Document:

Exhibit
10(a)

 

 

SUPERIOR
ESSEX COMMUNICATIONS LLC, and

ESSEX
GROUP, INC.,

as Borrowers

 

 

CREDIT
AGREEMENT

 

Dated: 
November 10, 2003

 

$120,000,000.00

 

 

THE
FINANCIAL INSTITUTIONS

PARTY
HERETO FROM TIME TO TIME, as Lenders

 

and

 

FLEET
CAPITAL CORPORATION,

as Administrative Agent,

 

and

 

GENERAL
ELECTRIC CAPITAL CORPORATION,

as Syndication Agent

 

and

 

FLEET
SECURITIES, INC.

GECC
CAPITAL MARKETS GROUP, INC.,

as Co-Lead Arrangers

 

 

 

TABLE
OF CONTENTSLIST OF EXHIBITS AND SCHEDULES

 

	
  Exhibit A

  	
  Form of Revolver Note

  
	
  Exhibit B

  	
  RESERVED

  
	
  Exhibit C

  	
  Form of Notice of
  Conversion/Continuation

  
	
  Exhibit D

  	
  Form of Notice of Borrowing

  
	
  Exhibit E

  	
  Form of Compliance
  Certificate

  
	
  Exhibit F

  	
  Form of Opinion Contents

  
	
  Exhibit G

  	
  Form of Assignment and
  Acceptance

  
	
  Exhibit H

  	
  Form of Notice

  
	
  Exhibit I

  	
  Letter of Credit Procurement Request

  

 

	
  Schedule 7.1.1

  	
  Borrowers’
  Business Locations

  
	
  Schedule 7.1.2

  	
  Borrowers’
  Insurance

  
	
  Schedule 8.1.1

  	
  Jurisdictions
  in which Borrowers and each Subsidiary is Authorized to do Business

  
	
  Schedule 8.1.4

  	
  Capital
  Structure of Borrowers

  
	
  Schedule 8.1.5

  	
  Corporate
  Names

  
	
  Schedule 8.1.12

  	
  Surety
  Obligations

  
	
  Schedule 8.1.13

  	
  Tax
  Identification Numbers of Borrowers and Subsidiaries

  
	
  Schedule 8.1.15

  	
  Patents,
  Trademarks, Copyrights and Licenses

  
	
  Schedule 8.1.18

  	
  Contracts
  Restricting Borrowers’ Right to Incur Debts; Surety Obligations

  
	
  Schedule 8.1.19

  	
  Litigation

  
	
  Schedule 8.1.21

  	
  Capitalized
  and Operating Leases

  
	
  Schedule 8.1.22

  	
  Pension
  Plans

  
	
  Schedule 8.1.24

  	
  Labor
  Contracts

  
	
  Schedule 9.2.5

  	
  Permitted
  Liens

  
	
  Schedule 9.2.8

  	
  Restrictions
  on Upstream Payments

  
	
  Schedule 9.2.10

  	
  Dispositions of Assets

  

 

 

CREDIT
AGREEMENT

 

THIS
CREDIT AGREEMENT is made on November 10, 2003, by
and among SUPERIOR
ESSEX COMMUNICATIONS LLC (individually “Superior”, and in its
capacity as the representative of the other Borrowers pursuant to Section 3.4
hereof, “Borrower Agent”), a Delaware limited liability company, with its chief
executive office and principal place of business at 150 Interstate North Parkway,
Suite 300, Atlanta, Georgia 30339; ESSEX GROUP, INC., a Michigan corporation
(“Essex”), with its chief executive office and principal place of business at
1601 Wall Street, Fort Wayne, Indiana 46802 (Superior and Essex being referred
to collectively as “Borrowers,” and individually as a “Borrower”); the various
financial institutions listed on the signature pages hereof and their
respective successors and permitted assigns which become “Lenders” as provided
herein; FLEET
CAPITAL CORPORATION, a Rhode Island corporation with an office at
300 Galleria Parkway, Suite 800, Atlanta, Georgia 30339, in its capacity as
collateral and administrative agent for the Lenders pursuant to Section 12
hereof (together with its successors in such capacity, “Administrative Agent”);
GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its
capacity as syndication agent for the Lenders pursuant to Section 12 hereof
(together with its successors in such capacity, “Syndication Agent”;
Administrative Agent and Syndication Agent are each hereafter referred to from
time to time individually as an “Agent” and collectively as “Agents”); and FLEET
SECURITIES, INC., a Delaware corporation, and GECC CAPITAL MARKETS GROUP, INC.,
a Delaware corporation, in their joint capacities as co-lead arrangers (in such
capacities, the “Co-Lead Arrangers”). 
Capitalized terms used in this Agreement have the meanings assigned to
them in Appendix A, General Definitions.

 

R
e c i t a l s:

 

WHEREAS, each Borrower has requested that Lenders make available a
revolving credit facility to Borrowers, which shall be used by Borrowers to
finance their mutual and collective business enterprise.  In order to utilize the financial powers of
each Borrower in the most efficient and economical manner, and in order to
facilitate the financing of each Borrower’s needs, Lenders will, at the request
of Borrower Agent, make loans to all Borrowers under the revolving credit
facility on a combined basis and in accordance with the provisions hereinafter
set forth.  Borrowers’ business is a
mutual and collective enterprise and Borrowers believe that the consolidation
of all revolving credit loans under this Agreement will enhance the aggregate
borrowing powers of each Borrower and ease the administration of their revolving
credit loan relationship with Lenders, all to the mutual advantage of
Borrowers.  Lenders’ willingness to
extend credit to Borrowers and to administer each Borrower’s collateral
security therefor, on a combined and joint and several basis as more fully set
forth in this Agreement, is done solely as an accommodation to Borrowers and at
Borrowers’ request in furtherance of Borrowers’ mutual and collective
enterprise.

 

WHEREAS, each Borrower has agreed to guarantee the obligations of each
of the other Borrowers under this Agreement and each of the other Loan
Documents.

 

WHEREAS, Lenders have agreed to make available to Borrowers a revolving
credit facility upon the terms and conditions set forth in this Agreement.

 

NOW, THEREFORE, for Ten Dollars ($10.00) and other good and valuable
consideration, the parties hereto hereby agree as follows:

 

SECTION 1.                            CREDIT
FACILITIES

 

1.1.                            Subject
to the terms and conditions of, and in reliance upon the representations and
warranties made in, this Agreement and the other Loan Documents, Lenders
severally agree to the extent

 

 

and in the manner hereinafter set forth to make their respective Pro
Rata shares of the Commitments available to Borrowers, in an aggregate amount
of up to $120,000,000, as follows:

 

1.2.                            Revolver
Commitment.

 

1.2.1.                     Revolver
Loans.  Each Lender agrees,
severally to the extent of its Revolver Commitment and not jointly with the
other Lenders, upon the terms and subject to the conditions set forth herein,
to make Revolver Loans to Borrowers at the request of Borrower Agent on any
Business Day during the period from the Closing Date through the Business Day
before the last day of the Term, not to exceed in aggregate principal amount
outstanding at any time such Lender’s Revolver Commitment at such time, which
Revolver Loans may be repaid and reborrowed in accordance with the provisions
of this Agreement; provided, however, that Lenders shall have no
obligation to Borrowers whatsoever to honor any request for a Revolver Loan on
or after the Commitment Termination Date or if at the time of the proposed
funding thereof the aggregate principal amount of all of the Revolver Loans
then outstanding and Pending Revolver Loans exceeds, or would exceed after the
funding of such Revolver Loan, the Borrowing Base.  Each Borrowing of Revolver Loans shall be funded by Lenders on a
Pro Rata basis in accordance with their respective Revolver Commitments (except
for Fleet with respect to Settlement Loans). 
The Revolver Loans shall bear interest as set forth in Section 2.1.
hereof.  Each Revolver Loan shall, at
the option of Borrowers, be made or continued as, or converted into, part of
one or more Borrowings that, unless specifically provided herein, shall consist
entirely of Base Rate Loans or LIBOR Loans.

 

1.2.2.                     Out-of-Formula
Loans.  If the unpaid balance of
Revolver Loans outstanding at any time should exceed the Borrowing Base at such
time (an “Out-of-Formula Condition”), such Revolver Loans shall nevertheless
constitute Obligations that are secured by the Collateral and entitled to all
of the benefits of the Loan Documents. 
In the event that Lenders are willing in their sole and absolute
discretion to make Out-of-Formula Loans or are required to do so by Section 1.2.7
or Section 12.9.4
hereof, such Out-of-Formula Loans shall be payable on demand and shall bear
interest as provided in Section 2.1.5 of this Agreement.

 

1.2.3.                     Use
of Proceeds.  The proceeds of the
Revolver Loans shall be used by Borrowers solely for one or more of the
following purposes:  (i) to satisfy any
Debt owing on the Closing Date under the DIP Loan Agreement; (ii) to facilitate
confirmation of the Plan of Reorganization and the transactions contemplated
thereby and pay amounts required to be paid on or after the Effective Date
pursuant to the Plan of Reorganization; (iii) to pay the fees and transaction
expenses associated with the closing of the transactions described herein; (iv)
to pay any of the Obligations; and (v) to make expenditures for other lawful
corporate purposes of Borrowers to the extent such expenditures are not
prohibited by this Agreement or Applicable Law.  In no event may any Revolver Loan proceeds be used by any
Borrower to make a contribution to the equity of any Subsidiary, to purchase or
to carry, or to reduce, retire or refinance any Debt incurred to purchase or
carry, any Margin Stock or for any related purpose that violates the provisions
of Regulations T, U or X of the Board of Governors.

 

1.2.4.                     Revolver
Notes.  The Revolver Loans made by
each Lender and interest accruing thereon shall be evidenced by the records of
Administrative Agent and such Lender and by the Revolver Note payable to such
Lender (or the assignee of such Lender), which shall be executed by Borrowers,
completed in conformity with this Agreement and delivered to such Lender.  All outstanding principal amounts and
accrued interest under the Revolver Notes shall be due and payable as set forth
in Section 4.2
hereof.

 

1.2.5.                     Voluntary
Reductions of Revolver Commitments. 
Borrower Agent (on behalf of Borrowers) shall have the right to
permanently reduce the amount of the Revolver Commitments, on a Pro Rata basis
for each Lender, at any time and from time to time upon written notice to
Administrative

 

2

 

Agent of such reduction, which notice shall specify the amount of such
reduction, shall be irrevocable once given, and shall be given at least 5
Business Days prior to the end of the month; provided, that, (i)
any such reduction of the Revolver Commitments shall be in a minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount, (ii)
any such reduction shall not cause the Revolver Commitments to be less than
$45,000,000, and (iii) if any such reduction is made during the first Loan
Year, Borrowers shall pay to Administrative Agent, for the Pro Rata benefit of
Lenders, as liquidated damages for the loss of the bargain, an amount equal to
0.50% of the amount by which the Commitments are so reduced.  Administrative Agent shall promptly transmit
such notice to each Lender.  The
effective date of any voluntary reduction of the Revolver Commitments shall be
the first day of a month following the month in which such notice is timely
received (as required above) by Administrative Agent.  If on the effective date of any such
reduction in the Revolver Commitments and after giving effect thereto an
Out-of-Formula Condition exists, then the provisions of Section 4.2.1(iii)
hereof shall apply, except that such repayment shall be due immediately upon
such effective date without further notice to or demand upon Borrowers.  The Revolver Commitments, once reduced, may
not be reinstated without the written consent of all Lenders.

 

1.2.6.                     Bank
Products.  Borrowers may request and
Administrative Agent may, in its sole and absolute discretion, arrange for
Borrowers and their Subsidiaries to obtain from Bank or Fleet, or Bank’s or
Fleet’s Affiliates, Bank Products.  If
Bank Products are provided by an Affiliate of Bank or Fleet, Borrowers agree to
indemnify and hold Agents, Bank, Fleet, and Lenders harmless from any and all
costs and obligations then or thereafter incurred by Agents, Bank, Fleet or any
of Lenders which arise from any indemnity given by Bank or Fleet or to their
respective Affiliates related to such Bank Products; provided, however,
nothing contained herein is intended to limit Borrowers’ rights, with respect
to Bank, Fleet, or their respective Affiliates, if any, which arise as a result
of the execution of documents by and among Borrowers, Bank, Fleet or their
Affiliates which relate to Bank Products. 
The agreement contained in this Section 1.2.6 shall survive
termination of this Agreement. 
Borrowers acknowledge and agree that the obtaining of Bank Products from
Bank, Fleet, or their respective Affiliates (i) is in the sole and absolute
discretion of Bank or Fleet or their respective Affiliates and (ii) is subject
to all rules and regulations of Bank and Fleet, and their respective
Affiliates.

 

1.2.7.                     Administrative
Agent Advances.  Administrative
Agent shall be authorized by Borrowers and Lenders, from time to time in
Administrative Agent’s sole and absolute discretion, at any time that a Default
or Event of Default exists or any of the conditions precedent set forth in Section 10
hereof have not been satisfied, to make Base Rate Loans to Borrowers on behalf
of Lenders in an aggregate amount outstanding at any time not to exceed 5%  of the Borrowing
Base, but not in excess of the aggregate of the Commitments minus the LC
Outstandings, but only to the extent that Administrative Agent deems the
funding of such Base Rate Loans to be necessary or desirable (i) to preserve or
protect the Collateral or any portion thereof, (ii) to enhance the likelihood
of or the amount of repayment of the Obligations or (iii) to pay any other
amount chargeable to Borrowers pursuant to the terms of this Agreement,
including costs, fees and expenses, all of which Base Rate Loans advanced by
Administrative Agent shall be deemed part of the Obligations and secured by the
Collateral, shall be treated as Settlement Loans and shall be settled and paid
by Borrowers and Lenders as provided herein for Settlement Loans; provided,
however, that the Required Lenders may at any time revoke Administrative
Agent’s authorization to make any such Base Rate Loans by written notice to
Administrative Agent, which shall become effective upon and after
Administrative Agent’s receipt thereof. 
The provisions of this Section 1.2.7 shall be in addition to
the provisions of Section 12.9.4 hereof.

 

1.3.                            LC
Facility.

 

1.3.1.                     Procurement of Letters of
Credit.  Subject to all of the terms
and conditions hereof, Fleet agrees to establish the LC Facility pursuant to
which, during the period from the Closing Date to (but excluding) the 30th day
prior to the last day of the Term, Fleet shall procure from Bank one

 

3

 

or more Letters of Credit on Borrower Agent’s request therefor from
time to time, subject to the following terms and conditions:

 

(i)                                     Each
Borrower acknowledges that Bank’s willingness to issue any Letter of Credit is
conditioned upon Bank’s receipt of (A) the LC Support duly executed and
delivered to Bank by Fleet, (B) an LC Application with respect to the requested
Letter of Credit and (C) such other instruments and agreements as Bank may
customarily require for the issuance of a letter of credit of equivalent type
and amount as the requested Letter of Credit. 
Fleet shall have no obligation to execute any LC Support or to join with
any Borrower in executing an LC Application unless (x) Fleet receives an LC
Request from such Borrower at least 5 Business Days prior to the date on which
Borrower desires to submit such LC Application to Bank and (y) each of the LC
Conditions is satisfied on the date of Fleet’s receipt of the LC Request and at
the time of the requested execution of the LC Application.  Any Letter of Credit issued on the Closing
Date shall be for an amount in Dollars that is greater than $250,000.  In no event shall Fleet or any other Lender
have any liability or obligation to any or all Borrowers or any Subsidiary for
any failure or refusal by Bank to issue, for Bank’s delay in issuing, or for
any error of Bank in issuing any Letter of Credit.

 

(ii)                                  Letters
of Credit may be requested by Borrower Agent (on behalf of Borrowers) only if
they are to be used (a) to support obligations of a Borrower incurred for
lawful corporate purposes of such Borrower not otherwise prohibited by this
Agreement or the other Loan Documents or (b) for such other purposes as
Administrative Agent and Lenders may approve from time to time in writing.

 

(iii)                               Borrowers
shall comply with all of the terms and conditions imposed on Borrowers by Bank,
whether such terms and conditions are contained in an LC Application or in any
agreement with respect thereto, and subject to the rights of Bank, Fleet shall
have the same rights and remedies that Bank has under any agreements that
Borrowers may have with Bank in addition to any rights and remedies contained
in any of the Loan Documents.  Borrowers
jointly and severally agree to reimburse Bank for any draw under any Letter of
Credit as hereinafter provided, and to pay Bank the amount of all other
liabilities and obligations payable to Bank under or in connection with any
Letter of Credit immediately when due, irrespective of any claim, setoff,
defense or other right that any or all Borrowers may have at any time against
Bank or any other Person (but without prejudice to the rights of any Borrower
to assert the same by way of a separate proceeding).  If Fleet shall pay any amount under a LC Support with respect to
any Letter of Credit (in which case Fleet shall provide Borrower Agent with
prompt notice thereof), then Borrowers shall be jointly and severally obligated
to pay to Fleet, in Dollars on the first Business Day following the date on
which payment was made by Fleet under such LC Support (the “Reimbursement
Date”), an amount equal to the amount paid by Fleet under such LC Support (or,
if payment thereunder was made by Fleet in a currency other than Dollars, an
amount equal to the Dollar Equivalent of such currency at the time of Fleet’s
payment under such LC Support, in each case) together with interest from and
after the Reimbursement Date until payment in full is made by Borrowers at the
Default Rate for Revolver Loans constituting Base Rate Loans as provided
herein. Until Fleet has received payment from Borrowers in accordance with the
foregoing provisions of this clause (iii), Fleet, in addition to all of its
other rights and remedies under this Agreement, shall be fully subrogated to
(A) the rights and remedies of Bank as issuer of the Letter of Credit under any
agreement with Borrowers relating to the issuance of such Letter of Credit, and
(B) the rights and remedies of each beneficiary under such Letter of Credit
whose claims against Borrowers have been discharged with the proceeds of such
Letter of Credit.  Whether or not a
Borrower submits any Notice of Borrowing to Administrative Agent, Borrowers
shall be deemed to have requested from Lenders a Borrowing of Base Rate Loans
in an amount necessary to pay to Fleet all amounts due Fleet on any
Reimbursement Date and each

 

4

 

Lender agrees to fund its Pro Rata share of such
Borrowing whether or not any Default or Event of Default has occurred or
exists, the Commitments have been terminated, the funding of the Borrowing
deemed requested by Borrowers would result in, or increase the amount of, any
Out-of-Formula Condition, or any of the conditions set forth in Section 10
hereof are not satisfied.

 

(iv)                              Borrowers
assume all risks of the acts, omissions or misuses of any Letter of Credit by
the beneficiary thereof.  The obligation
of Borrowers to reimburse Fleet for any payment made by Fleet under the LC
Support shall be absolute, unconditional, irrevocable and joint and several and
shall be paid without regard to any lack of validity or enforceability of any
Letter of Credit, the existence of any claim, setoff, defense or other right
which Borrowers may have at any time against a beneficiary of any Letter of
Credit, or improper honor by Bank of any draw request under a Letter of
Credit.  If presentation of a demand,
draft, certificate or other document does not comply with the terms of a Letter
of Credit and any Borrowers contends that, as a consequence of such
noncompliance it has no obligation to reimburse Bank for any payment made with
respect thereto, Borrowers shall nevertheless be obligated to reimburse Fleet
for any payment made under the LC Support with respect to such Letter of
Credit, but without waiving any claim Borrowers may have against Bank in
connection therewith.  All disputes
regarding any Letter of Credit shall be resolved by Borrowers directly with
Bank.

 

(v)                                 No
Letter of Credit shall be extended or amended in any respect that is not solely
ministerial, unless all of the LC Conditions are met as though a new Letter of
Credit were being requested and issued. 
With respect to any Letter of Credit that contains any “evergreen” or
automatic renewal provision, each Lender shall be deemed to have consented to
any such extension or renewal, unless any such Lender shall have provided to
Administrative Agent written notice that it declines to consent to any such
extension or renewal at least 30 days prior to the date on which the issuer of
the Letter of Credit is entitled to decline to extend or renew the Letter of
Credit.  If all of the LC Conditions are
met and no Default or Event of Default has occurred and is continuing, no
Lender shall have the right to decline to consent to any such extension or
renewal.

 

(vi)                              Each
Borrower hereby authorizes and directs Bank to deliver to Fleet all
instruments, documents and other writings and Property received by Bank
pursuant to or in connection with any Letter of Credit and to accept and rely
upon Fleet’s instructions and agreements with respect to all matters arising in
connection with such Letter of Credit and the related LC Application.

 

1.3.2.                     Participations.

 

(i)                                     Immediately
upon the issuance by Bank of any Letter of Credit, each Lender (other than
Fleet) shall be deemed to have irrevocably and unconditionally purchased and
received from Fleet, without recourse or warranty, an undivided interest and
participation equal to the Pro Rata share of such Lender (a “Participating
Lender”) in all LC Outstandings arising in connection with such Letter of
Credit and any security therefor or guaranty pertaining thereto, but in no
event greater than an amount which, when added to such Lender’s Pro Rata share
of all Revolver Loans and LC Outstandings then outstanding, exceeds such
Lender’s Revolver Commitment; provided, however that if Fleet
shall have received written notice from a Lender on or before the Business Day
immediately prior to the date of Bank’s issuance of a Letter of Credit that one
or more of the conditions set forth in Section 10 or Section 1.3.1 has not
been satisfied, Fleet shall have no obligation to procure (and shall not
procure) the requested Letter of Credit or any other Letter of Credit until
such notice is withdrawn in writing by that Lender or until the Required
Lenders shall have effectively waived such condition in accordance with this

 

5

 

Agreement. 
In no event shall Fleet be deemed to have notice or knowledge of any
existence of any Default or any Event of Default or the failure of any
conditions in Sections 10 or 1.3.1 hereof to be satisfied prior to its
receipt of such notice from a Lender.

