: (i) listed in the annex to, or is otherwise subject to the
      provisions of, the Anti-Terrorism Order; (ii) owned or controlled by, or acting
      for or on behalf of, any Person that is listed in the annex to, or is otherwise
      subject to the provisions of, the Anti-Terrorism Order; (iii) with which any
      Lender is prohibited from dealing or otherwise engaging
      in any transaction by any United States Anti-Terrorism Law; (iv) that commits,
      threatens or conspires to commit or supports “terrorism” as defined in the
      Anti-Terrorism Order; (v) that is named as a “specially designated national” or
“blocked person” on the most current OFAC List or other similar list; or (vi)
      located in an “embargoed country” or a “restricted country” as determined
      pursuant to GE Capital’s internal policies with respect to Persons that are in
      the same or similar businesses to that of the Credit Parties and their
      Subsidiaries. Upon the reasonable request of Parent, GE Capital shall provide
      Parent with any changes to the list or “embargoed countries” or “restricted
      countries” that have occurred after the Closing Date.

     

     

    
      
        
        

      

      
        A-3

        
          

        

      

      
        
        

      

    

     

     

    “Board
      of Directors”
means,
      with respect to any Person, the board of directors (or comparable managers)
      of
      such Person or any committee thereof duly authorized to act on behalf of the
      board.

     

    “Book
      Value”
means,
      with respect to any Inventory of any Person, the lower of (i) cost (as
      reflected in the general ledger of such Person in accordance with GAAP) and
      (ii) market value, in each case, determined in accordance with GAAP
      calculated on a first-in, first-out basis.

     

    “Borrower
      Parties”
means,
      individually or collectively, each of Borrowers and Canadian Borrowing Base
      Guarantors.

     

    “Borrower
      Representative”
means
      Milacron Inc. in its capacity as Borrower Representative pursuant to the
      provisions of Section
      1.1(e).

     

    “Borrowers”
and
      “Borrower”
have
      the respective meanings ascribed thereto in the preamble to the
      Agreement.

     

    “Borrowing
      Base Certificate”
means
      a
      certificate to be executed by the chief executive officer, chief financial
      officer, treasurer or controller of the Borrower Representative and delivered
      from time to time substantially in the form attached to the Agreement as
Exhibit
      4.1(b).

     

    “Business
      Day”
means
      any day that is not a Saturday, a Sunday or a day on which banks are required
      or
      permitted to be closed in the State of New York and in reference to LIBOR Loans
      shall mean any such day that is also a LIBOR Business Day.

     

    “Business
      Trade Secrets”
has
      the
      meaning specified therefor in Section 3.22.

     

    “Canadian
      Benefit Plans”
means
      all material employee benefit plans of any nature or kind whatsoever that are
      not Canadian Pension Plans and are maintained or contributed to by any Credit
      Party having employees in Canada.

     

    “Canadian
      Collateral Documents”
means
      the Canadian Security Agreements executed by the applicable Canadian Borrowing
      Base Guarantors and all similar agreements entered into by one or more of the
      Canadian Borrowing Base Guarantors guaranteeing payment of, or granting a Lien
      upon property as security for payment of, the Obligations.

     

    

     

    
      
        
        

      

      
        A-4

        
          

        

      

      
        
        

      

    

     

     

    

    “Canadian
      Security Agreements”
means,
      individually or collectively, as the context may require, the (i) the Security
      Agreement of even date herewith entered into by and among Agent, on behalf
      of
      itself and Lenders, and each Canadian Borrowing Base Guarantor that is a
      signatory thereto, and (ii) the Quebec Security Documents.

     

    “Canadian
      Guaranty”
means
      the Guaranty of even date herewith executed by the Canadian Borrowing Base
      Guarantors in favor of Agent, on behalf of itself and Lenders.

     

    “Canadian
      Dollars”
and
      “Cdn.$”
shall
      mean lawful currency of Canada.

     

    “Canadian
      Pension Plans”
means
      each plan which is a “registered pension plan” (as defined in
      Section 248(1) of the ITA) in Canada established, maintained or contributed
      to by any Credit Party for its employees or former employees and shall not
      mean
      the Canadian Pension Plan that is maintained by the Government of
      Canada.

     

    “Canadian
      Borrowing Base Guarantor”
means
      any wholly-owned Canadian Subsidiary of Parent (a) which is able to prepare
      all collateral reports in a comparable manner to the Borrowers’ reporting
      procedures; (b) which has granted to Agent a first priority perfected Lien
      (subject to Permitted Liens and other Liens acceptable to Agent) on all or
      substantially all of its personal property constituting ABL Priority Collateral
      and a first priority perfected Lien (or, prior to the Discharge of Term
      Obligations, a second priority perfected Lien) on all or substantially all
      of
      its remaining personal property to secure payment and performance of the
      Obligations; (c) with respect to which Agent has received all customary
      opinions, Code, Personal Property Security Act and Register of Personal and
      Moveable Real Rights (Quebec) search reports, certificates and other documents
      reasonably requested by Agent and such joinder agreements to this Agreement,
      guaranties, contribution and set-off agreements and such security agreements,
      pledge agreements, account control agreements and other Loan Documents
      reasonably requested by Agent in form and substance reasonably satisfactory
      to
      Agent; (d) whose outstanding equity interests are subject to a first
      priority pledge (or, prior to the Discharge of Term Obligations, a second
      priority pledge) in favor of Agent to secure payment and performance of the
      Obligations; and (e) with respect to which Agent has received and approved,
      in its Permitted Discretion, a collateral audit conducted by its personnel
      or an
      independent audit firm designated by Agent. As of the Closing Date, the Canadian
      Borrowing Base Guarantors consist of Milacron Canada Inc., D-M-E of Canada
      Limited, 528650 Ontario Limited, Progress Precision Inc., 450500 Ontario Limited
      and 2913607 Canada Limited.

     

    “Canadian
      Subsidiary”
means
      any Subsidiary of a Credit Party that is created or organized under the laws
      of
      Canada or a Province or territory of Canada.

     

    “Capital
      Expenditures”
means,
      with respect to any Person, all expenditures (by the expenditure of cash or
      the
      incurrence of Indebtedness) by such Person during any measuring period for
      any
      fixed assets or improvements or for replacements, substitutions or additions
      thereto that are required to be capitalized under GAAP other than any such
      expenditure to the extent made with the proceeds of any sale of fixed or capital
      assets, so long as such proceeds are applied within one year of such sale and
      other than expenditures made from insurance proceeds or condemnation
      awards.

     

     

    
      
        
        

      

      
        A-5

        
          

        

      

      
        
        

      

    

    
 

    

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

     

    “Capital
      Lease Obligation”
means,
      with respect to any Capital Lease of any Person, the amount of the obligation
      of
      the lessee thereunder that, in accordance with GAAP, would appear on a balance
      sheet of such lessee in respect of such Capital Lease.

     

    “Cash
      Collateral Account”
has
      the
      meaning ascribed to it Annex
      B.

     

    “Cash
      Management Systems”
has
      the
      meaning ascribed to it in Section
      1.8.

     

    “Change
      of Control”
means,
      other than pursuant to the Mizuho/Glencore Transactions, any of the following:
      (a) any person or group of persons (within the meaning of the Securities
      Exchange Act of 1934,) shall have acquired beneficial ownership (within the
      meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission
      under the Securities Exchange Act of 1934,) of 49% or more of the issued and
      outstanding shares of capital Stock of Parent having the right to vote for
      the
      election of directors of Parent under ordinary circumstances; or (b) during
      any
      period of twenty-four consecutive calendar months, individuals who at the
      beginning of such period constituted the Board of Directors of Parent (together
      with any new directors whose election by the Board of Directors of Parent or
      whose nomination for election by the Stockholders of Parent was approved by
      a
      vote of at least a majority of the directors then still in office who either
      were directors at the beginning of such period or whose election or nomination
      for election was previously so approved) cease for any reason other than death
      or disability to constitute a majority of the directors then in
      office.

     

    “Charges”
means
      all federal, state, county, city, municipal, local, foreign or other
      governmental taxes (including taxes owed to the PBGC at the time due and
      payable), levies, assessments, charges, liens, claims or encumbrances upon
      or
      relating to (a) the Collateral, (b) the Obligations, (c) the employees, payroll,
      income or gross receipts of any Credit Party, (d) any Credit Party’s ownership
      or use of any properties or other assets, or (e) any other aspect of any Credit
      Party’s business.

     

    “Chattel
      Paper”
means
      any “chattel paper,” as such term is defined in the Code, including electronic
      chattel paper, now owned or hereafter acquired by any Credit Party.

     

    “China
      JV”
means
      Milacron Plastics Machinery (Jiangyin) Co. LTD, a limited liability company
      and
      an enterprise legal person under the laws of China, a joint venture between
      Jiangnan Mould & Plastic Technology Co., LTD. (30%) and Milacron Plastics
      Technologies Group Inc. (70%) for the purpose of research, development, design
      and manufacturing of plastics processing machinery and supplies, molds for
      non-metallic articles, dies for motor vehicles, and jigs, sale of
      self-manufactured products and provision of related technical
      services.

     

    “Closing
      Date”
means
      December 19, 2006.

     

    

     

     

    
      
        
        

      

      
        A-6

        
          

        

      

      
        
        

      

    

     

    

    “Closing
      Checklist”
means
      the schedule, including all appendices, exhibits or schedules thereto, listing
      certain documents and information to be delivered in connection with the
      Agreement, the other Loan Documents and the transactions contemplated
      thereunder, substantially in the form attached hereto as Annex
      D.

     

    “Code”
means
      the Uniform Commercial Code as the same may, from time to time, be enacted
      and
      in effect in the State of New York; provided,
      that to
      the extent that the Code is used to define any term herein or in any Loan
      Document and such term is defined differently in different Articles or Divisions
      of the Code, the definition of such term contained in Article or Division 9
      shall govern; provided further,
      that in
      the event that, by reason of mandatory provisions of law, any or all of the
      attachment, perfection or priority of, or remedies with respect to, Agent’s or
      any Lender’s Lien on any Collateral is governed by the Uniform Commercial Code
      as enacted and in effect in a jurisdiction other than the State of New York,
      the
      term “Code”
shall
      mean the Uniform Commercial Code as enacted and in effect in such other
      jurisdiction solely for purposes of the provisions thereof relating to such
      attachment, perfection, priority or remedies and for purposes of definitions
      related to such provisions.

     

    “Collateral”
means
      the property covered by the Security Agreement, the Pledge Agreement, the
      Mortgages and the other Collateral Documents and any other property, real or
      personal, tangible or intangible, now existing or hereafter acquired, that
      may
      at any time be or become subject to a security interest or Lien in favor of
      Agent, on behalf of itself and Lenders, to secure the Obligations.

     

    “Collateral
      Documents”
means
      the Security Agreement, the Pledge Agreement, the Mortgages, the Canadian
      Collateral Documents, and any Patent Security Agreements, Trademark Security
      Agreements, and Copyright Security Agreements, in each case executed by the
      applicable Credit Party and/or Canadian Borrowing Base Guarantor, and all
      similar agreements entered into guaranteeing payment of, or granting a Lien
      upon
      property as security for payment of, the Obligations.

     

    “Collateral
      Reports”
means
      the reports with respect to the Collateral referred to in Annex
      F.

     

    “Collection
      Account”
means
      that certain account of Agent, account number 502-328-54 in the name of Agent
      at
      DeutscheBank Trust Company Americas in New York, New York ABA No. 021 001 033,
      or such other account as may be specified in writing by Agent as the “Collection
      Account”.

     

    “Commitment
      Termination Date”
means
      the earliest of (a) December 19, 2011, (b) the date that is ninety (90) days
      prior to the maturity date of the Senior Secured Notes in the event that more
      than $25,000,000 of the Senior Secured Notes remain outstanding at such time
      (and have not been defeased or irrevocably called for redemption, in each case
      with an irrevocable deposit into escrow of cash in an amount for such defeasance
      or call,
      in
      each
      case in accordance with the terms and conditions in the Senior Secured Notes
      Indenture or otherwise in form and substance reasonably satisfactory to Agent)
      (the “Early
      Termination Date”);
      (c)
      the date of termination of Lenders’ obligations to make Advances and to incur
      Letter of Credit Obligations
      or permit existing Loans to remain outstanding pursuant to Section
      8.2(b),
      and (d)
      the date of prepayment in full in cash by Borrowers of the Loans and the
      cancellation and return (or stand-by guarantee) of all Letters of Credit or
      the
      cash collateralization of all Letter of Credit Obligations pursuant to
Annex
      B,
      and the
      permanent reduction of all Commitments to zero dollars ($0).

     

     

     

    
      
        
        

      

      
        A-7

        
          

        

      

      
        
        

      

    

     

    “Commitments”
means
      (a) as to any Lender, the aggregate of such Lender’s Revolving Loan Commitment
      (including without duplication (i) the Swing Line Lender’s Swing Line Commitment
      and (ii) the Export-Related Loan Lender’s Export-Related Loan Commitment, each
      of (i) and (ii) as a subsets of its Revolving Loan Commitment) as set forth
      on
Annex J
      or in
      the most recent Assignment Agreement executed by such Lender and (b) as to
      all
      Lenders, the aggregate of all Lenders’ Revolving Loan Commitments (including
      without duplication (i) the Swing Line Lender’s Swing Line Commitment and (ii)
      the Export-Related Loan Lender’s Export-Related Loan Commitment, each of (i) and
      (ii) as a subsets of its Revolving Loan Commitment), which aggregate commitment
      shall be One Hundred Five Million Dollars ($105,000,000) on
      the
      Closing Date, as to each of clauses
      (a) and (b),
      as such
      Commitments may be reduced, amortized or adjusted from time to time in
      accordance with the Agreement.

     

    “Compliance
      Certificate”
has
      the
      meaning ascribed to it in Annex
      E.

     

    “Concentration
      Accounts”
has
      the
      meaning ascribed to it in Annex
      C.

     

    “Contingent
      Obligation”
means,
      with respect to any Person, any obligation of such Person guaranteeing or
      intended to guarantee any Indebtedness, leases, dividends or other obligations
      (“primary
      obligations”)
      of any
      other Person (the ”primary
      obligor”)
      in any
      manner, whether directly or indirectly, including, without limitation, (i)
      the
      direct or indirect guaranty, endorsement (other than for collection or deposit
      in the ordinary course of business), co-making, discounting with recourse or
      sale with recourse by such Person of the obligation of a primary obligor,
      (ii) the obligation to make take-or-pay or similar payments, if required,
      regardless of nonperformance by any other party or parties to an agreement,
      (iii) any obligation of such Person, whether or not contingent, (A) to purchase
      any such primary obligation or any property constituting direct or indirect
      security therefor, (B) to advance or supply funds (1) for the purchase or
      payment of any such primary obligation or (2) to maintain working capital
      or equity capital of the primary obligor or otherwise to maintain the net worth
      or solvency of the primary obligor, (C) to purchase property, assets,
      securities or services primarily for the purpose of assuring the owner of any
      such primary obligation of the ability of the primary obligor to make payment
      of
      such primary obligation or (D) otherwise to assure or hold harmless the
      holder of such primary obligation against loss in respect thereof; provided,
      however,
      that
      the term “Contingent Obligation” shall not include any product warranties
      extended in the ordinary course of business. The amount of any Contingent
      Obligation shall be deemed to be an amount equal to the stated or determinable
      amount of the primary obligation with respect to which such Contingent
      Obligation is made (or, if less, the maximum amount of such primary obligation
      for which such Person may be liable pursuant to the terms of the instrument
      evidencing such Contingent Obligation) or, if not stated or determinable, the
      maximum reasonably anticipated liability with respect thereto (assuming such
      Person is required to perform thereunder), as determined by such Person in
      good
      faith.

     

    

    
      
        
        

      

      
        A-8

        
          

        

      

      
        
        

      

    

     

    

    “Contracts”
means
      all “contracts,” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, in any event, including all contracts,
      undertakings, or agreements (other than rights evidenced by Chattel Paper,
      Documents or Instruments) in or under which any Credit Party may now or
      hereafter have any right, title or interest, including any agreement relating
      to
      the terms of payment or the terms of performance of any Account.

     

    “Control
      Letter”
means
      a
      letter agreement between Agent and (i) the issuer of uncertificated securities
      with respect to uncertificated securities in the name of any Credit Party,
      (ii)
      a securities intermediary with respect to securities, whether certificated
      or
      uncertificated, securities entitlements and other financial assets held in
      a
      securities account in the name of any Credit Party, (iii) a futures commission
      merchant or clearing house, as applicable, with respect to commodity accounts
      and commodity contracts held by any Credit Party, whereby, among other things,
      the issuer, securities intermediary or futures commission merchant limits any
      security interest in the applicable financial assets in a manner reasonably
      satisfactory to Agent, acknowledges the Lien of Agent, on behalf of itself
      and
      Lenders, on such financial assets, and agrees to follow the instructions or
      entitlement orders of Agent without further consent by the affected Credit
      Party.

     

    “Copyright
      Licenses”
means
      all licenses, contracts or other agreements, whether written or oral, naming
      any
      Grantor as licensee or licensor and providing for the grant of any right to
      use
      or sell any works covered by any copyright (including, without limitation,
      all
      Copyright Licenses set forth in Schedule II to the Security
      Agreement).

     

    “Copyright
      Security Agreement”
means
      a
      Copyright Security Agreement made in favor of Agent, on behalf of itself and
      Lenders, by each applicable Grantor.

     

    “Copyrights”
means,
      with respect to each Grantor, all of such Grantor’s domestic and foreign
      copyrights, whether registered or not, including, without limitation, all
      copyright rights throughout the universe (whether now or hereafter arising)
      in
      any and all media (whether now or hereafter developed), in and to all original
      works of authorship fixed in any tangible medium of expression, acquired or
      used
      by any Grantor (including, without limitation, all copyrights described in
      Schedule II to the Security Agreement), all applications for registration,
      registrations and recordings of ownership thereof (including, without
      limitation, applications, registrations and recordings of ownership in the
      United States Copyright Office or in any similar office or agency of the United
      States or any other country or any political subdivision thereof), and all
      extensions, restorations or renewals thereof.

     

    “Credit
      Parties”
means
      each Borrower and each Guarantor.

     

    “Covenant
      Trigger Event”
has
      the
      meaning ascribed to it in clause (b) of Annex
      G.

     

    “Default”
means
      any event that, with the passage of time or notice or both, would, unless cured
      or waived, become an Event of Default.

     

    “Default
      Rate”
has
      the
      meaning ascribed to it in Section
      1.5(d).

     

    

     

    
      
        
        

      

      
        A-9

        
          

        

      

      
        
        

      

    

     

    

    “Deposit
      Accounts”
means
      all “deposit accounts” as such term is defined in the Code, now or hereafter
      held in the name of any Credit Party.

     

    “Designated
      Real Property and Assets”
means
      the real property and related assets described on Schedule
      A-1.

     

    “Disbursement
      Accounts”
has
      the
      meaning ascribed to it in Annex
      C.

     

    “Discharge
      of Term Obligations”
has
      the
      meaning set forth in the Intercreditor Agreement.

     

    “Disposition”
means
      any transaction, or series of related transactions, pursuant to which any Person
      or any of its Subsidiaries sells, assigns, transfers or otherwise disposes
      of
      any property or assets (whether now owned or hereafter acquired) to any other
      Person, in each case, whether or not the consideration therefor consists of
      cash, securities or other assets owned by the acquiring Person, excluding any
      (x) sales of Inventory, Accounts and Equipment in the ordinary course of
      business on ordinary business terms and (y) dispositions of cash or sales
      or liquidations of Permitted Investments or other similar cash equivalents
      that
      are not otherwise in violation of the terms of this Agreement.

     

    “Documents”
means
      all “documents,” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, wherever located.

     

    “Dollars”
or
      “$”
means
      lawful currency of the United States of America.

     

    “Domestic
      Credit Party”
means
      any Credit Party that is organized under the laws of the United States or any
      state thereof.

     

    “Domestic
      Subsidiary”
means
      any Subsidiary of a Credit Party that is organized under the laws of the United
      States or any state thereof.

     

    “Early
      Termination Date”
has
      the
      meaning ascribed to such term in the definition of the term “Commitment
      Termination Date”.

     

    
      “EBITDA”
        means, for any period, the consolidated net income of the Credit Parties
        for
        such period determined in accordance with GAAP, plus (a) without duplication
        and
        to the extent deducted in determining such consolidated net income, the sum
        of
        (i) consolidated Interest Expense for such period, (ii) consolidated income
        tax
        expense for such period, (iii) all amounts attributable to depreciation and
        amortization for such period, (iv) other non-cash, non-operating expenses
        for
        such period, (v) any extraordinary losses for such period, (vi) any non-cash
        restructuring charges and expenses for such period, (vii) any restructuring
        charges and expenses paid or payable (without duplication) in cash in an
        aggregate amount not to exceed $5,000,000 for such period, and (viii) any
        charges incurred with respect to the Related Transactions, minus (b) without
        duplication and to the extent included in determining such consolidated net
        income, (i) any extraordinary gains for such period and (ii) any non-operating
        income for such period, in each case under clauses (a) and (b), with respect
        to
        the Credit Parties on a consolidated basis for the same period in which
        consolidated net income was calculated.

       

       

      
        
          
          

        

        
          A-10

          
            

          

        

        
          
          

        

      

       

       

      “E-Fax”
means
        any system used to receive or transmit faxes electronically.

       

    

    “Eligible
      Accounts”
has
      the
      meaning ascribed to it in Section
      1.6.

     

    “Eligible
      Export-Related Accounts”
has
      the
      meaning ascribed to it in Section
      1.6A
      of the
      Agreement.

     

    “Eligible
      Inventory”
has
      the
      meaning ascribed to it in Section
      1.7.

     

    “Eligible
      Machinery-in-Process”
has
      the
      meaning ascribed to it in Section
      1.7A.

     

    “Employee
      Plan”
means
      an employee benefit plan (as defined in Section 3(3) of ERISA) (other than
      a
      Multiemployer Plan) maintained (or that was maintained at any time during the
      five (5) calendar years preceding the date of any borrowing hereunder) for
      employees of any Credit Party or any of its ERISA Affiliates or was contributed
      to (or was required to be contributed to at any time during the five (5)
      calendar years preceding the date of any borrowing hereunder) by a Credit Party
      or any of its ERISA Affiliates.

     

    “Environmental
      Actions”
means
      any written complaint, summons, citation, written notice of violation,
      directive, order, claim, or any litigation, investigation, judicial or
      administrative proceeding or judgment by any Person or Governmental Authority
      resulting or arising from any violations of Environmental Laws or Releases
      of
      Hazardous Materials (i) from any assets, properties or businesses owned or
      operated by any Credit Party or any of its Subsidiaries or any predecessor
      in
      interest; (ii) at or relating to adjoining properties; or (iii) at or
      relating to any facilities which received Hazardous Materials generated by
      any
      Credit Party or any of its Subsidiaries or any predecessor in
      interest.

     

    “Environmental
      Laws”
means
      all applicable federal, state, local and foreign laws, statutes, ordinances,
      codes, rules, standards and regulations, now or hereafter in effect, and any
      binding and applicable judicial or administrative interpretation thereof,
      including any applicable judicial or administrative order, consent decree,
      order
      or judgment, imposing liability or standards of conduct for or relating to
      the
      regulation and protection of human health, safety, the environment and natural
      resources (including ambient air, surface water, groundwater, wetlands, land
      surface or subsurface strata, wildlife, aquatic species and vegetation).
      Environmental Laws include the Comprehensive Environmental Response,
      Compensation, and Liability Act of 1980 (42 U.S.C. §§ 9601 et
      seq.)
      (“CERCLA”);
      the
      Hazardous Materials Transportation Authorization Act of 1994 (49 U.S.C. §§ 5101
et
      seq.);
      the
      Federal Insecticide, Fungicide, and Rodenticide Act (7 U.S.C. §§ 136
et
      seq.);
      the
      Solid Waste Disposal Act (42 U.S.C. §§ 6901 et
      seq.);
      the
      Toxic Substance Control Act (15 U.S.C. §§ 2601 et
      seq.);
      the
      Clean Air Act (42 U.S.C. §§ 7401 et
      seq.);
      the
      Federal Water Pollution Control Act (33 U.S.C. §§ 1251 et
      seq.);
      the
      Occupational Safety and Health Act (29 U.S.C. §§ 651 et
      seq.);
      and
      the Safe Drinking Water Act (42 U.S.C. §§ 300(f) et
      seq.),
      and
      any and all regulations promulgated thereunder, and all analogous state, local
      and foreign counterparts or equivalents and any transfer of ownership
      notification or approval statutes.

     

    “Environmental
      Liabilities”
means,
      with respect to any Person, all liabilities, obligations, responsibilities,
      response, remedial and removal costs, investigation and feasibility study
      costs, capital costs, operation and maintenance costs, losses, damages, punitive
      damages, property damages, natural resource damages, consequential damages,
      treble damages, costs and expenses (including all reasonable fees, disbursements
      and expenses of counsel, experts and consultants), fines, penalties, sanctions
      and interest incurred as a result of or related to any Environmental
      Action.

    

     

    
      
        
        

      

      
        A-11

        
          

        

      

      
        
        

      

    

    

     

    “Environmental
      Lien”
means
      any Lien in favor of any Governmental Authority for Environmental
      Liabilities.

     

    “Environmental
      Permits”
means
      all permits, licenses, authorizations, certificates, approvals or registrations
      required by any Governmental Authority under any Environmental
      Laws.

     

    “Equipment”
means
      all “equipment,” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, wherever located and, in any event, including
      all
      such Credit Party’s machinery and equipment, including processing equipment,
      conveyors, machine tools, data processing and computer equipment, including
      embedded software and peripheral equipment and all engineering, processing
      and
      manufacturing equipment, office machinery, furniture, materials handling
      equipment, tools, attachments, accessories, automotive equipment, trailers,
      trucks, forklifts, molds, dies, stamps, motor vehicles, rolling stock and other
      equipment of every kind and nature, trade fixtures and fixtures not forming
      a
      part of real property, together with all additions and accessions thereto,
      replacements therefor, all parts therefor, all substitutes for any of the
      foregoing, fuel therefor, and all manuals, drawings, instructions, warranties
      and rights with respect thereto, and all products and proceeds thereof and
      condemnation awards and insurance proceeds with respect thereto.

     

    “ERISA”
means
      the Employee Retirement Income Security Act of 1974, as amended from time to
      time, and any successor statute and regulations thereunder, in each case, as
      in
      effect from time to time. References to sections of ERISA shall be construed
      also to refer to any successor sections.

     

    “ERISA
      Affiliate”
means,
      with respect to any Credit Party, any trade or business (whether or not
      incorporated) that, together with such Credit Party, is treated as a single
      employer within the meaning of Sections 414(b), (c), (m) or (o) of the
      IRC.