 

(ii)                                  If
Fleet makes any payment under an LC Support and Borrowers do not repay or cause
to be repaid the amount of such payment on the Reimbursement Date, Fleet shall
promptly notify Administrative Agent, which shall promptly notify each
Participating Lender, of such payment and each Participating Lender shall
promptly (and in any event within one Business Day after its receipt of notice
from Administrative Agent) and unconditionally pay to Administrative Agent, for
the account of Fleet, in immediately available funds, the amount of such
Participating Lender’s Pro Rata share of such payment, and Administrative Agent
shall promptly pay such amounts to Fleet. 
If a Participating Lender does not make its Pro Rata share of the amount
of such payment available to Administrative Agent on a timely basis as herein
provided, such Participating Lender agrees to pay to Administrative Agent for
the account of Fleet, forthwith on demand, such amount together with interest
thereon at the Federal Funds Rate until paid. 
The failure of any Participating Lender to make available to
Administrative Agent for the account of Fleet such Participating Lender’s Pro
Rata share of the LC Outstandings shall not relieve any other Participating
Lender of its obligation hereunder to make available to Administrative Agent
its Pro Rata share of the LC Outstandings, but no Participating Lender shall be
responsible for the failure of any other Participating Lender to make available
to Administrative Agent its Pro Rata share of the LC Outstandings on the date
such payment is to be made.

 

(iii)                               Whenever
Fleet receives a payment on account of the LC Outstandings, including any
interest thereon, as to which Administrative Agent has previously received
payments from any Participating Lender for the account of Fleet, Fleet shall
promptly pay to each Participating Lender which has funded its participating
interest therein, in immediately available funds, an amount equal to such
Participating Lender’s Pro Rata share thereof.

 

(iv)                              The
obligation of each Participating Lender to make payments to Administrative
Agent for the account of Fleet in connection with Fleet’s payment under a LC
Support shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, setoff, qualification or exception whatsoever (other than for
Fleet’s gross negligence or willful misconduct), and shall be made in
accordance with the terms and conditions of this Agreement under all
circumstances and irrespective of whether or not Borrowers may assert or have
any claim for any lack of validity or unenforceability of this Agreement or any
of the other Loan Documents; the existence of any Default or Event of Default;
any draft, certificate or other document presented under a Letter of Credit
having been determined to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any respect; the
existence of any setoff or defense any Obligor may have with respect to any of
the Obligations; or the termination of the Commitments.

 

(v)                                 Neither
Fleet nor any of its officers, directors, employees or agents shall be liable
to any Participating Lender for any action taken or omitted to be taken under
or in connection with any of the LC Documents, except as a result of actual
gross negligence or willful misconduct on the part of Fleet.  Fleet does not assume any responsibility for
any failure or delay in performance or breach by Borrowers or any other Person
of any of its obligations under any of the LC Documents.  Fleet does not make to Participating Lenders
any express or implied warranty, representation or guaranty with respect to the
Collateral, the LC Documents, or any Obligor. 
Fleet shall not be responsible to any Participating Lender for any
recitals, statements, information, representations or warranties contained in,
or for the execution, validity, genuineness, effectiveness or enforceability of
any of the LC Documents; the validity,

 

6

 

genuineness, enforceability, collectibility,
value or sufficiency of any of the Collateral or the perfection of any Lien
therein; or the assets, liabilities, financial condition, results of
operations, business, creditworthiness or legal status of any Borrower or any
other Obligor or any Account Debtor.  In
connection with its administration of and enforcement of rights or remedies
under any of the LC Documents, Fleet shall be entitled to act, and shall be
fully protected in acting upon, any certification, notice or other
communication in whatever form believed by Fleet, in good faith, to be genuine
and correct and to have been signed, sent or made by a proper Person.  Fleet may consult with and employ legal
counsel, accountants and other experts and to advise it concerning its rights,
powers and privileges under the LC Documents and shall be entitled to act upon,
and shall be fully protected in any action taken in good faith reliance upon,
any advice given by such experts.  Fleet
may employ agents and attorneys-in-fact in connection with any matter relating
to the LC Documents and shall not be liable for the negligence, default or
misconduct of any such agents or attorneys-in-fact selected by Fleet with
reasonable care.  Fleet shall not have
any liability to any Participating Lender by reason of Fleet’s refraining to
take any action under any of the LC Documents without having first received
written instructions from the Required Lenders to take such action.

 

(vi)                              Upon
the request of any Participating Lender, Fleet shall furnish to such
Participating Lender copies (to the extent then available to Fleet) of each
outstanding Letter of Credit and related LC Application and all other
documentation pertaining to such Letter of Credit as may be in the possession
of Fleet and reasonably requested from time to time by such Participating
Lender.

 

1.3.3.                     Cash Collateral Account.  If any LC Outstandings, whether or not then
due or payable, shall for any reason be outstanding (i) at any time when an
Event of Default has occurred and is continuing, (ii) on any date that
Availability is less than zero, or (iii) on or at any time after the Commitment
Termination Date, then Borrowers shall, on Fleet’s or Administrative Agent’s
request, forthwith pay to Fleet the amount of any LC Outstandings that are then
due and payable and shall Cash Collateralize any outstanding Letters of
Credit.  If Borrowers fail to make such
deposit on the first Business Day following Administrative Agent’s or Fleet’s
demand therefor, Lenders may (and shall upon direction of the Required Lenders)
advance such amount as Revolver Loans (whether or not an Out-of-Formula
Condition is created thereby).  Such
cash (together with any interest accrued thereon) shall be held by
Administrative Agent in the Cash Collateral Account and may be invested, in
Administrative Agent’s discretion, in Cash Equivalents.  Each Borrower hereby pledges to
Administrative Agent and grants to Administrative Agent a security interest in,
for the benefit of Administrative Agent in such capacity and for the Pro Rata
benefit of Lenders, all Cash Collateral held in the Cash Collateral Account
from time to time and all proceeds thereof, as security for the payment of all
Obligations, whether or not then due or payable.  From time to time after cash is deposited in the Cash Collateral
Account, Administrative Agent may apply Cash Collateral then held in the Cash
Collateral Account to the payment of any amounts, in such order as is otherwise
provided by the terms hereof, as shall be or shall become due and payable by
Borrowers to Administrative Agent or any Lender with respect to the LC
Outstandings.  No Borrower nor any other
Person claiming by, through or under or on behalf of Borrowers shall have any
right to withdraw any of the Cash Collateral held in the Cash Collateral
Account, including any accrued interest, provided, that upon
termination or expiration of all Letters of Credit and the payment and
satisfaction of all of the LC Outstandings, any Cash Collateral remaining in
the Cash Collateral Account shall be returned to Borrowers unless an Event of
Default then exists (in which event Administrative Agent may apply such Cash
Collateral to the payment of any other Obligations outstanding, with any
surplus remaining after Full Payment of the Obligations to be turned over to
Borrowers).

 

7

 

1.3.4.                     Indemnifications.

 

(i)                                     In
addition to any other indemnity which Borrowers may have to Agents or any
Lender under any of the other Loan Documents and without limiting such other
indemnification provisions, each Borrower hereby agrees to indemnify and defend
each of the Agent Indemnitees and Lender Indemnitees and to hold each of the
Agent Indemnitees and Lender Indemnitees harmless from and against any and all
Indemnified Claims which any of the Agent Indemnitees or any of the Lender
Indemnitees may incur (other than as the actual result of their own gross
negligence or willful misconduct) or be subject to as a consequence, directly
or indirectly, of (a) the issuance of, payment or failure to pay or any
performance or failure to perform under any Letter of Credit or LC Support or
(b) any suit, investigation or proceeding as to which any Agent or any Lender
is or may become a party to as a consequence, directly or indirectly, of the
issuance of any Letter of Credit or any LC Support or the payment or failure to
pay thereunder.

 

(ii)                                  Each
Participating Lender agrees to indemnify and defend each of the Fleet
Indemnitees (to the extent the Fleet Indemnitees are not reimbursed by
Borrowers or any other Obligor, but without limiting the indemnification
obligations of Borrowers under this Agreement), on a Pro Rata basis, from and
against any and all Indemnified Claims which may be imposed on, incurred by or
asserted against any of the Fleet Indemnitees in any way related to or arising
out of Fleet’s administration or enforcement of rights or remedies under any of
the LC Documents or any of the transactions contemplated thereby (including
costs and expenses which Borrowers are obligated to pay under Section 14.2
hereof), provided  that no Participating Lender shall be liable to
any of the Fleet Indemnitees for any of the foregoing to the extent that they
result solely from the willful misconduct or gross negligence of such Fleet
Indemnitees.

 

SECTION 2.                            INTEREST,
FEES AND CHARGES

 

2.1.                            Interest.

 

2.1.1.                     Rates of Interest.  Borrowers jointly and severally agree to pay
interest in respect of all unpaid principal amounts of the Revolver Loans from
the respective dates such principal amounts are advanced until paid (whether at
stated maturity, on acceleration or otherwise) at a rate per annum equal to the
applicable rate indicated below:

 

(i)                                     for
Revolver Loans made or outstanding as Base Rate Loans, the Applicable Margin
for Base Rate Loans plus the Base Rate in effect from time to time; or

 

(ii)                                  for
Revolver Loans made or outstanding as LIBOR Loans, the Applicable Margin for
LIBOR Loans plus the relevant Adjusted LIBOR Rate for the applicable
Interest Period selected by Borrowers in conformity with this Agreement.

 

Upon determining the Adjusted LIBOR Rate for any Interest Period
requested by Borrowers, Administrative Agent shall promptly notify Borrowers
thereof by telephone and, if so requested by Borrowers, confirm the same in
writing.  Such determination shall,
absent manifest error, be final, conclusive and binding on all parties and for
all purposes.  The applicable rate of
interest for all Loans (or portions thereof) bearing interest based upon the
Base Rate shall be increased or decreased, as the case may be, by an amount
equal to any increase or decrease in the Base Rate, with such adjustments to be
effective as of the opening of business on the day that any such change in the
Base Rate becomes effective.  Interest
on each Loan shall accrue from and including the date on which such Loan is
made, converted to a Loan of another Type or continued as a LIBOR Loan to (but
excluding) the date of any repayment thereof; provided, however,
that, if a Loan is repaid on the same day made, one day’s interest shall be
paid on such Loan.  The Base Rate on the
date hereof is 4.0% per annum and, therefore, the rate

 

8

 

of interest in effect hereunder on the date hereof, expressed in simple
interest terms, is 4.75% per annum with respect to any portion of the Revolver
Loans bearing interest as a Base Rate Loan.

 

2.1.2.                     Conversions and Continuations.

 

(i)                                     Borrowers
may on any Business Day, subject to the giving of a proper Notice of
Conversion/Continuation as hereinafter described, elect (A) to continue all or
any part of a LIBOR Loan by selecting a new Interest Period therefor, to
commence on the last day of the immediately preceding Interest Period, or (B)
to convert all or any part of a Loan of one Type into a Loan of another Type; provided,
however, that no outstanding Loans may be converted into or continued as
LIBOR Loans when any Default or Event of Default exists.  Any conversion of a LIBOR Loan into a Base
Rate Loan shall be made on the last day of the Interest Period for such LIBOR
Loan.  Any conversion or continuation
made with respect to less than the entire outstanding balance of the Revolver
Loans must be allocated among Lenders on a Pro Rata basis, and the Interest
Period for Loans converted into or continued as LIBOR Loans shall be coterminous
for each Lender.

 

(ii)                                  Whenever
Borrowers desire to convert or continue Loans under Section 2.1.2(i),
Borrower Agent shall give Administrative Agent written notice (or telephonic
notice promptly confirmed in writing) substantially in the form of Exhibit C,
signed by an authorized officer of Borrower Agent, at least 1 Business Day
before the requested conversion date, in the case of a conversion into Base
Rate Loans, and at least 2 Business Days before the requested conversion or
continuation date, in the case of a conversion into or continuation of LIBOR
Loans.  Promptly after receipt of a
Notice of Conversion/Continuation, Administrative Agent shall notify each
Lender in writing of the proposed conversion or continuation.  Each such Notice of Conversion/Continuation
shall be irrevocable and shall specify the aggregate principal amount of the
Loans to be converted or continued, the date of such conversion or continuation
(which shall be a Business Day) and whether the Loans are being converted into
or continued as LIBOR Loans (and, if so, the duration of the Interest Period to
be applicable thereto and, in the absence of any specification by Borrowers of
the Interest Period, an Interest Period of one month will be deemed to be
specified) or Base Rate Loans.  If, upon
the expiration of any Interest Period in respect of any LIBOR Loans, Borrowers
shall have failed to deliver the Notice of Conversion/Continuation, Borrowers
shall be deemed to have elected to convert such LIBOR Loans to Base Rate Loans.

 

2.1.3.                     Interest Periods.  In connection with the making or
continuation of, or conversion into, each Borrowing of LIBOR Loans, Borrowers
shall select an interest period (each an “Interest Period”) to be applicable to
such LIBOR Loan, which Interest Period shall commence on the date such LIBOR
Loan is made and shall end on a numerically corresponding day in the first,
second, third or sixth month thereafter; provided, however, that:

 

(i)                                     the
initial Interest Period for a LIBOR Loan shall commence on the date of such
Borrowing (including the date of any conversion from a Loan of another Type)
and each Interest Period occurring thereafter in respect of such LIBOR Loan
shall commence on the date on which the next preceding Interest Period expires;

 

(ii)                                  if
any Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day, provided
that, if any Interest Period in respect of LIBOR Loans would otherwise expire
on a day that is not a Business Day, but is a day of the month after which no
further Business Day occurs in such month, such Interest Period shall expire on
the next preceding Business Day;

 

9

 

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

 

(iv)                              no
Interest Period shall extend beyond the last day of the Term.

 

2.1.4.                     Interest Rate Not Ascertainable.  If Administrative Agent shall determine in
good faith (which determination shall, absent manifest error, be final,
conclusive and binding upon all parties) that on any date for determining the
Adjusted LIBOR Rate for any Interest Period, by reason of any changes arising
after the date of this Agreement affecting the London interbank market or any
Lender’s or Bank’s position in such market, adequate and fair means do not
exist for ascertaining the applicable interest rate on the basis provided for
in the definition of Adjusted LIBOR Rate, then, and in any such event,
Administrative Agent shall forthwith give notice (by telephone confirmed in
writing) to Borrowers of such determination. 
Until Administrative Agent determines that the circumstances giving rise
to the suspension described herein no longer exist (notice of which
determination shall promptly be delivered to Borrowers), the obligation of
Lenders to make LIBOR Loans shall be suspended, and such affected Loans then
outstanding shall, at the end of the then applicable Interest Period or at such
earlier time as may be required by Applicable Law, bear the same interest as
Base Rate Loans.

 

2.1.5.                     Default Rate of Interest.  Borrowers shall pay interest at a rate per
annum equal to the Default Rate (i) with respect to the principal amount of all
of the Obligations (and, to the extent permitted by Applicable Law, all past
due interest) upon the earlier to occur of (x) Borrower Agent’s receipt of
notice from Administrative Agent of the Required Lenders’ election to charge
the Default Rate based upon the existence of any Event of Default (which notice
Administrative Agent shall send only with the consent or at the direction of
the Required Lenders), whether or not acceleration or demand for payment of the
Obligations has been made, or (y) the commencement by or against any Borrower
of an Insolvency Proceeding whether or not under the circumstances described
above the Lenders elect to accelerate the maturity or demand payment of any of
the Obligations; and (ii) with respect to the principal amount of any
Out-of-Formula Loans, whether or not demand for payment thereof has been made
by Administrative Agent.  To the fullest
extent permitted by Applicable Law, the Default Rate shall apply and accrue on
any judgment entered with respect to any of the Obligations and to the unpaid
principal amount of the Obligations during any Insolvency Proceeding of a
Borrower.  Each Borrower acknowledges that
the cost and expense to Administrative Agent and each Lender attendant upon the
occurrence of an Event of Default are difficult to ascertain or estimate and
that the Default Rate is a fair and reasonable estimate to compensate
Administrative Agent and each Lender for such added cost and expense.  Interest accrued at the Default Rate shall
be due and payable on demand.

 

2.2.                            Fees.  In consideration of Lenders’ establishment
of the Commitments in favor of Borrowers, and Administrative Agent’s agreement
to serve as administrative and collateral agent hereunder, Borrowers jointly
and severally agree to pay the following fees:

 

2.2.1.                     Closing and Agency Fees.  Borrowers shall pay to Administrative Agent,
a closing fee, for the Pro-Rata benefit of the Lenders, and an agency fee, for
the benefit of Administrative Agent, in each case in the amounts and on the
terms set forth in the Fee Letter.

 

2.2.2.                     Unused Line Fee.  Until such time as the Commitments are
terminated as provided for herein, Borrowers shall be jointly and severally
obligated to pay to Administrative Agent for the Pro Rata benefit of Lenders an
unused line fee equal to the Applicable Margin for the unused line fee divided
by 360 days and multiplied by the number of days in the month and then
multiplied by the amount by which the Average Revolver Loan Balance for any
month (or portion thereof that the Commitments are in effect) is less than the
aggregate amount of the Revolver Commitments as of the first day of such month,
such fee to be paid on the first day of the following month; provided, however
that if

 

10

 

the Commitments are terminated on a day other than the first day of a
month, then any such fee payable for the month in which termination shall occur
shall be paid on the effective date of such termination.

 

2.2.3.                     LC Facility Fees.  Borrowers shall be jointly and severally
obligated to pay:  (a)(i) to
Administrative Agent, through its Treasury and International Services Group,
for the Pro Rata benefit of each Lender for standby Letters of Credit, the
Applicable Margin in effect for LIBOR Loans on a per annum basis based on the
average amount available to be drawn under all standby Letters of Credit
outstanding and all Letters of Credit that are paid or expire during the period
of measurement, payable monthly, in advance, on the first Business Day of the
following month; (ii)  to Administrative
Agent, through its Treasury and International Services Group, for its own
account a Letter of Credit fronting fee of 0.125% per annum based on the
average amount available to be drawn under all standby Letters of Credit
outstanding and all Letters of Credit that are paid or expire during the period
of measurement, payable monthly, in advance, on the first Business Day of the
following month; and (iii)  to Bank for
its own account all normal and customary charges associated with the issuance,
amending, negotiating, processing and administration of standby Letters of
Credit; and (b)(i) to Administrative Agent, through its Treasury and
International Services Group, for the ratable account of each Lender for
documentary Letters of Credit, the Letter of Credit Fee set forth as item
number 3 on Exhibit J hereto, payable monthly, in advance, on the first
Business Day of the following month; and (ii) 
to Bank, for its own account, all other fees and charges set forth as
item numbers 1, 2 and 4 through 12 on Exhibit J hereto.

 

2.2.4.                     Audit and Appraisal Fees.  Borrowers shall reimburse Administrative
Agent and Lenders for all reasonable costs and expenses incurred by
Administrative Agent and Lenders in connection with (i) examinations and
reviews of any Obligor’s books and records and such other matters pertaining to
any Obligor or any Collateral as Administrative Agent shall deem appropriate in
the exercise of its reasonable credit judgment up to a maximum of 4 times per
Loan Year (for both the Administrative Agent and Lenders), unless an Event of
Default exists (in which event, there shall be no limit on the number of
examinations and reviews for which Borrowers shall be obligated to reimburse
Administrative Agent and Lenders), and, in each case, shall pay to
Administrative Agent the standard amount charged by Administrative Agent per
day ($850 per day as of the Closing Date) for each day that an employee or agent
of Administrative Agent shall be engaged in an examination or review of any
Obligor’s books and records, and (ii) appraisals of Inventory no more
frequently than once per Loan Year, unless an Event of Default exists (in which
event, there shall be no limit on the number of appraisals for which Borrowers
shall be obligated to reimburse Administrative Agent and Lenders).  Subject to clause (i) above, the foregoing
shall not be construed to limit Administrative Agent’s or any Lender’s right to
conduct audits and appraisals of the Collateral as provided in Section 9.1.1.

 

2.2.5.                     General Provisions.  All fees shall be fully earned by the
identified recipient thereof pursuant to the foregoing provisions of this
Agreement and the Fee Letter on the due date thereof (and, in the case of
Letters of Credit, upon each issuance, renewal or extension of such Letter of
Credit) and, except as otherwise set forth herein or required by Applicable
Law, shall not be subject to rebate, refund or proration.  All fees provided for in this Section 2.2
are and shall be deemed to be compensation for services and are not, and shall
not be deemed to be, interest or any other charge for the use, forbearance or
detention of money.

 

2.3.                            Computation
of Interest and Fees.  All fees
and other charges provided for in this Agreement that are calculated as a per
annum percentage of any amount and all interest shall be calculated daily and
shall be computed on the actual number of days elapsed over a year of 360 days.  For purposes of computing interest and other
charges hereunder, all Payment Items and other forms of payment received by
Administrative Agent shall be deemed applied by Administrative Agent on account
of the Obligations (subject to final payment of such items) on the Business Day
that Administrative Agent receives such items in immediately available funds in
the Payment Account, and Administrative Agent shall be deemed to have received
such Payment Item on the date specified in Section 4.6 hereof.

 

11

 

2.4.                            Reimbursement
Obligations.

 

2.4.1.                     Borrowers shall reimburse each
Agent and (during any period that an Event of Default exists) each Lender for
all legal, accounting, appraisal, consulting and other fees and expenses
incurred by any Agent or any Lender in connection with (i) the negotiation and
preparation of any of the Loan Documents, any amendment or modification
thereto, any waiver of any Default or Event of Default thereunder, or any
restructuring or forbearance with respect thereto; (ii) the administration of
the Loan Documents and the transactions contemplated thereby; (iii) action
taken to perfect or maintain the perfection or priority of any of
Administrative Agent’s Liens with respect to any of the Collateral; (iv) any inspection
of or audits conducted with respect to any Borrower’s books and records or any
of the Collateral subject to the limitations on reimbursements set forth in Section 2.2.4
hereof; (v) any effort to verify, protect, appraise, preserve, or restore any of
the Collateral (subject to the limitations on reimbursements for appraisals of
Inventory set forth in Section 2.2.4 hereof) or to collect,
sell, liquidate or otherwise dispose of or realize upon any of the Collateral;
(vi) any litigation, contest, dispute, suit, proceeding or action (whether
instituted by or against either Agent, any Lender, any Obligor or any other
Person (but not in respect of any suit or proceeding instituted by any Lender
against any other Lender or any Agent)) in any way arising out of or relating
to any of the Collateral (or the validity, perfection or priority of any of
Administrative Agent’s Liens thereon), any of the Loan Documents or the
validity, allowance or amount of any of the Obligations; (vii) the protection
or enforcement or any rights or remedies of any Agent or any Lender in any
Insolvency Proceeding; and (viii) any other action taken by any Agent or any
Lender to enforce any of the rights or remedies of such Agent or such Lender
against any Obligor or any Account Debtors to enforce collection of any of the
Obligations or payments with respect to any of the Collateral.  All amounts chargeable to Borrowers under
this Section 2.4
shall constitute Obligations that are secured by all of the Collateral and
shall be payable on demand to Administrative Agent.  Borrowers shall also reimburse Administrative Agent for expenses
incurred by Administrative Agent in its administration of any of the Collateral
to the extent and in the manner provided in Section 7 hereof, in the
Security Agreement or in any of the other Loan Documents.  The foregoing shall be in addition to, and
shall not be construed to limit, any other provision of any of the Loan
Documents regarding the reimbursement by Borrowers of costs, expenses or
liabilities suffered or incurred by any Agent or any Lender.

 

2.4.2.                     If at any time Administrative
Agent shall agree to indemnify any Lender or any Affiliate or a Lender
(including Bank) against losses or damages that such Person may suffer or incur
in its dealings or transactions with Borrowers, or shall guarantee any
liability or obligation of Borrowers to such Person, or otherwise shall provide
assurances of Borrowers’ payment or performance under any agreement with such
Person, including indemnities, guaranties or other assurances of payment or
performance given by Administrative Agent with respect to Banking Relationship
Debt and Letters of Credit, then the Contingent Obligation of Administrative
Agent providing any such indemnity, guaranty or other assurance of payment or
performance, together with any payment made or liability incurred by
Administrative Agent in connection therewith, shall constitute Obligations that
are secured by the Collateral and Borrowers shall repay, on demand, any amount so paid
or any liability incurred by Administrative Agent in connection with any such
indemnity, guaranty or assurance, except that repayment with respect to any LC
Support shall be due on the Reimbursement Date as provided in Section 1.3.1(iii).  Nothing herein shall be construed to impose
upon Administrative Agent any obligation to provide any such indemnity,
guaranty or assurance except to the extent provided in Section 1.3 hereof.  The foregoing agreement of Borrowers shall
apply whether or not such indemnity, guaranty or assurance is in writing or
oral, and shall be in addition to any of the provisions of the Loan Documents
regarding reimbursement by Borrowers of costs, expenses or liabilities suffered
or incurred by Administrative Agent.

 

2.5.                            Bank
Charges.  Borrowers shall pay to
Administrative Agent, on demand, any and all fees, costs or
expenses which Administrative Agent or any Lender pays to a bank or other
similar

 

12

 

institution (including any fees paid by Administrative Agent or any
Lender to any Participant) arising out of or in connection with (i) the
forwarding to a Borrower or any other Person on behalf of a Borrower by
Administrative Agent or any Lender of proceeds of Loans made by Lenders to a
Borrower pursuant to this Agreement and (ii) the depositing for collection by
Administrative Agent or any Lender of any Payment Item received or delivered to
Administrative Agent or any Lender on account of the Obligations.  Each Borrower acknowledges and agrees that
Administrative Agent may charge such costs, fees and expenses to Borrowers
based upon Administrative Agent’s good faith estimate of such costs, fees and
expenses as they are incurred by Administrative Agent or any Lender (provided,
that Administrative Agent shall provide Borrower Agent with a detailed
accounting of such costs, fees and expenses each month for the immediately
preceding month).

 

2.6.                            Illegality.  Notwithstanding anything to the contrary
contained elsewhere in this Agreement, if (i) any change in any law or
regulation or in the interpretation thereof after the Closing Date by any
Governmental Authority charged with the administration thereof shall make it
unlawful for a Lender to make or maintain a LIBOR Loan or to give effect to its
obligations as contemplated hereby with respect to a LIBOR Loan or (ii) at any
time such Lender determines that the making or continuance of any LIBOR Loan
has become impracticable as a result of a contingency occurring after the
Closing Date which adversely affects the London interbank market or the
position of such Lender in such market, then after such determination is made
by such Lender, such Lender shall give Administrative Agent and Borrowers
notice thereof and may thereafter (A) declare that LIBOR Loans will not thereafter
be made by such Lender, whereupon any request by a Borrower for a LIBOR Loan
from such Lender shall be deemed a request for a Base Rate Loan unless such
Lender’s declaration shall be subsequently withdrawn (which declaration shall
be withdrawn promptly after the cessation of the circumstances described in
clause (i) or (ii) above); and (B) require that all outstanding LIBOR Loans
made by such Lender be converted to Base Rate Loans, under the circumstances of
clause (i) or (ii) of this Section 2.6 insofar as such Lender in
good faith determines the continuance of LIBOR Loans to be illegal or
impracticable, as the case may be, in which event all such LIBOR Loans of such
Lender shall be converted automatically to Base Rate Loans as of the date of
Borrowers’ receipt of the aforesaid notice from such Lender.

 

2.7.                            Increased
Costs.  If, by reason of (a) the
introduction after the Closing Date of or any change (including any change by
way of imposition or increase of Statutory Reserves or other reserve requirements)
in or in the interpretation of any law or regulation, or (b) the compliance
with any guideline or request from any central bank or other Governmental
Authority or quasi-Governmental Authority exercising control over banks or
financial institutions generally (whether or not having the force of law):

 

(i)                                     any
Lender shall be subject after the date hereof to any Tax, duty or other charge
with respect to any LIBOR Loan or its obligation to make LIBOR Loans, or a
change shall result in the basis of taxation of payment to any Lender of the
principal of or interest on its LIBOR Loans or its obligation to make LIBOR
Loans (except for changes in the rate of Tax on the overall net income or gross
receipts or franchise tax of such Lender imposed by the jurisdiction in which
such Lender’s principal executive office is located); or

 

(ii)                                  any
reserve (including any imposed by the Board of Governors), special deposits or
similar requirement against assets of, deposits with or for the account of, or
credit extended by, any Lender shall be imposed or deemed applicable or any
other condition affecting its LIBOR Loans or its obligation to make LIBOR Loans
shall be imposed on such Lender or the London interbank market;

 

and as a result thereof there shall be any increase in the cost to such
Lender of agreeing to make or making, funding or maintaining LIBOR Loans
(except to the extent already included in the determination of the applicable
Adjusted LIBOR Rate for LIBOR Loans), or there shall be a reduction in the
amount received or receivable by such Lender, then such Lender shall, promptly
after determining the existence

 

13

 

or amount of any such increased costs for which such Lender seeks
payment hereunder, give Borrowers notice thereof and Borrowers shall from time
to time, upon written notice from and demand by such Lender (with a copy of
such notice and demand to Administrative Agent), pay to Administrative Agent
for the account of such Lender, within 5 Business Days after the date specified
in such notice and demand, an additional amount sufficient to indemnify such
Lender against such increased costs.  A
certificate as to the amount of such increased costs, submitted to Borrowers by
such Lender, shall be final, conclusive and binding for all purposes, absent
manifest error.

 

If any Lender shall advise Administrative Agent at any time that,
because of the circumstances described hereinabove in this Section 2.7 or any other
circumstances arising after the date of this Agreement affecting such Lender or
the London interbank market or such Lender’s or Bank’s position in such market,
the Adjusted LIBOR Rate, as determined by Administrative Agent, will not
adequately and fairly reflect the cost to such Lender of funding LIBOR Loans,
then, and in any such event:

 

(i)                                     Administrative
Agent shall forthwith give notice (by telephone confirmed in writing) to
Borrowers and Lenders of such event;

 

(ii)                                  Borrowers’
right to request and such Lender’s obligation to make LIBOR Loans shall be immediately
suspended and Borrowers’ right to continue a LIBOR Loan as such beyond the then
applicable Interest Period shall also be suspended, until each condition giving
rise to such suspension no longer exists; and

 

(iii)                               such
Lender shall make a Base Rate Loan as part of the requested Borrowing of LIBOR
Loans, which Base Rate Loan shall, for all purposes, be considered part of such
Borrowing.

 

For purposes of this Section 2.7, all references to a
Lender shall be deemed to include any bank holding company or bank parent of
such Lender.

 

Notwithstanding anything herein to the contrary, (i) Borrowers shall
only be required to compensate any Lender in respect of any such increased
costs or reduction in the amount received or receivable by such Lender to the
extent Borrower has received a written request for such compensation within 90
days after such Lender has received actual notice of the occurrence of the
relevant circumstance giving rise to such increased costs or reduction in the
amount received or receivable by such Lender, as the case may be, and (ii)
Borrowers shall not be required to so compensate any Lender for such increased
costs or reduction in the amount received or receivable by such Lender to the
extent that such Lender does not charge substantially all of its customers
similarly situated to Borrowers in respect thereof.

 

2.8.                            Capital
Adequacy.  If any Lender
determines that after the Closing Date (a) the adoption of any Applicable Law
regarding capital requirements for banks or bank holding companies or the
subsidiaries thereof, (b) any change in the interpretation or administration of
any such Applicable Law by any Governmental Authority, central bank, or
comparable agency charged with the interpretation or administration thereof, or
(c) compliance by such Lender or its holding company with any request or
directive of any such Governmental Authority, central bank or comparable agency
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Lender’s capital to a level below that
which such Lender could have achieved (taking into consideration such Lender’s
and its holding company’s policies with respect to capital adequacy immediately
before such adoption, change or compliance and assuming that such Lender’s
capital was fully utilized prior to such adoption, change or compliance) but
for such adoption, change or compliance as a consequence of such Lender’s
commitment to make the Loans pursuant hereto by any amount deemed by such
Lender to be material:

 

14

 

(i)                                     Administrative
Agent shall promptly, after its receipt of a certificate from such Lender
setting forth such Lender’s determination of such occurrence, give notice
thereof to Borrowers and Lenders; and

 

(ii)                                  Borrowers
shall pay to Administrative Agent, for the account of such Lender, as an
additional fee from time to time, on demand, such amount as such Lender
certifies to be the amount reasonably calculated to compensate such Lender for
such reduction.

 

A certificate of such Lender claiming entitlement to compensation as
set forth above will be conclusive in the absence of manifest error.  Such certificate will set forth the nature
of the occurrence giving rise to such compensation, the additional amount or
amounts to be paid to such Lender (including the basis for such Lender’s
determination of such amount), and the method by which such amounts were
determined.  In determining such amount,
such Lender may use any reasonable averaging and attribution method.  For purposes of this Section 2.8 all
references to a Lender shall be deemed to include any bank holding company or
bank parent of such Lender.

 

Notwithstanding anything herein to the contrary, (i) Borrowers shall
only be required to compensate any Lender in respect of any such reduction in
the return of capital of Lenders to the extent Borrower has received a written
request for such compensation within 90 days after such Lender has received
actual notice of the occurrence of the relevant circumstance giving rise to
such reduction in the return of capital of such Lender, and (ii) Borrowers
shall not be required to so compensate any Lender for any such reduction in the
return of capital to any Lender to the extent that such Lender does not charge
substantially all of its customers similarly situated to Borrowers in respect
thereof.

 

2.9.                            Mitigation.  Each Lender agrees that, with reasonable
promptness after such Lender becomes aware that such Lender is entitled to
receive payments under Section 2.6, 2.7 or 2.8,
or is or has become subject to U.S. or United Kingdom withholding taxes payable
by any Borrower in respect of its Loans, it will, to the extent not
inconsistent with any internal policy of such Lender or any applicable legal or
regulatory restriction, (i) use all reasonable efforts to make, fund or
maintain the Commitment of such Lender or the Loans of such Lender through
another lending office of such Lender, or (ii) take such other reasonable
measures, if, as a result thereof, the circumstances which would relieve
Borrowers from their obligations to pay such additional amounts (or reduce the
amount of such payments), or such withholding taxes would be reduced, and if
the making, funding or maintaining of such Commitment or Loans through such
other lending office or in accordance with such other measures, as the case may
be, would not otherwise adversely affect such Commitment or Loans or the
interests of such Lender.

 

2.10.                     Funding
Losses.  If for any reason
(other than due to a default by a Lender or as a result of a Lender’s refusal
to honor a LIBOR Loan request due to circumstances described in Section 2.6
or 2.7
hereof) a Borrowing of, or conversion to or continuation of, LIBOR Loans does
not occur on the date specified therefor in a Notice of Borrowing or Notice of
Conversion/ Continuation (whether or not withdrawn), or if any repayment
(including any conversions pursuant to Section 2.1.2 hereof) of any of its
LIBOR Loans occurs on a date that is not the last day of an Interest Period applicable
thereto, or if for any reason Borrowers default in their obligation to repay
LIBOR Loans when required by the terms of this Agreement, then Borrowers shall
be jointly and severally obligated to pay to Administrative Agent, for the
ratable benefit of the affected Lenders an amount (if a positive number)
computed pursuant to the following formula:

 

L = (R - T) x P x D

360

 

where

 

L =                               amount
payable

 

15

 

R =                              interest
rate applicable to the LIBOR Loan unborrowed or prepaid

T =                              effective
interest rate per annum at which any readily marketable bond or other
obligations of the United States, selected at Administrative Agent’s sole
discretion, maturing on or nearest the last day of the then applicable or requested
Interest Period for such LIBOR Loan and in approximately the same amount as
such LIBOR Loan, can be purchased by Administrative Agent on the day of such
payment of principal or failure to borrow

P =                               the
amount of principal paid or the amount of the LIBOR Loan requested or to have
been continued or converted

D =                             the
number of days remaining in the Interest Period as of the date of such
prepayment or the number of days in the requested Interest Period

 

Borrowers shall pay such amount upon presentation by Administrative
Agent of a statement setting forth the amount and Administrative Agent’s
calculation thereof pursuant hereto, which statement shall be deemed true and
correct absent manifest error.  For
purposes of this Section 2.10, all references to a Lender shall be deemed
to include any bank holding company or bank parent of such Lender.

 

2.11.                     Maximum
Interest.  Regardless of any
provision contained in any of the Loan Documents, in no contingency or event
whatsoever shall the aggregate of all amounts that are contracted for, charged
or received by Administrative Agent and Lenders pursuant to the terms of this
Agreement or any of the other Loan Documents and that are deemed interest under
Applicable Law exceed the highest rate permissible under any Applicable
Law.  No agreements, conditions,
provisions or stipulations contained in this Agreement or any of the other Loan
Documents or the exercise by Administrative Agent of the right to accelerate
the payment or the maturity of all or any portion of the Obligations, or the
exercise of any option whatsoever contained in any of the Loan Documents, or
the prepayment by Borrowers of any of the Obligations, or the occurrence of any
contingency whatsoever, shall entitle Administrative Agent or any Lender to charge
or receive in any event, interest or any charges, amounts, premiums or fees
deemed interest by Applicable Law (such interest, charges, amounts, premiums
and fees referred to in this Section 2.11 collectively as
“Interest”) in excess of the Maximum Rate and in no event shall Borrowers be
obligated to pay Interest exceeding such Maximum Rate, and all agreements,
conditions or stipulations, if any, which may in any event or contingency
whatsoever operate to bind, obligate or compel Borrowers to pay Interest
exceeding the Maximum Rate shall be without binding force or effect, at law or
in equity, to the extent only of the excess of Interest over such Maximum
Rate.  If any Interest is charged or
received in excess of the Maximum Rate (“Excess”), each Borrower acknowledges
and stipulates that any such charge or receipt shall be the result of an
accident and bona fide error, and such Excess, to the extent received, shall be
applied first to reduce the principal Obligations and the balance, if any,
returned to Borrowers, it being the intent of the parties hereto not to enter
into a usurious or otherwise illegal relationship.  The right to accelerate the maturity of any of the Obligations
does not include the right to accelerate any Interest that has not otherwise accrued
on the date of such acceleration, and Administrative Agent and Lenders do not
intend to collect any unearned Interest in the event of any such
acceleration.  Each Borrower recognizes
that, with fluctuations in the rates of interest set forth in Section 2.1.1
of this Agreement, or in the Notes, and the Maximum Rate, such an unintentional
result could inadvertently occur.  All
monies paid to Administrative Agent or any Lender hereunder or under any of the
other Loan Documents, whether at maturity or by prepayment, shall be subject to
any rebate of unearned Interest as and to the extent required by Applicable
Law.  By the execution of this
Agreement, each Borrower covenants that (i) the credit or return of any Excess
shall constitute the acceptance by such Borrower of such Excess, and (ii) such
Borrower shall not seek or pursue any other remedy, legal or equitable, against
Administrative Agent or any Lender, based in whole or in part upon contracting
for, charging or receiving any Interest in excess of the Maximum Rate.  For the purpose of determining

 

16

 

whether or not any Excess has been contracted for, charged or received
by Administrative Agent or any Lender, all Interest at any time contracted for,
charged or received from Borrowers in connection with any of the Loan Documents
shall, to the extent permitted by Applicable Law, be amortized, prorated,
allocated and spread in equal parts throughout the full term of the
Obligations.  Borrowers, Administrative
Agent and Lenders shall, to the maximum extent permitted under Applicable Law,
(i) characterize any non-principal payment as an expense, fee or premium rather
than as Interest and (ii) exclude voluntary prepayments and the effects
thereof.  The provisions of this Section 2.11
shall be deemed to be incorporated into every Loan Document (whether or not any
provision of this Section is referred to therein).  All such Loan Documents and communications
relating to any Interest owed by Borrowers and all figures set forth therein
shall, for the sole purpose of computing the extent of Obligations, be
automatically recomputed by Borrowers, and by any court considering the same,
to give effect to the adjustments or credits required by this Section 2.11.

 

SECTION 3.                            LOAN
ADMINISTRATION

 

3.1.                            Manner
of Borrowing and Funding Revolver Loans.  Borrowings under the Commitments established pursuant to
Section 1.1 hereof shall be made and funded as follows:

 

3.1.1.                     Notice of Borrowing.

 

(i)                                     Whenever
Borrowers desire to make a Borrowing under Section 1.2 of this Agreement (other
than a Borrowing resulting from a conversion or continuation pursuant to Section 2.1.2),
Borrowers shall give Administrative Agent prior written notice (or telephonic
notice promptly confirmed in writing) of such Borrowing request (a “Notice of
Borrowing”), which shall be in the form of Exhibit D annexed hereto and signed by an
authorized officer of Borrower Agent. 
Such Notice of Borrowing shall be given by Borrower Agent or any other
Borrower no later than 12:00 noon at the office of Administrative Agent
designated by Administrative Agent from time to time (a) on the Business Day of
the requested funding date of such Borrowing, in the case of Base Rate Loans,
and (b) at least 2 Business Days prior to the requested funding date of such
Borrowing, in the case of LIBOR Loans. 
Notices received after 12:00 noon shall be deemed received on the next
Business Day.  The Revolver Loans made
by each Lender on the Closing Date shall be in excess of $250,000 and shall be
made as Base Rate Loans and thereafter may be made or continued as or converted
into Base Rate Loans or LIBOR Loans. 
Each Notice of Borrowing (or telephonic notice thereof) shall be
irrevocable and shall specify (a) the principal amount of the Borrowing, (b)
the date of Borrowing (which shall be a Business Day), (c) whether the
Borrowing is to consist of Base Rate Loans or LIBOR Loans, (d) in the case of
LIBOR Loans, the duration of the Interest Period to be applicable thereto, and
(e) the account of Borrowers to which the proceeds of such Borrowing are to be
disbursed.  Borrowers may not request
any LIBOR Loans if a Default or Event of Default exists.