     

    “E-System”
means
      any electronic system, including Intralinks®
      and any
      other Internet or extranet-based site, whether such electronic system is owned,
      operated or hosted by Agent, any of its Affiliates, or any of such Person’s
      respective officers, directors, employees, attorneys, agents and representatives
      or any other Person, providing for access to data protected by passcodes or
      other security system.

     

    “Event
      of Default”
has
      the
      meaning ascribed to it in Section
      8.1.

     

    “Excess
      Availability”
means
      the sum of (i) Aggregate Borrowing Availability plus (ii) the amount of cash
      in
      Blocked Accounts (excluding cash held in collection accounts with respect to
      the
      proceeds of Inventory and Accounts that were included as Eligible Inventory,
      Eligible
      Machinery-in-Process, Eligible Accounts and/or Eligible Export-Related Accounts
      in the Borrowing Base Certificate used to determine Aggregate Borrowing
      Availability).

     

    

     

    
      
        
        

      

      
        A-12

        
          

        

      

      
        
        

      

    

    

     

    “Excluded
      Assets”
has
      the
      meaning ascribed to it in the Security Agreement.

     

    “Ex-Im
      Bank”
means
      the Export-Import Bank of the United States or such other bank as shall be
      reasonably acceptable to Agent in its Permitted Discretion.

     

    “Ex-Im
      Bank Borrower Agreement”
means
      an agreement executed by one or more of Borrower Parties in favor of Ex-Im
      Bank
      and Export-Related Loan Lender, the form of which shall be substantially in
      the
      form attached hereto as Exhibit
      A-1
      after
      giving effect to the requested waivers and amendments in the Ex-Im Bank Waiver
      Request.

     

    “Ex-Im
      Bank Documents”
means
      collectively, the Ex-Im Bank Guarantee, any Loan Authorization Agreement between
      Export-Related Loan Lender and Ex-Im Bank and the Ex-Im Bank Borrower
      Agreement.

     

    “Ex-Im
      Bank Guarantee”
means
      any Guarantee executed by Ex-Im Bank in favor of Export-Related Loan Lender
      in
      form and substance reasonably satisfactory to Agent, together with all
      amendments, modifications and supplements thereto.

     

    “Ex-Im
      Bank Waiver Request”
means
      a
      waiver request letter issued by the Parent and GE Capital to the Ex-Im Bank
      after the Closing Date, which shall be in form and substance mutually acceptable
      to the Parent and GE Capital.

     

    “Export-Related
      Accounts”
means
      those Accounts of Borrower Parties that are an obligation of an Account Debtor
      located in a country other than the United States or Canada which arise from
      the
      sale of goods or services which are intended for export pursuant to written
      export orders or contracts for the purchase by the Account Debtor of such goods
      or services.

     

    “Export-Related
      Advance”
has
      the
      meaning ascribed to it in Section
      1.1(d).

     

    “Export-Related
      Borrowing Availability”
means
      as of the date of determination the lesser of (i) the Export-Related Loan
      Commitment and (ii) the Export-Related Borrowing Base, in each case, less the
      sum of (a) the aggregate Export-Related Loans then outstanding and (b) without
      duplication, any Reserves established by Agent at such time including, without
      limitation, any Export-Related Loan Reserve and the Availability
      Reserve.

     

    “Export-Related
      Borrowing Base”
means,
      as of any date of determination by Agent, an amount equal to the sum of (i)
      90%
      of the Book Value of Borrower Parties’ Eligible Export-Related Accounts at such
      time, less (ii) any Reserves established by Agent at such time with respect
      to
      the Export-Related Borrowing Base.

     

    “Export-Related
      Credit Participation”
and
      “Export-Related
      Credit Participations”
have
      the respective meanings ascribed thereto in Section
      1.1(d)(iii).

     

    

     

    
      
        
        

      

      
        A-13

        
          

        

      

      
        
        

      

    

    

    “Export-Related
      Loan”
means,
      at any time, the aggregate amount of Export-Related Advances outstanding to
      Borrowers.

     

    “Export-Related
      Loan Commitment”
means
      the lesser of (i) Ten Million Dollars ($10,000,000) or (ii) an amount to be
      determined by the Borrowers, and reflected by the Ex-Im Bank.

     

    “Export-Related
      Loan Commitment Date”
means
      the first date on which requested amendments and waivers contained in the
      Export-Related Waiver Request shall be granted by the Ex-Im Bank and the Ex-Im
      Bank Guarantee shall have become effective.

     

    “Export-Related
      Loan Lender”
means
      GE Capital.

     

    “Export-Related
      Loan Note”
has
      the
      meaning ascribed to it in Section
      1.1(d)(ii).

     

    “Export-Related
      Loan Reserve”
means
      a
      reserve established by Agent against the Export-Related Borrowing Base in an
      amount equal to ten percent (10%) of any outstanding Export-Related Loans based
      on availability from Eligible Export-Related Accounts.

     

    “Export-Related
      Loan Termination Date”
means,
      the earlier of (i) December 19, 2009, provided
      that
      such date shall be extended to December 19, 2011 if the Ex-Im Bank Guarantee
      has
      been extended for such period in a manner satisfactory to Agent and no Default
      or Event of Default shall have occurred and be continuing at the time of such
      extension, and (ii) the Commitment Termination Date.

     

    “Facility”
means
      each parcel of real property identified as a “Facility” on Schedule
      3.15
      that is
      owned by a Credit Party on the Closing Date, including, without limitation,
      the
      land on which such facility is located, all buildings and other improvements
      thereon, all fixtures located at or used in connection with such facility,
      all
      whether now or hereafter existing.

     

    “Fair
      Labor Standards Act”
means
      the Fair Labor Standards Act, 29 U.S.C. §201 et seq.

     

    “Federal
      Funds Rate”
means,
      for any day, a floating rate equal to the weighted average of the rates on
      overnight Federal funds transactions among members of the Federal Reserve
      System, as determined by Agent in its sole discretion, which determination
      shall
      be final, binding and conclusive (absent manifest error).

     

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

     

    “Fees”
means
      any and all fees payable to Agent or any Lender pursuant to the Agreement or
      any
      of the other Loan Documents.

     

    “Financial
      Covenants”
means
      the financial covenants set forth in Annex
      G.

     

    

     

    
      
        
        

      

      
        A-14

        
          

        

      

      
        
        

      

    

    

    “Financial
      Statements”
means
      the consolidated and consolidating income statements, statements of cash flows
      and balance sheets of Borrowers delivered in accordance with Section
      3.7
      and
Annex
      E.

     

    “Fiscal
      Month”
means
      any of the monthly accounting periods of Borrowers.

     

    “Fiscal
      Quarter”
means
      any of the quarterly accounting periods of Borrowers, ending on March 31, June
      30, September 30 and December 31 of each year.

     

    “Fiscal
      Year”
means
      any of the annual accounting periods of Borrowers ending on December 31of each
      year.

     

    “Fixed
      Charges”
means,
      with respect to the Credit Parties for any fiscal period, (a) the aggregate
      of all Interest Expense paid or accrued (without duplication) during such
      period, plus (b) scheduled payments of principal with respect to Indebtedness
      during such period, plus (c) Capital Expenditures during such period, plus
      (d)
      income taxes paid or payable (without duplication) in cash with respect to
      such
      fiscal period.

     

    “Fixed
      Charge Coverage Ratio”
means,
      with respect to the Credit Parties for any fiscal period, the ratio of (a)
      EBITDA during such fiscal period plus the lesser of (i) cash repatriated to
      one
      or more of the Borrowers from Foreign Subsidiaries which has been deposited
      into
      a Blocked Account during such fiscal period or (ii) $10,000,000 (net of any
      cash
      investments made by the Credit Parties (which shall exclude purchases of goods
      and services in the ordinary course of business for which such goods and
      services have been received by the applicable Credit Party) in their respective
      Foreign Subsidiaries during such fiscal period), to (b) Fixed Charges during
      such fiscal period.

     

    “Fixtures”
means
      all “fixtures” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party.

     

    “Foreign
      Subsidiary”
means
      any Subsidiary of a Credit Party that is not a Domestic Subsidiary. For purposes
      of this Agreement, no Credit Party shall be deemed to be a Foreign
      Subsidiary.

     

    “Funded
      Debt”
means,
      with respect to any Person, without duplication, all Indebtedness for borrowed
      money evidenced by notes, bonds, debentures, or similar evidences of
      Indebtedness that by its terms matures more than one year from, or is directly
      or indirectly renewable or extendible at such Person’s option under a revolving
      credit or similar agreement obligating the lender or lenders to extend credit
      over a period of more than one year from the date of creation thereof (but
      only
      to the extent borrowed thereunder), and specifically including Capital Lease
      Obligations, current maturities of long-term debt, revolving credit and
      short-term debt extendible beyond one year at the option of the debtor, and
      also
      including, in the case of Borrowers, the Obligations and, without duplication,
      Contingent Obligations consisting of guaranties of Funded Debt of other
      Persons.

     

    “Funded
      Export-Related Credit Participation”
has
      the
      meaning ascribed to it in Section
      1.1(d)(iii).

     

    

     

    
      
        
        

      

      
        A-15

        
          

        

      

      
        
        

      

    

    

    “GAAP”
means
      generally accepted accounting principles in the United States of America
      consistently applied, as such term is further defined in Annex
      G.

     

    “GE
      Capital”
means
      General Electric Capital Corporation, a Delaware corporation.

     

    “GE
      Capital Fee Letter”
means
      that certain letter, dated as of November 9, 2006, between GE Capital and Parent
      with respect to certain Fees to be paid from time to time by Borrowers to GE
      Capital.

     

    “General
      Intangibles”
means
      all “general intangibles,” as such term is defined in the Code, now owned or
      hereafter acquired by any Credit Party, including all right, title and interest
      that such Credit Party may now or hereafter have in or under any Contract,
      all
      payment intangibles, customer lists, Licenses, Copyrights, Trademarks, Patents,
      and all applications therefor and reissues, extensions or renewals thereof,
      rights in intellectual property, interests in partnerships, joint ventures
      and
      other business associations, licenses, permits, copyrights, trade secrets,
      proprietary or confidential information, inventions (whether or not patented
      or
      patentable), technical information, procedures, designs, knowledge, know-how,
      software, data bases, data, skill, expertise, experience, processes, models,
      drawings, materials and records, goodwill (including the goodwill associated
      with any Trademark or Trademark License), all rights and claims in or under
      insurance policies (including insurance for fire, damage, loss and casualty,
      whether covering personal property, real property, tangible rights or intangible
      rights, all liability, life, key man and business interruption insurance, and
      all unearned premiums), uncertificated securities, chooses in action, deposit,
      checking and other bank accounts, rights to receive tax refunds and other
      payments, rights to receive dividends, distributions, cash, Instruments and
      other property in respect of or in exchange for pledged Stock and Investment
      Property, rights of indemnification, all books and records, correspondence,
      credit files, invoices and other papers, including without limitation all tapes,
      cards, computer runs and other papers and documents in the possession or under
      the control of such Credit Party or any computer bureau or service company
      from
      time to time acting for such Credit Party.

     

    “Goods”
means
      all “goods” as defined in the Code, now owned or hereafter acquired by any
      Credit Party, wherever located, including embedded software to the extent
      included in “goods” as defined in the Code, manufactured homes, standing timber
      that is cut and removed for sale and unborn young of animals.

     

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

     

    “Grantor”
means
      any Person that is a “Grantor” under the Security Agreement.

     

    “Guaranties”
or
      “Guaranty”
means,
      individually or collectively as the context may require, each Subsidiary
      Guaranty, Canadian Guaranty and any other guaranty executed by any Guarantor
      in
      favor of Agent and Lenders in respect of the Obligations.

     

    

     

    
      
        
        

      

      
        A-16

        
          

        

      

      
        
        

      

    

    

    “Guarantors”
means
      each Subsidiary Guarantor, each Canadian Borrowing Base Guarantor, and each
      other Person, if any, that executes a guaranty or other similar agreement in
      favor of Agent, for itself and the ratable benefit of Lenders, in connection
      with the transactions contemplated by the Agreement and the other Loan
      Documents.

     

    “Handle”
means
      any manner of generating, accumulating, storing, treating, disposing of,
      transporting, transferring, handling, manufacturing or using, as any of such
      terms may further be defined in any Environmental Law, any Hazardous
      Materials.

     

    “Hazardous
      Material”
means
      (a) any element, compound or chemical that is defined, listed or otherwise
      classified as a contaminant, pollutant, toxic pollutant, toxic or hazardous
      substance, extremely hazardous substance or chemical, hazardous waste, special
      waste, or solid waste under Environmental Laws or that is likely to cause
      immediately, or at some future time, harm to or have an adverse effect on,
      the
      environment or risk to human health or safety, including, without limitation,
      any pollutant, contaminant, waste, hazardous waste, toxic substance or dangerous
      good which is defined or identified in any Environmental Law and which is
      present in the environment in such quantity or state that it contravenes any
      Environmental Law; (b) petroleum and its refined products; (c) polychlorinated
      biphenyls; (d) any substance exhibiting a hazardous waste characteristic under
      any Environmental Law, including, without limitation, corrosivity, ignitability,
      toxicity or reactivity, as well as any radioactive or explosive materials;
      and
      (e) any asbestos-containing materials and manufactured products containing
      hazardous substances listed or classified as such under Environmental
      Laws.

     

    “Hedging
      Agreement”
means
      any interest rate, foreign currency, commodity or equity swap, collar, cap,
      floor or forward rate agreement, or other agreement or arrangement designed
      to
      hedge interest rates or currency, commodity or equity values (including, without
      limitation, any option with respect to any of the foregoing and any combination
      of the foregoing agreements or arrangements), and any confirmation executed
      in
      connection with any such agreement or arrangement.

     

    “Hedging
      Obligations”
means
      obligations owed by any Borrower Party or any Guarantor to any Lender or any
      Affiliate of any Lender (in each case with the consent of Agent) with respect
      to
      any Hedging Agreement.

     

    “Hedging
      Reserve”
means,
      as of any date of determination, an amount determined by Agent in its reasonable
      credit judgment to reflect as of such date, the aggregate termination values
      of
      (i) all Hedging Agreements then in effect which constitute Hedging Obligations
      and (ii) all Swap Related Reimbursement Obligations, in the event such Hedging
      Agreements or the relevant hedging arrangement with respect to any Swap Related
      Reimbursement Obligations were to be terminated on such date after taking into
      account the effect of any legally enforceable netting agreement relating to
      such
      Hedging Agreements or any such hedging agreement related to a Swap Related
      Reimbursement Obligation.

     

     

    

     

    
      
        
        

      

      
        A-17

        
          

        

      

      
        
        

      

    

    

    
      “Indebtedness”
means,
        with respect to any Person, without duplication, (a) all indebtedness of
        such
        Person for borrowed money or obligations for the deferred purchase price
        of
        property payment for which is deferred 6 months or more, but excluding
        obligations to trade creditors
        or other accounts payable incurred in the ordinary course of business that
        are
        not overdue by more than 6 months unless being contested in good faith, (b)
        all
        reimbursement and other obligations with respect to letters of credit, bankers’
acceptances and surety bonds, whether or not matured, (c) all obligations
        evidenced by notes, bonds, debentures or similar instruments, (d) all
        indebtedness created or arising under any conditional sale or other title
        retention agreement with respect to property acquired by such Person (even
        though the rights and remedies of the lessor, seller or lender under such
        agreement in the event of default are limited to repossession or sale of
        such
        property), (e) all Capital Lease Obligations and the present value (discounted
        at the Index Rate as in effect on the Closing Date) of future rental payments
        under all synthetic leases, (f) all obligations of such Person under commodity
        purchase or option agreements or other commodity price hedging arrangements,
        in
        each case whether contingent or matured, (g) all obligations of such Person
        under any Hedging Agreement, in each case whether contingent or matured,
        (h) all
        Indebtedness referred to above of another Person secured by (or for which
        the
        holder of such Indebtedness has an existing right, contingent or otherwise,
        to
        be secured by) any Lien upon or in property or other assets (including accounts
        and contract rights) owned by such Person, even though such Person has not
        assumed or become liable for the payment of such Indebtedness, and (i) the
        Obligations.

       

    

    “Indemnified
      Liabilities”
has
      the
      meaning ascribed to it in Section
      1.13.

     

    “Indemnified
      Person”
has
      the
      meaning ascribed to in Section
      1.13.

     

    “Index
      Rate”
means,
      for any day, a floating rate equal to the higher of (i) the rate publicly quoted
      from time to time by The Wall Street Journal
      as the
“prime rate” (or, if The Wall Street
      Journal
      ceases
      quoting a prime rate, the highest per annum rate of interest published by the
      Federal Reserve Board in Federal Reserve statistical release H.15 (519)
      entitled “Selected Interest Rates” as the Bank prime loan rate or its
      equivalent), and (ii) the Federal Funds Rate plus 50 basis points per annum.
      Each change in any interest rate provided for in the Agreement based upon the
      Index Rate shall take effect at the time of such change in the Index
      Rate.

     

    “Index
      Rate Loan”
means
      a
      Loan or portion thereof bearing interest by reference to the Index
      Rate.

     

    “Instruments”
means
      all “instruments,” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, wherever located, and, in any event, including
      all
      certificated securities, all certificates of deposit, and all promissory notes
      and other evidences of indebtedness, other than instruments that constitute,
      or
      are a part of a group of writings that constitute, Chattel Paper.

     

    “Intellectual
      Property”
means
      any and all Copyrights, Trademarks and Patents.

     

    “Intercompany
      Subordination Agreement”
means
      an Intercompany Subordination Agreement made by a Credit Party or any Subsidiary
      of a Credit Party in favor of Agent, for the benefit of Agent and the Lenders,
      substantially in the form of Exhibit
      A-2.

     

    

     

    
      
        
        

      

      
        A-18

        
          

        

      

      
        
        

      

    

    

    “Intercreditor
      Agreement”
means
      that certain Intercreditor Agreement dated as of June 10, 2004 by and among
      JPMorgan Chase Bank, Parent and U.S. Bank National Association, as trustee,
      as
      amended by that certain Supplement No. 1 to Intercreditor Agreement, dated
      as of
      the Closing Date, between JPMorgan Chase Bank, N.A. (f/k/a JPMorgan Chase Bank),
      in its capacity as Departing ABL Agent, on behalf of itself and the Departing
      ABL Lenders (as defined therein), General Electric Capital Corporation, in
      its
      capacity as New ABL Agent, on behalf of itself and the New ABL Lenders (as
      defined therein), and U.S. Bank National Association, as trustee.

     

    “Interest
      Expense”
means,
      with respect to any Person for any fiscal period, (i) interest expense (whether
      cash or non-cash) of such Person determined in accordance with GAAP for the
      relevant period ended on such date, including, interest expense with respect
      to
      any Funded Debt of such Person and interest expense for the relevant period
      that
      has been capitalized on the balance sheet of such Person minus (ii) the sum
      of
      (a) to the extent included in such interest expense for such period, non-cash
      amounts attributable to amortization of financing costs paid in a previous
      period plus (b) to the extent included in such interest expense for such period,
      non-cash amounts attributable to amortization of debt discounts or accrued
      interest payable in kind for such period.

     

    “Interest
      Payment Date”
means
      (a) as to any Index Rate Loan, the first Business Day of each month to occur
      while such Loan is outstanding, and (b) as to any LIBOR Loan, the last day
      of
      the applicable LIBOR Period; provided
      that, in
      addition to the foregoing, each of (x) the date upon which all of the
      Commitments have been terminated and the Loans have been paid in full and (y)
      the Commitment Termination Date shall be deemed to be an “Interest Payment Date”
with respect to any interest that has then accrued under the
      Agreement.

     

    “Inventory”
means
      all “inventory,” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, wherever located, and in any event including
      inventory, merchandise, goods and other personal property that are held by
      or on
      behalf of any Credit Party for sale or lease or are furnished or are to be
      furnished under a contract of service, or that constitute raw materials, work
      in
      process, machinery-in-process, finished goods, returned goods, or materials
      or
      supplies of any kind, nature or description used or consumed or to be used
      or
      consumed in such Credit Party’s business or in the processing, production,
      packaging, promotion, delivery or shipping of the same, including all supplies
      and embedded software.

     

    “Investment
      Property”
means
      all “investment property” as such term is defined in the Code now owned or
      hereafter acquired by any Credit Party, wherever located, including (i) all
      securities, whether certificated or uncertificated, including stocks, bonds,
      interests in limited liability companies, partnership interests, treasuries,
      certificates of deposit, and mutual fund shares; (ii) all securities
      entitlements of any Credit Party, including the rights of any Credit Party
      to
      any securities account and the financial assets held by a securities
      intermediary in such securities account and any free credit balance or other
      money owing by any securities intermediary with respect to that account; (iii)
      all securities accounts of any Credit Party; (iv) all commodity contracts of
      any
      Credit Party; and (v) all commodity accounts held by any Credit
      Party.

     

    

     

    
      
        
        

      

      
        A-19

        
          

        

      

      
        
        

      

    

    

    “IRC”
means
      the Internal Revenue Code of 1986, as amended (or any successor statute thereto)
      and all regulations promulgated thereunder, in each case, as in effect from
      time
      to time. References to any section of the IRC shall be construed also to refer
      to any successor sections.

     

    “IRS”
means
      the Internal Revenue Service.

     

    “ITA”
means
      the Income
      Tax Act (Canada),
      as the
      same may, from time to time, be in effect.

     

    “Landlord
      Waiver”
means
      a
      letter in form and substance reasonably acceptable to Agent and executed by
      a
      landlord or mortgagee in respect of Collateral of the Credit Parties located
      at
      any leased premises of the Credit Parties, pursuant to which such landlord
      or
      mortgagee, as the case may be, among other things, waives or subordinates any
      Lien such landlord or mortgagee may have in respect of any
      Collateral.

     

    “L/C
      Issuer”
means
      issuers of Letters of Credit to Borrowers as contemplated by the Agreement,
      including with respect to stand-by Letters of Credit, GE Capital Financial
      Inc.

     

    “L/C
      Sublimit”
has
      the
      meaning ascribed to it in Annex
      B.

     

    “Lease”
means
      any lease of real property to which any Credit Party or any of its Subsidiaries
      is a party as lessor or lessee.

     

    “Lenders”
means
      GE Capital, the other Lenders named on the signature pages of the Agreement,
      and, if any such Lender shall decide to assign all or any portion of the
      Obligations, such term shall include any permitted assignee of such
      Lender.

     

    “Letter
      of Credit Fee”
has
      the
      meaning ascribed to it in Annex
      B.

     

    “Letter
      of Credit Obligations”
means
      all outstanding obligations incurred by Agent, Lenders and L/C Issuer at the
      request of Borrower Representative, whether direct or indirect, contingent
      or
      otherwise, due or not due, in connection with the issuance of Letters of Credit
      by the L/C Issuer or the purchase of a participation as set forth in
Annex B
      with
      respect to any Letter of Credit. The amount of such Letter of Credit Obligations
      shall equal the maximum amount that may be payable at such time or at any time
      thereafter by L/C Issuer, Agent or Lenders thereupon or pursuant thereto
less
      the face
      amount of any Letter of Credit Obligations that are cash collateralized in
      accordance with Annex
      B.

     

    “Letters
      of Credit”
means
      documentary or standby letters of credit issued for the account of any Borrower
      by any L/C Issuer, and bankers’ acceptances issued by any Borrower, for which
      Agent and Lenders have incurred Letter of Credit Obligations. “Letters of
      Credit” does not include a Swap Related L/C.

     

    “Letter-of-Credit
      Rights”
means
      “letter-of-credit rights” as such term is defined in the Code, now owned or
      hereafter acquired by any Credit Party, including rights to payment or performance
      under a letter of credit, whether or not such Credit Party, as beneficiary,
      has
      demanded or is entitled to demand payment or performance.
       

    

     

    

     

    
      
        
        

      

      
        A-20

        
          

        

      

      
        
        

      

    

    

    “LIBOR
      Business Day”
means
      a
      Business Day on which banks in the City of London are generally open for
      interbank or foreign exchange transactions.

     

    “LIBOR
      Loan”
means
      a
      Loan or any portion thereof bearing interest by reference to the LIBOR
      Rate.

     

    “LIBOR
      Period”
means,
      with respect to any LIBOR Loan, each period commencing on a LIBOR Business
      Day
      selected by Borrower Representative pursuant to the Agreement and ending one,
      two or three months thereafter, as selected by Borrower Representative’s
      irrevocable notice to Agent as set forth in Section
      1.5(e);
      provided,
      that the
      foregoing provision relating to LIBOR Periods is subject to the
      following:

     

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

     

    (b)    any
      LIBOR
      Period that would otherwise extend beyond the Commitment Termination Date shall
      end two (2) LIBOR Business Days prior to such date;

     

    (c)    any
      LIBOR
      Period that begins on the last LIBOR Business Day of a calendar month (or on
      a
      day for which there is no numerically corresponding day in the calendar month
      at
      the end of such LIBOR Period) shall end on the last LIBOR Business Day of a
      calendar month;

     

    (d)    Borrower
      Representative shall select LIBOR Periods so as not to require a payment or
      prepayment of any LIBOR Loan during a LIBOR Period for such Loan;
      and

     

    (e)     Borrower
      Representative shall select LIBOR Periods so that there shall be no more than
      eight (8) separate LIBOR Loans in existence at any one time.

     

    “LIBOR
      Rate”
means
      for each LIBOR Period, a rate of interest determined by Agent equal
      to:

     

    (a)    the
      offered rate for deposits in United States Dollars for the applicable LIBOR
      Period that appears on Telerate Page 3750 as of 11:00 a.m. (London time),
      on the second full LIBOR Business Day next preceding the first day of such
      LIBOR
      Period (unless such date is not a Business Day, in which event the next
      succeeding Business Day will be used); divided by

     

    (b)    a
      number
      equal to 1.0 minus
      the
      aggregate (but without duplication) of the rates (expressed as a decimal
      fraction) of reserve requirements in effect on the day that is two (2) LIBOR
      Business Days prior to the beginning of such LIBOR Period (including basic,
      

     

    

     

    
      
        
        

      

      
        A-21

        
          

        

      

      
        
        

      

    

    

    supplemental,
      marginal and emergency reserves under any regulations of the Federal Reserve
      Board or other Governmental Authority having jurisdiction with respect thereto,
      as now and from time to time in effect) for Eurocurrency funding (currently
      referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve
      Board) that are required to be maintained by a member bank of the Federal
      Reserve System.

     

    If
      such
      interest rates shall cease to be available from Telerate News Service (or its
      successor satisfactory to Agent), the LIBOR Rate shall be determined from such
      financial reporting service or other information as shall be mutually acceptable
      to Agent and Borrower Representative.

     

    “Licenses”
means
      the Copyright Licenses, the Trademark Licenses and the Patent
      Licenses.

     

    “Lien”
means
      any mortgage, deed of trust, pledge, lien (statutory or otherwise), security
      interest, charge or other encumbrance or security or preferential arrangement
      of
      any nature, including, without limitation, any conditional sale or title
      retention arrangement, any Capital Lease and any assignment, deposit arrangement
      or financing lease intended as, or having the effect of, security.

     

    “Loan
      Account”
has
      the
      meaning ascribed to it in Section
      1.12.

     

    “Loan
      Documents”
means
      the Agreement, the Notes, the Guaranties, the Collateral Documents, the Master
      Standby Agreement, the GE Capital Fee Letter, the Intercreditor Agreement,
      the
      Intercompany Subordination Agreement, and all other agreements, instruments,
      documents and certificates identified in the Closing Checklist executed and
      delivered to, or in favor of, Agent or any Lenders and including all other
      pledges, powers of attorney, consents, assignments, contracts, notices, letter
      of credit agreements and all other written matter whether heretofore, now or
      hereafter executed by or on behalf of any Credit Party, or any employee of
      any
      Credit Party, and delivered to Agent or any Lender in connection with the
      Agreement or the transactions contemplated thereby. Any reference in the
      Agreement or any other Loan Document to a Loan Document shall include all
      appendices, exhibits or schedules thereto, and all amendments, restatements,
      supplements or other modifications thereto, and shall refer to the Agreement
      or
      such Loan Document as the same may be in effect at any and all times such
      reference becomes operative.

     

    “Loans”
means,
      without duplication, the Revolving Loan, the Permitted Overadvance, the Swing
      Line Loan and the Export-Related Loan.

     

    “Lock
      Boxes”
has
      the
      meaning ascribed to it in Annex
      C.

     

    “Machinery-in-Process”
has
      the
      meaning ascribed to such term in the AccuVal appraisal dated as of September
      29,
      2006, and that certain addenda thereto dated as of November 20, 2006, each
      addressed to Agent.

     

    “Master
      Standby Agreement”
means
      the Master Agreement for Standby Letters of Credit dated as of the Closing
      Date
      among Borrowers, as Applicant(s), and L/C Issuer.

     

    

     

    
      
        
        

      

      
        A-22

        
          

        

      

      
        
        

      

    

    

    “Material
      Adverse Effect”
means
      a
      material adverse effect on any of (i) the operations, business, assets,
      properties, condition (financial or otherwise) or liabilities of the Credit
      Parties taken as a whole, (ii) the ability of any Credit Party to perform
      any of its obligations under any Loan Document to which it is a party,
      (iii) the legality, validity or enforceability of this Agreement or any
      other Loan Document, (iv) the rights and remedies of Agent or any Lender
      under any Loan Document, or (v) the validity, perfection or priority of any
      and all Liens in favor of Agent for the benefit of Agent and the Lenders on
      any
      of the Collateral with an aggregate fair market value in excess of
      $3,000,000.

     

    “Material
      Contract”
means,
      with respect to any Person, (i) each contract or agreement to which such Person
      or any of its Subsidiaries is a party involving aggregate annual consideration
      payable to or by such Person or such Subsidiary of $1,000,000 or more (other
      than purchase orders in the ordinary course of the business of such Person
      or
      such Subsidiary and other than contracts that by their terms may be terminated
      by such Person or Subsidiary in the ordinary course of its business upon less
      than 60 days’ notice without penalty or premium) and (ii) all other
      contracts or agreements material to the business, operations, condition
      (financial or otherwise), performance, properties or liabilities of such Person
      or any of its Subsidiaries, taken as a whole, and, in the case of any Credit
      Party, of the Credit Parties, taken as a whole.

     

    “Maximum
      Amount”
means,
      as of any date of determination, an amount equal to the Revolving Loan
      Commitment of all Lenders as of that date.

     

    “Maximum
      Overadvance Amount”
means
      the lesser of (i) $10,000,000 or (ii) the Availability Reserve in effect at
      such
      time of determination; provided,
      however,
      in
      Agent’s sole discretion, Agent may reduce the amount of the Availability Reserve
      without a correlating reduction in the Maximum Overadvance Amount.

     

    “Milacron
      Assurance”
means
      Milacron Assurance Ltd., a Bermuda company.

     

    “Milacron
      Capital”
means
      Milacron Capital Holdings B.V., a Dutch private company with limited
      liability.

     

    “Mizuho/Glencore
      Transaction”
means
      the transactions contemplated by the Mizuho/Glencore Transaction
      Documents.

     

    “Mizuho/Glencore
      Transaction Documents”
means
      the
      Note
      Purchase Agreement, dated as of March 12, 2004, by and among Milacron Inc.,
      Mizuho International plc and Glencore Finance AG, the securities to be sold
      by
      Milacron Inc. pursuant to the terms of such agreement, the securities into
      which
      or for which such securities may be converted or exchanged (including the Series
      B Preferred Stock) and/or further converted or exchanged pursuant to the terms
      thereof (including common Stock of Parent issuable upon conversion of the Series
      B Preferred Stock) and/or of such agreement, the security documents,
      registration rights agreement and other documents and instruments related
      thereto and the Subordination and Intercreditor Agreement of even date therewith
      by and among Mizuho International plc, Glencore Finance AG, Milacron Inc. and
      Credit Suisse First Boston, acting through its Cayman Islands
      Branch.

     

    “Moody’s”
means
      Moody’s Investors Service, Inc. and any successor thereto.

     

    

     

    
      
        
        

      

      
        A-23

        
          

        

      

      
        
        

      

    

    

    “Mortgaged
      Properties”
has
      the
      meaning assigned to it in Annex
      D.

     

    “Mortgage”
means
      a
      mortgage (including, without limitation, a leasehold mortgage), deed of trust
      or
      deed to secure debt, in form and substance reasonably satisfactory to Agent,
      made by a Credit Party in favor of Agent for the benefit of Agent and Lenders,
      securing the Obligations and delivered to Agent.

     

    “Multiemployer
      Plan”
means
      a
“multiemployer plan” as defined in Sections 3(37) or 4001(a)(3) of ERISA, and to
      which any Credit Party or ERISA Affiliate is making, is obligated to make or
      has
      made or been obligated to make, at any time during the preceding six calendar
      years, contributions on behalf of participants who are or were employed by
      any
      of them.

     

    “Net
      Cash Proceeds”
means,
      (i) with respect to any Disposition by any Credit Party, the amount of cash
      received (directly or indirectly) from time to time (whether as initial
      consideration or through the payment or disposition of deferred consideration)
      by or on behalf of such Person, in connection therewith after deducting
      therefrom only (A) the amount of any Indebtedness secured by any Permitted
      Lien
      on any asset (other than Indebtedness assumed by the purchaser of such asset)
      which is required to be, and is, repaid in connection with such Disposition
      (other than Indebtedness under this Agreement), (B) expenses related thereto
      incurred by such Person in connection therewith, (C) transfer taxes paid or
      payable to any taxing authorities by such Person in connection therewith, (D)
      net income taxes paid or to be paid in connection with such Disposition (after
      taking into account any tax credits or deductions and any tax sharing
      arrangements), (E) any reserves for adjustments in respect of the sale price
      of
      such assets and for future liabilities established in accordance with GAAP
      and
      (F) prior to the Discharge of Term Obligations, in the case of Senior Secured
      Priority Collateral, amounts payable to the holders of the Senior Secured Notes
      or to be held as Senior Secured Priority Collateral or otherwise applied, in
      each case in accordance with the terms of the Senior Secured Notes Indenture
      and
      the Intercreditor Agreement, provided that (1) the Borrower
      Representative shall certify to Agent that all such proceeds of Senior Secured
      Priority Collateral have been deposited into a Senior Secured Priority Account
      in accordance with Section
      5.20
      and as
      otherwise required by the Senior Secured Notes Indenture, the Intercreditor
      Agreement or the Loan Documents and (2) the Borrower Representative shall notify
      Agent in accordance with Section
      5.20
      prior to
      any withdrawal from or deposits to any such account, (ii) with respect to the
      issuance or incurrence of any Indebtedness by any Credit Party, or the sale
      or
      issuance by Parent of any shares of its Stock, the aggregate amount of cash
      received (directly or indirectly) from time to time (whether as initial
      consideration or through the payment or disposition of deferred consideration)
      by or on behalf of such Person in connection therewith, after deducting
      therefrom only (A) expenses related thereto incurred by such Person in
      connection therewith, underwriting discounts and commissions, (B) transfer
      taxes
      paid or payable by such Person in connection therewith, (C) net income taxes
      paid or to be paid in connection therewith (after taking into account any tax
      credits or deductions and any tax sharing arrangements and (D) prior to the
      Discharge of Term Obligations, amounts constituting proceeds of the Senior
      Secured Priority Collateral used to prepay the Senior Secured Notes pursuant
      to
      Section 3.07 of the Senior Secured Notes Indenture), and (iii) with respect
      to
      insurance or condemnation proceeds received by any Credit Party, the amount
      of
      cash proceeds received (directly or indirectly) from time to time by or on
      behalf of such Credit Party after deducting therefrom only (A) expenses related
      

     

    

     

    
      
        
        

      

      
        A-24

        
          

        

      

      
        
        

      

    

    

    thereto
      incurred by such Person in connection therewith, (B) transfer taxes paid or
      payable by such Person in connection therewith, (C) net income taxes paid or
      to
      be paid in connection therewith (after taking into account any tax credits
      or
      deductions and any tax sharing arrangements); in each case of clauses (i),
      (ii)
      and (iii) to the extent, but only to the extent, that the amounts so deducted
      are (x) actually paid to a Person that, except in the case of out-of-pocket
      expenses, is not an Affiliate of such Person and (y) properly attributable
      to
      such transaction or to the asset that is the subject thereof and (D) prior
      to
      the Discharge of Term Obligations, proceeds of Senior Secured Priority
      Collateral to the extent payable to the holders of the Senior Secured Notes
      or
      to be held as Senior Secured Priority Collateral or otherwise applied, in each
      case in accordance with the terms of the Senior Secured Notes Indenture and
      the
      Intercreditor Agreement, provided that (1) the Borrower Representative
      shall certify to Agent that all such proceeds of Senior Secured Priority
      Collateral have been deposited into a Senior Secured Priority Account in
      accordance with Section
      5.20
      and otherwise as required by the Senior Secured Notes Indenture, the
      Intercreditor Agreement or the Loan Documents and (2) the Borrower
      Representative shall notify Agent in accordance with Section
      5.20
      prior to
      any withdrawal from or deposits to any such account.

     

    “NOLV”
means,
      as to any particular asset, the value that is estimated to be recoverable in
      an
      orderly liquidation thereof, as determined from time to time by a qualified
      appraiser selected by Agent, net of all liquidation costs and
      expenses.

     

    “Non-Funding
      Lender”
has
      the
      meaning ascribed to it in Section
      9.9(a)(ii).

     

    “Notes”
means,
      collectively, the Revolving Notes, the Swing Line Notes and the Export-Related
      Notes.

     

    “Notice
      of Conversion/Continuation”
has
      the
      meaning ascribed to it in Section
      1.5(e).

     

    “Notice
      of Revolving Credit Advance”
has
      the
      meaning ascribed to it in Section
      1.1(a).

     

    “Notice
      of Export-Related Advance”
has
      the
      meaning ascribed to it in Section
      1.1(a).

     

    “Obligations”
means
      all present and future (i) Swap Related Reimbursement Obligations, Hedging
      Obligations and (iii) indebtedness, obligations, and liabilities of each Credit
      Party to Agent and the Lenders or any Affiliate of Agent or Lenders, whether
      or
      not the right of payment in respect of such claim is reduced to judgment,
      liquidated, unliquidated, fixed, contingent, matured, disputed, undisputed,
      legal, equitable, secured, unsecured, and whether or not such claim is
      discharged, stayed or otherwise affected by any proceeding referred to in
      Section 8.01, which may arise under, out of, or in connection with, this
      Agreement, any other Loan Document, the Letters of Credit or any other document,
      made, delivered or given in connection herewith or therewith. Without limiting
      the generality of the foregoing, the Obligations of each Credit Party under
      the
      Loan Documents include (a) the obligation to pay principal, interest (including,
      without limitation, all interest that accrues after the commencement of
      any
      insolvency proceeding of any Credit Party, whether or not a claim for
      post-filing interest is allowed in such proceeding), charges, expenses, fees,
      attorneys’ fees and disbursements, indemnities and other amounts payable by such
      Person under the Loan Documents, and (b) the obligation of such Person to
      reimburse any amount in respect of any of the foregoing that the Agent or any
      Lender (in its sole discretion) may elect to pay or advance on behalf of such
      Person.

     

    

     

    
      
        
        

      

      
        A-25

        
          

        

      

      
        
        

      

    

    

     

    “OFAC”
means
      the U.S. Department of Treasury Office of Foreign Assets Control.

     

    “OFAC
      Lists” means, collectively, the Specially Designated Nationals and Blocked
      Persons List maintained by OFAC pursuant to the Anti-Terrorism Order and/or
      any
      other list of terrorists or other restricted Persons maintained pursuant to
      any
      of the rules and regulations of OFAC or pursuant to any other applicable U.S.
      Federal Executive Orders.

     

    “Operating
      Lease Obligations”
means
      all obligations for the payment of rent for any real or personal property under
      leases or agreements to lease, other than Capital Lease
      Obligations.

     

    “Patent
      Licenses”
means
      all licenses, contracts or other agreements, whether written or oral, naming
      any
      Grantor as licensee or licensor and providing for the grant of any right to
      manufacture, use or sell any invention covered by any Patent (including, without
      limitation, all Patent Licenses set forth in Schedule II to the Security
      Agreement).

     

    “Patent
      Security Agreement”
means
      a
      Patent Security Agreement made in favor of Agent, on behalf of itself and
      Lenders, by each applicable Grantor.

     

    “Patents”
means,
      with respect to each Grantor, all of such Grantor’s domestic and foreign letters
      patent, design patents, utility patents, industrial designs, inventions, trade
      secrets, ideas, concepts, methods, techniques, processes, proprietary
      information, technology, know-how, formulae, rights of publicity and other
      general intangibles of like nature, now existing or hereafter acquired
      (including, without limitation, all domestic and foreign letters patent, design
      patents and utility patents described in Schedule II to the Security Agreement),
      all applications, registrations and recordings of ownership thereof (including,
      without limitation, applications, registrations and recordings of ownership
      in
      the United States Patent and Trademark Office, or in any similar office or
      agency of the United States or any other country or any political subdivision
      thereof), and all reissues, divisions, continuations and continuations in part
      thereof.

     

    “PBGC”
means
      the Pension Benefit Guaranty Corporation or any successor thereto.

     

    “Permitted
      Discretion”
means
      a
      determination made in good faith and in the exercise of reasonable (from the
      perspective of a secured asset-based lender) business judgment.

     

    “Permitted
      European Receivables Financing”
means
      the factoring of trade receivables in the ordinary course of business by direct
      and indirect Foreign Subsidiaries of Milacron
      Capital; provided,
      that
      the aggregate face amount with respect to such receivables shall not exceed,
      at
      any one time, in the aggregate, the equivalent of
€20,000,000.

     

    

     

    
      
        
        

      

      
        A-26

        
          

        

      

      
        
        

      

    

    

     

    “Permitted
      Foreign Indebtedness”
means,
      collectively, (i) Indebtedness of direct and indirect Foreign Subsidiaries
      of Milacron Capital arising out of Permitted European Receivables Financing
      and
      (ii) the Permitted Indian Indebtedness.

     

    “Permitted
      Indebtedness”
      means:

     

    (a)    any
      Indebtedness owing to any of Agent or Lenders under this Agreement and the
      other
      Loan Documents;

     

    (b)    any
      other
      Indebtedness existing on the Closing Date and listed on Schedule
      6.2,
      and the
      extension of maturity, refinancing or modification of the terms thereof;
provided,
      however,
      that
      (i) such extension, refinancing or modification is pursuant to terms that,
      taken
      as a whole, are not less favorable to the Credit Parties and the Lenders than
      the terms of the Indebtedness being extended, refinanced or modified or are
      otherwise reasonably satisfactory to Agent and (ii) after giving effect to
      such
      extension, refinancing or modification, the amount of such Indebtedness is
      not
      greater than the amount of Indebtedness outstanding immediately prior to such
      extension, refinancing or modification;

     

    (c)    Indebtedness
      evidenced by Capitalized Lease Obligations entered into in order to finance
      Capital Expenditures made by the Credit Parties, which Indebtedness, when
      aggregated with the principal amount of all indebtedness incurred under this
      clause
      (c)
      and
clause
      (d)
      of this
      definition, does not exceed $10,000,000 at any time outstanding;

     

    (d)    Indebtedness
      secured by a Lien permitted by clause
      (e)
      of the
      definition of “Permitted Lien”;

     

    (e)    Indebtedness
      permitted under Section
      6.5;

     

    (f)    Indebtedness
      evidenced by the Senior Secured Notes or the Senior Secured Notes Guarantees,
      and the extensions of maturity, refinancing or modification of the terms
      thereof, but only to the extent permitted by Section
      6.12;

     

    (g)    Permitted
      Foreign Indebtedness;

     

    (h)    [Intentionally
      Omitted];

     

    (i)    Indebtedness
      of the Foreign Subsidiaries under any financing, factoring or similar
      arrangements under non-U.S. law, (but not including Indebtedness of the Foreign
      Subsidiaries permitted under clause
      (o)
      of this
      definition) the aggregate outstanding principal amount not at any time exceeding
      $43,000,000 and the extension of maturity, refinancing or modification of the
      terms thereof;

     

     

    

     

    
      
        
        

      

      
        A-27

        
          

        

      

      
        
        

      

    

     

    
 

    
      (j)    the
        following intercompany Indebtedness: (i) Indebtedness of any Domestic Credit
        Party to any other Domestic Credit Party, in each case to the extent such
        Indebtedness is (A) evidenced by a promissory note with terms and
        provisions reasonably acceptable to Agent, (B) promptly pledged to Agent
        pursuant to the Pledge Agreement, and (C) subject to an Intercompany
        Subordination Agreement or such other subordination provisions acceptable
        to
        Agent; (ii) Indebtedness of any Foreign Subsidiary to any other Foreign
        Subsidiary; (iii) Indebtedness of any Domestic Subsidiary that is not a Credit
        Party to any other Domestic Subsidiary that is not a Credit Party to the
        extent
        that the aggregate principal amount of such Indebtedness outstanding at any
        time
        does not exceed $250,000; (iv) unsecured Indebtedness of any Credit Party
        owing
        to any Foreign Subsidiary resulting from loans or advances made by a Foreign
        Subsidiary to a Credit Party, to the extent such Indebtedness is subject
        to an
        Intercompany Subordination Agreement or such other subordination provisions
        acceptable to Agent; (v) unsecured Indebtedness of the Parent owing to Milacron
        Assurance in connection with the self-insurance program of the Parent and
        its
        Subsidiaries to the extent such Indebtedness (A) is evidenced by a promissory
        note with terms and provisions reasonably acceptable to Agent, (B) is subject
        to
        an Intercompany Subordination Agreement or such other subordination provisions
        acceptable to Agent, (C) will not be repaid in amounts in excess of the
        amounts necessary to pay the obligations of Milacron Assurance under the
        self-insurance program for the benefit of the Parent and the Subsidiaries
        permitted under Section 5.7
        and (D)
        to the extent repaid by the Parent to Milacron Assurance for Milacron Assurance
        to make available to a Foreign Subsidiary in respect of such self-insurance
        program, will result, prior to or concurrently with such repayment, in Foreign
        Subsidiaries remitting, transferring or otherwise repatriating funds to a
        Credit
        Party in an aggregate US dollar amount equal to the amount repaid by the
        Parent
        for such purpose; and (vi) Indebtedness of any Foreign Subsidiary owing to
        any
        Credit Party existing as of the Closing Date and listed on Schedule
        6.2
        (but not
        the increase, extension of maturity, refinancing or other modification
        thereof);

    

     

    (k)    (i)  Indebtedness
      (whether or not secured) incurred by any Credit Party under Hedging Agreements
      provided by Agent, any Lender or any Affiliate of Agent or any Lender entered
      into the ordinary course of financial management and not for speculative
      purposes; and (ii) unsecured Indebtedness incurred by any Credit Party under
      Hedging Agreements entered into the ordinary course of financial management
      and
      not for speculative purposes;

     

    (l)     Indebtedness
      arising from judgments, orders or other awards to the extent not constituting
      an
      Event of Default;

     

    (m)    Contingent
      Obligations to the extent the “primary obligations” of the “primary obligor” are
      not prohibited by this Agreement or any other Loan Document;

     

    (n)    letters
      of credit existing as of the Closing Date and listed on Schedule
      6.2;

     

    (o)    unsecured
      Indebtedness in respect of customer financing programs (including lease
      transactions) in an aggregate principal amount outstanding not at any time
      exceeding $20,000,000;

     

    (p)    additional
      unsecured Indebtedness of the Credit Parties and any of their Subsidiaries
      not
      otherwise permitted pursuant to this definition of Permitted Indebtedness,
      so
long
      as
      the aggregate principal amount of all Indebtedness permitted by this clause
      (p)
      does not exceed $5,000,000; and

     

    

     

    
      
        
        

      

      
        A-28

        
          

        

      

      
        
        

      

    

    

     

    (q)    Indebtedness
      arising out of and in connection with the terms and conditions of the sale
      of
      notes receivable permitted pursuant to Section
      6.3(a)(G).

     

    “Permitted
      Indian Indebtedness”
means
      Indebtedness of Ferromatik Milacron India Limited arising under any credit
      facility (including any letter of credit facility) under foreign law;
provided,
      that
      the aggregate principal amount of all such Indebtedness at any time outstanding
      shall not exceed the equivalent of $4,500,000 (based on the applicable exchange
      rate quoted by GE Capital in effect on the Closing Date).

     

    “Permitted
      Investments”
means
      (i) marketable direct obligations issued or unconditionally guaranteed by
      the United States Government or issued by any agency thereof and backed by
      the
      full faith and credit of the United States, in each case, maturing within six
      months from the date of acquisition thereof; (ii) commercial paper,
      maturing not more than 270 days after the date of issue rated P-1 by
      Moody’s or A-1 by Standard & Poor’s; (iii) certificates of deposit
      maturing not more than 270 days after the date of issue, issued by
      commercial banking institutions and money market or demand deposit accounts
      maintained at commercial banking institutions, each of which is a member of
      the
      Federal Reserve System and has a combined capital and surplus and undivided
      profits of not less than $500,000,000; (iv) repurchase agreements having
      maturities of not more than 90 days from the date of acquisition which are
      entered into with major money center banks included in the commercial banking
      institutions described in clause (iii) above and which are secured by
      readily marketable direct obligations of the United States Government or any
      agency thereof, (v) money market accounts maintained with mutual funds
      having assets in excess of $2,500,000,000; and (vi) tax exempt securities
      rated A or higher by Moody’s or A+ or higher by Standard &
Poor’s.

     

    “Permitted
      Liens”
      means:

     

    (a)    Liens
      securing the Obligations;

     

    (b)    Liens
      for
      taxes, assessments and governmental charges the payment of which is not required
      under Section
      5.2;

     

    (c)    Liens
      imposed by law (other than any such Lien imposed pursuant to
      Section 401(a)(29) or 412(n) of the IRC or by ERISA which is not
      attributable to the minimum funding waiver application described in Section
      6.15,
      if such
      application is approved in advance in writing by Agent and the Requisite Lenders
      as provided for therein), such as carriers’, warehousemen’s, mechanics’,
      materialmen’s and other similar Liens arising in the ordinary course of business
      and securing obligations (other than Indebtedness for borrowed money) that
      are
      not overdue by more than 30 days or are being contested in good faith and
      by appropriate proceedings promptly initiated and diligently conducted, and
      a
      reserve or other appropriate provision, if any, as shall be required by GAAP
      shall have been made therefor;

     

    (d)    Liens
      existing on the Closing Date and listed on Schedule
      6.1,
      and the
      extension of maturity, refinancing or other modification of the terms thereof,
      but not the extension
      of coverage thereof to other property or the extension, refinancing or other
      modification of the terms thereof to increase the amount of the Indebtedness
      secured thereby;

     

    

     

    
      
        
        

      

      
        A-29

        
          

        

      

      
        
        

      

    

    

     

    (e)     (i)
       purchase money Liens (including precautionary Lien filings made under the
      Code of any jurisdiction) on equipment acquired or held by any Credit Party
      or
      any of its Subsidiaries in the ordinary course of its business to secure the
      purchase price of such equipment or Indebtedness incurred solely for the purpose
      of financing the acquisition of such equipment or (ii) Liens existing on
      such equipment at the time of its acquisition; provided,
      however,
      that in
      the case of each of clauses (i) and (ii), (A) no such Lien shall extend to
      or cover any other property of any Credit Party or any of its Subsidiaries,
      and
      (B) the aggregate principal amount of Indebtedness secured by any or all such
      Liens shall not exceed at any one time outstanding $5,000,000;

     

    (f)    deposits
      and pledges of cash securing (i) obligations incurred in respect of workers’
compensation, unemployment insurance, automobile liability or other forms of
      governmental insurance or benefits, (ii) the performance of bids, tenders,
      leases, contracts (other than for the payment of money) and statutory
      obligations, (iii) obligations on surety or appeal bonds, but only to the extent
      such deposits or pledges are made or otherwise arise in the ordinary course
      of
      business and secure obligations not past due, (iv) the letters of credit
      permitted under clause
      (n)
      of the
      definition of Permitted Indebtedness, or (v) obligations to suppliers and
      service providers (including lessors in respect of operating leases) of the
      Credit Parties made in the ordinary course of business and securing obligations
      not past due, to the extent the aggregate amount of all such cash deposited
      or
      pledged at any time does not exceed $4,500,000;

     

    (g)    easements,
      zoning restrictions, rights of way, survey exceptions, leases and subleases
      and
      similar encumbrances on real property and minor irregularities in the title
      thereto that do not (x) secure obligations for the payment of money or (y)
      materially impair the value of such property or its use by any Credit Party
      or
      any of its Subsidiaries in the normal conduct of such Person’s business, and any
      other Lien described in a Title Insurance Policy with respect to any real
      property subject to a Mortgage and (ii) Liens limited to the real property
      subject to a Lease of any Credit Party affecting the interest of the landlord
      of
      any such Lease (and any underlying landlord in the case of a ground
      lease);

     

    (h)    Liens
      securing Indebtedness permitted by clause
      (c)
      of the
      definition of Permitted Indebtedness, and Liens securing Hedging Agreements
      permitted by clause (k)(i)
      of the
      definition of Permitted Indebtedness, to the extent permitted therein, to the
      extent such Hedging Agreements are with an Agent, a Lender or any Affiliates
      of
      the foregoing;

     

    (i)    Liens
      of
      landlords arising under real property Leases to the extent (x) the real property
      subject to such Liens is subject to a Landlord Waiver to the extent required
      pursuant to Section
      5.12,
      and (y)
      such Liens arise in the ordinary course of business and do not serve and do
      not
      secure any past due obligation for the payment of money;

     

    (j)    bankers’
      Liens with respect to depository account arrangements entered into in the
      ordinary course of business securing obligations not past due;

     

    

     

    
      
        
        

      

      
        A-30

        
          

        

      

      
        
        

      

    

    

    (k)    Liens
      in
      favor of any Credit Party in the assets or property of a Subsidiary of the
      Parent that is not a Credit Party;

     

    (l)    Liens
      arising from judgments, orders, or other awards not constituting an Event of
      Default;

     

    (m)    Liens
      on
      assets of any Foreign Subsidiary securing Indebtedness of any Foreign Subsidiary
      permitted by clauses (g) or (i) of the definition of Permitted
      Indebtedness;

     

    (n)    Liens
      of
      the L/C Issuer required to be granted in connection with Letters of
      Credit;

     

    (o)    Liens
      securing indebtedness permitted by clause
      (f)
      of the
      definition of Permitted Indebtedness, but only so long as the Intercreditor
      Agreement shall be in full force and effect;

     

    (p)    [Intentionally
      Omitted];

     

    (q)    to
      the
      extent not included in clause
      (c)
      above,
      solely with respect to Eligible Accounts owned by a Canadian Borrowing Base
      Guarantor, Prior Claims that are unregistered and secure amounts that are not
      yet due and payable;

     

    (r)    [Intentionally
      Omitted];

     

    (s)    other
      Liens of the Credit Parties securing obligations not exceeding $1,000,000 in
      the
      aggregate; provided
      that, to
      the extent that such Liens are consensual, such Liens do not encumber any ABL
      Priority Collateral; and

     

    (t)    Liens
      arising out of and in connection with the terms and conditions of the sale
      of
      notes receivable permitted pursuant to Section
      6.3(a)(G).