 

(ii)                                  Unless
payment is otherwise timely made by Borrowers, the becoming due of any amount
required to be paid with respect to any of the Obligations (whether as
principal, accrued interest, fees or other charges,  including the repayment of any LC
Outstandings and any amounts owed to any Affiliate of Administrative Agent, but
excluding any Banking Relationship Debt (other than customary fees and other
charges associated therewith)) shall be deemed irrevocably to be a request
(without any requirement for the submission of a Notice of Borrowing) for
Revolver Loans on the due date of, and in an aggregate amount required to pay,
such Obligations, and the proceeds of such Revolver Loans may be disbursed by
way of direct payment of the relevant Obligation and shall bear interest as
Base Rate Loans.  Neither Administrative
Agent nor any Lender shall have any obligation to Borrowers to honor any deemed
request for a Revolver Loan on or after the Commitment Termination Date, when
an Out-of-Formula Condition exists or would result therefrom, or when any
applicable condition

 

17

 

precedent set forth in Section 10 hereof is not
satisfied, but, subject to the provisions of Section 12.9.4 may do so
in the discretion of Administrative Agent or at the direction of the Required
Lenders, and without regard to the existence of, and without being deemed to
have waived, any Default or Event of Default and regardless of whether such
Revolver Loan is funded after the Commitment Termination Date.

 

(iii)                               If
Borrowers elect to establish a Controlled Disbursement Account with Bank or any
Affiliate of Bank, then the presentation for payment by Bank of any check or
other item of payment drawn on the Controlled Disbursement Account at a time
when there are insufficient funds in such account to cover such check shall be
deemed irrevocably to be a request (without any requirement for the submission
of a Notice of Borrowing) for Revolver Loans on the date of such presentation
and in an amount equal to the aggregate amount of the items presented for
payment, and the proceeds of such Revolver Loans may be disbursed to the
Controlled Disbursement Account and shall bear interest as Base Rate
Loans.  Neither Administrative Agent nor
any Lender shall have any obligation to honor any deemed request for a Revolver
Loan on or after the Commitment Termination Date or when an Out-of-Formula
Condition exists or would result therefrom or when any condition precedent in Section 10
hereof is not satisfied, but, subject to the provisions of Section 12.9.4 may do so
in the discretion of Administrative Agent or at the direction of the Required
Lenders, and without regard to the existence of, and without being deemed to
have waived, any Default or Event of Default and regardless of whether such
Revolver Loan is funded after the Commitment Termination Date.

 

(iv)                              As
an accommodation to Borrowers, Administrative Agent and Lenders may permit
telephonic requests for Borrowings and electronic transmittal of instructions,
authorizations, notices, certificates, agreements or reports to Administrative
Agent by Borrowers; provided, however, that Borrowers shall
confirm each such telephonic request for a Borrowing of LIBOR Loans by delivery
of the required Notice of Borrowing to Administrative Agent by facsimile
transmission promptly, but in no event later than 5:00 p.m. on the same
day.  Neither Administrative Agent nor
any Lender shall have any liability to Borrowers for any loss or damage
suffered by Borrowers as a result of Administrative Agent’s or any Lender’s
honoring of any requests, execution of any instructions, authorizations or
agreements or reliance on any reports communicated to it telephonically or
electronically and purporting to have been sent to Administrative Agent or
Lenders by any Borrower and neither Administrative Agent nor any Lender shall
have any duty to verify the origin of any such communication or the identity or
authority of the Person sending it.

 

3.1.2.                     Fundings by Lenders.  Subject to its receipt of notice from
Administrative Agent of a Notice of Borrowing as provided in Section 3.1.1(i)
(except in the case of a deemed request by a Borrower for a Revolver Loan as
provided in Sections 3.1.1(ii) or (iii) or 3.1.3(ii) hereof, in which
event no Notice of Borrowing need be submitted), each Lender shall timely honor
its Revolver Commitment by funding its Pro Rata share of each Borrowing of
Revolver Loans that is properly requested by such Borrower and that such
Borrower is entitled to receive under this Agreement.  Administrative Agent shall endeavor to notify Lenders of each
Notice of Borrowing (or deemed request for a Borrowing pursuant to Section 3.1.1(ii)
or (iii)
hereof), by 1:30 p.m. on the proposed funding date (in the case of Base Rate
Loans) or by 3:00 p.m. at least 2 Business Days before the proposed funding
date (in the case of LIBOR Loans).  Each
Lender shall deposit with Administrative Agent an amount equal to its Pro Rata
share of the Borrowing requested or deemed requested by such Borrower at
Administrative Agent’s designated bank in immediately available funds not later
than 3:00 p.m. on the date of funding of such Borrowing, unless Administrative
Agent’s notice to Lenders is received after 1:30 p.m. on the proposed funding
date of a Base Rate Loan, in which event Lenders shall deposit with
Administrative Agent their respective Pro Rata shares of the requested
Borrowing on or before 11:00 a.m. of the next Business Day.  Subject to its receipt of such amounts from
Lenders, Administrative Agent shall make the proceeds of the Revolver

 

18

 

Loans received by it available to a Borrower by disbursing such
proceeds in accordance with such Borrower’s disbursement instructions set forth
in the applicable Notice of Borrowing. 
Neither Administrative Agent nor any Lender shall have any liability on
account of any delay by any bank or other depository institution in treating
the proceeds of any Revolver Loan as collected funds or any delay in receipt,
or any loss, of funds that constitute a Revolver Loan, the wire transfer of
which was initiated by Administrative Agent in accordance with wiring
instructions provided to Administrative Agent. 
Unless Administrative Agent shall have been notified in writing by a
Lender prior to the proposed time of funding that such Lender does not intend
to deposit with Administrative Agent an amount equal to such Lender’s Pro Rata
share of the requested Borrowing (or deemed request for a Borrowing pursuant to
Section 3.1.1(ii)
or (iii)
hereof), Administrative Agent may assume that such Lender has deposited or
promptly will deposit its share with Administrative Agent and Administrative
Agent may in its discretion disburse a corresponding amount to or for the
account of Borrowers on the applicable funding date.  If a Lender’s Pro Rata share of such Borrowing is not in fact
deposited with Administrative Agent, then, if Administrative Agent has
disbursed to or for the account of a Borrower an amount corresponding to such
share, then such Lender agrees to pay, and in addition Borrowers agree to
repay, to Administrative Agent forthwith on demand such corresponding amount,
together with interest thereon, for each day from the date such amount is
disbursed by Administrative Agent to or for the benefit of Borrowers until the
date such amount is paid or repaid to Administrative Agent, (a) in the case of
Borrowers, at the interest rate applicable to such Borrowing and (b) in the
case of such Lender, at the Federal Funds Rate.  If such Lender repays to Administrative Agent such corresponding
amount, such amount so repaid shall constitute a Revolver Loan, and if both
such Lender and Borrowers shall have repaid such corresponding amount,
Administrative Agent shall promptly return to Borrowers such corresponding
amount in same day funds.  A notice from
Administrative Agent submitted to any Lender with respect to amounts owing
under this Section 3.1.2 shall be conclusive, absent manifest error.

 

3.1.3.                     Settlement and Settlement
Loans.

 

(i)                                     In
order to facilitate the administration of the Revolver Loans under this
Agreement, Lenders agree (which agreement shall be solely between Lenders and
Administrative Agent and shall not be for the benefit of or enforceable by any
Borrower) that settlement among them with respect to the Revolver Loans may
take place on a periodic basis on dates determined from time to time by
Administrative Agent (each a “Settlement Date”), which may occur before or
after the occurrence or during the continuance of a Default or Event of Default
and whether or not all of the conditions set forth in Section 10 of this
Agreement have been met.  On each
Settlement Date, payment shall be made by or to each Lender in the manner
provided herein and in accordance with the Settlement Report delivered by
Administrative Agent to Lenders with respect to such Settlement Date so that,
as of each Settlement Date and after giving effect to the transaction to take
place on such Settlement Date, each Lender shall hold its Pro Rata share of all
Revolver Loans and participations in LC Outstandings.  Administrative Agent shall request settlement with the Lenders on
a basis not less frequently than once every 5 Business Days.

 

(ii)                                  Between
Settlement Dates, Administrative Agent may request Fleet to advance, and Fleet
may, but shall in no event be obligated to, advance to Borrowers out of Fleet’s
own funds the entire principal amount of any Borrowing of Revolver Loans that
are Base Rate Loans requested or deemed requested pursuant to this Agreement
(any such Revolver Loan funded exclusively by Fleet being referred to as a
“Settlement Loan”).  Each Settlement Loan
shall constitute a Revolver Loan hereunder and shall be subject to all of the
terms, conditions and security applicable to other Revolver Loans, except that
all payments thereon shall be payable to Fleet solely for its own account.  The obligation of Borrowers to repay such
Settlement Loans to Fleet shall be evidenced by records of Fleet.  Unless a funding is required by all Lenders
pursuant to Section 1.2.7 or Section 12.9.4, Administrative Agent
shall not request Fleet to make any Settlement Loan if (A) Administrative Agent
shall have received written notice from any Lender

 

19

 

that one or more of the applicable conditions
precedent set forth in Section 10 hereof will not be
satisfied on the requested funding date for the applicable Borrowing and
Administrative Agent shall have made a determination (without any liability to
any Person) that such condition precedent will not be satisfied on the
requested funding date, or (B) the requested Borrowing would exceed the amount
of Availability on the funding date. 
Fleet shall not be required to determine whether the applicable
conditions precedent set forth in Section 10 hereof have been satisfied
or the requested Borrowing would exceed the amount of Availability on the
funding date applicable thereto prior to making, in its sole discretion, any
Settlement Loan.  On each Settlement
Date, or, if earlier, upon demand by Administrative Agent for payment thereof,
the then outstanding Settlement Loans shall be immediately due and
payable.  As provided in Section 3.1.1(ii),
Borrowers shall be deemed to have requested (without the necessity of
submitting any Notice of Borrowing) Revolver Loans to be made on each
Settlement Date in the amount of all outstanding Settlement Loans and to have
Administrative Agent cause the proceeds of such Revolver Loans to be applied to
the repayment of such Settlement Loans and interest accrued thereon.  Administrative Agent shall notify the Lenders
of the outstanding balance of Revolver Loans prior to 12:00 noon on each
Settlement Date and each Lender (other than Fleet) shall deposit with
Administrative Agent (without setoff, counterclaim or reduction of any kind) an
amount equal to its Pro Rata share of the amount of Revolver Loans deemed
requested in immediately available funds not later than 3:00 p.m. on such
Settlement Date.  Each Lender’s
obligation to make such deposit with Administrative Agent shall be absolute and
unconditional and without regard to whether any of the conditions precedent set
forth in Section 10
hereof are satisfied, any Out-of-Formula Condition exists or the Commitment
Termination Date has occurred.  If, as
the result of the commencement by or against Borrowers of any Insolvency
Proceeding or otherwise, any Settlement Loan may not be repaid by the funding
by Lenders of Revolver Loans, then each Lender (other than Fleet) shall be
deemed to have purchased a participating interest in any unpaid Settlement Loan
in an amount equal to such Lender’s Pro Rata share of such Settlement Loan and
shall transfer to Fleet, in immediately available funds not later than the 2nd
Business Day after Fleet’s request therefor, the amount of such Lender’s
participation.  The proceeds of
Settlement Loans may be used solely for purposes for which Revolver Loans
generally may be used in accordance with Section 1.2.3 hereof.  If any amounts received by Fleet in respect
of any Settlement Loans are later required to be returned or repaid by Fleet to
Borrowers or any other Obligor or their respective representatives or
successors-in-interest, whether by court order, settlement or otherwise, the
other Lenders shall, upon demand by Fleet with notice to Administrative Agent,
pay to Administrative Agent for the account of Fleet, an amount equal to each
other Lender’s Pro Rata share of all such amounts required to be returned or
repaid by Fleet.

 

3.1.4.                     Disbursement Authorization.  Each Borrower hereby irrevocably authorizes
Administrative Agent to disburse the proceeds of each Revolver Loan requested by
any Borrower, or deemed to be requested pursuant to Section 3.1.1 or Section 3.1.3(ii),
as follows:  (i) the proceeds of each
Revolver Loan requested under Section 3.1.1(i) shall be disbursed by
Administrative Agent in accordance with the terms of the written disbursement
letter from Borrowers in the case of the initial Borrowing, and, in the case of
each subsequent Borrowing, by wire transfer to such bank account as may be
agreed upon by Borrowers and Administrative Agent from time to time or
elsewhere if pursuant to a written direction from any Borrower; and (ii) the
proceeds of each Revolver Loan requested under Section 3.1.1(ii) or Section 3.1.3(ii)
shall be disbursed by Administrative Agent by way of direct payment of the
relevant interest or other Obligation. 
Any Loan proceeds received by any Borrower or in payment of any of the
Obligations shall be deemed to have been received by all Borrowers.

 

3.2.                            Defaulting
Lender.  If any Lender shall, at
any time, fail to make any payment to Administrative Agent or Fleet that is
required hereunder, Administrative Agent may, but shall not be required to,
retain payments that would otherwise be made to such defaulting Lender
hereunder and apply

 

20

 

such payments to such defaulting Lender’s defaulted obligations
hereunder, at such time, and in such order, as Administrative Agent may elect
in its sole discretion.  With respect to
the payment of any funds from Administrative Agent to a Lender or from a Lender
to Administrative Agent, the party failing to make the full payment when due
pursuant to the terms hereof shall, upon demand by the other party, pay such
amount together with interest on such amount at the Federal Funds Rate.  The failure of any Lender to fund its
portion of any Revolver Loan or payment in respect of an LC Obligation shall
not relieve any other Lender of its obligation, if any, to fund its portion of
the Revolver Loan or payment in respect of an LC Obligation on the date of
Borrowing, but no Lender shall be responsible for the failure of any other
Lender to make any Revolver Loan or payment in respect of an LC Obligation to
be made by such Lender on the date of any Borrowing.  Solely as among the Lenders and solely for purposes of voting or
consenting to matters with respect to any of the Loan Documents, Collateral or
any Obligations and determining a defaulting Lender’s Pro Rata share of
payments and proceeds of Collateral pending such defaulting Lender’s cure of
its defaults hereunder, a defaulting Lender shall not be deemed to be a
“Lender” and such Lender’s Commitment shall be deemed to be zero (0).  The provisions of this Section 3.2 shall be
solely for the benefit of Administrative Agent and Lenders and may not be
enforced by Borrowers.

 

3.3.                            Special
Provisions Governing LIBOR Loans.

 

3.3.1.                     Number of LIBOR Loans.  In no event may the number of LIBOR Loans
outstanding at any time to Borrowers exceed 5.

 

3.3.2.                     Minimum Amounts.  Each Borrowing of LIBOR Loans pursuant to Section 3.1.1(i),
and each continuation of or conversion to LIBOR Loans pursuant to Section 2.1.2
hereof, shall be in a minimum amount of $1,000,000 and integral
multiples of $100,000 in excess of that amount.

 

3.3.3.                     LIBOR Lending Office.  Each Lender’s initial LIBOR Lending Office
is set forth opposite its name on the signature pages hereof.  Each Lender shall have the right at any time
and from time to time to designate a different office of itself or of any
Affiliate as such Lender’s LIBOR Lending Office, and to transfer any outstanding
LIBOR Loans to such LIBOR Lending Office. 
No such designation or transfer shall result in any liability on the
part of Borrowers for increased costs or expenses resulting solely from such
designation or transfer except any such transfer that is made by a Lender
pursuant to Section 2.6 or Section 2.7 hereof, or otherwise for
the purpose of complying with Applicable Law. 
Increased costs for expenses resulting from a change in Applicable Law
occurring subsequent to any such designation or transfer shall be deemed not to
result solely from such designation or transfer.

 

3.3.4.                     Funding of LIBOR Loans.
Each Lender may, if it so elects, fulfill its obligation to make, continue or
convert LIBOR Loans hereunder by causing one of its foreign branches or Affiliates
(or an international banking facility created by such Lender) to make or
maintain such LIBOR Loans; provided, however, that such LIBOR
Loans shall nonetheless be deemed to have been made and to be held by such
Lender, and the obligation of Borrowers to repay such LIBOR Loans shall
nevertheless be to such Lender for the account of such foreign branch,
Affiliate or international banking facility. 
The calculation of all amounts payable to Lender under Section 2.7
and 2.10
shall be made as if each Lender had actually funded or committed to fund its
LIBOR Loan through the purchase of an underlying deposit in an amount equal to
the amount of such LIBOR Loan and having a maturity comparable to the relevant
Interest Period for such LIBOR Loans; provided, however, that
each Lender may fund its LIBOR Loans in any manner it deems fit and the
foregoing presumption shall be utilized only for the calculation of amounts
payable under Section 2.7 and Section 2.10.

 

3.4.                            Borrower
Agent.  Each Borrower hereby
irrevocably appoints Superior Essex Communications LLC and Superior Essex
Communications LLC agrees to act under this Agreement, as the agent and
representative of itself and each other Borrower for all purposes under this
Agreement (in

 

21

 

such capacity, “Borrower Agent”), including requesting Borrowings,
selecting whether any Loan or portion thereof is to bear interest as a Base
Rate Loan or a LIBOR Loan, and receiving account statements and other notices
and communications to Borrowers (or any of them) from Administrative
Agent.  Administrative Agent and each
Lender may rely, and shall be fully protected in relying, on any Notice of
Borrowing, Notice of Conversion/Continuation, disbursement instructions,
reports, information, Borrowing Base Certificate or any other notice or
communication made or given by Borrower Agent, whether in its own name, on
behalf of any Borrower or on behalf of “the Borrowers,” and Administrative
Agent and each Lender shall have no obligation to make any inquiry or request
any confirmation from or on behalf of any other Borrower as to the binding
effect on such Borrower of any such Notice of Borrowing, Notice of Conversion
Continuation, instruction, report, information, Borrowing Base Certificate or
other notice or communication, nor shall the joint and several character of
Borrowers’ liability for the Obligations be affected, provided  that
the provisions of this Section 3.4 shall not be construed so
as to preclude any Borrower from directly requesting Borrowings or taking other
actions permitted to be taken by “a Borrower” hereunder.  Administrative Agent may maintain a single
Loan Account in the name of “Superior Essex Communications LLC” hereunder, and
each Borrower expressly agrees to such arrangement and confirms that such
arrangement shall have no effect on the joint and several character of such
Borrower’s liability for the Obligations.

 

3.5.                            All
Loans to Constitute One Obligation. 
The Loans shall constitute one general obligation of Borrowers and
(unless otherwise expressly provided in any Security Document) shall be secured
by Administrative Agent’s Lien upon all of the Collateral; provided, however,
that Administrative Agent and each Lender shall be deemed to be a creditor of
each Borrower and the holder of a separate claim against each Borrower to the
extent of any Obligations jointly and severally owed by Borrowers to
Administrative Agent or such Lender.

 

SECTION 4.                            PAYMENTS

 

4.1.                            General
Payment Provisions.  All
payments (including all prepayments) of principal of and interest on the Loans,
LC Outstandings  and other Obligations that are payable to Administrative
Agent or any Lender shall be made to Administrative Agent in Dollars without
any offset or counterclaim and free and clear of (and without deduction for)
any present or future Taxes, and, with respect to payments made other than by
application of balances in the Payment Account, in immediately available funds
not later than 1:00 p.m. on the due date (and payment made after such time on
the due date to be deemed to have been made on the next succeeding Business
Day).  All payments received by
Administrative Agent shall be distributed by Administrative Agent in accordance
with Section 4.5
hereof, subject to the rights of offset that Administrative Agent may have as
to amounts otherwise to be remitted to a particular Lender by reason of amounts
due Administrative Agent from such Lender under any of the Loan Documents.

 

4.2.                            Repayment
of Revolver Loans.

 

4.2.1.                     Payment of Principal.  The outstanding principal amounts with
respect to the Revolver Loans shall be repaid as follows:

 

(i)                                     Any
portion of the Revolver Loans consisting of the principal amount of Base Rate
Loans shall be paid by Borrowers to Administrative Agent, for the Pro Rata
benefit of Lenders (or, in the case of Settlement Loans, for the sole benefit
of Fleet) unless timely converted to a LIBOR Loan in accordance with this
Agreement, immediately upon (a) each receipt by Administrative Agent, any
Lender or Borrowers of any proceeds of any Collateral, to the extent of such
proceeds, (b) the Commitment Termination Date, and (c) in the case of
Settlement Loans, the earlier of Fleet’s demand for payment or on each
Settlement Date with respect to all Settlement Loans outstanding on such date.