     

    “Permitted
      Overadvance”
has
      the
      meaning ascribed to it in Section
      1.1(a)(iii).

     

    “Person”
means
      any individual, sole proprietorship, partnership, joint venture, trust,
      unincorporated organization, association, corporation, limited liability
      company, institution, public benefit corporation, other entity or government
      (whether federal, state, county, city, municipal, local, foreign, or otherwise,
      including any instrumentality, division, agency, body or department
      thereof).

     

    “Pledge
      Agreement”
means
      the Pledge Agreement of even date herewith executed by the Borrower Parties
      in
      favor of Agent, on behalf of itself and Lenders, pledging all Stock of its
      Subsidiaries, if any, and all intercompany notes owing to or held by
      it.

     

    “Post-Closing
      Letter”
means
      that certain letter agreement, dated as of the date hereof, between Agent and
      Borrower Representative, with respect to post-closing obligations and
      covenants.

     

    

     

    
      
        
        

      

      
        A-31

        
          

        

      

      
        
        

      

    

    

    “Primary
      Borrowing Availability”
means
      as of any date of determination, the lesser of (i) the Maximum Amount and (ii)
      the sum of the Primary Borrowing Base plus the Maximum Overadvance Amount,
      in
      each case, less
      (a) the
      sum of the Revolving Loan plus Export-Related Loan then outstanding and (b)
      without duplication, any Reserves established by Agent at such time including,
      without limitation, any Export-Related Loan Reserve and the Availability
      Reserve.

     

    “Primary
      Borrowing Base”
means,
      as of any date of determination by Agent, from time to time, an amount equal
      to
      the sum at such time of:

     

    (a)    85%
      of
      the Book Value of Borrower Parties’ Eligible Accounts;

     

    (b)    the
      lesser of (a) 60% of Borrower Parties’ Eligible Inventory (other than
      Machinery-in-Process) valued at the lower of cost (determined on a first-in,
      first-out basis) or market or (b) 85% of the NOLV of Borrower Parties’ Eligible
      Inventory (other than Machinery-in-Process); and

     

    (c)    the
      lesser of (a) 60% of the Eligible Machinery-in-Process valued at the lower
      of
      cost (determined on a first-in, first-out basis) or market or (b) 85% of the
      greatest of (1) the appraised build-out value for such Eligible
      Machinery-in-Process, (2) the appraised scrap value for such Eligible
      Machinery-in-Process or (3) another value reasonably acceptable to Agent (in
      each scenario, the value of such Eligible Machinery-in-Process to be supported
      by an appraisal in form and substance reasonably satisfactory to
      Agent);

     

    in
      each
      case, without duplication, less any Reserves established by Agent at such time
      including, without limitation, any Export-Related Loan Reserve, the Availability
      Reserve and any Reserve for Prior Claims.

     

    “Prior
      Credit Agreement”
means
      that certain Financing Agreement, dated June 10, 2004, among Parent,
      certain subsidiaries of Parent as borrowers and guarantors, the Lenders party
      thereto, JPMorgan Chase Bank, Wells Fargo Foothill LLC and J.P. Morgan
      Business Credit Corp. (as amended, restated, supplemented or otherwise modified
      from time to time).

     

    “Prior
      Claims”
means
      all liens created by applicable law (in contrast with liens voluntarily granted)
      which rank or are capable of ranking prior or pari
      passu
      with
      Agent’s security interests (or similar liens under applicable laws), against all
      or part of the assets of a Canadian Borrowing Base Guarantor, including for
      amounts owing for vacation pay, employee source deductions and contributions,
      goods and services taxes, sales taxes, harmonized sales taxes, Quebec corporate
      income taxes, municipal taxes, workers’ compensation, pension plan or fund
      obligations and overdue rents.

     

    “Prior
      Lenders”
means
      the “Lenders” as defined in the Prior Credit Agreement.

     

    “Prior
      Lender Obligations”
means
      Indebtedness of the Credit Parties incurred under the Prior Credit
      Agreement.

     

    

     

    
      
        
        

      

      
        A-32

        
          

        

      

      
        
        

      

    

    

    “Projections”
means
      Borrowers’ and their respective Subsidiaries forecasted consolidated and
      consolidating: (a) balance sheets; (b) profit and loss statements; (c) cash
      flow
      statements; and (d) capitalization statements, all prepared on a consolidated
      and consolidating basis, and otherwise consistent with the historical Financial
      Statements of the Borrowers and their respective Subsidiaries, together with
      appropriate supporting details and a statement of underlying
      assumptions.

     

    “Pro
      Rata Share”
means
      with respect to all matters relating to any Lender, (a) with respect to the
      Revolving Loan and the Export-Related Credit Participation, the percentage
      obtained by dividing (i) the Revolving Loan Commitment of that Lender by (ii)
      the aggregate Revolving Loan Commitments of all Lenders, and (b) with respect
      to
      all Loans on and after the Commitment Termination Date, the percentage obtained
      by dividing (i) the aggregate outstanding principal balance of the Loans held
      by
      that Lender, by (ii) the outstanding principal balance of the Loans held by
      all
      Lenders.

     

    “Quebec
      Security Documents”
will
      consist in (i) a Deed of Movable Hypothec by certain Canadian
      Borrowing Base Guarantors
      in
      favour of Agent, as “fondé
      de pouvoir”
      under
      Article 2692 of the Civil
      Code of Quebec,
      to be
      executed before a notary of the Province of Quebec, (ii) a debenture issued
      by
      certain Canadian
      Borrowing Base Guarantors
      pursuant
      to such Deed of Movable Hypothec, and (iii) a debenture pledge to be granted
      by
      certain Canadian
      Borrowing Base Guarantors
      in
      respect of any debenture issued under such Deed of Movable
      Hypothecs.

     

    “Records”
has
      the
      meaning ascribed to it in the Code.

     

    “Refinancing”
means
      the repayment in full by Borrowers of the Prior Lender Obligations on the
      Closing Date.

     

    “Refunded
      Swing Line Loan”
has
      the
      meaning ascribed to it in Section
      1.1(c)(iii).

     

    “Regulation
      T”,
      “Regulation
      U”
and
      “Regulation
      X”
mean,
      respectively, Regulations T, U and X of the Federal Reserve Board or any
      successor, as the same may be amended or supplemented from time to
      time.

     

    “Related
      Transactions”
means
      the initial borrowing under the Revolving Loan on the Closing Date, the
      Refinancing, the payment of all fees, costs and expenses associated with all
      of
      the foregoing and the execution and delivery of all of the Related Transactions
      Documents.

     

    “Related
      Transactions Documents”
means
      the Loan Documents and all other agreements or instruments executed in
      connection with the Related Transactions.

     

    “Release”
means
      any release, threatened release, spill, emission, leaking, pumping, pouring,
      emitting, emptying, escape, injection, deposit, disposal, discharge, dispersal,
      dumping, leaching or migration of Hazardous Material in the indoor or outdoor
      environment, including the movement of Hazardous Material through or in the
      air,
      soil, surface water or ground water.

     

    

     

    
      
        
        

      

      
        A-33

        
          

        

      

      
        
        

      

    

    

    “Remedial
      Action”
means
      all actions taken pursuant to Environmental Laws to (i) clean up, remove,
      remediate, contain, treat, monitor, assess, evaluate or in any other way address
      Hazardous Materials in the indoor or outdoor environment; (ii) prevent or
      minimize a Release or threatened Release of Hazardous Materials so they do
      not
      migrate or endanger or threaten to endanger public health or welfare or the
      indoor or outdoor environment; (iii) perform pre-remedial studies and
      investigations and post-remedial operation and maintenance activities; or
      (iv) perform any other actions authorized by 42 U.S.C.
§ 9601.

     

    “Reportable
      Event”
means
      an event described in Section 4043 of ERISA (other than an event for which
      notice to the PBGC is waived under the regulations promulgated under such
      Section).

     

    “Requisite
      Lenders”
means
      Lenders having (a) more than 50.1% of the Commitments of all Lenders, or (b)
      if
      the Commitments have been terminated, more than 50.1% of the aggregate
      outstanding amount of all Loans.

     

    “Requisite
      Revolving Lenders”
means
      Lenders having (a) more than 50.1% of the Revolving Loan Commitments of all
      Lenders, or (b) if the Revolving Loan Commitments have been terminated, more
      than 50.1% of the aggregate outstanding amount of the Revolving Loan and the
      Export-Related Loan (with the Swing Line Loan and, for purposes hereof, the
      Export-Related Loan being attributable to the Lender ultimately required to
      participate in such Loan).

     

    “Reserves”
means,
      without duplication, as of any date of determination (i) the Availability
      Reserve, (ii) the Export-Related Loan Reserve, (iii) any Hedging Reserve, and
      (iv) other reserves against Eligible Accounts, Eligible Export-Related Account,
      Eligible Inventory and Eligible Machinery-in-Process and other amounts as Agent
      may from time to time establish and revise in its Permitted Discretion reducing
      the amount of Loans and Letters of Credit which would otherwise be available
      to
      the Borrowers under the lending formula(s) provided for herein: (a) to reflect
      events, conditions, contingencies or risks which, as determined by Agent in
      its
      Permitted Discretion, adversely affect, or have a reasonable likelihood of
      adversely affecting, either (1) the Collateral or any other property which
      is
      security for the Obligations or its value, (2) the assets or business of any
      Credit Party or (3) the security interests and other rights of Agent and the
      Lenders in the Collateral (including the enforceability, perfection and priority
      (including, without limitation, in respect of any Liens, whether or not
      permitted under the Loan Documents, which may have priority over the Liens
      securing the Obligations) thereof), (b) to reflect Agent’s reasonable belief
      that any collateral report or financial information furnished by or on behalf
      of
      any Borrower to Agent is incomplete, inaccurate or misleading in any material
      respect, (c) if the dilution with respect to the accounts for any period has
      increased or may be reasonably anticipated to increase above historical levels,
      (d) in respect of unpaid medical claims associated with the Borrowers’
self-insurance program in excess of historical amounts, or (e) reserves to
      cover
      any Prior Claims which may have priority over the Liens securing the
      Obligations. To the extent Agent may establish new criteria or revise existing
      criteria for Eligible Accounts or Eligible Inventory so as to address any
      circumstances, condition, event or contingency in a manner reasonably
      satisfactory to Agent, Agent shall not establish a Reserve for the same purpose.
      The amount of any Reserve established by Agent shall have a reasonable
      relationship to the event, condition or other matter which is the basis for such
      reserve as 

     

    

     

    
      
        
        

      

      
        A-34

        
          

        

      

      
        
        

      

    

    

    determined
      by Agent in its Permitted Discretion and shall promptly be reduced or eliminated
      to the extent such event, condition or other matter no longer reasonably
      justifies such reserve.

     

    “Revolving
      Credit Advance”
has
      the
      meaning ascribed to it in Section
      1.1(a)(i).

     

    “Revolving
      Lenders”
means,
      as of any date of determination, Lenders having a Revolving Loan
      Commitment.

     

    “Revolving
      Loan”
means,
      at any time, the sum of (i) the aggregate amount of Revolving Credit Advances
      (including any Swing Line Loans and any Permitted Overadvances) outstanding
      to
      Borrowers plus
      (ii) the
      aggregate Letter of Credit Obligations incurred on behalf of Borrowers. Unless
      the context otherwise requires, references to the outstanding principal balance
      of the Revolving Loan shall include the outstanding balance of Letter of Credit
      Obligations.

     

    “Revolving
      Loan Commitment”
means
      (a) as to any Lender, the aggregate commitment of such Lender to make Revolving
      Credit Advances, incur Letter of Credit Obligations, make Permitted Overadvances
      or purchase Export-Related Credit Participations as set forth on Annex J
      to the
      Agreement or in the most recent Assignment Agreement executed by such Lender
      and
      (b) as to all Lenders, the aggregate commitment of all Lenders to make Revolving
      Credit Advances, incur Letter of Credit Obligations, make Permitted Overadvances
      or purchase Export-Related Credit Participations, which aggregate commitment
      shall be One Hundred Five Million Dollars ($105,000,000) on the Closing Date,
      as
      such amount may be adjusted, if at all, from time to time in accordance with
      the
      Agreement.

     

    “Revolving
      Note”
has
      the
      meaning ascribed to it in Section 1.1(a)(ii).

     

    “Security
      Agreement”
means
      the Security Agreement of even date herewith entered into by and among Agent,
      on
      behalf of itself and Lenders, and each Credit Party that is a signatory
      thereto.

     

    “SEC”
means
      the Securities and Exchange Commission or any other similar or successor agency
      of the Federal government administering the Securities Act.

     

    “Securities
      Act”
means
      the Securities Act of 1933, as amended, or any similar Federal statute, and
      the
      rules and regulations of the SEC thereunder, all as the same shall be in effect
      from time to time.

     

    “Senior
      Secured Exchange Notes”
means
      the 111⁄2% senior secured notes of the Parent due May 15, 2011 issued in an
      exchange offer pursuant to the Senior Secured Notes Indenture.

     

    “Senior
      Secured Notes”
means
      the 111⁄2% secured notes of the Parent due 2011 in an aggregate principal amount
      of $225,000,000 issued pursuant to the Senior Secured Notes Indenture and the
      Senior Secured Exchange Notes.

     

    

     

    
      
        
        

      

      
        A-35

        
          

        

      

      
        
        

      

    

    

    “Senior
      Secured Notes Collateral Agent”
means
      U.S. Bank National Association, in its capacity as collateral agent under the
      Senior Secured Notes Security Documents, together with its successors in such
      capacity.

     

    “Senior
      Secured Notes Documents”
means
      the Senior Secured Notes Indenture, the Senior Secured Notes, the Senior Secured
      Notes Guarantees, the Senior Secured Notes Security Documents and all other
      agreements, instruments and other documents pursuant to which the Senior Secured
      Notes have been or will be issued or otherwise setting forth the terms of the
      Senior Secured Notes, in each case as such agreement, instrument or other
      document may be amended, supplemented or otherwise modified from time to time
      in
      accordance with the terms thereof, but to the extent permitted under the terms
      of the Loan Documents.

     

    “Senior
      Secured Notes Guarantees”
means
      the guarantee by each guarantor of Parent’s obligations under the Senior Secured
      Notes Indenture and the Senior Secured Notes, executed pursuant to the
      provisions of the Senior Secured Notes Indenture.

     

    “Senior
      Secured Notes Indenture”
means
      the Indenture dated as of May 26, 2004 by and among U.S. Bank National
      Association, as trustee, Milacron Escrow, as issuer, to be merged with and
      into
      the Parent, and the guarantors party thereto, as may be amended, supplemented
      or
      otherwise modified from time to time in accordance with the terms thereof,
      but
      only to the extent permitted under the terms of the Loan Documents.

     

    “Senior
      Secured Notes Security Documents”
means
      all security agreements, pledge agreements, collateral assignments, mortgages,
      collateral agency agreements, control agreements, deeds of trust or other grants
      or transfers for security executed and delivered by Milacron Escrow, any
      guarantor of the Senior Secured Notes or any Subsidiary of Milacron Escrow
      creating (or purporting to create) a Lien upon “Collateral” (as such term is
      defined in the Senior Secured Notes Indenture) in favor of the Senior Secured
      Notes Collateral Agent or Agent, as applicable, in each case, as amended,
      modified, renewed, restated or replaced, in whole or in part, from time to
      time,
      in accordance with its terms.

     

    “Senior
      Secured Priority Account”
means
      each deposit account of any Credit Party to which solely proceeds of Senior
      Secured Priority Collateral are deposited and which are segregated and
      identified in writing to Agent in accordance with Section
      5.20.

     

    “Senior
      Secured Priority Collateral”
means
      the Term Priority Collateral as such term is defined in the Intercreditor
      Agreement.

     

    “Series
      B Preferred Stock”
means
      the 6% Series B Convertible Preferred Stock of Parent.

     

    “Series
      B Certificate of Designation”
means
      that certain Certificate of Designation of Voting Powers, Designation,
      Preferences and Relative, Participating, Optional and Other Special Rights
      and
      Qualifications, Limitations and Restrictions of 6.0% Series B Convertible
      Preferred Stock of Milacron Inc., as in effect on the Closing Date.

     

    

     

    
      
        
        

      

      
        A-36

        
          

        

      

      
        
        

      

    

    

    “Shareholder
      Rights Plan”
means
      the Rights Agreement, dated as of February 5, 1999, between Parent and Mellon
      Investor Services (formerly known as ChaseMellon Shareholder Services, L.L.C.),
      as amended.

     

    “Software”
means
      all “software” as such term is defined in the Code, now owned or hereafter
      acquired by any Credit Party, other than software embedded in any category
      of
      Goods, including all computer programs and all supporting information provided
      in connection with a transaction related to any program.

     

    “Solvent”
means,
      with respect to any Person on a particular date, that on such date (a)
the
      sum
      of the assets, at a fair market valuation, of such Person would be expected
      to
      exceed its debts, (b) such Person has not incurred or intended to, nor does
      it
      believe that it will, incur debts beyond its ability to pay such debts as such
      debts mature; and (c) such
      person has sufficient capital with which to conduct its business. For purposes
      of this definition of “Solvent”, “debt” means any liability on a claim, and
“claim” means (i) right to payment whether or not such a right is reduced
      to judgment, liquidated, unliquidated, fixed, contingent, matured, unmatured,
      disputed, undisputed, legal, equitable, secured or unsecured; or (ii) right
      to an equitable remedy for breach of performance if such breach gives rise
      to a
      payment, whether or not such right to an equitable remedy is reduced to
      judgment, fixed, contingent, matured, unmatured, disputed, undisputed, secured
      or unsecured.

     

    “Standard
      & Poor’s”
means
      Standard & Poor’s Ratings Services, a division of The McGraw-Hill
      Companies, Inc. and any successor thereto.

     

    “Stock”
means
      all shares, options, warrants, general or limited partnership interests,
      membership interests or other equivalents (regardless of how designated) of
      or
      in a corporation, partnership, limited liability company or equivalent entity
      whether voting or nonvoting, including common stock, preferred stock or any
      other “equity security” (as such term is defined in Rule 3a11-1 of the General
      Rules and Regulations promulgated by the Securities and Exchange Commission
      under the Securities Exchange Act of 1934).

     

    “Stockholder”
means,
      with respect to any Person, each holder of Stock of such Person.

     

    “Subsidiary”
means,
      with respect to any Person, (a) any corporation of which an aggregate of more
      than 50% of the outstanding Stock having ordinary voting power to elect a
      majority of the Board of Directors of such corporation (irrespective of whether,
      at the time, Stock of any other class or classes of such corporation shall
      have
      or might have voting power by reason of the happening of any contingency) is
      at
      the time, directly or indirectly, owned legally or beneficially by such Person
      or one or more Subsidiaries of such Person, or with respect to which any such
      Person has the right to vote or designate the vote of 50% or more of such Stock
      whether by proxy, agreement, operation of law or otherwise, and (b) any
      partnership or limited liability company in which such Person and/or one or
      more
      Subsidiaries of such Person shall have an interest (whether in the form of
      voting or participation in profits or capital contribution) of more than 50%.
      Unless the context otherwise requires, each reference to a Subsidiary shall
      be a
      reference to a Subsidiary of a Borrower.

     

    

     

    
      
        
        

      

      
        A-37

        
          

        

      

      
        
        

      

    

    

    “Subsidiary
      Guarantors”
means
      Milacron International Marketing Company, and each other Subsidiary of Parent,
      if any, that executes a guaranty or other similar agreement in favor of Agent,
      for itself and the ratable benefit of Lenders, in connection with the
      transactions contemplated by the Agreement and the other Loan
      Documents.

     

    “Subsidiary
      Guaranty”
means
      the Subsidiary Guaranty of even date herewith executed by the Subsidiary
      Guarantors in favor of Agent, on behalf of itself and Lenders.

     

    “Supporting
      Obligations”
means
      all “supporting obligations” as such term is defined in the Code, including
      letters of credit and guaranties issued in support of Accounts, Chattel Paper,
      Documents, General Intangibles, Instruments, or Investment
      Property.

     

    “Swap
      Related L/C”
means
      a
      letter of credit or other credit enhancement provided by GE Capital to the
      extent supporting the payment obligations by Borrowers under an interest rate
      protection or hedging agreement or transaction (including, but not limited
      to,
      interest rate swaps, caps, collars, floors and similar transactions) designed
      to
      protect or manage exposure to the fluctuations in the interest rates applicable
      to any of the Loans, and which agreement or transaction Borrowers entered into
      as the result of a specific referral pursuant to which GE Capital, GE Corporate
      Financial Services, Inc. or any other Affiliate of GE Capital had arranged
      for
      Borrowers to enter into such agreement or transaction. The term includes a
      Swap
      Related L/C as it may be increased from time to time fully to support Borrowers’
payment obligations under any and all such interest rate protection or hedging
      agreements or transactions.

     

    “Swap
      Related Reimbursement Obligation”
      has
      the
      meaning ascribed to it in Section
      1.2A.

     

    “Swing
      Line Advance”
has
      the
      meaning ascribed to it in Section
      1.1(c)(i).

     

    “Swing
      Line Availability”
has
      the
      meaning ascribed to it in Section
      1.1(c)(i).

     

    “Swing
      Line Commitment”
means,
      as to the Swing Line Lender, the commitment of the Swing Line Lender to make
      Swing Line Advances as set forth on Annex J
      to the
      Agreement, which commitment constitutes a subfacility of the Revolving Loan
      Commitment of the Swing Line Lender.

     

    “Swing
      Line Lender”
means
      GE Capital.

     

    “Swing
      Line Loan”
means,
      as the context may require, at any time, the aggregate amount of Swing Line
      Advances outstanding to any Borrower or to all Borrowers.

     

    “Swing
      Line Note”
has
      the
      meaning ascribed to it in Section
      1.1(c)(ii).

     

    “Taxes”
means
      taxes, levies, imposts, deductions, Charges or withholdings, and all liabilities
      with respect thereto, excluding net income taxes and franchise and doing
      business taxes (imposed in lieu of net income taxes) imposed on the Agent or
      any
      Lender as a result of a present or former connection between the Agent or such
      Lender and the jurisdiction of the Governmental Authority imposing such tax
      or
      any political subdivision or taxing authority thereof
      or therein (other than any such connection arising solely from the Agent's
      or
      such Lender's having executed, delivered or performed its obligations or
      received a payment under, or enforced, this Agreement or any other Loan
      Document).

     

    

     

    
      
        
        

      

      
        A-38

        
          

        

      

      
        
        

      

    

    

     

    “Termination
      Date”
means
      the date on which (a) the Loans have been repaid in full in cash, (b) all other
      non-contingent Obligations under the Agreement and the other Loan Documents
      have
      been completely discharged, (c) all Letter of Credit Obligations have been
      cash
      collateralized, canceled or backed by standby letters of credit in accordance
      with Annex
      B,
      and (d)
      none of Borrowers shall have any further right to borrow any monies under the
      Agreement.

     

    “Termination
      Event”
means
      (i) a Reportable Event with respect to any Employee Plan, (ii) any event that
      causes any Credit Party or any of its ERISA Affiliates to incur liability under
      Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
      4212 of ERISA or Section 4971 or 4975 of the IRC, (iii) the filing of a
      notice of intent to terminate an Employee Plan or the treatment of an Employee
      Plan amendment as a termination under Section 4041 of ERISA, (iv) the
      institution of proceedings by the PBGC to terminate an Employee Plan, or
      (v) any other event or condition which might constitute grounds under
      Section 4042 of ERISA for the termination of, or the appointment of a
      trustee to administer, any Employee Plan.

     

    “Title
      Insurance Policy”
means
      a
      mortgagee’s loan policy, in form and substance satisfactory to Agent, together
      with all endorsements made from time to time thereto, issued by or on behalf
      of
      First American Title Insurance Company or such other title company reasonably
      acceptable to Agent, insuring the Lien created by a Mortgage in an amount and
      on
      terms reasonably satisfactory to Agent, delivered to Agent.

     

    “Trademark
      Security Agreement”
means
      a
      Trademark Security Agreement made in favor of Agent, on behalf of itself and
      Lenders, by each applicable Grantor.

     

    “Trademark
      Licenses”
means
      all licenses, contracts or other agreements, whether written or oral, naming
      any
      Grantor as licensor or licensee and providing for the grant of any right
      concerning any Trademark, together with any goodwill connected with and
      symbolized by any such trademark licenses, contracts or agreements and the
      right
      to prepare for sale or lease and sell or lease any and all Inventory now or
      hereafter owned by any Grantor and now or hereafter covered by such licenses
      (including, without limitation, all Trademark Licenses described in Schedule
      II
      to the Security Agreement).

     

    “Trademarks”
means,
      with respect to each Grantor, all of such Grantor’s domestic and foreign
      trademarks, service marks, collective marks, certification marks, trade names,
      business names, d/b/a’s, Internet domain names, trade styles, designs, logos and
      other source identifiers and all general intangibles of like nature, now or
      hereafter owned, adopted, acquired or used by any Grantor (including, without
      limitation, all domestic and foreign trademarks, service marks, collective
      marks, certification marks, trade names, business names, d/b/a’s and Internet
      domain names described in Schedule II to the Security Agreement), all
      applications, registrations and recordings thereof (including, without
      limitation, applications, registrations and recordings of ownership in the
      United States Patent and Trademark Office or in any similar office or agency
      of
      the United States, any state thereof or any other country or any political
subdivision
      thereof), and all extensions and renewals thereof, together with all goodwill
      of
      the business symbolized by and associated with such marks and all customer
      lists, formulae and other Records of any Grantor relating to the distribution
      of
      products and services in connection with which any of such marks are
      used.

     

    

     

    
      
        
        

      

      
        A-39

        
          

        

      

      
        
        

      

    

    

     

    “WARN”
has
      the
      meaning specified therefor in Section 6.26.

     

    Rules
      of
      construction with respect to accounting terms used in the Agreement or the
      other
      Loan Documents shall be as set forth in Annex
      G.
      All
      other undefined terms contained in any of the Loan Documents shall, unless
      the
      context indicates otherwise, have the meanings provided for by the Code to
      the
      extent the same are used or defined therein; in the event that any term is
      defined differently in different Articles or Divisions of the Code, the
      definition contained in Article or Division 9 shall control. Unless otherwise
      specified, references in the Agreement or any of the Appendices to a Section,
      subsection or clause refer to such Section, subsection or clause as contained
      in
      the Agreement. The words “herein,” “hereof” and “hereunder” and other words of
      similar import refer to the Agreement as a whole, including all Annexes,
      Exhibits and Schedules, as the same may from time to time be amended, restated,
      modified or supplemented, and not to any particular section, subsection or
      clause contained in the Agreement or any such Annex, Exhibit or
      Schedule.

     

    Wherever
      from the context it appears appropriate, each term stated in either the singular
      or plural shall include the singular and the plural, and pronouns stated in
      the
      masculine, feminine or neuter gender shall include the masculine, feminine
      and
      neuter genders. The words “including”, “includes” and “include” shall be deemed
      to be followed by the words “without limitation”; the word “or” is not
      exclusive; references to Persons include their respective successors and assigns
      (to the extent and only to the extent permitted by the Loan Documents) or,
      in
      the case of governmental Persons, Persons succeeding to the relevant functions
      of such Persons; and all references to statutes and related regulations shall
      include any amendments of the same and any successor statutes and regulations.
      Whenever any provision in any Loan Document refers to the knowledge (or an
      analogous phrase) of any Credit Party, such words are intended to signify that
      such Credit Party has actual knowledge or awareness of a particular fact or
      circumstance or that such Credit Party, if it had exercised reasonable
      diligence, would have known or been aware of such fact or
      circumstance.

     

                    With
      respect to
real
      or
      tangible personal property located in the Province of Quebec, (a) the terms
      “real property”, “personal property” and “real and personal property” and words
      of similar import shall be deemed to also refer to “immovable property”,
“movable property” and “immovable and movable property”. The terms “tangible”
and “intangible” and words of similar import shall be deemed to also refer to
“corporeal” and “incorporeal”.

     

    

     

    
      
        
        

      

      
        A-40

        
          

        

      

      
        
        

      

    

    

    ANNEX
      B (Section
      1.2)

    to

    CREDIT
      AGREEMENT

     

    LETTERS
      OF CREDIT

    

    

    (a)    Issuance.
      Subject
      to the terms and conditions of the Agreement, Agent and Revolving Lenders agree
      to incur, from time to time prior to the Commitment Termination Date, upon
      the
      request of Borrower Representative on behalf of the applicable Borrower and
      for
      such Borrower’s account, Letter of Credit Obligations by causing Letters of
      Credit to be issued by GE Capital or a Subsidiary thereof or a bank or
      other legally authorized Person (each, an “L/C
      Issuer”)
      on
      terms acceptable to Agent and Borrowers for such Borrower’s account and
      guaranteed by Agent; provided,
      that if
      the L/C Issuer is a Revolving Lender, then such Letters of Credit shall not
      be
      guaranteed by Agent but rather each Revolving Lender shall, subject to the
      terms
      and conditions hereinafter set forth, purchase (or be deemed to have purchased)
      risk participations in all such Letters of Credit issued with the written
      consent of Agent, as more fully described in paragraph (b)(ii) below. The
      aggregate amount of all such Letter of Credit Obligations shall not at any
      time
      exceed the least of (i) Twenty Five Million Dollars ($25,000,000) (the
“L/C
      Sublimit”),
      (ii) the Maximum Amount less the aggregate outstanding principal balance of
      the Revolving Loans and Export-Related Advances, and (iii) the Primary
      Borrowing Availability. No such Letter of Credit shall have an expiry date
      that
      is more than one year following the date of issuance thereof, unless otherwise
      determined by Agent, in its sole discretion (including with respect to customary
      evergreen provisions); provided
      that any
      Letter of Credit with a one-year term may provide for renewal thereof for an
      additional one-year period (which shall in no event extend beyond the Commitment
      Termination Date); provided, further, L/C Issuer may, and at the
      request of the Requisite Lenders shall, elect not to permit such renewal by
      giving 30 days' prior written notice to Borrower Representative and the
      beneficiary of such Letter of Credit of its intent not to renew such Letter
      of
      Credit. Neither Agent nor Revolving Lenders shall be under any obligation to
      incur Letter of Credit Obligations in respect of, or purchase risk
      participations in, any Letter of Credit having an expiry date that is later
      than
      the Commitment Termination Date.

     

    (b) (i)    Advances
      Automatic; Participations.
      In the
      event that Agent or any Revolving Lender shall make any payment on or pursuant
      to any Letter of Credit Obligation, such payment shall then be deemed
      automatically to constitute a Revolving Credit Advance to the applicable
      Borrower under Section
      1.1(a)
      of the
      Agreement regardless of whether a Default or Event of Default has occurred
      and
      is continuing and notwithstanding any Borrower’s failure to satisfy the
      conditions precedent set forth in Section
      2,
      and
      each Revolving Lender shall be obligated to pay its Pro Rata Share thereof
      in
      accordance with the Agreement. The failure of any Revolving Lender to make
      available to Agent for Agent’s own account its Pro Rata Share of any such
      Revolving Credit Advance or payment by Agent under or in respect of a Letter
      of
      Credit shall not relieve any other Revolving Lender of its obligation hereunder
      to make available to Agent its Pro Rata Share thereof, but no Revolving Lender
      shall be responsible for the failure of any
      other
      Revolving Lender to make available such other Revolving Lender’s Pro Rata Share
      of any such payment.
       

    

     

     

    
      
        
        

      

      
        B-1

        
          

        

      

      
        
        

      

    

    

    (ii)    If
      it
      shall be illegal or unlawful for any Borrower to incur Revolving Credit Advances
      as contemplated by paragraph (b)(i) above because of an Event of Default
      described in Section
      8.1(i) or (j)
      or
      otherwise or if it shall be illegal or unlawful for any Revolving Lender to
      be
      deemed to have assumed a ratable share of the reimbursement obligations owed
      to
      an L/C Issuer, or if the L/C Issuer is a Revolving Lender, then (A) immediately
      and without further action whatsoever, each Revolving Lender shall be deemed
      to
      have irrevocably and unconditionally purchased from Agent (or such L/C Issuer,
      as the case may be) an undivided interest and participation equal to such
      Revolving Lender’s Pro Rata Share (based on the Revolving Loan Commitments) of
      the Letter of Credit Obligations in respect of all Letters of Credit then
      outstanding and (B) thereafter, immediately upon issuance of any Letter of
      Credit, each Revolving Lender shall be deemed to have irrevocably and
      unconditionally purchased from Agent (or such L/C Issuer, as the case may be)
      an
      undivided interest and participation in such Revolving Lender’s Pro Rata Share
      (based on the Revolving Loan Commitments) of the Letter of Credit Obligations
      with respect to such Letter of Credit on the date of such issuance. Each
      Revolving Lender shall fund its participation in all payments or disbursements
      made under the Letters of Credit in the same manner as provided in the Agreement
      with respect to Revolving Credit Advances.

     

    (c)    Cash
      Collateral.

     

    (i)    If
      Borrowers are required to provide cash collateral for any Letter of Credit
      Obligations pursuant to the Agreement, including Section
      8.2
      of the
      Agreement, prior to the Commitment Termination Date, each Borrower will pay,
      promptly upon written notice of demand, to Agent for the ratable benefit of
      itself and Revolving Lenders cash or cash equivalents acceptable to Agent
      (“Cash
      Equivalents”)
      in an
      amount equal to 105% of the maximum amount then available to be drawn under
      each
      applicable Letter of Credit outstanding for the benefit of such Borrower. Such
      funds or Cash Equivalents shall be held by Agent in a cash collateral account
      (the “Cash
      Collateral Account”)
      maintained at a bank or financial institution reasonably acceptable to Agent.
      The Cash Collateral Account shall be in the name of the applicable Borrower
      and
      shall be pledged to, and subject to the control of, Agent, for the benefit
      of
      Agent and Lenders, in a manner satisfactory to Agent. Each Borrower hereby
      pledges and grants to Agent, on behalf of itself and Lenders, a security
      interest in all such funds and Cash Equivalents held in the Cash Collateral
      Account from time to time and all proceeds thereof, as security for the payment
      of all amounts due in respect of the Letter of Credit Obligations and other
      Obligations, whether or not then due. The Agreement, including this Annex
      B,
      shall
      constitute a security agreement under applicable law. If Borrowers are required
      to provide an amount of cash collateral hereunder or as a result of the
      occurrence of an Event of Default, such amount shall be returned to Borrowers
      within three (3) Business Days after all Events of Default have been cured
      or
      waived.

     

    (ii)    If
      any
      Letter of Credit Obligations, whether or not then due and payable, shall for
      any
      reason be outstanding on the Commitment Termination Date, Borrowers shall either
      (A) provide cash collateral therefor in the manner described above, or (B)
      cause
      all such
      Letters of Credit and guaranties thereof, if any, to be canceled and returned,
      or (C) deliver a stand-by letter (or letters) of credit in guaranty of such
      Letter of Credit Obligations, which stand-by letter (or letters) of credit
      shall
      be of like tenor and duration (plus thirty (30) additional days) as, and in
      an
      amount equal to 105% of, the aggregate maximum amount then available to be
      drawn
      under, the Letters of Credit to which such outstanding Letter of Credit
      Obligations relate and shall be issued by a Person, and shall be subject to
      such
      terms and conditions, as are be reasonably satisfactory to Agent in its sole
      discretion.

     

    

     

    
      
        
        

      

      
        B-2

        
          

        

      

      
        
        

      

    

    
       

    

    (iii)    From
      time
      to time after funds are deposited in the Cash Collateral Account by any
      Borrower, whether before or after the Commitment Termination Date, Agent may
      apply such funds or Cash Equivalents then held in the Cash Collateral Account
      to
      the payment of any amounts, and in such order as Agent may elect, as shall
      be or
      shall become due and payable by such Borrower to Agent and Lenders with respect
      to such Letter of Credit Obligations of such Borrower and, upon the satisfaction
      in full of all Letter of Credit Obligations of such Borrower, if the maturity
      of
      the Loans has been accelerated or if an Event of Default has occurred and is
      continuing, to any other Obligations of any Borrower then due and
      payable.

     

    (iv)    No
      Borrower nor any Person claiming on behalf of or through any Borrower shall
      have
      any right to withdraw any of the funds or Cash Equivalents held in the Cash
      Collateral Account, except that upon the termination of all Letter of Credit
      Obligations and the payment of all amounts payable by Borrowers to Agent and
      Lenders in respect thereof, any funds remaining in the Cash Collateral Account
      shall (A) if the maturity of the Loans has been accelerated or if an Event
      of
      Default has occurred and is continuing, be applied to other Obligations then
      due
      and owing and upon payment in full of such Obligations, any remaining amount
      shall be paid to Borrowers or as otherwise required by law or (B) be paid to
      Borrowers or as otherwise required by law. Interest earned on deposits in the
      Cash Collateral Account shall be held as additional collateral.

     

    (v)    Notwithstanding
      any of the foregoing, to the extent required by the Senior Secured Notes
      Indenture, Borrowers shall be permitted to grant a security interest in, for
      the
      benefit of the holders of the Senior Secured Notes, the cash deposited in the
      Cash Collateral Account pursuant to the terms of clause (ii) or (iii) of this
      paragraph (d), subject to the terms of the Intercreditor Agreement.

     

    (d)    Fees
      and Expenses.
      Borrowers agree to pay to Agent for the benefit of Revolving Lenders, as
      compensation to such Lenders for Letter of Credit Obligations incurred
      hereunder, (i) all reasonable out-of-pocket costs and expenses incurred by
      Agent
      or any Lender on account of such Letter of Credit Obligations, and (ii) for
      each
      month during which any Letter of Credit Obligation shall remain outstanding,
      a
      fee (the “Letter
      of Credit Fee”)
      in an
      amount equal to the Applicable L/C Margin from time to time in effect multiplied
      by the maximum amount available from time to time to be drawn under the
      applicable Letter of Credit. Such fee shall be paid to Agent for the benefit
      of
      the Revolving Lenders in arrears, on the first day of each month and on the
      Commitment Termination Date. In addition, Borrowers shall pay to any L/C Issuer,
      on demand, such fees (including all per annum fees), and reasonable
      out-of-pocket charges and expenses of such L/C Issuer in respect of the
      issuance, negotiation, acceptance, amendment,
      transfer and payment of such Letter of Credit or otherwise payable pursuant
      to
      the application and related documentation under which such Letter of Credit
      is
      issued.

     

    

     

    
      
        
        

      

      
        B-3

        
          

        

      

      
        
        

      

    

    

     

    (e)    Request
      for Incurrence of Letter of Credit Obligations.
      Borrower Representative shall give Agent at least two (2) Business Days’ prior
      written notice requesting the incurrence of any Letter of Credit Obligation
      (including the amendment, renewal or extension of any outstanding Letter of
      Credit). The notice shall be accompanied by the form of the Letter of Credit
      (which shall be acceptable to the L/C Issuer) and, if requested by the L/C
      Issuer, a completed letter of credit application on the L/C Issuer’s standard
      form; provided that the Application for Standby Letter of Credit in the
      form of Exhibit
      B-1
      attached
      hereto will be the standard form to be used for all Letters of Credit issued
      by
      GE Capital or a subsidiary thereof. Notwithstanding anything contained herein
      to
      the contrary, Letter of Credit applications by Borrower Representative and
      approvals by Agent and the L/C Issuer may be made and transmitted pursuant
      to
      electronic codes and security measures mutually agreed upon and established
      by
      and among Borrower Representative, Agent and the L/C Issuer. In the event of
      any
      inconsistency between the terms and conditions of this Agreement and the terms
      and conditions of any form of letter of credit application or other agreement
      submitted by Borrower Representative to, or entered into by Borrower
      Representative with, the L/C Issuer relating to any Letter of Credit, the terms
      and conditions of this Agreement shall control.

     

    (f)    Obligation
      Absolute.
      The
      obligation of Borrowers to reimburse Agent and Revolving Lenders for payments
      made with respect to any Letter of Credit Obligation shall be absolute,
      unconditional and irrevocable, without necessity of presentment, demand, protest
      or other formalities on the terms and conditions in the Agreement, and the
      obligations of each Revolving Lender to make payments to Agent with respect
      to
      Letters of Credit shall be unconditional and irrevocable. Such obligations
      of
      Borrowers and Revolving Lenders shall be paid strictly in accordance with the
      terms hereof under all circumstances including the following:

     

    (i)    any
      lack
      of validity or enforceability of any Letter of Credit or the Agreement or the
      other Loan Documents or any other agreement;

     

    (ii)    the
      existence of any claim, setoff, defense or other right that any Borrower or
      any
      of their respective Affiliates or any Lender may at any time have against a
      beneficiary or any transferee of any Letter of Credit (or any Persons or
      entities for whom any such transferee may be acting), Agent, any Lender, or
      any
      other Person, whether in connection with the Agreement, the Letter of Credit,
      the transactions contemplated herein or therein or any unrelated transaction
      (including any underlying transaction between any Borrower or any of their
      respective Affiliates and the beneficiary for which the Letter of Credit was
      procured);

     

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

     

    

     

    
      
        
        

      

      
        B-4

        
          

        

      

      
        
        

      

    

    

    (iv)    payment
      by Agent (except as otherwise expressly provided in paragraph (g)(ii)(C) below)
      or any L/C Issuer under any Letter of Credit or guaranty thereof against
      presentation of a demand, draft or certificate or other document that does
      not
      comply with the terms of such Letter of Credit or such guaranty;

     

    (v)    any
      other
      circumstance or event whatsoever, that is similar to any of the foregoing;
      or

     

    (vi)    the
      fact
      that a Default or an Event of Default has occurred
      and is continuing;

     

    provided
      that the
      foregoing clauses (i) through (vi) shall not be construed to excuse the L/C
      Issuer for liability to Borrowers to the extent of any damages suffered by
      the
      Borrowers that are caused by the L/C Issuer’s failure to exercise care when
      determining whether drafts and other documents presented under a Letter of
      Credit comply with the terms thereof; provided,
      further,
      the
      parties hereto expressly agree that, in the absence of gross negligence or
      willful misconduct on the part of the L/C Issuer (as finally determined by
      a
      court of competent jurisdiction), the L/C Issuer shall be deemed to have
      exercised care in each such determination.

     

    (g)    Indemnification;
      Nature of Lenders’ Duties.

     

    (i)    In
      addition to amounts payable as elsewhere provided in the Agreement, Borrowers
      hereby agree to pay and to protect, indemnify, and save harmless Agent and
      each
      Lender from and against any and all claims, demands, liabilities, damages,
      losses, and all reasonable out-of-pocket costs, charges and expenses (including
      reasonable attorneys’ fees) that Agent or any Lender may incur or be subject to
      as a consequence, direct or indirect, of (A) the issuance of any Letter of
      Credit or guaranty thereof, or (B) the failure of Agent or any Lender seeking
      indemnification or of any L/C Issuer to honor a demand for payment under any
      Letter of Credit or guaranty thereof as a result of any act or omission, whether
      rightful or wrongful, of any present or future de jure or de facto government
      or
      Governmental Authority, in each case other than to the extent solely as a result
      of the gross negligence or willful misconduct of Agent or such Lender (as
      finally determined by a court of competent jurisdiction).

     

    (ii)    As
      between Agent and any Lender and Borrowers, Borrowers assume all risks of the
      acts and omissions of, or misuse of any Letter of Credit by beneficiaries,
      of
      any Letter of Credit. In furtherance and not in limitation of the foregoing,
      to
      the fullest extent permitted by law, neither Agent nor any Lender shall be
      responsible for: (A) the form, validity, sufficiency, accuracy, genuineness
      or
      legal effect of any document issued by any party in connection with the
      application for and issuance of any Letter of Credit, even if it should in
      fact
      prove to be in any or all respects invalid, insufficient, inaccurate, fraudulent
      or forged; (B) the validity or sufficiency of any instrument transferring or
      assigning or purporting to transfer or assign any Letter of Credit or the rights
      or benefits thereunder or proceeds thereof, in whole or in part, that may prove
      to be invalid or ineffective for any reason; (C) failure of the beneficiary
      of
      any Letter of Credit to comply fully with conditions required in order to demand
      payment under such Letter of Credit; provided,
      that in
      the case of any payment by Agent under any Letter of 

     

    

     

    
      
        
        

      

      
        B-5

        
          

        

      

      
        
        

      

    

    

    Credit
      or
      guaranty thereof, Agent shall be liable to the extent such payment was made
      solely as a result of its gross negligence or willful misconduct (as finally
      determined by a court of competent jurisdiction) in determining that the demand
      for payment under such Letter of Credit or guaranty thereof complies on its
      face
      with any applicable requirements for a demand for payment under such Letter
      of
      Credit or guaranty thereof; (D) errors, omissions, interruptions or delays
      in
      transmission or delivery of any messages, by mail, cable, telegraph, telex
      or
      otherwise, whether or not they may be in cipher; (E) errors in interpretation
      of
      technical terms; (F) any loss or delay in the transmission or otherwise of
      any
      document required in order to make a payment under any Letter of Credit or
      guaranty thereof or of the proceeds thereof; (G) the credit of the proceeds
      of
      any drawing under any Letter of Credit or guaranty thereof; and (H) any
      consequences arising from causes beyond the control of Agent or any Lender.
      None
      of the above shall affect, impair, or prevent the vesting of any of Agent’s or
      any Lender’s rights or powers hereunder or under the Agreement; provided,
      however,
      that
      the foregoing clauses (A) through (H) shall not be construed to excuse the
      L/C
      Issuer for liability to Borrowers to the extent of any damages suffered by
      the
      Borrowers that are caused by the L/C Issuer’s failure to exercise care when
      determining whether drafts and other documents presented under a Letter of
      Credit comply with the terms thereof; provided,
      further,
      the
      parties hereto expressly agree that, in the absence of gross negligence or
      willful misconduct on the part of the L/C Issuer (as finally determined by
      a
      court of competent jurisdiction), the L/C Issuer shall be deemed to have
      exercised care in each such determination.

     

    (iii)    Nothing
      contained herein shall be deemed to limit or to expand any waivers, covenants
      or
      indemnities made by Borrowers in favor of any L/C Issuer in any letter of credit
      application, reimbursement agreement or similar document, instrument or
      agreement between or among Borrowers and such L/C Issuer, including a Master
      Standby Agreement entered into with Agent.

     

    (h)    Disbursement
      and Interest.

     

    The
      L/C
      Issuer shall, promptly following its receipt thereof, examine all documents
      purporting to represent a demand for payment under a Letter of Credit. The
      L/C
      Issuer shall promptly notify Agent and Borrower Representative by telephone
      (confirmed by telecopy) of such demand for payment and whether the L/C Issuer
      has made or will make a payment thereunder. If the L/C Issuer shall make any
      payment under the Letter of Credit, then, unless Borrowers shall reimburse
      such
      payment in full on the date such payment is made, the unpaid amount thereof
      shall bear interest, for each day from and including the date such payment
      is
      made to but excluding the date that Borrowers reimburse such payment, at the
      rate per annum then applicable to Index Rate Loans. The parties hereto expressly
      agree that, in the absence of gross negligence or willful misconduct on the
      part
      of the L/C Issuer (as finally determined by a court of competent jurisdiction),
      the L/C Issuer shall be deemed to have exercised care in each such
      determination.

    

    
      

       

      
        
          
          

        

        
          B-6

          
            

          

        

        
          
          

        

      

      

    

    ANNEX
      C (Section
      1.8)

    to

    CREDIT
      AGREEMENT

     

    CASH
      MANAGEMENT SYSTEM

     

    Each
      Borrower shall, and shall cause its Subsidiaries to, establish and maintain
      the
      Cash Management Systems described below:

     

    (a)    Except
      as
      otherwise permitted in the Post-Closing Letter, on or before the Closing Date
      and until the Termination Date, Borrowers shall (i) establish lock boxes
      (“Lock
      Boxes”)
      or at
      Agent’s discretion, blocked accounts (“Blocked
      Accounts”)
      at one
      or more of the banks set forth in Schedule
      3.21,
      and
      shall request in writing and otherwise take such reasonable steps to ensure
      that
      all Account Debtors forward payment directly to such Lock Boxes, and (ii)
      deposit and cause its Subsidiaries to deposit or cause to be deposited promptly,
      and in any event no later than the first Business Day after the date of receipt
      thereof, all cash, checks, drafts or other similar items of payment relating
      to
      or constituting payments made in respect of any and all Collateral (whether
      or
      not otherwise delivered to a Lock Box) into one or more Blocked Accounts in
      such
      Borrower’s name or any such Subsidiary’s name and at a bank identified in
Schedule
      3.21
      (each, a
“Relationship
      Bank”).
      On or
      before the Closing Date, Borrowers shall have established concentration accounts
      in one or more of their respective names (each a “Concentration
      Account”
and
      collectively, the “Concentration
      Accounts”)
      at the
      bank or banks that shall be designated as the Concentration Account bank for
      each such Borrower or Borrowers in Schedule
      3.21
      (each a
“Concentration
      Account Bank”
and
      collectively, the “Concentration
      Account Banks”),
      which
      banks shall be reasonably satisfactory to Agent.

     

    (b)    Borrowers
      shall maintain, in one or more of their respective names, an account (each
      a
“Disbursement
      Account”
and
      collectively, the “Disbursement
      Accounts”)
      at a
      bank reasonably acceptable to Agent into which Agent shall, from time to time,
      deposit proceeds of Loans made to Borrowers pursuant to Section
      1.1
      for use
      by Borrowers solely in accordance with the provisions of Section
      1.4.
      In
      addition, subject to the limitations set forth in this Agreement, the Domestic
      Credit Parties and their Domestic Subsidiaries shall be permitted to maintain
      and fund (i) deposit accounts of Domestic Credit Parties and their Domestic
      Subsidiaries (other than deposit accounts for which cash collections of the
      Credit Parties are deposited) so long as the aggregate balance in such deposit
      accounts does not exceed of $4,000,000 at any one time and (ii) the Excluded
      Deposit Accounts (as defined in the Security Agreement).

     

    (c)    Except
      as
      otherwise permitted in the Post-Closing Letter, on or before the Closing Date
      (or such later date as Agent shall consent to in writing), each Concentration
      Account Bank, each bank where a Disbursement Account is maintained and all
      other
      Relationship Banks, shall have entered into tri-party blocked account agreements
      with Agent, for the benefit of itself and Lenders, and the applicable Borrower
      and Subsidiaries thereof, as applicable, in form and substance reasonably
      acceptable to Agent, which shall become operative on or prior to the Closing
      Date. Each such blocked account agreement shall provide, among 

     

    

     

    
      
        
        

      

      
        C-1

        
          

        

      

      
        
        

      

    

    

    other
      things, that (i) all items of payment deposited in such account and proceeds
      thereof deposited in the applicable Concentration Account are held by such
      bank
      as agent or bailee-in-possession for Agent, on behalf of itself and Lenders,
      (ii) the bank executing such agreement has no rights of setoff or recoupment
      or
      any other claim against such account, as the case may be, other than for payment
      of its service fees and other charges directly related to the administration
      of
      such account and for returned checks or other items of payment, and (iii) from
      and after the Closing Date (A) with respect to banks at which a Blocked Account
      is maintained, such bank agrees to forward immediately all amounts in each
      Blocked Account to such Borrower’s Concentration Account Bank and to commence
      the process of daily sweeps from such Blocked Account into the applicable
      Concentration Account and (B) with respect to each Concentration Account Bank,
      such bank agrees to immediately forward all amounts received in the applicable
      Concentration Account to the Collection Account through daily sweeps from such
      Concentration Account into the Collection Account. No Borrower shall, or shall
      cause or permit any Subsidiary thereof to, accumulate or maintain cash in
      Disbursement Accounts or payroll accounts as of any date of determination in
      excess of checks outstanding against such accounts as of that date and amounts
      necessary to meet minimum balance requirements.