 

22

 

(ii)                                  Any
portion of the Revolver Loans consisting of the principal amount of LIBOR Loans
shall be paid by Borrowers to Administrative Agent, for the Pro Rata benefit of
Lenders, unless converted to a Base Rate Loan or continued as a LIBOR Loan in
accordance with the terms of this Agreement, immediately upon (a) the last day
of the Interest Period applicable thereto and (b) the Commitment Termination
Date.  In no event shall Borrowers be authorized
to make a voluntary prepayment with respect to any Revolver Loan outstanding as
a LIBOR Loan prior to the last day of the Interest Period applicable thereto
unless (x) otherwise agreed in writing by Administrative Agent, or Borrowers
are otherwise expressly authorized or required by any other provision of this
Agreement to pay any LIBOR Loan outstanding on a date other than the last day
of the Interest Period applicable thereto, and (y) Borrowers pay to
Administrative Agent, for the Pro Rata benefit of Lenders, concurrently with
any prepayment of a LIBOR Loan, any amount due Administrative Agent and Lenders
under Section 2.10
hereof as a consequence of such prepayment.  Notwithstanding the foregoing provisions of
this Section 4.2.1(ii),
if, on any date that Administrative Agent receives cash proceeds of any of the
Collateral, there are no Revolver Loans outstanding as Base Rate Loans,
Administrative Agent may either hold such proceeds as cash security for the
timely payment of the Obligations or apply such proceeds to any outstanding
Revolver Loans bearing interest as LIBOR Loans as the same become due and
payable (whether at the end of the applicable Interest Periods or on the
Commitment Termination Date).

 

(iii)                               Notwithstanding
anything to the contrary contained elsewhere in this Agreement, if an
Out-of-Formula Condition shall exist, Borrowers shall, on Administrative
Agent’s demand, repay the outstanding Revolver Loans that are Base Rate Loans
in an amount sufficient to reduce the aggregate unpaid principal amount of all
Revolver Loans by an amount equal to such excess; and, if such payment of Base
Rate Loans is not sufficient to eliminate the Out-of-Formula Condition, then
Borrowers shall immediately deposit with Administrative Agent, for the Pro Rata
benefit of Lenders, for application to any outstanding Revolver Loans bearing
interest as LIBOR Loans as the same become due and payable (whether at the end
of the applicable Interest Periods or on the Commitment Termination Date) cash
in an amount sufficient to eliminate such Out-of-Formula Condition, and
Administrative Agent may (a) hold such deposit as cash security pending
disbursement of same to Lenders for application to the Obligations, or (b) if a
Default or Event of Default exists, immediately apply such proceeds to the
payment of the Obligations, including the Revolver Loans outstanding as LIBOR
Loans (in which event Borrowers shall also pay to Administrative Agent for the
Pro Rata benefit of Lenders any amounts required by Section 2.10 to be paid
by reason of the prepayment of a LIBOR Loan prior to the last day of the
Interest Period applicable thereto).

 

4.2.2.                     Payment of Interest.  Interest accrued on the Revolver Loans shall
be due and payable on (i) the first day of each month (for the immediately
preceding month), computed through the last day of the preceding month, with
respect to any Revolver Loan (whether a Base Rate Loan or LIBOR Loan) and (ii)
the last day of the applicable Interest Period in the case of a LIBOR Loan.  Accrued interest shall also be paid by
Borrowers on the Commitment Termination Date. 
With respect to any Base Rate Loan converted into a LIBOR Loan pursuant
to
Section 2.1.2 on a day when interest would not otherwise have
been payable with respect to such Base Rate Loan, accrued interest to the date
of such conversion on the amount of such Base Rate Loan so converted shall be
paid on the conversion date.

 

4.3.                            Payment
of Other Obligations.  The
balance of the Obligations requiring the payment of money, including the LC Outstandings
and Extraordinary Expenses incurred by Administrative Agent or any Lender,
shall be repaid by Borrowers to Administrative Agent for allocation among
Administrative Agent and Lenders as provided in the Loan Documents, or, if no
date of payment is otherwise specified in the Loan Documents, on demand.

 

23

 

4.4.                            Marshaling;
Payments Set Aside.  Neither
Administrative Agent nor any Lender shall be under any obligation to marshal
any assets in favor of Borrowers or any other Obligor or against or in payment
of any or all of the Obligations.  To
the extent that Borrowers make a payment or payments to Administrative Agent or
any Lender, or Administrative Agent or any Lender receives payment from the
proceeds of any Collateral or exercises its right of setoff, and such payment
or the proceeds of such Collateral or setoff (or any part thereof) are
subsequently invalidated, declared to be fraudulent or preferential, set aside
or required to be repaid to a trustee, receiver or any other Person, then to
the extent of any loss by Administrative Agent or any Lender, the Obligations
or part thereof originally intended to be satisfied, and all Liens, rights and
remedies therefor, shall be revived and continued in full force and effect as
if such payment or proceeds had not been made or received and any such
enforcement or setoff had not occurred. 
The provisions of the immediately preceding sentence of this Section 4.4
shall survive any termination of the Commitments and Full Payment of the
Obligations.

 

4.5.                            Allocation
of Payments and Collections.

 

4.5.1.                     Allocation of Payments.  All monies to be applied to the Obligations,
whether such monies represent voluntary or mandatory payments or prepayments by
one or more Obligors or are received pursuant to demand for payment or realized
from any disposition of Collateral, shall be allocated among Agents and such of
the Lenders as are entitled thereto (and, with respect to monies allocated to
Lenders, on a Pro Rata basis unless otherwise provided herein):  (i) first, to Administrative Agent to pay
principal and accrued interest on any portion of the Revolver Loans which
Administrative Agent may have advanced on behalf of any Lender and for which
Administrative Agent has not been reimbursed by such Lender or Borrowers; (ii)
second, to Fleet to pay the principal and accrued interest on any portion of
the Settlement Loans outstanding, to be shared with Lenders that have acquired
and paid for a participating interest in such Settlement Loans; (iii) third, to
the extent that Fleet has not received from any Participating Lender a payment
as required by Section 1.3.2 hereof, to Fleet to pay all such required
payments from each Participating Lender; (iv) fourth, to Administrative Agent to
pay the amount of Extraordinary Expenses and amounts owing to Administrative
Agent pursuant to Section 14.10 hereof that have not
been reimbursed to Administrative Agent by Borrowers or Lenders, together with
interest accrued thereon at the rate applicable to Revolver Loans that are Base
Rate Loans; (v) fifth, to Agents to pay any Indemnified Amount that has not
been paid to Agents by Obligors or Lenders, together with interest accrued
thereon at the rate applicable to Revolver Loans that are Base Rate Loans; (vi)
sixth, to Agents to pay any fees due and payable to Agents; (vii) seventh, to
each Lender for any Indemnified Amount that such Lender has paid to
Administrative Agent and any Extraordinary Expenses that such Lender has
reimbursed to Administrative or such Lender has incurred, to the extent that
such Lender has not been reimbursed by Obligors therefor; (viii) eighth, to
Fleet to pay principal and interest with respect to LC Outstandings (or to the
extent any of the LC Outstandings are contingent and an Event of Default then
exists, deposited in the Cash Collateral Account to provide security for the
payment of the LC Outstandings), which payment shall be shared with the
Participating Lenders in accordance with Section 1.3.2(iii) hereof; (ix) ninth,
to Lenders in payment of the unpaid principal and accrued interest in respect
of the Loans (other than Settlement Loans) and other Obligations (excluding
Banking Relationship Debt) then outstanding; and (x) tenth, to the payment of
any Banking Relationship Debt.  The
allocations set forth in this Section 4.5 are solely to determine
the rights and priorities of Agents and Lenders as among themselves and may be
changed by Agents and Lenders without notice to or the consent or approval of
any Borrower or any other Person.

 

4.5.2.                     Erroneous Allocation.  Administrative Agent shall not be liable for
any allocation or distribution of payments made by it in good faith and, if any
such allocation or distribution is subsequently determined to have been made in
error, the sole recourse of any Lender to which payment was due but not made
shall be to recover from the other Lenders or Administrative Agent any payment
in excess of the amount to which such other Lenders or Administrative Agent are
determined to be entitled

 

24

 

(and such other Lenders and Administrative Agent hereby agree to return
to such Lender any such erroneous payments received by them).

 

4.6.                            Application
of Payments and Collateral Proceeds. 
All Payment Items received by Administrative Agent by 1:00 p.m. on any
Business Day shall be deemed received on that Business Day.  All Payment Items received by Administrative
Agent after 1:00 p.m. on any Business Day shall be deemed received on the
following Business Day.  Each Borrower
irrevocably waives the right to direct the application of any and all payments
and Collateral proceeds at any time or times hereafter received by
Administrative Agent or any Lender from or on behalf of Borrowers, and each
Borrower does hereby irrevocably agree that Administrative Agent shall have the
continuing exclusive right to apply and reapply any and all such payments and
Collateral proceeds received at any time or times hereafter by Administrative
Agent or its agent against the Obligations, in such manner as Administrative
Agent may deem advisable, notwithstanding any entry by Administrative Agent
upon any of its books and records (subject, as among Administrative Agent and
Lenders, to application in accordance with Section 4.5); provided, however,
that any payments or proceeds of Collateral received by Administrative Agent on
any date that an Event of Default does not exist shall be applied in accordance
with any provisions of this Agreement that govern the application of such payment
or proceeds.  If, as the result of
Administrative Agent’s collection of proceeds of Accounts and other Collateral
as authorized by Section 7.2.6 a credit balance exists, such credit
balance shall not accrue interest in favor of Borrowers, but shall be available
to Borrowers at any time or times for so long as no Default or Event of Default
exists. Lenders may, at their option, apply such credit balance against any of
the Obligations upon and after the occurrence of an Event of Default.

 

4.7.                            Loan
Accounts; the Register; Account Stated.

 

4.7.1.                     Loan Accounts.  Each Lender shall maintain in accordance
with its usual and customary practices an account or accounts (a “Loan
Account”) evidencing the Debt of Borrowers to such Lender resulting from each
Loan owing to such Lender from time to time, including the amount of principal
and interest payable to such Lender from time to time hereunder and under each
Note payable to such Lender.  Any
failure of a Lender to record in the Loan Account, or any error in doing so,
shall not limit or otherwise affect the obligation of Borrowers hereunder (or
under any Note) to pay any amount owing hereunder to such Lender.

 

4.7.2.                     The Register.  Administrative Agent shall maintain a
register (the “Register”) which shall include a master account and a subsidiary
account for each Lender and in which accounts (taken together) shall be
recorded (i) the date and amount of each Borrowing made hereunder, the Type of
each Loan comprising such Borrowing and any Interest Period applicable thereto,
(ii) the effective date and amount of each Assignment and Acceptance delivered
to and accepted by it and the parties thereto, (iii) the amount of any
principal or interest due and payable or to become due and payable from
Borrowers to each Lender hereunder or under the Notes, and (iv) the amount of
any sum received by Administrative Agent from Borrowers or any other Obligor
and each Lender’s share thereof.  The
Register shall be available for inspection by Borrowers or any Lender at the
offices of Administrative Agent at any reasonable time and from time to time
upon reasonable prior notice.  Any
failure of Administrative Agent to record in the Register, or any error in
doing so, shall not limit or otherwise affect the obligation of Borrowers hereunder
(or under any Note) to pay any amount owing with respect to the Loans or
provide the basis for any claim against Administrative Agent.

 

4.7.3.                     Entries Binding.  The entries made in the Register and each
Loan Account shall constitute rebuttably presumptive evidence of the
information contained therein; provided, however, that if a copy
of information contained in the Register or any Loan Account is provided to any
Person, or any Person inspects the Register or any Loan Account, at any time or
from time to time, then the information contained in the Register or the Loan
Account, as applicable, shall be conclusive and binding on such

 

25

 

Person for all purposes absent manifest error, unless such Person notifies
Administrative Agent in writing within 30 days after such Person’s receipt of
such copy or such Person’s inspection of the Register or Loan Account of its
intention to dispute the information contained therein.

 

4.8.                            Gross
Up for Taxes.  If Borrowers shall
be required by Applicable Law to withhold or deduct any Taxes from or in
respect of any sum payable under this Agreement or any of the other Loan
Documents, (a) the sum payable to Administrative Agent or such Lender shall be
increased as may be necessary so that, after making all required withholding or
deductions, Administrative Agent or such Lender (as the case may be) receives
an amount equal to the sum it would have received had no such withholding or
deductions been made, (b) Borrowers shall make such withholding or deductions,
and (c) Borrowers shall pay the full amount withheld or deducted to the
relevant taxation authority or other authority in accordance with Applicable
Law.  If Administrative Agent or any
Lender determines that it has received a refund, credit, or other reduction of
taxes in respect of any Taxes paid by Borrowers pursuant to this Section 4.8,
such Person shall within 30 days from the date of actual receipt of such refund
or the filing of the tax return in which such credit or other reduction results
in a lower tax payment, pay over such refund or the amount of such tax
reduction to Borrowers (but only to the extent of Taxes paid by Borrowers
pursuant to this Section 4.8), net of all out-of-pocket expenses of such
Person, and without interest (other than interest paid by the relevant
Governmental Authority with respect to such refund).  Notwithstanding anything to the contrary in this Agreement,
Borrowers agree to repay any amount paid over to the Borrowers pursuant to the
immediately preceding sentence (plus penalties, interest, or other charges) if
such Person is required to repay such amount to the taxing Governmental
Authority upon the written request of Administrative Agent or any Lender
(provided such written request is made by Administrative Agent or such Lender
within 90 days of the date on which written notice of such obligation to repay
is delivered to such Lender by the applicable taxing Governmental Authority),
and such repayment obligation of Borrowers shall survive Full Payment of the
Obligations and the termination of any of the Commitments.

 

4.9.                            Withholding
Tax Exemption.  At least 5
Business Days prior to the first date on which interest or fees are payable
hereunder for the account of any Foreign Lender, such Foreign Lender agrees
that it will deliver to Borrower Agent and Administrative Agent 2 duly
completed copies of United States Internal Revenue Service Form W-8BEN or
W-8ECI (or any subsequent replacement substitute or form therefor), certifying
in either case that such Lender is entitled to receive payment under this
Agreement and its Note without deduction or withholding of any United States
federal income taxes.  Each Foreign
Lender which so delivers a Form W-8BEN or W-8ECI further undertakes to deliver
to Borrower Agent and Administrative Agent 2 additional copies of such form (or
a successor form) on or before the date that such form expires (currently, 3
successive calendar years for Form W-8BEN and one calendar year for Form
W-8ECI) or becomes obsolete or after the occurrence of any event requiring a
change in the most recent form so delivered by it, and such amendments thereto
or extensions or renewals thereof as may be reasonably requested by Borrower
Agent or Administrative Agent, in each case, certifying that such Foreign
Lender is entitled to receive payments under this Agreement and its Notes
without deduction or withholding of any United States federal income taxes,
unless an event (including any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required that renders all such forms inapplicable or that would prevent such
Foreign Lender from duly completing and delivering any such form with respect
to it and such Lender advises Borrowers and Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income taxes.

 

4.10.                     Nature
and Extent of Each Borrower’s Liability.

 

4.10.1.               Joint
and Several Liability.  Each
Borrower shall be liable for, on a joint and several basis, and hereby
guarantees the timely payment by all other Borrowers of, all of the Loans and
other Obligations, regardless of which Borrower actually may have received the
proceeds of any Loans or

 

26

 

other extensions of credit hereunder or the amount of such Loans
received or the manner in which Administrative Agent or any Lender accounts for
such Loans or other extensions of credit on its books and records, it being
acknowledged and agreed that Loans to any Borrower inure to the mutual benefit
of all Borrowers and that Administrative Agent and Lenders are relying on the
joint and several liability of Borrowers in extending the Loans and other
financial accommodations hereunder. 
Each Borrower hereby unconditionally and irrevocably agrees that upon
default in the payment when due (whether at stated maturity, by acceleration or
otherwise) of any principal of, or interest owed on, any of the Loans or other
Obligations, such Borrower shall forthwith pay the same, without notice or
demand.

 

4.10.2.               Unconditional Nature of Liability.  Each Borrower’s joint and several liability
hereunder with respect to, and guaranty of, 
the Loans and other Obligations shall, to the fullest extent permitted
by Applicable Law, be unconditional irrespective of (i) the validity,
enforceability, avoidance or subordination of any of the Obligations or of any
promissory note or other document evidencing all or any part of the
Obligations, (ii) the absence of any attempt to collect any of the Obligations
from any other Obligor or any Collateral or other security therefor, or the
absence of any other action to enforce the same, (iii) the waiver, consent,
extension, forbearance or granting of any indulgence by Administrative Agent or
any Lender with respect to any provision of any instrument evidencing or
securing the payment of any of the Obligations, or any other agreement now or
hereafter executed by any other Borrower and delivered to Administrative Agent
or any Lender, (iv) the failure by Administrative Agent to take any steps to
perfect or maintain the perfected status of its security interest in or Lien
upon, or to preserve its rights to, any of the Collateral or other security for
the payment or performance of any of the Obligations or Administrative Agent’s
release of any Collateral or of its Liens upon any Collateral, (v)
Administrative Agent’s or any Lender’s election, in any proceeding instituted
under the Bankruptcy Code, for the application of Section 1111(b)(2) of
the Bankruptcy Code, (vi) any borrowing or grant of a security interest by any
other Borrower, as debtor-in-possession under Section 364 of the
Bankruptcy Code, (vii) the release or compromise, in whole or in part, of the
liability of any Obligor for the payment of any of the Obligations, (viii) any
amendment or modification of any of the Loan Documents or any waiver of a
Default or Event of Default, (ix) any increase in the amount of the Obligations
beyond any limits imposed herein or in the amount of any interest, fees or
other charges payable in connection therewith, or any decrease in the same, (x)
the disallowance of all or any portion of Administrative Agent’s or any
Lender’s claims against any other Obligor for the repayment of any of the
Obligations under Section 502 of the Bankruptcy Code, or (xi) any other
circumstance that might constitute a legal or equitable discharge or defense of
any Borrower.  After the occurrence and
during the continuance of any Event of Default, Administrative Agent may
proceed directly and at once, without notice to any Obligor, against any or all
of Obligors to collect and recover all or any part of the Obligations, without
first proceeding against any other Obligor or against any Collateral or other
security for the payment or performance of any of the Obligations, and each
Borrower waives any provision under Applicable Law that might otherwise require
Administrative Agent to pursue or exhaust its remedies against any Collateral
or Obligor before pursuing another Obligor. 
Each Borrower consents and agrees that Administrative Agent shall be
under no obligation to marshal any assets in favor of any Obligor or against or
in payment of any or all of the Obligations.

 

4.10.3.               No Reduction in Liability for
Obligations.  No payment or payments
made by an Obligor or received or collected by Administrative Agent from a
Borrower or any other Person by virtue of any action or proceeding or any
setoff or appropriation or application at any time or from time to time in
reduction of or in payment of the Obligations shall be deemed to modify,
reduce, release or otherwise affect the liability of any Borrower under this
Agreement, each of whom shall remain jointly and severally liable for the
payment and performance of all Loans and other Obligations until the
Obligations are paid in full and this Agreement is terminated.

 

4.10.4.               Contribution.  Each Borrower is unconditionally obligated
to repay the Obligations as a joint and several obligor under this Agreement.  If, as of any date, the aggregate amount

 

27

 

of payments made by a Borrower on account of the Obligations and
proceeds of such Borrower’s Collateral that are applied to the Obligations
exceeds the aggregate amount of Loan proceeds actually used by such Borrower in
its business (such excess amount being referred to as an “Accommodation
Payment”), then each of the other Borrowers (each such Borrower being referred
to as a “Contributing Borrower”) shall be obligated to make contribution to
such Borrower (the “Paying Borrower”) in an amount equal to (A) the product
derived by multiplying the sum of each Accommodation Payment of each Borrower
by the Allocable Percentage of the Borrower from whom contribution is sought less
(B) the amount, if any, of the then outstanding Accommodation Payment of such
Contributing Borrower (such last mentioned amount which is to be subtracted
from the aforesaid product to be increased by any amounts theretofore paid by
such Contributing Borrower by way of contribution hereunder, and to be
decreased by any amounts theretofore received by such Contributing Borrower by
way of contribution hereunder); provided, however, that a Paying
Borrower’s recovery of contribution hereunder from the other Borrowers shall be
limited to that amount paid by the Paying Borrower in excess of its Allocable
Percentage of all Accommodation Payments then outstanding of all
Borrowers.  As used herein, the term
“Allocable Percentage” shall mean, on any date of determination thereof, a
fraction the denominator of which shall be equal to the number of Borrowers who
are parties to this Agreement on such date and the numerator of which shall be
1; provided, however, that such percentages shall be modified in
the event that contribution from a Borrower is not possible by reason of
insolvency, bankruptcy or otherwise by reducing such Borrower’s Allocable
Percentage equitably and by adjusting the Allocable Percentage of the other
Borrowers proportionately so that the Allocable Percentages of all Borrowers at
all times equals 100%.

 

4.10.5.               Subordination.  Each Borrower hereby subordinates any
claims, including any right of payment, subrogation, contribution and
indemnity, that it may have from or against any other Obligor, and any
successor or assign of any other Obligor, including any trustee, receiver or
debtor-in-possession, howsoever arising, due or owing or whether heretofore,
now or hereafter existing, to the Full Payment of all of the Obligations.