     

    (d)    So
      long
      as no Event of Default has occurred and is continuing, Borrowers may amend
      Schedule
      3.21
      to add
      or replace a Relationship Bank, Lock Box, Blocked Account or to replace any
      Concentration Account or any Disbursement Account; provided,
      that
      (i) Agent shall have consented in writing in advance to the opening of such
      account or Lock Box with the relevant bank (such consent not to be unreasonably
      withheld) and (ii) prior to the time of the opening of such account or Lock
      Box,
      the applicable Borrower or its Subsidiaries, as applicable, and such bank shall
      have executed and delivered to Agent a tri-party blocked account agreement,
      in
      form and substance reasonably satisfactory to Agent. Borrowers shall close
      any
      of their accounts (and establish replacement accounts in accordance with the
      foregoing sentence) promptly and in any event within thirty (30) days following
      notice from Agent that the creditworthiness of any bank holding an account
      is no
      longer acceptable in Agent’s reasonable judgment, or as promptly as practicable
      and in any event within sixty (60) days following notice from Agent that the
      operating performance, funds transfer or availability procedures or performance
      with respect to accounts or Lock Boxes of the bank holding such accounts or
      Agent’s liability under any tri-party blocked account agreement with such bank
      is no longer acceptable in Agent’s reasonable judgment.

     

    (e)    The
      Lock
      Boxes, Blocked Accounts, Disbursement Accounts and the Concentration Accounts
      shall be cash collateral accounts, with all cash, checks and other similar
      items
      of payment in such accounts securing payment of the Loans and all other
      Obligations, and in which each Borrower and each Subsidiary thereof shall have
      granted a Lien to Agent, on behalf of itself and Lenders, pursuant to the
      Security Agreement.

     

    (f)    All
      amounts deposited in the Collection Account shall be deemed received by Agent
      in
      accordance with Section
      1.10
      and
      shall be applied (and allocated) by Agent in accordance with Section
      1.11.
      In no
      event shall any amount be so applied unless and until such amount shall have
      been credited in immediately available funds to the Collection
      Account.

     

    

     

    
      
        
        

      

      
        C-2

        
          

        

      

      
        
        

      

    

    

    (g)    Each
      Borrower shall and shall cause its Affiliates, officers, employees, agents,
      directors or other Persons acting for or in concert with such Borrower (each
      a
“Related
      Person”)
      to (i)
      hold in trust for Agent, for the benefit of itself and Lenders, all checks,
      cash
      and other items of payment received by such Borrower or any such Related Person,
      and (ii) within one (1) Business Day after receipt by such Borrower or any
      such Related Person of any checks, cash or other items of payment, deposit
      the
      same into a Blocked Account of such Borrower. Each Borrower on behalf of itself
      and each Related Person thereof acknowledges and agrees that all cash, checks
      or
      other items of payment constituting proceeds of Collateral are part of the
      Collateral. All proceeds of the sale or other disposition of any Collateral,
      shall be deposited directly into the applicable Blocked Accounts.

     

     

    
      
        
        

      

      
        C-3

        
          

        

      

      
        
        

      

    

    

     

    ANNEX
      D (Section
      2.1(a))

    to

    CREDIT
      AGREEMENT

     

    CLOSING
      CHECKLIST

     

    

    In
      addition to, and not in limitation of, the conditions described in Section
      2.1
      of the
      Agreement, pursuant to Section
      2.1(a),
      the
      following items must be received by Agent in form and substance satisfactory
      to
      Agent on or prior to the Closing Date (each capitalized term used but not
      otherwise defined herein shall have the meaning ascribed thereto in Annex
      A
      to the
      Agreement):

     

    A.    Appendices.
      All
      Appendices to the Agreement, in form and substance satisfactory to
      Agent.

     

    B.    Revolving
      Notes, Swing Line Notes and Export-Related Notes.
      Duly
      executed originals of the Revolving Notes, Swing Line Notes and Export-Related
      Notes for each applicable Lender that has requested such Notes reasonably in
      advance of the Closing Date, dated the Closing Date.

     

    C.    Security
      Agreements.
      Duly
      executed originals of the Security Agreement and the Canadian Security
      Agreements, each dated the Closing Date, and all instruments, documents and
      agreements executed pursuant thereto.

     

    D.    Insurance.
      Satisfactory evidence that the insurance policies required by Section
      5.7
      are in
      full force and effect, together with appropriate evidence showing lender loss
      payable and/or additional insured clauses or endorsements, as reasonably
      requested by Agent, in favor of Agent, on behalf of Lenders.

     

    E.    Security
      Interests and Code Filings.

     

    (a)    Evidence
      reasonably satisfactory to Agent of the completion of, or arrangements to
      complete, all recordings and filings of, or with respect to the Security
      Agreement and the Canadian Security Agreements as may be necessary in the
      reasonable opinion of Agent to provide a perfected security interest (subject
      only to Permitted Liens) in the Collateral (to the extent intended to be created
      by the Security Agreement and/or the Canadian Security Agreements and with
      the
      priority contemplated by the Intercreditor Agreement), including (i) such
      documents duly executed by each Credit Party (including financing statements
      under the Code and other applicable documents under the laws of any jurisdiction
      with respect to the perfection of Liens) as Agent may request in order to
      perfect its security interests in the Collateral and (ii) copies of Code,
      Personal Property Security Act (Ontario) and/or Register of Personal and
      Moveable Real Rights (Quebec) search reports listing all effective financing
      statements or other registrations that name any Credit Party as debtor, together
      with copies of such financing statements, none of which shall cover the
      Collateral, except for those relating to the Prior Lender Obligations (all
      of
      which shall be terminated on the Closing Date) and Permitted Liens.

     

    

    
      
        
           

          
          

        

        
          D-1

          
            

          

        

        
          
          

        

      

    

     

     

    (b)    Evidence
      reasonably satisfactory to Agent, including copies, of all UCC-1 and other
      financing statements or registrations filed in favor of any Credit Party with
      respect to each location, if any, at which Inventory may be
      consigned.

     

    F.    Payoff
      Letter; Termination Statements.
      Copies
      of a duly executed payoff letter, in form and substance reasonably satisfactory
      to Agent, in respect of the Prior Lenders loan documents evidencing repayment
      in
      full of all Prior Lender Obligations, together with (a) UCC-3 or other
      appropriate termination statements, in form and substance satisfactory to Agent,
      manually signed by the agent for the Prior Lenders, as applicable, releasing
      all
      liens of Prior Lenders upon any of the personal property of each Credit Party,
      and (b) termination of all blocked account agreements, bank agency agreements
      or
      other similar agreements or arrangements or arrangements in favor of Prior
      Lenders or relating to the Prior Lender Obligations.

     

    G.   Intellectual
      Property Security Agreements.
      Duly
      executed originals of Trademark Security Agreements, Copyright Security
      Agreements and Patent Security Agreements, each dated the Closing Date and
      signed by each Credit Party which owns Trademarks, Copyrights and/or Patents,
      as
      applicable, all in form and substance reasonably satisfactory to Agent, together
      with all instruments, documents and agreements executed pursuant
      thereto.

     

    H.   Guaranties.
      Guaranties executed by each Subsidiary Guarantor and each Canadian Borrowing
      Base Guarantor in favor of Agent, for the benefit of Lenders.

     

    I.     
      Initial
      Borrowing Base Certificate.
      Duly
      executed originals of an initial Borrowing Base Certificate, dated the Closing
      Date, reflecting information concerning Eligible Accounts, Eligible Inventory
      and Eligible Export-Related Accounts of the Borrower Parties as of November
      30,
      2006.

     

    J.     
      Initial
      Notice of Revolving Credit Advance.
      Duly
      executed originals of a Notice of Revolving Credit Advance, dated the Closing
      Date, with respect to the initial Revolving Credit Advance to be requested
      by
      Borrower Representative on the Closing Date.

     

    K.   
      Letter
      of Direction.
      Duly
      executed originals of a letter of direction from Borrower Representative
      addressed to Agent, on behalf of itself and Lenders, with respect to the
      disbursement on the Closing Date of the proceeds of the initial Revolving Credit
      Advance.

     

    L.     Cash
      Management System; Blocked Account Agreements.
      Evidence satisfactory to Agent that, as of the Closing Date, Cash Management
      Systems complying with Annex
      C
      to the
      Agreement have been established and are currently being maintained in the manner
      set forth in such Annex
      C,
      together with copies of duly executed tri-party blocked account and lock box
      agreements, reasonably satisfactory to Agent, with the banks as required by
      Annex
      C.

     

     

    
      
        
        

      

      
        D-2

        
          

        

      

      
        
        

      

    

     

    M.   Charter
      and Good Standing.
      For
      each Credit Party, such Person’s (a) charter and all amendments thereto, (b)
      good standing certificates (including verification of tax status)
      in its state of incorporation and (c) good standing certificates (including
      verification of tax status) and certificates of qualification to conduct
      business in each jurisdiction where its ownership or lease of property or the
      conduct of its business requires such qualification, each dated a recent date
      prior to the Closing Date and certified by the applicable Secretary of State
      or
      other authorized Governmental Authority.

     

    N.   
      Bylaws
      and Resolutions.
      For
      each Credit Party, (a) such Person’s bylaws, together with all amendments
      thereto and (b) resolutions of such Person’s Board of Directors, approving and
      authorizing the execution, delivery and performance of the Loan Documents to
      which such Person is a party and the transactions to be consummated in
      connection therewith, each certified as of the Closing Date by such Person’s
      corporate secretary or an assistant secretary as being in full force and effect
      without any modification or amendment.

     

    O.   
      Incumbency
      Certificates.
      For
      each Credit Party, signature and incumbency certificates of the officers of
      each
      such Person executing any of the Loan Documents, certified as of the Closing
      Date by such Person’s corporate secretary or an assistant secretary as being
      true, accurate, correct and complete.

     

    P.    
      Opinions
      of Counsel.
      Duly
      executed originals of the following opinions, each in form and substance
      reasonably satisfactory to Agent and its counsel, dated the Closing Date, which
      shall include in such opinion an express statement to the effect that Agent
      and
      Lenders are authorized to rely on such opinion:

     

    1.     
      Hugh
      O’Donnell, General Counsel to Parent;

     

    2.     
      Cravath,
      Swaine & Moore LLP, special New York counsel to Parent;

     

    3.     
      Baker
      & McKenzie, legal counsel to the Canadian subsidiaries of
      Parent;

     

    4.     
Foley
      & Lardner LLP, Illinois counsel to Nickerson Machinery Chicago,
      Inc.;

     

    
      
        5.     
          Richards,
          Layton & Finger, special counsel for Delaware subsidiaries of
          Parent;

         

        6.     
Malkerson
          Gilliland Martin LLP, Minnesota counsel to Northern Supply Company,
          Inc.;

      

    

     

    7.     
      Dykema
      Gosset PLLC, special counsel to Michigan subsidiaries; and

     

    8.     
      Frost
      Brown Todd LLC, Ohio counsel to Milacron Marketing Company.

     

    Q.    
      Pledge
      Agreement.
      Duly
      executed original of the Pledge Agreement accompanied by (as applicable) (a)
      share certificates representing all of the outstanding certificated Stock being
      pledged pursuant to such Pledge Agreement and stock powers for such share
      certificates executed in blank and (b) the original intercompany notes and
      other
instruments
      evidencing Indebtedness being pledged pursuant to such Pledge Agreement, duly
      endorsed in blank.

    

    
      
        
          
          

        

        
          D-3

          
            

          

        

        
          
          

        

      

    

    

     

    R.    
Officer’s
      Certificate. Agent shall have received duly executed originals of a
      certificate of Parent executed by the Chief Executive Officer and Chief
      Financial Officer of Parent, dated the Closing Date, stating that (i) since
      Credit Parties’ quarterly financial statements dated as of June 30, 2006, no
      material adverse change, individually or in the aggregate, in the business,
      financial or other condition of the Credit Parties taken as a whole, or the
      collateral which will be subject to the security interest granted to Agent
      and
      Lenders or in the projections of the Credit Parties taken as a whole;
provided, however, notwithstanding anything to the contrary
      contained herein, the pension liabilities incurred by the Credit Parties prior
      to the Closing Date or under the Pension Protection Act of 2006, the payments
      made by the Credit Parties for pension liabilities prior to the Closing Date
      of
      approximately $30,000,000, the borrowing under the Prior Credit Agreement
      related thereto and any accounting changes under SFAS 158 (collectively, the
      “Pension Matters”), shall not be deemed a material adverse change for the
      purposes of such certificate, (ii) no litigation commenced which would have
      a
      material adverse impact on the Credit Parties taken as a whole, their business,
      or their ability to repay the loans, or which would challenge the transactions
      under consideration, and (iii) since Credit Parties’ quarterly financial
      statements dated as of June 30, 2006, no material increase in the liabilities
      of
      the Credit Parties taken as a whole, or a material decrease in the assets of
      the
      Credit Parties taken as a whole (other than, in each case, changes related
      to
      the Pension Matters).

     

    S.    
      Mortgages.
      Mortgages covering all of the fee owned real property (the “Mortgaged
      Properties”)
      together with: (a) title insurance policies, in each case reasonably
      satisfactory in form and substance to Agent, in its reasonable discretion and
      (b) evidence that arrangement to record counterparts of the Mortgages have
      been
      made in all places to the extent necessary or desirable, in the judgment of
      Agent, to create a valid and enforceable priority lien (subject to Permitted
      Liens) on each Mortgaged Property in favor of Agent for the benefit of itself
      and Lenders (or in favor of such other trustee as may be required or desired
      under local law).

     

    T.    
      Intercompany
      Subordination Agreement.
      Intercompany Subordination Agreement executed by each Credit Party or a
      Subsidiary of a Credit Party in favor of Agent, for the benefit of Agent and
      the
      Lenders, substantially in the form of Exhibit
      A-2.

     

    U.    
      [Intentionally
      Omitted].

     

    V.    
      Appraisals.
      Agent
      shall have received appraisals as to all Inventory, and any addenda thereto
      if
      and as applicable, addressed to Agent and in form and substance reasonably
      satisfactory to Agent (it being acknowledged that the AccuVal appraisal dated
      as
      of September 29, 2006 is reasonably satisfactory to Agent).

     

    W.  
      Audited
      Financials; Financial Condition.
      Agent
      shall have received the Financial Statements and Projections set forth in
Section 3.7,
      certified by Borrower Representative’s Chief Financial Officer, in each case in
      form and substance reasonably satisfactory to Agent. Agent shall have further
      received a certificate of Parent executed by the Chief Executive Officer and/or
      the Chief Financial Officer of Parent, based on such Projections, to the effect
      that (a) the Borrower Parties, taken as a whole, will be Solvent upon the
      consummation of the transactions contemplated herein and (b) in the case of
      such
      Projections, that such Projections were prepared in good faith based on
      assumptions which were believed to be reasonable at the time made.

     

     

    
      
        
        

      

      
        D-4

        
          

        

      

      
        
        

      

    

     

     

    X.    
      Master
      Standby Agreement.
      A
      Master Agreement for Standby Letters of Credit among Borrowers and GE Capital
      Financial Inc.

     

    Y.    Senior
      Secured Notes Indenture.
      Parent
      shall have certified to Agent that at the time of, and immediately after giving
      effect to, the Credit Agreement and transactions contemplated therein, the
      Commitments, and any Obligations thereunder, shall be permitted under the Senior
      Secured Note Indenture, as evidenced by a certificate detailing the calculation
      of the Domestic Borrowing Base (as defined in the Senior Secured Notes
      Indenture).

     

    

    
 

    
      
        D-5

      

      
        
        

        
          

        

      

      
        
        

      

    

    ANNEX
      E (Section
      4.1(a))

    to

    CREDIT
      AGREEMENT

     

    FINANCIAL
      STATEMENTS AND PROJECTIONS -- REPORTING

     

    Borrowers
      shall deliver or cause to be delivered to Agent or to Agent and Lenders, as
      indicated, the following:

     

    (a)    
as
      soon
      as available and in any event within 45 days after the end of each Fiscal
      Quarter of Parent and its Subsidiaries (or, if earlier, the date five Business
      Days after Parent files its Form 10-Q with the SEC) commencing with the first
      Fiscal Quarter of Parent and its Subsidiaries ending after the Closing Date,
      balance sheets, statements of operations and retained earnings and statements
      of
      cash flow of Parent and its Subsidiaries as at the end of such quarter, in
      each
      case, on a consolidated and, to the extent prepared, consolidating basis (on
      a
      basis consistent with the business unit financial projections provided to Agent
      on the Closing Date), and for the period commencing at the end of the
      immediately preceding Fiscal Year and ending with the end of such quarter,
      setting forth in each case in comparative form the figures for the corresponding
      date or period of the immediately preceding Fiscal Year, all in reasonable
      detail and, in the case of consolidated information, certified by an Authorized
      Officer of Parent as fairly presenting, in all material respects in accordance
      with GAAP, the financial position of Parent and its Subsidiaries as of the
      end
      of such quarter and the results of operations and cash flows of Parent and
      its
      Subsidiaries for such quarter, in accordance with GAAP applied in a manner
      consistent with that of the most recent audited financial statements of Parent
      and its Subsidiaries furnished to Agent and the Lenders, subject to normal
      year-end adjustments and the absence of footnotes;

     

    (b)    
as
      soon
      as available, and in any event within 90 days after the end of each Fiscal
      Year
      of Parent and its Subsidiaries (or, if earlier, the date five Business Days
      after Parent files its form 10-K with the SEC), balance sheets, statements
      of
      operations and retained earnings and statements of cash flow of Parent and
      its
      Subsidiaries as at the end of such Fiscal Year, in each case, on a consolidated
      and, to the extent prepared in connection with the audit thereof, consolidating
      basis (on a basis consistent with the business unit financial projections
      provided to Agent on the Closing Date), and setting forth in each case in
      comparative form the corresponding figures for the immediately preceding Fiscal
      Year, all in reasonable detail and, in the case of consolidated information,
      prepared in accordance with GAAP, and accompanied by a report and an unqualified
      opinion, prepared in accordance with generally accepted auditing standards,
      of
      independent certified public accountants of recognized standing selected by
      Parent and satisfactory to Agent (which opinion on such consolidated information
      shall be without (A) a “going concern” or like qualification or exception, (B)
      any qualification or exception as to the scope of such audit, or (C) any
      qualification which relates to the treatment or classification of any item
      and
      which, as a condition to the removal of such qualification, would require an
      adjustment to such item, the effect of which would be to cause any noncompliance
      with the provisions of Section
      5.21),
      together with a written statement of such accountants (1) to the effect that,
      in
      making the examination necessary for their certification of such financial
      statements, they have not obtained any knowledge of the existence of an Event
      of
      Default or a Default
      and (2) if such accountants shall have obtained any knowledge of the existence
      of an Event of Default or such Default, describing the nature
      thereof;

     

    

    
      
         

        
          E-1

          
            

          

        

        
          
          

        

      

    

    

     

    (c)    
as
      soon
      as available, and in any event within 30 days after the end of each Fiscal
      Month
      of Parent and its Subsidiaries commencing with the first Fiscal Month of Parent
      and its Subsidiaries ending after the Closing Date, internally prepared
      consolidated and consolidating balance sheets, consolidated and consolidating
      statements of operations and consolidated and consolidating statements of cash
      flows as at the end of such Fiscal Month, and for the period commencing at
      the
      end of the immediately preceding Fiscal Year and ending with the end of such
      Fiscal Month, all in reasonable detail and certified by an Authorized Officer
      of
      Parent as fairly presenting, in all material respects in accordance with GAAP,
      the financial position of Parent and its Subsidiaries as at the end of such
      Fiscal Month and the results of operations, retained earnings and cash flows
      of
      Parent and its Subsidiaries for such Fiscal Month, in accordance with GAAP
      applied in a manner consistent with that of the most recent audited financial
      statements furnished to Agent and the Lenders, subject to normal year-end
      adjustments and the absence of footnotes;

     

    (d)    
simultaneously
      with the delivery of the financial statements of Parent and its Subsidiaries
      required by clauses (a), (b) and (c) of this Annex E, a certificate (a
“Compliance
      Certificate”)
      of
      Parent executed by an Authorized Officer of Parent (A) stating that such
      Authorized Officer has reviewed the provisions of this Agreement and the other
      Loan Documents and has made or caused to be made under his or her supervision
      a
      review of the condition and operations of Parent and its Subsidiaries with
      a
      view to determining whether Parent and its Subsidiaries are in compliance with
      all of the provisions of this Agreement and such Loan Documents at the time
      of
      such review, and that such review has not disclosed, and such Authorized Officer
      has no knowledge of, the existence at the date of such certification of an
      Event
      of Default or Default or, if an Event of Default or Default existed, describing
      the nature and period of existence thereof and the action which Parent and
      its
      Subsidiaries propose to take or have taken with respect thereto and (B)
      attaching a schedule showing the calculations specified in Section
      5.21
      whether
      or not a Covenant Trigger Event shall have occurred;

     

    (e)    
upon
      Agent’s reasonable request, reports as required by paragraph (b)(ii) of Annex F,
      in form and detail reasonably satisfactory to Agent and certified by an
      Authorized Officer of Borrower Representative as being accurate and complete
      in
      all material respects;

     

    (f)     
      promptly
      after submission to any Governmental Authority, all documents and information
      furnished to such Governmental Authority in connection with any investigation
      of
      any Credit Party other than routine inquiries by such Governmental
      Authority;

     

    (g)    
as
      soon
      as possible, and in any event within 3 Business Days after any Authorized
      Officer has knowledge of the occurrence of an Event of Default or Default that
      is continuing or the occurrence of any event or development that could
      reasonably be expected have a Material Adverse Effect, the written statement
      of
      an Authorized Officer of Borrower Representative setting forth the details
      of
      such Event of Default or Default or other event or development having a Material
      Adverse Effect and the action which the affected Credit Party proposes to take
      with respect thereto;

     

    

    
      
         

        
          E-2

          
            

          

        

        
          
          

        

      

    

    

    (h)    
(A)
      as
      soon as possible and in any event within 15 days after any Credit Party or
      any
      ERISA Affiliate thereof knows or has reason to know that (1) any Reportable
      Event with respect to any Employee Plan has occurred, (2) any other Termination
      Event with respect to any Employee Plan has occurred, or (3) an accumulated
      funding deficiency has been incurred or an application has been made to the
      Secretary of the Treasury for a waiver or modification of the minimum funding
      standard (including installment payments) or an extension of any amortization
      period under Section 412 of the IRC with respect to an Employee Plan, a
      statement of an Authorized Officer of Borrower Representative setting forth
      the
      details of such occurrence and the action, if any, which such Credit Party
      or
      such ERISA Affiliate proposes to take with respect thereto, (B) promptly and
      in
      any event within 10 days after receipt thereof by any Credit Party or any ERISA
      Affiliate thereof from the PBGC, copies of each notice received by any Credit
      Party or any ERISA Affiliate thereof of the PBGC’s intention to terminate any
      Plan or to have a trustee appointed to administer any Plan, (C) promptly and
      in
      any event within 15 days after the filing thereof with the Internal Revenue
      Service if requested by Agent, copies of each Schedule B (Actuarial Information)
      to the annual report (Form 5500 Series) with respect to each Employee Plan
      and
      Multiemployer Plan, (D) promptly and in any event within 15 days after any
      Credit Party or any ERISA Affiliate thereof knows or has reason to know that
      a
      required installment within the meaning of Section 412 of the IRC has not been
      made when due with respect to an Employee Plan, (E) promptly and in any event
      within 10 days after receipt thereof by any Credit Party or any ERISA Affiliate
      thereof from a sponsor of a Multiemployer Plan or from the PBGC, a copy of
      each
      notice received by any Credit Party or any ERISA Affiliate thereof concerning
      the imposition or amount of withdrawal liability under Section 4202 of ERISA
      or
      indicating that such Multiemployer Plan may enter reorganization status under
      Section 4241 of ERISA and (F) promptly and in any event within 15 days after
      any
      Credit Party or any ERISA Affiliate thereof sends notice of a plant closing
      or
      mass layoff (as defined in WARN) to employees, copies of each such notice sent
      by such Credit Party, in each case under the immediately preceding clauses
      (A)
      through (F), to the extent any such event or occurrence would reasonably be
      expected to result in liability of any Credit Party in an amount in excess
      of
      $1,000,000;

     

    (i)     
      promptly
      after the commencement thereof but in any event not later than 5 Business Days
      after service of process with respect thereto on, or the obtaining of knowledge
      thereof by, any Credit Party, notice of each action, suit or proceeding before
      any court or other Governmental Authority or other regulatory body or any
      arbitrator which could reasonably be expected to have a Material Adverse
      Effect;

     

    (j)      
      as
      soon
      as possible and in any event within 5 Business Days after any Authorized Officer
      has knowledge of the execution, receipt or delivery thereof, copies of any
      notices that any Credit Party executes or receives in connection with any
      Material Contract (other than Indebtedness) that such Credit Party determines
      in
      good faith to be material to Agent of the Lenders;

     

    (k)    
as
      soon
      as possible and in any event within 5 Business Days after execution, receipt
      or
      delivery thereof, copies of any notices that any Credit Party executes or
      receives in connection with the sale or other Disposition of the Stock of,
      or
      all or substantially all of the assets of, any Credit Party that, in each case,
      such Credit Party determines in good faith to be material to such transaction
      or
      to Agent or the Lenders; provided that nothing in this clause (k) shall
      be deemed to permit any such Disposition;

     

    

    
      
        
          
          

        

        
          E-3

          
            

          

        

        
          
          

        

      

    

    

     

     

    (l)     
      as
      soon
      as possible and in any event within 5 Business Days after delivery to holders
      of
      Senior Secured Notes or Filing with the SEC, copies of such material statements,
      reports and other information any Credit Party may make generally available
      to
      the holders of the Senior Secured Notes or file with the SEC or any national
      (domestic or foreign) securities exchange;

     

    (m)   
promptly
      upon receipt thereof, copies of all financial reports (including, without
      limitation, management letters), if any, submitted to any Credit Party by its
      auditors in connection with any annual or interim audit of the books thereof,
      subject to the consent, if required, by such auditors;

     

    (n)   
not
      later
      than 30 days prior to the end of each Fiscal Year of Parent and its
      Subsidiaries, a copy of the annual operating plan of Parent and its
      Subsidiaries, which shall include without limitation, a forecast of the balance
      sheet, income statement and statement of cash flows for the subsequent Fiscal
      Year of Parent and its Subsidiaries in a form reasonably acceptable to Agent
      and
      prepared on a monthly basis by management; and

     

    (o)  
promptly
      upon request, such other information concerning the condition or operations,
      financial or otherwise, of any Credit Party as Agent may from time to time
      may
      reasonably request.

     

    

    

    

    
      
        
          
          

          
          

        

        
          E-4

          
            

          

        

        
          
          

          
            

          

        

      

    

    

    ANNEX
      F (Section
      4.1(b))

    to

    CREDIT
      AGREEMENT

     

    COLLATERAL
      REPORTS

     

     
      Borrowers shall deliver or cause to be delivered the following:

     

    (a)    
To
      Agent,
      (A) as soon as available and in any event within 15 days after the end of each
      month commencing with the first month ending after the Closing Date, or (B)
      no
      later than 12:00 noon (New York time) Thursday of each calendar week, if
      requested by Agent when Excess Availability would be less than $15,000,000,
      a
      Borrowing Base Certificate, current as of the close of business on Friday of
      the
      immediately preceding week, supported by schedules showing the derivation
      thereof and containing such detail and other information as Agent may reasonably
      request from time to time, provided that (I) the Aggregate Borrowing Base set
      forth in the Borrowing Base Certificate shall be effective from and including
      the date such Borrowing Base Certificate is duly received by Agent but not
      including the date on which a subsequent Borrowing Base Certificate is received
      by Agent, unless Agent disputes the eligibility of any property included in
      the
      calculation of the Aggregate Borrowing Base or the valuation thereof by notice
      of such dispute to Borrower Representative, (II) in the event of any dispute
      about the eligibility of any property included in the calculation of the
      Aggregate Borrowing Base or the valuation thereof, Agent’s Permitted Discretion
      shall control until such dispute is resolved and (III) in the case of Borrowing
      Base Certificates delivered on a weekly basis, the Inventory component may
      be
      updated on a monthly basis;

     

    (b)    
To
      Agent,
      each in a form reasonably satisfactory to Agent:

     

    (i)      
      upon
      Agent’s reasonable request, schedules of sales made, credits issued and cash
      received;

     

    (ii)      as
      soon
      as possible after the end of each Fiscal Month (but in any event within fifteen
      (15) days after the end thereof), on a monthly basis or more frequently as
      Agent
      may reasonably request: (A) perpetual inventory reports for each location of
      Inventory of the Borrower Parties, but only to the extent such Borrower Parties
      are capable of providing such reports for such location, and if not capable,
      such other inventory reports in form and substance reasonably acceptable to
      Agent, (B) inventory reports by location and Inventory category (and including
      the amounts of Inventory and the value thereof at any leased locations and
      at
      premises of warehouses, processors or other third parties), (C) agings of
      Accounts (together with a reconciliation to the previous month’s aging and
      general ledger), and (D) agings of accounts payable (and including information
      indicating the amounts owing to owners and lessors of leased premises,
      warehouses, processors and other third parties from time to time in possession
      of any Collateral);

     

    (iii)     
      upon
      Agent’s request, (A) copies of customer statements, purchase orders, sales
      invoices, credit memos, remittance advices and reports, and copies of deposit
      slips and bank statements, (B) copies of shipping and delivery documents, and
      (C) copies of purchase orders,
      invoices and delivery documents for Inventory and equipment acquired by any
      Borrower Party; and
       

    

     

    

    
      
         

        
          F-1

          
            

          

        

        
          
          

        

      

    

    

    (iv)     
      such
      other reports as to the portion of the Collateral comprised of Inventory and
      Accounts of Borrower Parties as Agent shall reasonably request from time to
      time.

     

    (c)     
      If
      any
      Credit Party’s records or reports of the Collateral are prepared or maintained
      by an accounting service, contractor, shipper or other agent, such Credit Party
      hereby irrevocably authorizes such service, contractor, shipper or agent to
      deliver such records, reports, and related documents to Agent and to follow
      Agent’s instructions with respect to further services at any time that an Event
      of Default has occurred and is continuing.

     

    (d)     
      To
      Agent,
      on a quarterly basis or at such more frequent intervals as Agent may reasonably
      request from time to time (together with a copy of all or any part of such
      delivery requested by any Lender in writing after the Closing Date), collateral
      reports with respect to each Borrower Party, including all additions and
      reductions (cash and non-cash) with respect to Accounts of such Borrower Party,
      in each case accompanied by such supporting detail and documentation as shall
      be
      requested by Agent in its reasonable discretion each of which shall be prepared
      by the applicable Borrower Party as of the last day of the immediately preceding
      quarter or the date two (2) days prior to the date of any such
      request.

     

    (e)     
      To
      Agent,
      at the time of delivery of each of the quarterly Financial Statements delivered
      pursuant to Annex
      E:

     

    (i)      
      a
      reconciliation of the Accounts trial balance to the most recent Borrowing Base
      Certificate, general ledger and quarterly Financial Statements delivered
      pursuant to Annex
      E,
      in each
      case accompanied by such supporting detail and documentation as shall be
      requested by Agent in its reasonable discretion;

     

    (ii)     
      a
      reconciliation of the perpetual inventory by location to the most recent
      Borrowing Base Certificate, general ledger and quarterly Financial Statements
      delivered pursuant to Annex E,
      in each
      case accompanied by such supporting detail and documentation as shall be
      requested by Agent in its reasonable discretion;

     

    (iii)     
      an
      aging
      of accounts payable and a reconciliation of that accounts payable aging to
      the
      general ledger and quarterly Financial Statements delivered pursuant to
Annex E,
      in each
      case accompanied by such supporting detail and documentation as shall be
      requested by Agent in its reasonable discretion;

     

    (iv)     
      a
      reconciliation of the outstanding Loans as set forth in the quarterly Loan
      Account statement provided by Agent to the general ledger and monthly Financial
      Statements delivered pursuant to Annex E,
      in each
      case accompanied by such supporting detail and documentation as shall be
      requested by Agent in its reasonable discretion;

     

     

    
      
        
        

      

      
        F-2

        
          

        

      

      
        
        

      

    

     

     

    (f)      
      To
      Agent,
      upon its reasonable request, (i) a listing of government contracts of each
      Borrower Party subject to the Federal Assignment of Claims Act of 1940; and
      (ii)
      a
      list of any applications for the registration of any Patent, Trademark or
      Copyright filed by any Credit Party with the United States Patent and Trademark
      Office, the United States Copyright Office or any similar office or agency
      in
      the prior Fiscal Quarter;

     

    (g)     
      Each
      Borrower Party, at its own expense, shall deliver to Agent the results of each
      physical verification, if any, that such Borrower Party may in their discretion
      have made, or caused any other Person to have made on their behalf, of all
      or
      any portion of their Inventory (and, if an Event of Default has occurred and
      is
      continuing, each Borrower shall, upon the request of Agent, conduct, and deliver
      the results of, such physical verifications as Agent may require);

     

    (h)     
      Each
      Borrower Party, at its own expense, shall deliver to Agent appraisals of its
      Inventory, as Agent may reasonably request in its Permitted Discretion (but
      not
      more frequently than annually, unless an Event of Default shall have occurred
      and be continuing in which case such limitation on the number of appraisals
      shall no longer apply; provided,
      however,
      solely
      with respect to reimbursement of the cost of any such appraisals after an Event
      of Default, any such appraisal shall not be at the expense of the Borrower
      Parties unless (i) such Event of Default shall have occurred and be continuing
      under Section
      8.1(a), (b), (i), (j) or (k),
      (ii)
      any other Event of Default shall have occurred and be continuing for a period
      of
      60 consecutive days without being waived or cured or (iii) Agent shall
      accelerate the payment of all or any part of the Obligations or otherwise
      exercise its rights and remedies under Section
      8.2
      or any
      other Loan Document against all or any part of the Collateral), each such
      appraisal to be conducted by an appraiser, and in form and substance reasonably
      satisfactory to Agent; and

     

    (i)      
      Such
      other reports, statements and reconciliations with respect to the Primary
      Borrowing Base, the Export-Related Borrowing Base, Collateral or Obligations
      of
      any or all Credit Parties as Agent shall from time to time request in its
      reasonable discretion.

     

    

    

    
      
        
          
          

          
          

        

        
          F-3

          
            

          

        

        
          
          

          
            

          

        

      

    

    

    ANNEX
      G (Section
      6.10)

    to

    CREDIT
      AGREEMENT

     

    FINANCIAL
      COVENANTS

     

                    Borrowers
      shall not breach
      or fail to comply with any of the following financial covenants, each of which
      shall be calculated in accordance with GAAP consistently applied, until the
      Termination Date:

     

                    (a)    
Maximum
      Capital Expenditures.
      The
      Credit Parties on a consolidated basis shall not make Capital Expenditures
      during the following Fiscal Years that exceed in the aggregate the amounts
      set
      forth opposite each such Fiscal Year below (the “Maximum
      Capital Expenditures”);
      provided
      that the
      Maximum Capital Expenditures for each Fiscal Year, commencing with the Fiscal
      Year ending December 31, 2008, shall be increased by the amount by which
      (x) the Maximum Capital Expenditures for the immediately preceding Fiscal
      Year exceeds (y) the aggregate amount of the actual Capital Expenditures of
      the Credit Parties for such immediately preceding Fiscal Year:

     

    
      	
              Fiscal
                Year

            	
              Maximum
                Capital Expenditures

            
	
              2007

            	
              $14,950,000

            
	
              2008

            	
              $15,870,000

            
	
              2009

            	
              $16,790,000

            
	
              2010

            	
              $16,790,000

            
	
              2011

            	
              $16,790,000

            

    

    

                    (b)    Minimum
      Fixed Charge Coverage Ratio.
      If at
      any time Excess Availability is less than $5,000,000 (a “Covenant
      Trigger Event”),
      then
      Credit Parties shall be required to maintain a Fixed Charge Coverage Ratio,
      tested as of the 12-month period ending on the last day of the last full Fiscal
      Month prior to such Covenant Trigger Event, of not less than the
      following:

     

    

    
      	
              Period

            	
              Minimum
                Fixed Charge

              Coverage
                Ratio

            
	
              Period
                commencing on the Closing Date and ending on December 31,
                2007

            	
              0.80
                to 1.00

            
	
              All
                times thereafter

            	
              1.00
                to 1.00

            

    

     

     

    
      
        
        

      

      
        G-1

        
          

        

      

      
        
        

      

    

     

    
 

    provided,
      however,
      if a
      Covenant Trigger Event has occurred and Excess Availability of at least
      $10,000,000 is maintained for a period of 90 consecutive days, compliance with
      the Fixed Charge Coverage Ratio shall not longer be required unless and until
      another Covenant Trigger Event shall occur.

     

                    (c)    Unless
      otherwise specifically provided herein, any accounting term used in the
      Agreement shall have the meaning customarily given such term in accordance
      with
      GAAP, and all financial computations hereunder shall be computed in accordance
      with GAAP consistently applied. That certain items or computations are
      explicitly modified by the phrase “in accordance with GAAP” shall in no way be
      construed to limit the foregoing. If any “Accounting Changes” (as defined below)
      shall occur after the date hereof and such changes result in a change in the
      calculation of the financial covenants, standards or terms used in the Agreement
      or any other Loan Document, then Borrowers, Agent and Lenders agree to enter
      into negotiations in order to amend such provisions of the Agreement so as
      to
      equitably reflect such Accounting Changes with the desired result that the
      criteria for evaluating Borrowers’ and their Subsidiaries’ financial condition
      shall be the same after such Accounting Changes as if such Accounting Changes
      had not been made; provided,
      however,
      that
      the agreement of Requisite Lenders to any required amendments of such provisions
      shall be sufficient to bind all Lenders. “Accounting
      Changes”
means
      (i) changes in accounting principles required by the promulgation of any rule,
      regulation, pronouncement or opinion by the Financial Accounting Standards
      Board
      of the American Institute of Certified Public Accountants (or successor thereto
      or any agency with similar functions), (ii) changes in accounting principles
      concurred in by any Borrower’s certified public accountants; (iii) purchase
      accounting adjustments under A.P.B. 16 or 17 and EITF 88-16, and the application
      of the accounting principles set forth in FASB 109, including the establishment
      of reserves pursuant thereto and any subsequent reversal (in whole or in part)
      of such reserves; and (iv) the reversal of any reserves established as a result
      of purchase accounting adjustments. All such adjustments resulting from
      expenditures made subsequent to the Closing Date (including capitalization
      of
      costs and expenses or payment of pre-Closing Date liabilities) shall be treated
      as expenses in the period the expenditures are made and deducted as part of
      the
      calculation of EBITDA in such period, but only to the extent any such adjustment
      would result in a change in the calculation of Fixed Charge Coverage Ratio
      for
      such period. If Agent, Borrowers and Requisite Lenders agree upon the required
      amendments, then after appropriate amendments have been executed and the
      underlying Accounting Change with respect thereto has been implemented, any
      reference to GAAP contained in the Agreement or in any other Loan Document
      shall, only to the extent of such Accounting Change, refer to GAAP, consistently
      applied after giving effect to the implementation of such Accounting Change.
      If
      Agent, Borrowers and Requisite Lenders cannot agree upon the required amendments
      within thirty (30) days following the date of implementation of any Accounting
      Change, then all Financial Statements delivered and all calculations of
      financial covenants and other standards and terms in accordance with the
      Agreement and the other Loan Documents shall be prepared, delivered and made
      without regard to the underlying Accounting Change. For purposes of Section
      8.1,
      a
      breach of the Financial Covenant contained in paragraph(b) of this Annex G
      shall be
      deemed to have occurred as of the last day of any specified measurement period
      with respect to
      Minimum Fixed Charge Coverage Ratio, regardless of when the Financial Statements
      reflecting such breach are delivered to Agent.

     

    
 

    
      
        
        

      

      
        G-2

        
          

        

      

      
        
        

      

    

     

     

    ANNEX
      H (Section
      9.9(a))

    to

    CREDIT
      AGREEMENT

     

    WIRE
      TRANSFER INFORMATION

    

    

    

    
      	
              Bank:

            	
              DeutscheBank
                Trust Company Americas

            
	
              Address:

            	
              One
                Bankers Trust Plaza

              New
                York, NY

            
	
              ABA
                #:

            	
              021-001-033

            
	
              Account
                No.:

            	
              50-279-513

            
	
              Account
                Name:

            	
              GECC
                CFS CIF COLLECTION ACCOUNT

            
	
              Reference:

            	
              Milacron
                Inc.- CFN9325

            

    

    

    

    
 

    
      
        
        

      

      
        H-1

        
          

        

      

      
        
        

      

    

     

     

    ANNEX
      I (Section
      11.10)

    to

    CREDIT
      AGREEMENT

     

    NOTICE
      ADDRESSES

     

    
      	
              (A)

            	
              General
                Electric Capital Corporation

              201
                Merritt Seven

              Norwalk,
                Connecticut 06851

              Attention:
                Milacron Account Manager

              Telecopier
                No.: (203) 952-4238

              Telephone
                No.: (203) 956-4118

            
	 	 
	 	
              with
                copies to:

               

              General
                Electric Capital Corporation

              401
                Merritt Seven

              Norwalk,
                Connecticut 06851

              Attention:
                Milacron - Loan Servicer

              Telecopier
                No.: (203) __________

              Telephone
                No.: (203) ___________

            
	 	 
	 	
              and

            
	 	 
	 	
              General
                Electric Capital Corporation

              401
                Merritt Seven, Second Floor

              Norwalk,
                Connecticut 06851

              Attention:
                Corporate Counsel - Corporate Lending

              Telecopier
                No.: (203) 956-4001

              Telephone
                No.: (203) 229-1492

            
	 	 
	 	
              and
                (which notice shall not constitute notice to Agent or GE
                Capital)

            
	 	 
	 	
              Paul,
                Hastings, Janofsky & Walker LLP

              600
                Peachtree Street, Suite 2400

              Atlanta,
                Georgia 30305

              Attention:
                Jesse H. Austin, III, Esq.

              Telecopier
                No.: (404) 815-2424

              Telephone
                No.: (404) 815-2208

            

    

    

    

    
      
        
          I-1

        

        
          
            

          

        

        
          
          

        

      

    

    

    

    
      	
              (B)

            	
              If
                to any Credit Party, to Borrower Representative, at

            
	 	 
	 	
              Milacron
                Inc.

              2090
                Florence Avenue

              Cincinnati,
                Ohio 45206

              Attention:
                John Francy

              Telephone
                No.: 513-487-5912

              Telecopier
                No.: 513-487-5586

            
	 	 
	 	
              with
                copies to:

              Cravath,
                Swaine & Moore LLP

              825
                Eighth Avenue

              New
                York, New York 10019

              Telephone
                No.: 212-474-1000

              Telecopier
                No.: 212-474-3700

              Attention:
                Paul Michalski, Esq.

            

    

    

    

    

    

    
      
        
          
             

          

          
          

        

        
          I-2

          
            

          

        

        
          
          

          
            

          

        

      

    

    

    ANNEX
      J (from Annex
      A - Commitments definition)

    to

    CREDIT
      AGREEMENT

     

    

    
      	 	
              Lender(s)

            
	 	 
	
              Revolving
                Loan Commitment

            	
                      General
                Electric Capital Corporation

            
	
              (including
                a Swing Line Commitment

            	 
	
              of
                $10,000,000) of $105,000,000

            	 
	 	 
	
              Export-Related
                Loan Commitment of $10,000,000

               

            	
                      General
                Electric Capital Corporation

               

            

    

    
 

     

     

     

     

     

    J-1Unassociated Document

     

    Exhibit
      10.1

    
 

    VOTING
      AGREEMENT

     

    VOTING
      AGREEMENT, dated as of December 20, 2006 (this “Agreement”),
      between NATIONAL HEALTHCARE CORPORATION, a Delaware corporation (“Parent”),
      and
      NATIONAL HEALTH REALTY, INC., a Maryland corporation (“Company”),
      and
      each stockholder of Parent and Company whose name and signature is set forth
      on
      the signature page hereof (collectively, the “Stockholders,”
and
      each, a “Stockholder”).

     

    WHEREAS,
      Davis Acquisition Sub LLC, a Delaware corporation and a wholly-owned subsidiary
      of NHC/OP (“Merger
      Subsidiary”),
      NHC/OP, L.P., a Delaware limited partnership (“NHC/OP”),
      Parent
      and Company are, concurrently with the execution hereof, entering into an
      Agreement and Plan of Merger (the “Merger
      Agreement”);

     

    WHEREAS,
      pursuant to the Merger Agreement, a successor to Company will merge with and
      into Merger Subsidiary, with Merger Subsidiary being the surviving entity (the
      “Merger”),
      and
      upon the consummation of the Merger each share of common stock of the successor
      to Company, par value $0.01 per share, will be converted into the right to
      receive the Merger Consideration;

     

    WHEREAS,
      each Stockholder is the record and/or beneficial owner of such number of shares
      of common stock of Parent, par value $0.01 per share (the “Parent
      Common Stock”),
      or
      shares of common stock of Company, par value $0.01 per share (the “Company
      Common Stock”)
      as the
      case may be, as is set forth opposite such Stockholder’s name on Schedule I
      hereof (collectively, the “Existing
      Shares”);

     

    WHEREAS,
      each Stockholder acknowledges that Merger Subsidiary, NHC/OP, Parent and Company
      are entering into the Merger Agreement in reliance on the representations,
      warranties, covenants and other agreements of such Stockholder set forth in
      this
      Agreement and would not enter into the Merger Agreement if each such Stockholder
      did not enter into this Agreement.

     

    NOW,
      THEREFORE, in consideration of the foregoing and the respective representations,
      warranties, covenants and agreements set forth herein and in the Merger
      Agreement, and intending to be legally bound hereby, Parent, Company and each
      Stockholder agree as follows:

     

    1.  Defined
      Terms.
      Capitalized terms used herein without definition shall have the meanings
      assigned to such terms in the Merger Agreement. The following words have the
      meanings given to them below.

     

    “beneficial
      ownership”
has
      the
      meaning set forth in Rule 13d-3 under the Exchange Act.

     

    “Consolidation”
means
      the consolidation of Company with its wholly-owned subsidiary pursuant to the
      Articles of Consolidation, as a result of which a new Maryland corporation
      shall
      be formed which (i) shall assume the corporate name “National Health Realty,
      Inc.,” (ii) shall have as its outstanding stock only the stock of Company
      outstanding immediately prior to the effectiveness of such consolidation, and
      (iii) shall succeed to the business, properties, assets and rights and become
      subject to all of the obligations and liabilities of Company, including the
      Merger Agreement.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -2-

      

    

    

     

    “Exchange
      Act”
means
      the Securities Exchange Act of 1934, as amended.

     

    “person”
has
      the
      meaning specified in Sections 3(a)(9) and 13(d)(3) of the Exchange
      Act.

     

    “Representative” with
      respect to any person who is an individual, any affiliate of such person
      (including any family member or any entity controlled by such person), or any
      agent, representative or advisor of such person, including any investment
      banker, attorney or accountant retained by such person or any of such person’s
      affiliates.

     

    “Shares”
means,
      (i) with respect to each Stockholder of Company, all Existing Shares of such
      Stockholder that are shares of Company Common Stock, and any shares of Company
      Common Stock, beneficial ownership of which is acquired by such Stockholder
      after the date hereof, including, without limitation, shares acquired by
      purchase or upon the exercise, conversion or exchange of any option, warrant
      or
      convertible security, and (ii) with respect to each Stockholder of Parent,
      all
      Existing Shares of such Stockholder that are shares of Parent Common Stock,
      and
      any shares of Parent Common Stock, beneficial ownership of which is acquired
      by
      such Stockholder after the date hereof, including without limitation, shares
      acquired by purchase or upon the exercise, conversion or exchange of any option,
      warrant or convertible security.

     

    “Support
      Documents”
means
      this Agreement and all other agreements, instruments and other documents
      executed and delivered by each Stockholder in connection with this
      Agreement.

     

    “Termination
      Time”
means
      the earliest of the following: (i) the time at which Parent and Company give
      joint written notice to each of the Stockholders that the Termination Time
      has
      occurred; (ii) the Effective Time; and (iii) the time at which the
      Merger Agreement terminates pursuant to Section 7.01 thereof.

     

    “Voting
      Shares”
means,
      (i) with respect to each Stockholder of Company, such Stockholder’s Shares, not
      including Shares that are the subject of unexercised options, warrants, rights
      or convertible securities, and (ii) with respect to each Stockholder of Parent,
      such Stockholder’s Shares, not including Shares that are the subject of
      unexercised options, warrants, rights or convertible securities.

     

    2.  Agreement
      to Vote.

     

    (a)  In
      order
      to induce Merger Subsidiary and Parent to enter into the Merger Agreement,
      each
      Stockholder of Company hereby agrees that, from and after the date hereof and
      until the Termination Time, at any meeting of the stockholders of Company,
      however called, or in connection with any written consent of the stockholders
      of
      Company, such Stockholder shall appear at each such meeting, in person or by
      proxy, or otherwise cause such Stockholder’s Voting Shares to be counted as
      present thereat for purposes of establishing a quorum, and each such Stockholder
      shall vote (or cause to be voted) or act by written consent with respect to
      all
      of its Voting Shares that are beneficially owned by each such Stockholder or
      its
      affiliates or as to which such Stockholder has, directly or indirectly, the
      right to vote or direct the voting, (i) in favor of adoption and approval
      of the Merger Agreement, the Consolidation and the Merger and the approval
      of
      the terms thereof and each of the other actions contemplated by the Merger
      Agreement and this Agreement; (ii) against any action or agreement that
      would result in a breach of any covenant, representation or warranty or any
      other obligation or agreement of Company contained in the Merger Agreement
      or of
      any Stockholder of Company contained in this Agreement; (iii) against

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -3-

      

    

    any
      Company Takeover Proposal; and (iv) against any other action, agreement or
      transaction (other than the Merger Agreement and the transactions contemplated
      thereby) that is intended, or could reasonably be expected, to impede, interfere
      or be inconsistent with, delay, postpone, discourage or materially adversely
      affect the Consolidation, the Merger or the performance by each of the
      Stockholders of Company of such Stockholder’s obligations under this Agreement,
      including, but not limited to (A) any extraordinary corporate transaction,
      such as a merger, consolidation or other business combination involving Company
      or any of its Subsidiaries (other than the Consolidation or the Merger);
      (B) a sale, lease or transfer of a material amount of assets of Company or
      any of its Subsidiaries or a reorganization, recapitalization or liquidation
      of
      Company or any of its Subsidiaries; (C) a material change in the policies
      or management of Company; (D) an election of new members to the board of
      directors of Company; (E) any material change in the present capitalization
      or dividend policy of Company or any amendment or other change to Company’s
      articles of incorporation (other than as contemplated in the Merger Agreement);
      or (F) any other material change in Company’s corporate structure (other
      than as contemplated in the Merger Agreement) or business. Each Stockholder
      of
      Company hereby agrees that such Stockholder will not enter into any voting
      or
      other agreement or understanding with any person or entity or grant a proxy
      or
      power of attorney with respect to such Stockholder’s Shares prior to the
      Termination Time (other than a proxy or power of attorney to an officer of
      Parent that may be exercised solely in accordance with this Section 2 and
      except as provided in Section 3 below) or vote or give instructions in any
      manner inconsistent with clauses (i), (ii), (iii) or (iv) of the preceding
      sentence. Each Stockholder of Company hereby agrees, during the period
      commencing on the date hereof and ending on the Termination Time, not to vote
      or
      execute any written consent in lieu of a stockholders meeting or vote, if such
      consent or vote by the stockholders of Company would be inconsistent with or
      frustrate the purposes of the other covenants of such Stockholder pursuant
      to
      this paragraph. 

     

    (b)  In
      order
      to induce Company to enter into the Merger Agreement, each Stockholder of Parent
      hereby agrees that, from and after the date hereof and until the Termination
      Time, at any meeting of the stockholders of Parent, however called, or in
      connection with any written consent of the stockholders of Parent, such
      Stockholder shall appear at each such meeting, in person or by proxy, or
      otherwise cause such Stockholder’s Voting Shares to be counted as present
      thereat for purposes of establishing a quorum, and each such Stockholder shall
      vote (or cause to be voted) or act by written consent with respect to all of
      its
      Voting Shares that are beneficially owned by each such Stockholder or its
      affiliates or as to which such Stockholder has, directly or indirectly, the
      right to vote or direct the voting, (i) in favor of the establishment and
      issuance of the Series A Convertible Preferred Stock of Parent (including any
      related amendment to the certificate of incorporation of Parent) pursuant to
      and
      in accordance with the Merger Agreement and in favor of adoption and approval
      of
      this Agreement; (ii) against any action or agreement that would result in a
      breach of any covenant, representation or warranty or any other obligation
      or
      agreement of any Stockholder of Parent contained in this Agreement; and (iii)
      against any other action, agreement or transaction that is intended, or could
      reasonably be expected, to impede, interfere or be inconsistent with, delay,
      postpone, discourage or materially adversely affect the performance by each
      of
      the Stockholders of Parent of such Stockholder’s obligations under this
      Agreement. Each Stockholder of Parent hereby agrees that such Stockholder will
      not enter into any voting or other agreement or understanding with any person
      or
      entity or grant a proxy or power of attorney with respect to such Stockholder’s
      Shares prior to the Termination Time (other than a proxy or power of attorney
      to
      an officer of Company that may be exercised solely in accordance with this
      Section 2 and except as provided in Section 3 below) or vote or give
      instructions in any manner inconsistent with clauses (i), (ii) or (iii) of
      the
      preceding sentence. Each Stockholder of Parent hereby agrees, during the period
      commencing on the date hereof and ending on the Termination Time, not to vote
      or
      execute any written consent in lieu of a 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -4-

      

    

    stockholders
      meeting or vote, if such consent or vote by the stockholders of Parent would
      be
      inconsistent with or frustrate the purposes of the other covenants of such
      Stockholder pursuant to this paragraph.