 

SECTION 5.                            TERM
AND TERMINATION OF COMMITMENTS

 

5.1.                            Term
of Commitments.  Subject to each
Lender’s right to cease making Loans and other extensions of credit to
Borrowers when any Default or Event of Default exists or upon termination of
the Commitments as provided in Section 5.2 hereof, the Commitments
shall be in effect for a period of 4 years from the date hereof through the
close of business on November 10, 2007 (the “Term”).

 

5.2.                            Termination.

 

5.2.1.                     Termination by Administrative
Agent.  Administrative Agent may (and
upon the direction of the Required Lenders, shall) terminate the Commitments
without notice at any time that an Event of Default exists; provided, however,
that the Commitments shall automatically terminate as provided in Section 11.2
hereof.

 

5.2.2.                     Termination by Borrowers.
Upon at least 30 days prior written notice to Administrative Agent, Borrower
Agent (on behalf of Borrowers) may, at its option, terminate the Commitments in
full; provided, however, no such termination by Borrowers shall
be effective until Full Payment of the Obligations.  Any notice of termination given by Borrowers shall be irrevocable
unless Administrative Agent otherwise agrees in writing.  Borrowers may elect to terminate the
Commitments in their entirety only; provided,  that, nothing
contained herein shall affect Borrowers’ right to voluntarily reduce the
Commitments as provided in Section 1.2.5 of this Agreement.  No section of this Agreement, Type of
Loan available hereunder or Commitment may be terminated by Borrowers singly.

 

5.2.3.                     Termination Charges.  If the Commitments are terminated pursuant
to Section 5.2.1
or  5.2.2 during the
first Loan Year, then on the effective date of such termination

 

28

 

Borrowers shall pay to Administrative Agent, for the Pro Rata benefit
of Lenders (in addition to the then outstanding principal, accrued interest,
fees and other charges owing under the terms of this Agreement and any of the
other Loan Documents), as liquidated damages for the loss of the bargain and
not as a penalty, an amount equal to 0.50% of the Commitments.

 

5.2.4.                     Effect of Termination.  On the effective date of termination of the
Commitments by Administrative Agent or by Borrowers, all of the Obligations
shall be immediately due and payable and Lenders shall have no obligation to
make any Loans and Fleet shall have no obligation to procure any Letters of
Credit.  All undertakings, agreements,
covenants, warranties and representations of Borrowers contained in the Loan
Documents shall survive any such termination and Administrative Agent shall
retain its Liens in the Collateral and all of its rights and remedies under the
Loan Documents notwithstanding such termination until Full Payment of the
Obligations.  Notwithstanding the Full
Payment of the Obligations, Administrative Agent shall not be required to
terminate its security interests in any of the Collateral unless, with respect
to any loss or damage Administrative Agent may incur as a result of the
dishonor or return of any Payment Items applied to the Obligations,
Administrative Agent shall have received either (i) a written agreement,
executed by Borrowers and any Person deemed financially responsible by
Administrative Agent whose loans or other advances to Borrowers are used in
whole or in part to satisfy the Obligations, indemnifying Agents and Lenders
from any such loss or damage; or (ii) such monetary reserves and Liens on the
Collateral for such period of time as Administrative Agent, in its reasonable
discretion, may deem necessary to protect Administrative Agent from any such
loss or damage.  The provisions of Sections
2.4, 2.7, 2.8, 2.10, 4.4,  4.8 and this Section 5.2.4 and all
obligations of Borrowers to indemnify any Agent or any Lender pursuant to this
Agreement or any of the other Loan Documents, shall in all events survive any
termination of the Commitments and Full Payment of the Obligations.

 

SECTION 6.                            COLLATERAL

 

6.1.                            Security
Interest.  To secure the prompt
payment and performance of all of the Obligations, each Borrower has granted to
Administrative Agent, for the benefit of Secured Parties, a continuing security
interest in and Lien upon all of the Collateral pursuant to the Security
Agreement and the other Security Documents.

 

6.2.                            No
Assumption of Liability.  The
security interest granted pursuant to the Security Agreement and the other
Security Documents is granted as security only and shall not subject
Administrative Agent or any Lender to, or in any way alter or modify, any
obligation of liability of Borrowers with respect to or arising out of the
Collateral.

 

6.3.                            Lien
Perfection; Further Assurances. 
Promptly after Administrative Agent’s request therefor, Borrowers shall
execute or cause to be executed and deliver to Administrative Agent such
instruments, assignments, title certificates or other documents as are
necessary under the UCC or other Applicable Law to perfect (or continue the
perfection of) Administrative Agent’s Lien upon the Collateral and shall take
such other action as may be reasonably requested by Administrative Agent to
give effect to or carry out the intent and purposes of this Agreement.

 

SECTION 7.                            COLLATERAL
ADMINISTRATION

 

7.1.            General
Provisions.

 

7.1.1.                     Location of Collateral.  All tangible items of Collateral, other than
Inventory in transit and Permitted Consigned Inventory, shall at all times be
kept by Borrowers at one or more of the business locations of Borrowers set
forth in Schedule 7.1.1
hereto and shall not be moved therefrom, without the prior written approval of
Administrative Agent, except that in the absence of an Event of Default and
acceleration of the maturity of the Obligations in consequence thereof,
Borrowers may

 

29

 

(i) make sales or other dispositions of any Collateral to the extent
authorized by Section 9.2.10 hereof and (ii) move Inventory or
Equipment or any record relating to any Collateral to a location in the United
States other than those shown on Schedule 7.1.1 hereto so long as
Borrowers have given Administrative Agent at least 10 Business Days prior
written notice of such new location. 
Notwithstanding anything to the contrary contained in this Agreement,
Borrowers shall not be permitted to keep, store or otherwise maintain any
Collateral at any location (including any location described in Section 7.1.1),
unless (i) a Borrower is the owner of such location, (ii) a Borrower leases
such location and the landlord has executed in favor of Administrative Agent a
Lien Waiver or, if such landlord has not executed such a Lien Waiver, a Rent
Reserve is instituted with respect to such location, (iii) the Collateral
consists of Inventory placed with a warehouseman, bailee or processor,
Administrative Agent has received from such warehouseman, bailee or processor an
acceptable Lien Waiver and an appropriate UCC-1 financing statement has been
filed with the appropriate Governmental Authority in the jurisdiction where
such warehouseman, bailee or processor is located in order to perfect, or to
maintain the uninterrupted perfection of, Administrative Agent’s security
interest in such Inventory, or (iv) the Collateral consists of Permitted
Consigned Inventory.

 

7.1.2.                     Insurance of Collateral;
Condemnation Proceeds.

 

(i)                                     Each
Borrower shall maintain and pay for insurance upon all Collateral, wherever
located, covering casualty, hazard, public liability, theft, malicious
mischief, and such other risks in such amounts as are usually insured against
by companies engaged in similar businesses in the same geographic area and with
such insurance companies of standing and reputation no less favorable than
those companies reflected on Schedule 7.1.2 or are otherwise
reasonably satisfactory to Administrative Agent.  Schedule 7.1.2 describes all insurance of Borrowers in
effect on the date hereof.  All proceeds
payable under each such policy shall be payable to Administrative Agent for
application to the Obligations. 
Borrowers shall deliver the originals or certified copies of such
policies to Administrative Agent with satisfactory lender’s loss payable
endorsements reasonably satisfactory to Administrative Agent naming
Administrative Agent as lender’s loss payee, mortgagee, assignee or additional
insured, as appropriate.  Each policy of
insurance or endorsement shall contain a clause requiring the insurer to give
not less than 30 days prior written notice to Administrative Agent in the event
of cancellation of the policy for any reason whatsoever other than non-payment
of premiums (in which case 10 days prior written notice shall be required) and
otherwise including those provisions contained in the form of endorsement
provided to Borrowers by the Administrative Agent on the Closing Date.  If any Borrower fails to provide and pay for
such insurance, Administrative Agent may, at its option, but shall not be
required to, procure the same and charge Borrowers therefor.  Each Borrower agrees to deliver to
Administrative Agent, promptly as rendered, true copies of all material reports
made in any reporting forms to insurance companies.  For so long as no Event of Default exists, each Borrower shall
have the right to settle, adjust and compromise any claim with respect to any
insurance maintained by such Borrower; provided, that all
proceeds thereof are applied in the manner specified in this Agreement, and
Administrative Agent agrees promptly to provide any necessary endorsement to
any checks or drafts issued in payment of any such claim.  At any time that an Event of Default exists,
only Administrative Agent shall be authorized to settle, adjust and compromise
such claims, Administrative Agent shall have all rights and remedies with
respect to such policies of insurance as are provided for in this Agreement and
the other Loan Documents.

 

(ii)                                  Any
proceeds of insurance referred to in this Section 7.1.2 and any condemnation
awards that are paid to Administrative Agent in connection with a condemnation
of any of the Collateral shall be paid to Administrative Agent and applied in
accordance with Section 4.5.1.

 

30

 

7.1.3.                     Protection of Collateral.  All expenses of protecting, storing,
warehousing, insuring, handling, maintaining and shipping any Collateral, all
Taxes imposed under any Applicable Law on any of the Collateral or in respect
of the sale thereof, and all other payments required to be made by
Administrative Agent to any Person to realize upon any Collateral shall be
borne and paid by Borrowers. 
Administrative Agent shall not be liable or responsible in any way for
the safekeeping of any of the Collateral or for any loss or damage thereto
(except for reasonable care in the custody thereof while any Collateral is in
Administrative Agent’s actual possession) or for any diminution in the value
thereof, or for any act or default of any warehouseman, carrier, forwarding
agency, or other Person whomsoever, but the same shall be at Borrowers’ sole
risk.

 

7.1.4.                     Defense of Title to Collateral.  Each Borrower shall at all times defend such
Borrower’s title to the Collateral and Administrative Agent’s Liens therein
against all Persons and all claims and demands whatsoever other than Permitted
Liens.

 

7.2.                            Administration
of Accounts.

 

7.2.1.                     Records and Schedules of
Accounts.  Each Borrower shall keep
accurate and complete records of its Accounts and all payments and collections
thereon and shall submit to Administrative Agent weekly or on such other more
frequent periodic basis as Administrative Agent shall request a sales and
collections report for the preceding period, in form satisfactory to Administrative
Agent (which form shall be substantially consistent with forms required by
Administrative Agent from its other customers in the same or similar business
as Borrowers (other than changes necessary due to Borrowers’ specific business
operations)).  Each Borrower shall also
provide to Administrative Agent on or before the fourth Business Day of each
week, a detailed aged trial balance of all Accounts existing as of the last day
of the preceding week, specifying the names, addresses, face value, dates of invoices
and due dates for each Account Debtor obligated on an Account so listed
(“Schedule of Accounts”), and, upon Administrative Agent’s request
therefor, copies of proof of delivery and a copy of all documents, including
repayment histories and present status reports relating to the Accounts so
scheduled and such other matters and information relating to the status of then
existing Accounts as Administrative Agent shall reasonably request.  In addition, if Accounts in an aggregate
face amount in excess of $1,000,000 cease to be Eligible Accounts in whole or
in part, Borrowers shall notify Administrative Agent of such occurrence
promptly (and in any event within 2 Business Days) after any Borrower’s having
obtained actual knowledge of such occurrence and the Borrowing Base shall
thereupon be adjusted to reflect such occurrence.  Each Borrower shall deliver to Administrative Agent copies of
invoices or invoice registers related to all of its Accounts.

 

7.2.2.                     Discounts, Disputes and Returns.  If any Borrower grants any discounts,
allowances or credits that are not shown on the face of the invoice for the
Account involved or otherwise in accordance with such Borrower’s customary sale
policies, such Borrower shall report such discounts, allowances or credits, as the
case may be to Administrative Agent as part of the next required
Schedule of Accounts.  If any
amounts due and owing in excess of $500,000 are in dispute between any Borrower
and any Account Debtor, or if any returns are made in excess of $500,000 with
respect to any Accounts owing from an Account Debtor, such Borrower shall
provide Administrative Agent with written notice thereof at the time of
submission of the next Schedule of Accounts, explaining in reasonable
detail the reason for the dispute or return if known, all claims related
thereto and the amount in controversy. 
At any time an Event of Default exists, Administrative Agent shall have
the right to settle or adjust all disputes and claims directly with the Account
Debtor and to compromise the amount or extend the time for payment of any
Accounts comprising a part of the Collateral upon such terms and conditions as
Administrative Agent may deem advisable, and to charge the deficiencies, costs
and expenses thereof, including attorneys’ fees, to Borrowers.

 

31

 

7.2.3.                     Taxes.  If an Account of any Borrower includes a
charge for any Taxes payable to any Governmental Authority, and if such Taxes
are not paid when due or otherwise Properly Contested, Administrative Agent is
authorized, in its sole discretion, from and after the occurrence of an Event
of Default to pay the amount thereof to the proper taxing authority for the
account of such Borrower and to charge Borrowers therefor; provided, however,
that neither Administrative Agent nor any Lender shall be liable for any Taxes
that may be due by Borrowers.

 

7.2.4.                     Account Verification.  Whether or not an Event of Default exists,
Administrative Agent shall have the right at any time, in the name of any designee
of Administrative Agent or any Borrower (or at any time an Event of Default
exists, in the name of Administrative Agent) to verify the validity, amount or
any other matter relating to any Accounts of such Borrower by mail, telephone,
telegraph or otherwise.  Borrowers shall
cooperate fully with Administrative Agent in an effort to facilitate and
promptly conclude any such verification process.

 

7.2.5.                     Maintenance of Dominion Account.  Borrowers shall maintain a Dominion Account
pursuant to a lockbox or other arrangement reasonably acceptable to
Administrative Agent and with such bank as may be selected by Borrowers and be
reasonably acceptable to Administrative Agent. 
Borrowers shall (i) request in writing and otherwise take such
reasonable steps to ensure that all Account Debtors forward payment directly to
the Dominion Account (or to lockboxes related to the Dominion Account to which
the bank at which the Dominion Account is maintained has sole and exclusive
access and from which any items of payment are automatically deposited into the
Dominion Account), and (ii) deposit and cause its Subsidiaries to deposit or
cause to be deposited promptly, and in any event no later than the second
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
lockbox) into the Dominion Account. 
Borrowers shall issue to such bank an irrevocable letter of instruction
directing such bank to deposit all payments or other remittances received in
the lockbox to the Dominion Account. 
Borrowers shall enter into agreements, in form reasonably satisfactory
to Administrative Agent, with the bank at which the Dominion Account is
maintained by which such bank shall immediately transfer to the Payment Account
all monies deposited to the Dominion Account. 
All funds deposited in the Dominion Account shall be subject to
Administrative Agent’s Lien.  Borrowers
shall obtain the agreement (in favor of and in form and content reasonably
satisfactory to Administrative Agent and Lenders) by the bank at which the
Dominion Account is maintained to waive any offset rights against the funds
deposited into the Dominion Account, except offset rights in respect of charges
incurred in the administration of the Dominion Account.  Neither Administrative Agent nor any Lender
assumes any responsibility to Borrowers for such lockbox arrangement or Dominion
Account, including any claim of accord and satisfaction or release with respect
to deposits accepted by any bank thereunder. 
Notwithstanding anything to the contrary in this Section 7.2.5, (i) for
so long as no Event of Default exists, Borrowers and their Subsidiaries may
permit monies in an amount not to exceed $2,000,000 to remain in Deposit
Accounts located in Canada and such monies shall not be required to be
deposited into the Dominion Account and (ii) for so long as required by
SunTrust Bank, Borrowers may maintain a $250,000 balance in the Dominion
Account maintained with SunTrust Bank pursuant to the terms of that certain
Blocked Account Agreement among SunTrust Bank, Borrowers, Administrative Agent
and New Senior Secured Note Holder Agent.

 

7.2.6.                     Collection of Accounts and
Proceeds of Collateral.  To expedite
collection, each Borrower shall endeavor in the first instance to make
collection of such Borrower’s Accounts. 
All Payment Items received by any Borrower in respect of its Accounts,
together with the proceeds of any other Collateral, shall be held by such
Borrower as trustee of an express trust for Administrative Agent’s benefit;
such Borrower shall immediately deposit same in kind in the Dominion Account;
and Administrative Agent may remit such proceeds to Lenders for application of
such proceeds to the Obligations in the manner authorized by this
Agreement.  Administrative Agent retains
the right at all times that an Event of Default exists to notify Account
Debtors of any Borrower that Accounts have

 

32

 

been assigned to Administrative Agent and to collect Accounts directly
in its own name and to charge to Borrowers the collection costs and expenses
incurred by Administrative Agent or Lenders, including reasonable attorneys’ fees.

 

7.3.                            Administration
of Inventory.

 

7.3.1.                     Records and Reports of
Inventory.  Each Borrower shall keep
accurate and complete records of its Inventory (including records showing the
cost thereof and daily withdrawals therefrom and additions thereto) and shall
furnish Administrative Agent and Lenders inventory reports respecting such
Inventory in form and detail satisfactory to Administrative Agent and Lenders
(which reports shall be substantially consistent with reports required by
Administrative Agent from its other customers in the same or similar business
as Borrowers (other than changes necessary due to Borrowers’ specific business
operations) monthly or at such more frequent times as Administrative Agent and
Lenders may request.  Each Borrower
shall, at its own expense, conduct a physical inventory no less frequently than
annually (and on a more frequent basis if requested by Administrative Agent
when an Event of Default exists) and periodic cycle counts consistent with such
Borrower’s historical practices and shall provide to Administrative Agent and
Lenders a report based on each such physical inventory and cycle count promptly
after completion thereof, together with such supporting information as
Administrative Agent shall reasonably request. 
Administrative Agent may participate in and observe each physical count
or inventory, which participation shall be at Borrowers’ expense at any time
that an Event of Default exists.

 

7.3.2.                     Returns of Inventory.  No Borrower shall return any of its
Inventory to a supplier or vendor thereof, or any other Person, whether for
cash, credit against future purchases or then existing payables, or otherwise,
unless (i) such return is in the Ordinary Course of Business of such Borrower
and such Person; (ii) no Default or Event of Default exists or would result
therefrom; (iii) the return of such Inventory will not result in an
Out-of-Formula Condition; (iv) such Borrower promptly notifies Administrative
Agent thereof if the aggregate Value of all Inventory returned in any month
exceeds $1,000,000; and (v) any cash payments received by such Borrower in
connection with any such return are promptly turned over to Administrative
Agent for application to the Obligations.

 

7.3.3.                     Acquisitions and Sales of
Inventory.  Each Borrower will use
its best efforts to insure that all Inventory that is produced in the United
States of America will be produced in accordance in all material respects with
the FLSA.  Except for Permitted
Consigned Inventory and except as otherwise expressly permitted in writing by
the Required Lenders,  no Borrower shall sell any Inventory to any customer on
approval or any basis upon which the customer has a right to return or
obligates any Borrower to repurchase such Inventory (it being acknowledged that
the foregoing does not include the discretionary decisions on the part of a
Borrower to repurchase Inventory).

 

7.3.4.                     Maintenance of Inventory.  Borrowers shall produce, use, store and
maintain all Inventory with all reasonable care and caution in all material
respects in accordance with applicable standards of any insurance and in all
material respects in conformity with Applicable Law (including the requirements
of the FLSA) and will maintain current rent payments (within applicable grace
periods provided for in leases) at all locations at which any Inventory is
maintained or stored.

 

7.4.                            Administration
of Equipment.

 

7.4.1.                     Records and Schedules of
Equipment.  Each Borrower shall keep
accurate records itemizing and describing the kind, type, quality, quantity and
cost of its Equipment and all dispositions made in accordance with Section 7.4.2
hereof, and shall furnish Administrative Agent and Lenders with a current
schedule containing the foregoing information on at least an annual basis
and more often if requested by Administrative Agent.  Promptly after request therefor by Administrative Agent,

 

33

 

Borrowers shall deliver to Administrative Agent and Lenders any and all
evidence of ownership, if any, of any of the Equipment which individually has a
book value in excess of $500,000.

 

7.4.2.                     Dispositions of Equipment.  No Borrower will sell, lease or otherwise
dispose of or transfer any of the Equipment or any part thereof without the
prior written consent of Administrative Agent; provided, however,
that the foregoing restriction shall not apply, for so long as no Default or
Event of Default exists, to (i) dispositions of Equipment which, in the
aggregate during any consecutive 12-month period, has a fair market value of
$2,000,000 or less, provided that all Net Disposition Proceeds thereof are
remitted to Administrative Agent for application to the Obligations, (ii)
replacements of Equipment that is substantially worn, damaged or obsolete with
Equipment of like kind, function and value, provided that the replacement
Equipment shall be acquired prior to or substantially concurrently with any
disposition of the Equipment that is to be replaced, the replacement Equipment
shall be free and clear of Liens other than Permitted Liens, and Borrowers
shall have given Administrative Agent at least 10 days prior written notice of
such disposition and (iii) dispositions of Equipment by a Borrower to another
Borrower or any Subsidiary Guarantor or dispositions of Equipment by a Subsidiary
to a Borrower or any Subsidiary Guarantor.