     

    3.  Proxy.

     

    (a)  As
      security for its obligations under Section 2 hereof, each Stockholder of Company
      hereby grants to, and appoints, Robert Adams, Donald Daniel and John Lines,
      in
      their respective capacities as officers of Parent, and any individual who shall
      hereafter succeed to any such officer of Parent, and any other person designated
      in writing by Parent, each of them individually, such Stockholder’s proxy and
      attorney-in-fact (with full power of substitution) to vote or act by written
      consent, to the fullest extent permitted by and subject to applicable law,
      with
      respect to such Stockholder’s Shares in accordance with Section 2 hereof. THIS
      PROXY IS COUPLED WITH AN INTEREST, SHALL BE IRREVOCABLE AND SHALL TERMINATE
      AT
      THE TERMINATION TIME. Each Stockholder of Company will take such further action
      or execute such other instruments as may be necessary to effectuate the intent
      of this proxy and hereby revokes any proxy previously granted by such
      Stockholder with respect to such Stockholder’s Shares.

     

    (b)  As
      security for its obligations under Section 2 hereof, each Stockholder of Parent
      hereby grants to, and appoints, Robert Adams, Donald Daniel and John Lines,
      in
      their respective capacities as officers of Company, and any individual who
      shall
      hereafter succeed to any such officer of Company, and any other person
      designated in writing by Company, each of them individually, such Stockholder’s
      proxy and attorney-in-fact (with full power of substitution) to vote or act
      by
      written consent, to the fullest extent permitted by and subject to applicable
      law, with respect to such Stockholder’s Shares in accordance with Section 2
      hereof. THIS PROXY IS COUPLED WITH AN INTEREST, SHALL BE IRREVOCABLE AND SHALL
      TERMINATE AT THE TERMINATION TIME. Each Stockholder of Parent will take such
      further action or execute such other instruments as may be necessary to
      effectuate the intent of this proxy and hereby revokes any proxy previously
      granted by such Stockholder with respect to such Stockholder’s
      Shares.

     

    4.  Representations
      and Warranties of Parent.
      Parent
      represents and warrants to each Stockholder as follows:

     

    (a)  Organization.
      Parent
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of Delaware.

     

    (b)  Authority;
      Enforceability.
      Parent
      has the requisite corporate power and authority to enter into this Agreement
      and
      to carry out its obligations hereunder. The execution and delivery of this
      Agreement and the consummation of the transactions contemplated hereby have
      been
      duly authorized by Parent’s board of directors and no other corporate
      proceedings on the part of Parent are necessary to authorize the execution
      and
      delivery of this Agreement by Parent and the consummation by it of the
      transactions contemplated hereby. This Agreement has been duly executed and
      delivered by Parent and is a valid and legally binding obligation of Parent,
      enforceable in accordance with its terms, except as may be limited by
      bankruptcy, insolvency or other similar laws affecting the rights and remedies
      of creditors generally, and subject to general principles of equity, whether
      applied by a court of law or equity.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -5-

      

    

    

     

    (c)  No
      Conflict.
      The
      execution and delivery of this Agreement by Parent do not, and the performance
      of this Agreement by Parent will not, (i) conflict with or violate the
      certificate of incorporation or by-laws of Parent, (ii) conflict with or violate
      any law, rule, regulation or order applicable to Parent or by which any of
      its
      properties or assets is bound, or (iii) conflict with, result in any breach
      of
      or constitute a default (or an event that with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, or require payment under, or result
      in the creation of any lien on the properties or assets of Parent pursuant
      to,
      any note, bond, mortgage, indenture, contract, agreement, lease, license,
      permit, franchise or other instrument or obligation to which Parent is a party
      or by which Parent or any of its respective properties is bound, except for
      any
      thereof that could not reasonably be expected to materially impair the ability
      of Parent to perform its obligations hereunder or under the Merger Agreement
      or
      to consummate the transactions contemplated hereby or thereby on a timely
      basis.

     

    5.  Representations
      and Warranties of Company.
      Company
      represents and warrants to each Stockholder as follows:

     

    (a)  Organization.
      Company
      is a corporation duly organized, validly existing and in good standing under
      the
      laws of the State of Maryland.

     

    (b)  Authority;
      Enforceability.
      Company
      has the requisite corporate power and authority to enter into this Agreement
      and
      to carry out its obligations hereunder. The execution and delivery of this
      Agreement and the consummation of the transactions contemplated hereby have
      been
      duly authorized by Company’s board of directors and no other corporate
      proceedings on the part of Company are necessary to authorize the execution
      and
      delivery of this Agreement by Company and the consummation by it of the
      transactions contemplated hereby. This Agreement has been duly executed and
      delivered by Company and is a valid and legally binding obligation of Company,
      enforceable in accordance with its terms, except as may be limited by
      bankruptcy, insolvency or other similar laws affecting the rights and remedies
      of creditors generally, and subject to general principles of equity, whether
      applied by a court of law or equity.

     

    (c)  No
      Conflict.
      The
      execution and delivery of this Agreement by Company do not, and the performance
      of this Agreement by Company will not, (i) conflict with or violate the charter
      or by-laws of Company, (ii) conflict with or violate any law, rule, regulation
      or order applicable to Company or by which any of its properties or assets
      is
      bound, or (iii) conflict with, result in any breach of or constitute a default
      (or an event that with notice or lapse of time or both would become a default)
      under, or give to others any rights of termination, amendment, acceleration
      or
      cancellation of, or require payment under, or result in the creation of any
      lien
      on the properties or assets of Company pursuant to, any note, bond, mortgage,
      indenture, contract, agreement, lease, license, permit, franchise or other
      instrument or obligation to which Company is a party or by which Company or
      any
      of its respective properties is bound, except for any thereof that could not
      reasonably be expected to materially impair the ability of Company to perform
      its obligations hereunder or under the Merger Agreement or to consummate the
      transactions contemplated hereby or thereby on a timely basis.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -6-

      

    

    

     

    6.  Representations
      and Warranties of the Stockholders.
      Each
      Stockholder represents and warrants to Parent and Company as
      follows:

     

    (a)  Organization.
      If such
      Stockholder is not an individual, such Stockholder has been duly organized
      and
      is validly existing and in good standing under the laws of the jurisdiction
      of
      its organization.

     

    (b)  Authority.
      If such
      Stockholder is not an individual, such Stockholder has all necessary authority
      to enter into this Agreement, to perform its obligations hereunder and to
      consummate the transactions contemplated hereby, and the execution, delivery
      and
      performance of this Agreement by such Stockholder and the consummation by such
      Stockholder of the transactions contemplated hereby have been duly authorized
      by
      all necessary action on the part of such Stockholder.

     

    (c)  Enforceability.
      This
      Agreement has been duly executed and delivered by such Stockholder and is a
      valid and legally binding obligation of such Stockholder, enforceable in
      accordance with its terms, except as may be limited by bankruptcy, insolvency
      or
      other similar laws affecting the rights and remedies of creditors generally,
      and
      subject to general principles or equity, whether applied by a court of law
      or
      equity.

     

    (d)  No
      Conflict.
      The
      execution and delivery of this Agreement by such Stockholder do not, and the
      performance of this Agreement by such Stockholder will not, (i) if such
      Stockholder is not an individual, conflict with or violate the certificate
      of
      incorporation or by-laws, or trust agreement or other organizational documents,
      of such Stockholder, (ii) conflict with or violate any law, rule, regulation
      or
      order applicable to such Stockholder or by which any of such Stockholder’s
      properties or assets is bound, or (iii) conflict with, result in any breach
      of
      or constitute a default (or an event that with notice or lapse of time or both
      would become a default) under, or give to others any rights of termination,
      amendment, acceleration or cancellation of, or require payment under, or result
      in the creation of any lien on the properties or assets of such Stockholder
      pursuant to, any note, bond, mortgage, indenture, contract, agreement, lease,
      license, permit, franchise or other instrument or obligation to which such
      Stockholder is a party or by which such Stockholder or any of such Stockholder’s
      properties or assets is bound, except for any thereof that would not result
      in
      the imposition of a lien on such Stockholder’s Shares and would not reasonably
      be expected to materially impair the ability of such Stockholder to perform
      such
      Stockholder’s obligations hereunder or under the Merger Agreement or to
      consummate the transactions contemplated hereby or thereby on a timely
      basis.

     

    (e)  No
      Consent.
      The
      execution and delivery of this Agreement by such Stockholder do not, and the
      performance by such Stockholder of such Stockholder’s obligations hereunder will
      not, require such Stockholder to obtain any consent, approval, authorization
      or
      permit of, or to make any filing with or notification to, any Governmental
      Entity other than filings required under the Exchange Act disclosing the
      execution of this Agreement and the terms hereof.

     

    (f)  No
      Proceedings.
      There is
      no suit, action, investigation or proceeding pending or, to the knowledge of
      such Stockholder, threatened against such Stockholder at law or in equity before
      or by any Governmental Entity that could reasonably be expected to materially
      impair the ability of such Stockholder to perform such Stockholder’s obligations
      hereunder on a timely ba-

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -7-

      

    

    sis,
      and
      there is no agreement, commitment or law to which such Stockholder is subject
      that could reasonably be expected to materially impair the ability of such
      Stockholder to perform such Stockholder’s obligations hereunder on a timely
      basis.

     

    (g)  Ownership.
      Such
      Stockholder’s Existing Shares are owned beneficially and of record by such
      Stockholder except as indicated on Schedule I opposite such Stockholder’s name.
      Such Stockholder’s Existing Shares constitute all of the shares of Parent Common
      Stock or Company Common Stock, as the case may be, owned of record or
      beneficially by such Stockholder. Except for units of NHR/OP, L.P. which are
      convertible into Company Common Stock, all of the Existing Shares are issued
      and
      outstanding and, except as indicated on Schedule I opposite such Stockholder’s
      name, such Stockholder does not own, of record or beneficially, any warrants,
      options, convertible securities or other rights to acquire any shares of Parent
      Common Stock or Company Common Stock, as the case may be. Such Stockholder
      has
      not appointed or granted any proxy which is still effective with respect to
      any
      Shares. Such Stockholder has sole voting power, sole power of disposition,
      sole
      power to demand appraisal rights and sole power to agree to all of the matters
      set forth in this Agreement, in each case, with respect to all of such
      Stockholder’s Existing Shares, with no limitations, qualifications or
      restrictions on such rights, subject to applicable securities laws and the
      terms
      of this Agreement.

     

    (h)  No
      Encumbrances.
      Such
      Stockholder’s Shares and the certificates representing such Shares (if any) are
      now, and at all times during the term hereof will be, held by the Stockholder,
      or by a nominee or custodian for the benefit of the Stockholder, free and clear
      of all liens, claims, security interests, proxies, voting trusts or agreements,
      understandings or arrangements or any other encumbrances whatsoever, except
      as
      arising hereunder.

     

    (i)  No
      Finder’s Fees.
      Except
      as provided in the Merger Agreement, no broker, investment banker, financial
      adviser or other person is entitled to any broker’s, finder’s, financial
      adviser’s or other similar fee or commission in connection with the transactions
      contemplated hereby based upon arrangements made by or on behalf of such
      Stockholder for which Merger Subsidiary, Parent or Company or any of their
      respective Subsidiaries could be or become liable.

     

    7.  Agreements
      of the Stockholders.

     

    (a)  Restrictions
      on Transfer; Proxies; Non-Interference.(i)
      Each
      Stockholder of Company hereby agrees, until the Termination Time, not to (A)
      sell, transfer, pledge, encumber, grant, assign or otherwise dispose of, enforce
      any redemption agreement with Company or enter into any contract, option or
      other arrangement or understanding with respect to or consent to the offer
      for
      sale, sale, transfer, pledge, encumbrance, grant, assignment or other
      disposition of, record or beneficial ownership of any of such Stockholder’s
      Shares (whether acquired heretofore or hereafter) or any interest in any of
      the
      foregoing, except to Parent, (B) in connection with any Company Takeover
      Proposal, vote, agree to vote, grant any proxy or power of attorney to vote,
      deposit into a voting trust or enter into a voting agreement with respect to,
      any of such Stockholder’s Shares except for, with, by or on behalf of Merger
      Subsidiary or Parent or (C) take any action that would make any
      representation or warranty of such Stockholder contained herein untrue or
      incorrect or have the effect of preventing such Stockholder from performing
      such
      Stockholder’s obligations under this Agreement, or that would otherwise
      materially hinder or delay Parent from consummating the Merger.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -8-

      

    

    

     

    (ii) Each
      Stockholder of Parent hereby agrees, until the Termination Time, not to take
      any
      action that would make any representation or warranty of such Stockholder
      contained herein untrue or incorrect or have the effect of preventing such
      Stockholder from performing such Stockholder’s obligations under this
      Agreement.

     

    (b)  Non-Solicitation.
      Each
      Stockholder of Company acknowledges that such Stockholder has received a copy
      of, and read, the Merger Agreement, including Section 4.02 thereof. Such
      Stockholder agrees to comply with the provisions of the Merger Agreement to
      the
      extent applicable to Company’s Representatives, and, without limiting the
      foregoing, agrees to, and to cause such Stockholder’s Representatives to, comply
      with Section 4.02 thereof (for this purpose, the term “Company Takeover
      Proposal” shall include any inquiry, expression of interest, proposal or offer
      with respect to any matter described in Section 7(a) hereof).

     

    (c)  Information.
      (i) Each
      Stockholder of Company hereby agrees, until the Termination Time, to notify
      Parent promptly of (A) the number of any additional shares of Company
      Common Stock and the number and type of any other Shares of Company Common Stock
      acquired by such Stockholder, if any, after the date hereof and (B) any
      such inquiries or proposals that are received by, any such information that
      is
      requested from, or any such negotiations or discussions that are sought to
      be
      initiated or continued with, such Stockholder of Company with respect to any
      matter described in Section 7(a) or 7(b).

     

    (ii) Each
      Stockholder of Parent hereby agrees, until the Termination Time, to notify
      Company promptly of the number of any additional shares of Parent Common Stock
      and the number and type of any other Shares of Parent Common Stock acquired
      by
      such Stockholder, if any, after the date hereof.

     

    (d)  Waiver
      of Appraisal Rights.
      Each
      Stockholder of Company hereby waives any rights of appraisal or rights to
      dissent from the Consolidation, the Merger and each of the other transactions
      contemplated by the Merger Agreement that such Stockholder may
      have.

     

    (e)  Stop
      Transfer.
      Each
      Stockholder of Company will not request Company to, and Company will not,
      register the transfer (book-entry or otherwise) of any certificate or
      uncertificated interest representing any of such Stockholder’s Shares, unless
      such transfer is made in compliance with this Agreement. 

     

    8.  Further
      Assurances.
      From
      time to time, at Parent’s or Company’s request and without further
      consideration, each Stockholder shall execute and deliver such additional
      documents and take all such further action as may be reasonably necessary or
      desirable to consummate and make effective the transactions contemplated by
      this
      Agreement. Without limiting the generality of the foregoing, no Stockholder
      shall enter into an agreement or arrangement (or alter, amend or terminate
      any
      existing agreement or arrangement) if such action would materially impair the
      ability of such Stockholder to effectuate, carry out or comply with all of
      the
      terms of this Agreement.

     

    9.  Notices.
      All
      notices and other communications hereunder shall be in writing and shall be
      deemed duly given (1) on the date of delivery if delivered personally, or by
      telecopy or telefacsimile, upon confirmation of receipt, (2) on the first
      business day following the date of dispatch if delivered by a recognized
      next-day courier service, or (3) on the fifth business day following the date
      of
      mail-

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -9-

      

    

    ing
      if
      delivered by registered or certified mail, return receipt requested, postage
      prepaid. All notices hereunder shall be given the relevant party at the address
      stated in the Merger Agreement, in the case of Parent and Company, and on
      Schedule I hereto, in the case of the Stockholders, or at any other address
      as
      the party may specify for this purpose by notice to the other party pursuant
      to
      this Section 9.

     

    10.  No
      Waivers.
      No
      failure or delay by Parent, Company or any Stockholder in exercising any right,
      power or privilege under any Support Document shall operate as a waiver of
      that
      right, power or privilege. A single or partial exercise of any right, power
      or
      privilege shall not preclude any other or further exercise of that right, power
      or privilege or the exercise of any other right, power or privilege. The rights
      and remedies provided in the Support Documents shall be cumulative and not
      exclusive of any rights or remedies provided by law.

     

    11.  Amendments,
      Etc.
      No
      amendment, modification, termination or waiver of any provision of any Support
      Document shall be effective unless it shall be in writing and signed and
      delivered by Parent, Company and each affected Stockholder, and then it shall
      be
      effective only in the specific instance and for the specific purpose for which
      it is given.

     

    12.  Successors
      and Assigns; Third Party Beneficiaries.

     

    (a)  Except
      pursuant to the Consolidation, no party shall assign any of such party’s rights
      or remedies or delegate any of such party’s obligations or liabilities, in whole
      or in part, under any Support Document. Any assignment or delegation in
      contravention of this Section 12 shall be void ab initio
      and shall
      not relieve the assigning or delegating party of any obligation under any
      Support Document.

     

    (b)  The
      provisions of each Support Document shall be binding upon and inure solely
      to
      the benefit of the parties hereto and their respective permitted heirs,
      executors, legal representatives, successors and assigns, and no other
      person.

     

    13.  Governing
      Law.
      This
      Agreement and each other Support Document shall be governed by and construed
      in
      accordance with the laws of the State of Delaware, except as it relates to
      shares of Maryland corporations in a way specifically governed by Maryland
      law

     

    14.  Severability
      of Provisions.
      If any
      term or other provision of any Support Document is invalid, illegal or incapable
      of being enforced by any law or public policy, all other terms and provisions
      of
      such Support Document shall nevertheless remain in full force and effect so
      long
      as the economic or legal substance of the transactions contemplated hereby
      is
      not affected in any manner materially adverse to any party. Upon such
      determination that any term or other provision is invalid, illegal or incapable
      of being enforced, the parties shall negotiate in good faith to modify such
      Support Document so as to effect the original intent of the parties as closely
      as possible in an acceptable manner in order that the transactions contemplated
      hereby are consummated as originally contemplated to the greatest extent
      possible.

     

    15.  Headings
      and References.
      Article
      and section headings in each Support Document are included for the convenience
      of reference only and do not constitute a part of the Support Document for
      any
      other purpose. References to articles and sections in any Support Document
      are
      references to the sections of the Support Document unless the context shall
      require otherwise. Any of the 

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -10-

      

    

    terms
      defined in this Agreement may, unless the context otherwise requires, be used
      in
      the singular or the plural, depending on the reference. The use in this
      Agreement of the word “include” or “including,” when following any general
      statement, term or matter, shall not be construed to limit such statement,
      term
      or matter to the specific items or matters set forth immediately following
      such
      word or to similar items or matters, whether or not nonlimiting language (such
      as “without limitation” or “but not limited to” or words of similar import) is
      used with reference thereto, but rather shall be deemed to refer to all other
      items or matters that fall within the broadest possible scope of such general
      statement, term or matter.

     

    16.  Entire
      Agreement.
      The
      Support Documents embody the entire agreement and understanding of each of
      the
      parties hereto, and supersede all other written or oral prior agreements or
      understandings, with respect to the subject matters of the Support
      Documents.

     

    17.  Enforcement.
      The
      parties agree that irreparable damage would occur in the event that any of
      the
      provisions of any Support Agreement were not performed in accordance with their
      specific terms or were otherwise breached. It is accordingly agreed that the
      parties shall be entitled to an injunction or injunctions to prevent breaches
      of
      the Support Agreements and to enforce specifically the terms and provisions
      of
      the Support Agreements in any court of the United States or of the State of
      New
      York court sitting in the Borough of Manhattan, City of New York, this being
      in
      addition to any other remedy to which they are entitled at law or in
      equity.

     

    18.  Fees
      and Expenses.
      Whether
      or not the Merger is consummated, all costs and expenses incurred in connection
      with the Support Documents and the transactions contemplated hereby and thereby
      shall be paid by the party incurring such expense.

     

    19.  Counterparts.
      This
      Agreement may be signed in any number of counterparts, each of which shall
      be an
      original, with the same effect as if all signatures were on the same
      instrument.

     

    20.  Officers
      and Directors.
      Notwithstanding anything to the contrary in this Agreement, in the event a
      Stockholder is a director or officer of Parent or Company, nothing in this
      Agreement is intended or shall be construed to require such Stockholder, in
      his
      or her capacity as a director or officer of Parent or Company, to act or fail
      to
      act in accordance with his or her duties under applicable law in such capacity.
      Furthermore, no Stockholder who is or becomes (during the term hereof) a
      director or officer of Parent or Company makes any agreement or understanding
      herein in his or her capacity as a director or officer, and nothing herein
      will
      limit or affect, or give rise to any liability to any Stockholder in such
      Stockholder’s capacity as a director or officer of Parent or Company. For the
      avoidance of doubt, nothing in this Section 20 shall in any way limit, modify
      or
      abrogate any of the obligations of the Stockholders hereunder, including
      (a) to vote the Shares in accordance with the terms of this Agreement and
      (b) in the case of Stockholders of Company, to not transfer any of such
      Stockholders’ Shares except as permitted under Section 7(a)
      above.

     

    21.  Waiver
      of Jury Trial.
      Each party to this Agreement, as a condition of such party’s right to enforce or
      defend any right under or in connection with this Agreement or any other Support
      Document, waives any right to a trial by jury in any action to enforce or defend
      any right under this Agreement or any other Support Document and agrees that
      any
      action shall be tried before a court and not before a
      jury.

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -11-

      

    

    IN
      WITNESS
      WHEREOF, Parent, the Company and each of the undersigned Stockholders have
      caused this Agreement to be duly executed as of the day and year first above
      written.

     

    NATIONAL
      HEALTHCARE CORPORATION

     

    By: /s/
      R.
      Michael Ussery

    Name: R.
      Michael
      Ussery

    Title: Senior
      V.P., Operations

     

     

    NATIONAL
      HEALTH REALTY, INC.

     

    By: /s/
      Robert G. Adams

    Name: Robert
      G.
      Adams

    Title: President

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -12-

      

    

    STOCKHOLDERS
      OF PARENT:

     

    

     

    /s/
      James Paul Abernathy  

    Name:
      James Paul Abernathy

    

    

    

    /s/
      Robert G. Adams   

    Name:
      Robert G. Adams

    

    

    

    /s/
      W.
      Andrew Adams   

    Name:
      W.
      Andrew Adams

    

    

    

    /s/
      Ernest G. Burgess, III  

    Name:
      Ernest G. Burgess, III

    

    

    

    /s/
      Emil E. Hassan   

    Name:
      Emil
      E. Hassan

    

    

    

    /s/
      Richard F. LaRoche, Jr.  

    Name:
      Richard F. LaRoche, Jr.

    

    

    

    /s/
      Lawrence C. Tucker   

    Name:
      Lawrence C. Tucker

    

    

    

    

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        -13-

      

    

    STOCKHOLDERS
      OF COMPANY: 

    

    

    

    /s/
      James Paul Abernathy  

    Name:
      James Paul Abernathy

    

    

    

    /s/
      Robert G. Adams   

    Name:
      Robert G. Adams

    

    

    

    /s/
      W.
      Andrew Adams   

    Name:
      W.
      Andrew Adams

    

    

    

    /s/
      Ernest G. Burgess, III  

    Name:
      Ernest G. Burgess, III

    

    

    

    /s/
      James R. Jobe   

    Name:
      James R. Jobe

    

    

    

    /s/
      Richard F. LaRoche, Jr.  

    Name:
      Richard F. LaRoche, Jr.

    

    

    

    /s/
      Joseph M. Swanson   

    Name:
      Joseph M. Swanson

    

    

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

    Schedule
      I

     

    
      	
              Stockholder
                of Parent

            	
              Notice
                Address

            	
              Number
                of

              Existing
                Shares

            
	
              James
                Paul Abernathy

               

            	
              2102
                Greenland Dr.

              Murfreesboro,
                TN 37130

               

            	
              10,473

               

            
	
              Robert
                G. Adams

               

            	
              100
                Vine St. Ste. 1400

              Murfreesboro,
                TN 37130

               

            	
              354,932

               

            
	
              W.
                Andrew Adams

               

            	
              100
                Vine Street, Suite 1200

              Murfreesboro,
                TN 37130

               

            	
              1,093,652

               

            
	
              Ernest
                G. Burgess, III

               

            	
              7097
                Franklin Road 

              Murfreesboro,
                TN 37128

               

            	
              146,204

               

            
	
              Emil
                E. Hassan

               

            	
              1704
                Irby Lane

              Murfreesboro,
                TN 37127

               

            	
              6,000

               

            
	
              Richard
                F. LaRoche, Jr.

               

            	
              2103
                Shannon Dr.

              Murfreesboro,
                TN 37129

               

            	
              343,951

               

            
	
              Lawrence
                C. Tucker

               

            	
              140
                Broadway 

              New
                York, NY 10005

               

            	
              720,155

               

            

    

    

    

    
      	
              Stockholder
                of Company

            	
              Notice
                Address

            	
              Number
                of

              Existing
                Shares

            
	
              James
                Paul Abernathy

               

            	
              2102
                Greenland Dr.

              Murfreesboro,
                TN 37130

               

            	
              8,187

               

            
	
              W.
                Andrew Adams

               

            	
              100
                Vine Street, Suite 1200

               

              Murfreesboro,
                TN 37130

               

            	
              1,257,681

               

            
	
              Robert
                G. Adams

               

            	
              100
                Vine St. Ste. 1400

              Murfreesboro,
                TN 37130

               

            	
              436,309

               

            
	
              Ernest
                G. Burgess, III

               

            	
              7097
                Franklin Road 

              Murfreesboro,
                TN 37128

               

            	
              140,000

               

            
	
              James
                R. Jobe

               

            	
              707
                Regal Drive

              Murfreesboro,
                TN 37129 

               

            	
              0

               

            
	
              Joseph
                M. Swanson

               

            	
              1188
                Park Avenue 

              Murfreesboro,
                TN 37129

               

            	
              5,000

               

            
	
              Richard
                F. LaRoche, Jr.

               

            	
              2103
                Shannon Dr.

              Murfreesboro,
                TN 37129

               

            	
              372,714

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00115-of-00352.parquet"}]]