 

7.4.3.                     Condition of Equipment.  Each Borrower shall use its best efforts to
ensure that the Equipment is in good operating condition and repair, and all
necessary replacements of and repairs thereto shall be made so that the
operating efficiency of the Equipment shall be maintained and preserved,
ordinary wear and tear excepted.  Each
Borrower shall use its best efforts to ensure that the Equipment shall be mechanically
and structurally sound, capable of performing the functions for which the
Equipment was originally designed, in accordance with the manufacturer’s
published and recommended specifications. 
No Borrower will permit any of the Equipment to become affixed to any
real Property leased to such Borrower so that an interest arises therein under
the real estate laws of the applicable jurisdiction unless the landlord of such
real Property has executed a landlord waiver or leasehold mortgage in favor of
and in form reasonably acceptable to Administrative Agent, and no Borrower will
permit any of the Equipment to become an accession to any personal Property
that is subject to a Lien unless the Lien is a Permitted Lien.

 

7.5.                            Borrowing
Base Certificates.  On the
Closing Date and on or before the fourth Business Day of each week after the
Closing Date, Borrowers shall deliver to Administrative Agent (and
Administrative Agent shall, on request from a Lender, promptly deliver to such
Lender) a Borrowing Base Certificate prepared as of the close of business of
the previous week, and at such other times as Administrative Agent may
request.  All calculations of
Availability in connection with any Borrowing Base Certificate shall originally
be made by Borrowers and certified by a Senior Officer to Administrative Agent,
provided, that Administrative Agent shall have the right to
review and adjust, in the exercise of its reasonable credit judgment, any such
calculation (i) to reflect its reasonable estimate of declines in value of any
of the Collateral described therein and (ii) to the extent that such
calculation is not in accordance with this Agreement or does not accurately
reflect the amount of the Availability Reserve.  In no event shall the Borrowing Base be deemed to exceed the
amount of the Borrowing Base shown on the Borrowing Base Certificate last
received by Administrative Agent prior to such date, as such Borrowing Base
Certificate may be adjusted from time to time by Administrative Agent as herein
authorized.

 

SECTION 8.                            REPRESENTATIONS
AND WARRANTIES

 

8.1.                            General
Representations and Warranties. 
To induce Administrative Agent and Lenders to enter into this Agreement
and to make available the Commitments, each Borrower warrants and represents to
Administrative Agent and Lenders that:

 

8.1.1.                     Organization and Qualification.  Each Borrower and each of its Subsidiaries
is an entity duly organized, validly existing and in good standing under the
laws of the jurisdiction of its

 

34

 

organization.  Each Borrower and
each of its Subsidiaries is duly qualified and is authorized to do business and
is in good standing as a foreign corporation in each state or jurisdiction
listed on Schedule 8.1.1
hereto and in all other states and jurisdictions in which the failure of such
Borrower or any of such Subsidiaries to be so qualified would have a Material
Adverse Effect.

 

8.1.2.                     Power and Authority.  Each Borrower and each of its Subsidiaries
is duly authorized and empowered to enter into, execute, deliver and perform
this Agreement and each of the other Loan Documents to which it is a
party.  The execution, delivery and
performance of this Agreement and each of the other Loan Documents have been
duly authorized by all necessary action and do not and will not (i) require any
consent or approval of any of the holders of the Equity Interests of any
Borrower or any of its Subsidiary other than those obtained on or prior to the
Closing Date; (ii) contravene the Organic Documents of any Borrower or any of
its Subsidiaries; (iii) violate, or cause any Borrower or any of its
Subsidiaries to be in default under, any provision of any Applicable Law,
order, writ, judgment, injunction, decree, determination or award in effect
having applicability to any Borrower or any of its Subsidiaries; (iv) result in
a breach of or constitute a default under any indenture or loan or credit
agreement or any other material agreement, lease or instrument to which any
Borrower or any of its Subsidiaries is a party or by which it or its Properties
may be bound or affected; or (v) result in, or require, the creation or
imposition of any Lien (other than Permitted Liens) upon or with respect to any
of the Properties now owned or hereafter acquired by any Borrower or any of its
Subsidiaries.

 

8.1.3.                     Legally Enforceable Agreement.  This Agreement is, and each of the other
Loan Documents when delivered under this Agreement will be, a legal, valid and
binding obligation of each Borrower and each of its Subsidiaries signatories
thereto enforceable against them in accordance with the respective terms of
such Loan Documents, except as the enforceability thereof may be limited by
bankruptcy, insolvency or other similar laws of general application affecting
the enforcement of creditors’ rights.

 

8.1.4.                     Capital Structure.  As of the Closing Date, Schedule 8.1.4 hereto
states (i) the correct name of each Subsidiary, its jurisdiction of
incorporation and the percentage of its Equity Interests having voting powers
owned by each Person, (ii) the name of each Borrower’s corporate Affiliates and
the nature of the affiliation and (iii) the number of authorized and issued
Equity Interests (and treasury shares) of each Borrower and its
Subsidiaries.  Each Borrower has good
title to all of the shares it purports to own of the Equity Interests of each
of its Subsidiaries, free and clear in each case of any Lien other than
Permitted Liens.  All such outstanding
Equity Interests have been duly issued and are fully paid and non-assessable.  Since the date of the financial statements
of Borrowers referred to in Section 8.1.9 hereof, Borrowers have
not made, or obligated themselves to make, any Distribution (other than (i)
cash Distributions to another Borrower, Guarantor or Superior TeleCom Inc.
consummated prior to the Closing Date and (ii) the Distribution of Equity
Interest of Essex International Inc. from Superior Telecommunications Inc. to
New Subsidiary prior to or on the Closing Date).  As of the Closing Date, there are no outstanding options to
purchase, or any rights or warrants to subscribe for, or any commitments or
agreements to issue or sell, or any Equity Interests or obligations convertible
into, or any powers of attorney relating to, shares of the capital stock of any
Borrower or any of its Subsidiaries.  As
of the Closing Date, except as set forth on Schedule 8.1.4 hereto
and the Security Documents, there are no outstanding agreements or instruments
binding upon the holders of any Borrower’s Equity Interests relating to the
ownership of its Equity Interests.

 

8.1.5.                     Corporate Names.  During the 5-year period preceding the
Closing Date, no Borrower nor any of its Subsidiaries has been known as or used
any corporate, fictitious or trade names except those listed on Schedule 8.1.5
hereto.  Except as set forth on Schedule 8.1.5
or as contemplated by the Plan of Reorganization, no Borrower nor any of its
Subsidiaries has been the surviving corporation of a merger or consolidation or
acquired all or substantially all of the assets of any Person within the past 5
years.

 

35

 

8.1.6.                     Business Locations;
Administrative Agent for Process. 
As of the Closing Date, the chief executive office and other places of
business of each Borrower and its Subsidiaries are as listed on Schedule 7.1.1
hereto.  During the 5-year period
preceding the Closing Date, no Borrower nor any of its Subsidiaries has had an
office, place of business or agent for service of process other than as listed
on Schedule 7.1.1.  Except as shown on Schedule 7.1.1 on the
Closing Date, no Inventory of any Borrower or any of its Subsidiaries is stored
with a bailee, warehouseman or similar Person, nor is any Inventory consigned
to any Person (other than Permitted Consigned Inventory).

 

8.1.7.                     Title to Properties; Priority
of Liens.  Each Borrower and each of
its Subsidiaries has good and marketable title to and fee simple ownership of,
or valid and subsisting leasehold interests in, all of its real Property, and
good title to all of its personal Property, including all Property reflected in
the financial statements referred to in Section 8.1.9 or delivered pursuant to
Section 9.1.3,
in each case free and clear of all Liens except Permitted Liens.  Except as otherwise provided on Schedule 8.1.34,
each Borrower has paid or discharged, and has caused each of its Subsidiaries
to pay and discharge, all lawful claims which, if unpaid, could reasonably be
expected to become a Lien against any Properties of such Borrower or any such
Subsidiary that is not a Permitted Lien other than such claims that are being
Properly Contested.  The Liens granted
to Administrative Agent pursuant to this Agreement and the other Security
Documents are duly perfected, first priority Liens, subject only to those
Permitted Liens that are expressly permitted by the terms of this Agreement to
have priority over the Liens of Administrative Agent.

 

8.1.8.                     Accounts.  Administrative Agent may rely, in
determining which Accounts are Eligible Accounts, on all statements and
representations made by Borrowers with respect to any Account.  Unless indicated in the most recent
Borrowing Base Certificate, or otherwise indicated in writing to Administrative
Agent with respect to each Account, each Borrower warrants that:

 

(i)                                     It
is genuine and in all respects what it purports to be, it is not evidenced by a
judgment and is an Eligible Account;

 

(ii)                                  It
arises out of a completed, bona fide sale and delivery of goods by a
Borrower in the Ordinary Course of Business and substantially in accordance
with the terms and conditions of all purchase orders, contracts or other
documents relating thereto and forming a part of the contract between a
Borrower and the Account Debtor;

 

(iii)                               It
is for a sum certain maturing as stated in the duplicate invoice covering such
sale, a copy of which has been furnished or is available to Administrative
Agent on request;

 

(iv)                              Such
Account, and Administrative Agent’s security interest therein, is not, and will
not (by voluntary act or omission of a Borrower) be in the future, subject to
any offset, Lien, deduction, defense, dispute, counterclaim or any other
adverse condition except for disputes resulting in returned goods where the
amount in controversy is immaterial, and each such Account is absolutely owing
to a Borrower and is not contingent in any respect or for any reason;

 

(v)                                 The
contract under which such Account arose does not condition or restrict a
Borrower’s right to assign to Administrative Agent the right to payment
thereunder unless such Borrower has obtained the Account Debtor’s consent to
such collateral assignment or complied with any conditions to such assignment
(regardless of whether under the UCC or other Applicable Law any such
restrictions are ineffective to prevent the grant of a Lien upon such Account
in favor of Administrative Agent);

 

(vi)                              Such
Borrower has not made any agreement with any Account Debtor thereunder for any
extension, compromise, settlement or modification of any such Account or any

 

36

 

deduction therefrom, except discounts or
allowances which are granted by a Borrower in the Ordinary Course of Business
and which are reflected in the calculation of the net amount of each respective
invoice related thereto and are reflected in the Schedules of Accounts
submitted to Administrative Agent pursuant to Section 7.2.1 hereof;

 

(vii)                           To
Borrower’s knowledge, there are no facts, events or occurrences which are
reasonably likely to impair the validity or enforceability of such Account or
reduce the amount payable thereunder from the face amount of the invoice and
statements delivered to Administrative Agent with respect thereto;

 

(viii)                        To
Borrower’s actual knowledge, the Account Debtor thereunder (1) had the capacity
to contract at the time any contract or other document giving rise to the
Account was executed and (2) is Solvent; and

 

(ix)                                To
Borrower’s actual knowledge, there are no proceedings or actions which are
threatened or pending against any Account Debtor thereunder and which are
reasonably likely to result in any material adverse change in such Account
Debtor’s financial condition or the collectibility of such Account.

 

8.1.9.                     Financial Statements; Fiscal
Year.  The Consolidated and
consolidating balance sheets of Superior Telecom Inc. and Borrowers and such
other Persons described therein (including the accounts of all Subsidiaries of
Borrowers for the respective periods during which a Subsidiary relationship
existed) as of September 30, 2003 and the related statements of income,
changes in stockholder’s equity, and changes in financial position for the
periods ended on such dates, have been prepared in accordance with GAAP (except
for year end adjustments and the absence of footnotes), and present fairly the
financial positions of Borrowers and such Persons at such dates and the results
of Borrowers’ operations for such periods, 
and to the extent such financial statements contain notes, such notes do
not contain any untrue statement of a material fact or omit any material fact
required to be included by GAAP.  Since
September 30, 2003, except as contemplated by the Plan of Reorganization,
there has been no material change in the condition, financial or otherwise, of
Borrowers and such other Persons as shown on the Consolidated balance sheet as
of such date and no material change in the aggregate value of Equipment and
real Property owned by Borrowers or such other Persons.

 

8.1.10.               Full Disclosure.  This Agreement and each other written
statement made herein or in connection herewith do not contain any untrue
statement of a material fact or omit any material fact necessary to make the
statements contained herein or therein not materially misleading, in each case,
in light of the facts and circumstances existing at the time any such statement
was made.  There are no facts or circumstances
in existence on the Closing Date which any Borrower has failed to disclose to
Administrative Agent and Lenders in writing that could reasonably be expected
to have a Material Adverse Effect.

 

8.1.11.               Solvent Financial Condition.  Each Borrower and its Subsidiaries is
Solvent and, after giving effect to the Loans to be made hereunder, the Letters
of Credit to be issued in connection herewith and the consummation of the other
transactions described in the Loan Documents, will be Solvent.

 

8.1.12.               Surety Obligations.  Except as set forth on Schedule 8.1.12 hereto
on the Closing Date, no Borrower nor any of its Subsidiaries is obligated as
surety or indemnitor under any surety or similar bond or other contract issued
or entered into any agreement to assure payment, performance or completion of
performance of any undertaking or obligation of any Person.

 

8.1.13.               Taxes.  The FEIN and organizational identification number of each
Borrower and each of its Subsidiaries (if any) is as shown on Schedule 8.1.13
hereto.  Each Borrower and each of its

 

37

 

Subsidiaries has filed all federal, state and material local tax
returns and other material reports it is required by law to file (after giving
effect to any applicable extensions) and has paid, or made provision for the
payment of, all Taxes upon it, its income and Properties as and when such Taxes
are due and payable, except to the extent being Properly Contested.  The provision for Taxes on the books of each
Borrower and each of its Subsidiaries are adequate for all years not closed by
applicable statutes, and for its current Fiscal Year.

 

8.1.14.               Brokers.  There are no claims against any Borrower for
brokerage commissions, finder’s fees or investment banking fees in connection
with the transactions contemplated by this Agreement or any of the other Loan
Documents, other than to Rothschild, Inc. (which claims will be paid by
Borrowers in accordance with the Plan of Reorganization).

 

8.1.15.               Intellectual Property. Each
Borrower and each of its Subsidiaries each owns or has the lawful right to use
all Intellectual Property material to the conduct of its business as presently
conducted without any known conflict with the rights of others; there is no
objection to, or pending (or, to Borrowers’ knowledge, threatened) Intellectual
Property Claim with respect to, any Borrower’s or any of its Subsidiaries’
right to use any such Intellectual Property and such Borrower is not aware of
any grounds for challenge or objection thereto; and, except as may be disclosed
on Schedule 8.1.15,
no Borrower nor any of its Subsidiaries pays any royalty or other compensation
to any Person for the right to use any Intellectual Property, other than “off
the shelf” software license arrangements. 
As of the Closing Date, all Intellectual Property is listed on Schedule 8.1.15
hereto, to the extent such Intellectual Property is registered under any
Applicable Law or are otherwise material to any Borrower’s or any of its
Subsidiaries’ business.

 

8.1.16.               Governmental Approvals.  Each Borrower and each of its Subsidiaries
has, and is in good standing with respect to, all Governmental Approvals
necessary to continue to conduct its business as heretofore or proposed to be
conducted by it and to own or lease and operate its Properties as now owned or
leased by it, except for those Governmental Approvals the failure of which to
have would not have a Material Adverse Effect.

 

8.1.17.               Compliance with Laws.  Each Borrower and each of its Subsidiaries
has duly complied with, and its Properties, business operations (including
production of Inventory) and leaseholds are in compliance in all material
respects with, the provisions of all Applicable Law (except to the extent that
any such noncompliance with Applicable Law could not reasonably be expected to
have a Material Adverse Effect).

 

8.1.18.               Burdensome Contracts.  Except as set forth on Schedule 8.1.18, no
Borrower nor any of its Subsidiaries is a party or subject to any contract,
agreement, or charter or other corporate restriction, which has or could be
reasonably expected to have a Material Adverse Effect.  No Borrower nor any of its Subsidiaries is a
party or subject to any Restrictive Agreements, except as set forth on Schedule 8.1.18
hereto, none of which prohibit the execution or delivery of any of the Loan
Documents by any Obligor or the performance by any Obligor of its obligations
under any of the Loan Documents to which it is a party, in accordance with the
terms of such Loan Documents.

 

8.1.19.               Litigation.  Except as set forth on Schedule 8.1.19 hereto,
there are no actions, suits, proceedings or investigations pending or, to the
knowledge of any Borrower, threatened on the Closing Date against or affecting
any Borrower or any of its Subsidiaries, or the business, operations,
Properties, or condition of any Borrower or any of its Subsidiaries, (i) which
relate to any of the Loan Documents or any of the transactions contemplated
thereby or (ii) which, if determined adversely to any Borrower or any of its
Subsidiaries, could reasonably be expected to have a Material Adverse
Effect.  To the knowledge of each
Borrower, no Borrower nor any of its Subsidiaries is in default on the Closing

 

38

 

Date with respect to any order, writ, injunction, judgment, decree or
rule of any court, Governmental Authority or arbitration board or tribunal.

 

8.1.20.               No Defaults.  No event has occurred and no condition
exists which would, upon or after the execution and delivery of this Agreement
or any Borrower’s performance hereunder, constitute a Default or an Event of
Default.  As of the Closing Date, no
Borrower nor any of its Subsidiaries is in default, and no event has occurred
and no condition exists which constitutes or which with the passage of time or
the giving of notice or both would constitute a default, under any Material
Contract or in the payment of any Debt for Money Borrowed of a Borrower or a
Subsidiary to any Person.

 

8.1.21.               Leases.  Schedule 8.1.21 hereto is a complete listing of each
capitalized and operating lease of each Borrower and each of its Subsidiaries
on the Closing Date that constitutes a Material Contract.  As of the Closing Date, each Borrower and
each of its Subsidiaries is in compliance, in all material respects, with all
of the terms of each of its respective capitalized and operating leases and
there is no basis upon which the lessors under any such leases could terminate
same or declare any Borrower or any of its Subsidiaries in default thereunder.

 

8.1.22.               Pension Plans.  Except as disclosed on Schedule 8.1.22 hereto,
no Borrower nor any of its Subsidiaries has any Plan on the Closing Date.  Each Borrower and each of its Subsidiaries
is in compliance in all material respects with the requirements of ERISA and
the regulations promulgated thereunder with respect to each Plan.  No fact or situation that is reasonably
likely to result in a Material Adverse Effect exists in connection with any
Plan.

 

8.1.23.               Trade Relations.  As of the Closing Date, there exists no
actual or, to the Borrowers’ knowledge threatened termination, cancellation or
limitation of, or any materially adverse modification or change in, the
business relationship between any Borrower and any customer or any group of
customers whose purchases individually or in the aggregate are material to the
business of such Borrower, or with any material supplier or group of material
suppliers, and there exists no condition or state of facts or circumstances to
prevent any Borrower from conducting such business after the consummation of
the transactions contemplated by this Agreement in substantially the same
manner in which it has heretofore been conducted, subject to residual effects
of the Chapter 11 Case, none of which could reasonably be expected to have a
Material Adverse Effect.

 

8.1.24.               Labor Relations.  Except as described on Schedule 8.1.24 hereto,
no Borrower nor any of its Subsidiaries is on the Closing Date a party to or
bound by any collective bargaining agreement, management agreement or
consulting agreement.  On the Closing
Date, there are no material grievances, disputes or controversies with any
union or any other organization of any Borrower’s or any Subsidiary’s
employees, or, to any Borrower’s knowledge, any threats of strikes, work
stoppages or any asserted pending demands for collective bargaining by any
union or organization.

 

8.1.25.               Not a Regulated Entity.  No Obligor is (i) an “investment company” or
a “person directly or indirectly controlled by or acting on behalf of an investment
company” within the meaning of the Investment Company Act of 1940; (ii) a
“holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935;
or (iii) subject to regulation under the Federal Power Act, the Interstate
Commerce Act, any public utilities code or any other Applicable Law regarding
its authority to incur Debt.

 

8.1.26.               Tax Shelter Regulations.  Borrowers do not intend to treat the Loans
and related transactions as being a “reportable transaction” (within the
meaning of Treasury Regulation Section 1.6011-4).  In the event that Borrowers determine to
take any action inconsistent with such intention, Borrowers promptly will
notify Administrative Agent thereof.  If
Borrowers so notify Administrative Agent, Borrowers acknowledge that one or
more of the Lenders may treat its advances as

 

39

 

part of a transaction that is subject to Treasury Regulation
Section 301.6112-1, and such Lender or Lenders, as applicable, will
maintain the lists and other records required by such Treasury Regulation.

 

8.1.27.               Margin Stock.  No Borrower nor any of its Subsidiaries is
engaged, principally or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying any Margin Stock.

 

8.1.28.               Payable Practice.No Borrower nor
any of its Subsidiaries has made any material change in the historical accounts
payable practices from those in effect immediately prior to the Closing Date.

 

8.1.29.               Environmental Law.

 

(i)                                     Each
Borrower and each of its Subsidiaries is in compliance in all material respects
with all applicable Environmental Laws and except as set forth on
Schedule 8.1.29 neither any Borrower nor any Subsidiary nor any of its
presently owned real Property or presently conducted operations, nor its
previously owned real Property (during such Borrower’s or its Subsidiaries’
prior ownership thereof) or prior operations, is subject to any enforcement
order from or liability agreement with any Governmental Authority or private
Person respecting (i) any material non-compliance with any applicable
Environmental Law or (ii) any material liabilities and costs or remedial action
arising from an Environmental Release or threatened Environmental Release.

 

(ii)                                  Each
Borrower and each of its Subsidiaries have obtained all material permits
necessary for their current operations under applicable Environmental Laws, and
all such permits are in good standing and each Borrower and each of its
Subsidiaries are in compliance in all material respects with the terms and
conditions of such permits.

 

(iii)                               Except
as identified on Schedule 8.1.29, no Borrower nor any of its Subsidiaries,
nor, to the best of any Borrower’s knowledge, any of its predecessors in
interest, stored, treated or disposed of any hazardous waste as defined under
the RCRA except in material compliance with applicable Environmental Laws or a
permit issued pursuant thereto.

 

(iv)                              Except
as identified on Schedule 8.1.29, no Borrower nor any of its Subsidiaries
has received any summons, complaint, order or similar written notice from a
Governmental Authority indicating that it is not currently in compliance with,
or that any Governmental Authority is investigating its compliance with, any
Environmental Laws or that it is or may be liable to any other Person as a
result of an Environmental Release or threatened Environmental Release.

 

(v)                                 To
the best of each Borrower’s knowledge, and except as identified on Schedule 8.1.29,
none of the present or past operations of any Borrower or any of its
Subsidiaries is the subject of any investigation by any Governmental Authority
evaluating whether any remedial action is needed by Borrowers or any of their
Subsidiaries to respond to an Environmental Release or threatened Environmental
Release.

 

(vi)                              Except
as disclosed on Schedule 8.1.29, there is not now, nor, to the best of
any Borrower’s knowledge has there ever been on or in the Real Estate:

 

(A)                              any underground storage
tanks or surface impoundments (except those that have been removed in material
compliance with applicable Environmental Law or have been maintained in
compliance with applicable Environmental Law),

 

(B)                                any
friable asbestos-containing material, or

 

40

 

(C)                                any polychlorinated
biphenyls (PCBs) used in hydraulic oils, electrical transformers or other
equipment (except those that have been handled in material compliance with
applicable Environmental Law).

 

(vii)                           Except
as identified on Schedule 8.1.29, neither any Borrower nor any of its
Subsidiaries has filed any notice under any requirement of Environmental Law
reporting an Environmental Release within the last 5 years, except for
Environmental Releases that have been resolved in compliance with applicable
Environmental Law.

 

(viii)                        Except
as disclosed on Schedule 8.1.29, neither any Borrower nor any of its
Subsidiaries has entered into any written settlement agreements with any Person
(including the prior owner of its property) imposing material obligations or
liabilities on any Borrower or any of its Subsidiaries with respect to any
remedial action in response to an Environmental Release.

 

(ix)                                None
of the products currently distributed or sold by any Borrower or any of its
Subsidiaries contains asbestos containing material.

 

(x)                                   No Environmental
Lien is attached (or has attached and not been released) to the Real Estate, except,
with respect to any Environmental Liens arising after the Closing Date, those
being Properly Contested.

 

8.1.30.               ERISA Compliance.

 

(i)                                     Each
Plan is in compliance in all material respects with the applicable provisions
of ERISA, the Internal Revenue Code and other federal or state law.  Each Plan which is intended to qualify under
Section 401(a) of the Internal Revenue Code has received a favorable
determination letter from the IRS (or has timely filed an application for a
determination letter that is under review by the IRS) and to the best knowledge
of Borrowers, nothing has occurred which could reasonably be expected to cause
the loss of such qualification.  Each
Borrower and each ERISA Affiliate has made all required contributions to any
Plan subject to Section 412 of the Internal Revenue Code, and no
application for a funding waiver or an extension of any amortization period
pursuant to Section 412 of the Internal Revenue Code has been made with
respect to any Plan.

 

(ii)                                  There
are no pending or, to the best knowledge of any Borrower, threatened claims,
actions or lawsuits, or action by any Governmental Authority, with respect to
any Plan which has resulted or could reasonably be expected to result in a
Material Adverse Effect.  There has been
no non-exempt prohibited transaction or violation of the fiduciary
responsibility rules with respect to any Plan which has resulted or could
reasonably be expected to result in a Material Adverse Effect.

 

(iii)                               (a)
No Reportable Event (other than a Reportable Event as to which the thirty day
notice period is waived by the Pension Benefit Guaranty Corporation under the
regulations promulgated under such section) has occurred or is reasonably
expected to occur with respect to any Plan that has or could reasonably be
expected to have a Material Adverse Effect; (b) no Plan has incurred an
“accumulated funding deficiency” within the meaning of Section 412 of the
Internal Revenue Code that has or could reasonably be expected to have a
Material Adverse Effect; (c) neither any Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability under Title IV of ERISA
with respect to any Plan (other than premiums due and not delinquent under
Section 4007 of ERISA) that has or could reasonably be expected to have a
Material Adverse Effect; (d) neither any Borrower nor any ERISA Affiliate has
incurred, or reasonably expects to incur, any liability (and no event has
occurred which, with the giving of notice under Section 4219 of ERISA,
could reasonably be expected to result in such liability) under
Section 4201 or 4243 of ERISA with respect to a Multi-employer Plan that
has or could reasonably be expected to have a Material Adverse Effect; and (e)
neither any Borrower nor any ERISA Affiliate has engaged in a transaction that
could be subject to Section 4069 or 4212(c) of ERISA.

 

41

 

(iv)                              As
of the Closing Date, no Borrower nor any of its Subsidiaries is a party to a
Multiemployer Plan.

 

Notwithstanding the foregoing, the representations and warranties in
this Section 8.1.30
are qualified such that to the extent that any such representation or warranty
applies to a Multiemployer Plan, such representation or warranty shall be
deemed to be to the best knowledge of the Borrower.

 

8.1.31.               Bank Accounts.  Schedule 8.1.31 contains as of the
Closing Date a complete and accurate list of all bank accounts maintained by
Borrowers with any bank or other financial institution.  Borrowers shall notify Administrative Agent
in writing at least 15 days prior to opening any new bank account (other than
with Administrative Agent or its affiliates) and shall promptly deliver or
cause to be delivered to Administration Agent a Deposit Account Control
Agreement with respect to any such new bank account.

 

8.1.32.               Anti-Terrorism Laws.

 

(a)                                  General.  To the best of Borrowers’ knowledge, no
Borrower nor any Affiliate of any Borrower is in violation of any
Anti-Terrorism Law or engages in or conspires to engage in any transaction that
evades or avoids, or has the purpose of evading or avoiding, or attempts to
violate, any of the prohibitions set forth in any Anti-Terrorism Law.

 

(b)                                 Executive
Order No. 13224.

 

(i)                                     No Borrower nor
any Affiliate of any Borrower is any of the following (each a “Blocked
Person”):

 

(A)                              a Person that is listed
in the annex to, or is otherwise subject to the provisions of, Executive Order
No. 13224;

 

(B)                                a Person owned or
controlled by, or acting for or on behalf of, any Person that is listed in the
annex to, or is otherwise subject to the provisions of, Executive Order No.
13224;

 

(C)                                a Person or entity with
which any bank or other financial institution is prohibited from dealing or
otherwise engaging in any transaction by any Anti-Terrorism Law;

 

(D)                               a Person or entity that
commits, threatens or conspires to commit or supports “terrorism” as defined in
Executive Order No. 13224;

 

(E)                                 a Person or entity
that is named as a “specially designated national” on the most current list
published by the U.S. Treasury Department Office of Foreign Asset Control at
its official website or any replacement website or other replacement official
publication of such list; or

 

(F)                                 a Person or entity who
is affiliated with a Person or entity listed above.

 

To the best of Borrowers’ knowledge, no Borrower nor any Affiliate of
any Borrower (i) conducts any business or engages in making or receiving any
contribution of funds, goods or services to or for the benefit of any Blocked
Person or (ii) deals in, or otherwise engages in any transaction relating to,
any property or interests in property blocked pursuant to Executive Order No.
13224.

 

42

 

8.1.33.               Confirmation Order.  The Confirmation Order has been entered on
the docket of the Chapter 11 Case and has not been (a) modified, altered or
amended in any material respect that would be adverse to Administrative Agent
or Lenders or (b) reversed, vacated or stayed. 
The notice given in the Chapter 11 Case regarding the proposed entry of
the Confirmation Order and the confirmation hearing complied in all material
respects with the applicable provisions of the Bankruptcy Code, the Bankruptcy
Rules and any orders entered in the Chapter 11 Case regarding notice.  As of the Closing Date, Debtors are not in
default under any of their obligations under the Plan of Reorganization.

 

8.1.34.               No Bankruptcy Liens.  Except as set forth on Schedule 8.1.34, the
docket of the Chapter 11 Case reflects no Liens granted or ordered by the
Bankruptcy Court in the Chapter 11 Case in favor of any “party in interest” (as
such term is used in the Bankruptcy Code) with respect to any property of any
Debtor or Borrower, including any Liens granted to a debtor-in-possession
lender or adequate protection Liens, except Liens that are disclosed in the
Disclosure Statement and will be released as of the Effective Date upon
consummation (and in accordance with the terms and conditions) of the Plan of
Reorganization.

 

8.2.                            Reaffirmation
of Representations and Warranties. 
Each representation and warranty contained in this Agreement and the
other Loan Documents shall be deemed to be reaffirmed by each Borrower on each
day that Borrowers request or are deemed to have requested an extension of
credit hereunder, except for changes expressly contemplated by the terms of
this Agreement or those consented to by Required Lenders.  Notwithstanding the foregoing,
representations and warranties which by their terms are applicable only to a
specific date shall be deemed made only at and as of such date.

 

8.3.                            Survival
of Representations and Warranties. 
All representations and warranties of Borrowers contained in this
Agreement or any of the other Loan Documents shall survive the execution,
delivery and acceptance thereof by Administrative Agent, Lenders and the
parties thereto and the closing of the transactions described therein or
related thereto.

 

SECTION 9.                            COVENANTS
AND CONTINUING AGREEMENTS

 

9.1.                            Affirmative
Covenants.  For so long as there
are any Commitments outstanding and thereafter until the Full Payment of the
Obligations, each Borrower covenants that, unless the Required Lenders have
otherwise consented in writing, it shall and shall cause each Subsidiary to:

 

9.1.1.                     Visits and Inspections.  Permit representatives of Administrative Agent,
from time to time, as often as may be reasonably requested, but only during
normal business hours and (except when a Default or Event of Default exists and
subject to the limitations on reimbursement set forth on Section 2.2.4 hereof)
upon reasonable prior notice to a Borrower, to visit and inspect the Properties
of such Borrower and each of its Subsidiaries, inspect, audit and make extracts
from such Borrower’s and each Subsidiary’s books and records, and discuss with
its officers, its employees and its independent accountants, such Borrower’s
and each Subsidiary’s business, financial condition, business prospects and
results of operations; provided, however, that for so long as no
Event of Default exists, with respect to environmental inspections of the
Properties, representatives of Administrative Agent shall only have the right
to inspect once every 12 months, unless Administrative Agent has a reasonable
basis to believe that a condition exists or an event has occurred which
reasonably could give rise to material liabilities under applicable
Environmental Laws.  Representatives of
each Lender shall be authorized to accompany Administrative Agent on each such
visit and inspection and to participate with Administrative Agent therein, but
at their own expense, unless a Default or Event of Default exists.  Neither Administrative Agent nor any Lender
shall have any duty to make any such inspection and shall not incur any
liability by reason of its failure to conduct or delay in conducting any such
inspection.

 

9.1.2.                     Notices.  Notify Administrative Agent and Lenders in
writing, promptly after a Borrower’s obtaining knowledge thereof, (i) of the
commencement of any litigation affecting any Obligor

 

43

 

or any of its Properties, whether or not the claims asserted in such
litigation are considered by Borrowers to be covered by insurance, and of the
institution of any administrative proceeding, to the extent that such
litigation or proceeding, if determined adversely to such Obligor, could
reasonably be expected to have a Material Adverse Effect; (ii) of any material
labor dispute to which any Obligor may become a party, any pending or
threatened strikes or walkouts relating to any of its plants or other facilities,
and the expiration of any labor contract to which it is a party or by which it
is bound; (iii) of any material default by any Obligor under, or termination
of, any Material Contract or any note, indenture, credit agreement, mortgage,
lease, deed, guaranty or other similar agreement relating to any Debt of such
Obligor exceeding $1,000,000; (iv) of the existence of any Default or Event of
Default; (v) of any default by any Person under any note or other evidence of
Debt payable to an Obligor in an amount exceeding $1,000,000; (vi) of any
judgment against any Obligor in an amount exceeding $500,000; (vii) of the
assertion by any Person of any Intellectual Property Claim, the adverse
resolution of which could reasonably be expected to have a Material Adverse
Effect; (viii) of any violation or asserted violation by any Borrower of any
Applicable Law (including ERISA, OSHA, FLSA, or any Environmental Laws), the
adverse resolution of which could reasonably be expected to have a Material
Adverse Effect; (ix) of any Environmental Release by an Obligor or on any
Property owned or occupied by an Obligor that could reasonably be expected to
have a Material Adverse Effect; and (x) of the discharge of Borrowers’
independent accountants or any withdrawal of resignation by such independent
accountants from their acting in such capacity.  In addition, Borrowers shall give Administrative Agent at least
30 Business Days’ prior written notice of any Obligor’s opening of any new
office or place of business.

 

9.1.3.                     Financial and Other Information.  Keep adequate records and books of account
with respect to its business activities in which proper entries are made in
accordance with GAAP reflecting all its financial transactions; and cause to be
prepared and to be furnished to Administrative Agent and Lenders the following
(all to be prepared in accordance with GAAP applied on a consistent basis,
unless Borrowers’ certified public accountants concur in any change therein,
such change is disclosed to Administrative Agent and is consistent with GAAP
and, if required by the Required Lenders, the financial covenant set forth in Section 9.3
are amended in a manner requested by the Required Lenders to take into account
the effects of such change):

 

(i)                                     as
soon as available, and in any event within 90 days after the close of each
Fiscal Year, audited balance sheets of New Parent and its Subsidiaries as of
the end of such Fiscal Year and the related statements of income, shareholders’
equity and cash flow, on a Consolidated and consolidating basis, certified
without qualification by a firm of independent certified public accountants of
recognized national standing selected by Borrowers but reasonably acceptable to
Administrative Agent (except for a qualification for a change in accounting principles
with which the accountant concurs and except for qualifications which are
acceptable to Administrative Agent in its reasonable business judgment), and
setting forth in each case in comparative form the corresponding Consolidated
and consolidating figures for the preceding Fiscal Year;

 

(ii)                                  as
soon as available, and in any event within 45 days after the end of each Fiscal
Quarter hereafter (other than the fourth Fiscal Quarter of any Fiscal Year),
unaudited balance sheets of New Parent and its Subsidiaries as of the end of
such Fiscal Quarter and the related unaudited statements of income and cash
flow for such Fiscal Quarter and for the portion of Borrowers’ Fiscal Year then
elapsed, on a Consolidated and consolidating basis, setting forth in each case
in comparative form the corresponding figures for the preceding Fiscal Year and
certified by the principal financial officer of Borrowers as prepared in
accordance with GAAP and fairly presenting the Consolidated financial position
and results of operations of Borrowers and their Subsidiaries for such Fiscal
Quarter and period subject only to changes from audit and year-end adjustments
and except that such statements need not contain notes;

 

44

 

(iii)                               as soon
as available, and in any event within 30 days after the end of each month
hereafter, unaudited balance sheets of New Parent and its Subsidiaries as of
the end of such month and the related unaudited statements of income and cash
flow for such month and for the portion of Borrowers’ Fiscal Year then elapsed,
on a Consolidated and consolidating basis, setting forth in each case in
comparative form the corresponding figures for the preceding Fiscal Year and
certified by the principal financial officer of Borrowers as prepared in
accordance with GAAP and fairly presenting the Consolidated financial position
and results of operations of Borrowers and their Subsidiaries for such month
and period subject only to changes from audit and year-end adjustments and except
that such statements need not contain notes;

 

(iv)                              not
later than 20 days after each month, a listing of all of each Borrower’s trade
payables as of the last Business Day of such month, specifying the name of and
balance due each trade creditor; and

 

(v)                                 promptly
after the sending or filing thereof, as the case may be, copies of any proxy
statements, financial statements or reports which any Borrower has made
generally available to its shareholders and copies of any regular, periodic and
special reports or registration statements which any Borrower files with the
SEC or any Governmental Authority which may be substituted therefor, or any
national securities exchange.

 

Concurrently with the delivery of the financial statements described in
clause (i) of this Section 9.1.3, Borrowers shall deliver
to Administrative Agent and Lenders a copy of the accountants’ letter to
Borrowers’ management that is prepared in connection with such financial
statements.  Concurrently with the
delivery of the financial statements described in clauses (i) and (ii) of this Section 9.1.3,
or more frequently if requested by Administrative Agent or any Lender during
any period that a Default or Event of Default exists, Borrowers shall cause to
be prepared and furnished to Administrative Agent and Lenders a Compliance
Certificate executed by the chief financial officer of Borrower Agent, on
behalf of itself and the other Borrowers.

 

Promptly after the sending or filing thereof, Borrowers shall also
provide to Administrative Agent copies of any annual report to be filed in
accordance with ERISA in connection with each Plan (other than an annual report
with respect to a Multiemployer Plan, in which case such report shall be
provided to Administrative Agent upon request therefor) and such other data and
information (financial and otherwise) required to be filed with the United
States Department of Labor or the Pension Benefit Guaranty Corporation.  In addition, Borrowers shall provide to
Administrative Agent such other data and information as Administrative Agent,
from time to time, may reasonably request, bearing upon or related to the
Collateral or any Borrower’s and any of its Subsidiaries’ financial condition
or results of operations, subject to applicable privacy laws and regulations.

 

9.1.4.                     Landlord and Storage Agreements.  Provide Administrative Agent with copies of
all existing agreements, and promptly after execution thereof provide
Administrative Agent with copies of all future agreements, between any Borrower
and any landlord, warehouseman or bailee which owns any premises at which any
Collateral with a value in excess of $100,000 may, from time to time, be kept.

 

9.1.5.                     Projections.  No later than 30 days prior to the end of
each Fiscal Year of Borrowers (other than Fiscal Year 2003), deliver to
Administrative Agent and Lenders the Projections of Borrowers for the
forthcoming Fiscal Year, month by month.

 

9.1.6.                     Taxes.Pay and discharge all
Taxes prior to the date on which such Taxes become delinquent or penalties
attach thereto, except and to the extent only that such Taxes are being
Properly Contested.

 

45

 

9.1.7.                     Compliance with Laws.  Comply with all Applicable Law, including
ERISA, all applicable Environmental Laws, FLSA, OSHA, the Sarbanes-Oxley Act,
and all laws, statutes, regulations and ordinances regarding the collection,
payment and deposit of Taxes, and obtain and keep in force any and all
Governmental Approvals necessary to the ownership of its Properties or to the conduct
of its business, to the extent that any such failure to comply, obtain or keep
in force could be reasonably expected to have a Material Adverse Effect.  Without limiting the generality of the
foregoing, if any Environmental Release shall occur at or on any of the
Properties of any Borrower or any of its Subsidiaries, Borrowers shall, or
shall cause the applicable Subsidiary to, act promptly and diligently to
investigate and report to Administrative Agent and all appropriate Governmental
Authorities the extent of, and to make appropriate remedial action to
eliminate, such Environmental Release all as required under applicable
Environmental Law, whether or not ordered or otherwise directed to do so by any
Governmental Authority.  Additionally,
Borrowers will not use any proceeds of the Loans directly or indirectly to fund
a personal loan to or for the benefit of a director or executive officer of a
Borrower or Guarantor in violation of the Sarbanes-Oxley Act or any other
Applicable Law.

 

9.1.8.                     Insurance.  In addition to the insurance required herein
with respect to the Collateral, maintain with its insurers as of the Closing
Date or with other financially sound and reputable insurers having a rating no
less favorable than the rating in effect on the Closing Date applicable to its
insurers as of the Closing Date, (i) insurance with respect to its Properties
and business against such casualties and contingencies of such type (including
product liability, workers’ compensation, larceny, embezzlement, or other criminal
misappropriation insurance) and in such amounts and with such coverages, limits
and deductibles as is customary in the business of such Borrower or such
Subsidiary and (ii) business interruption insurance in an amount not less than  the
amounts reflected in Schedule 9.1.8.

 

9.1.9.                     Intellectual Property.  Promptly after applying for or otherwise
acquiring any registered Intellectual Property, deliver to Administrative
Agent, in form and substance reasonably acceptable to Administrative Agent and
in recordable form, all documents necessary for Administrative Agent to perfect
its Lien on such Intellectual Property.

 

9.1.10.               Tax Shelter Investments.  Promptly after Borrowers have notified
Administrative Agent of any intention by Borrowers to treat the Loans as being
a “reportable transaction” (within the meaning of Treasury Regulation
Section 1.6011-4), furnish Administrative Agent with a duly completed copy
of IRS Form 8886 or any successor form.

 

9.1.11.               Banking Relationship.  Within 120 days after the Closing Date,
establish and maintain its lockbox and primary concentration and disbursement
accounts, including the Dominion Account and the Controlled Disbursement
Account, at Bank.

 

9.1.12.               Interest Rate Protection.  As promptly as practicable, and in any event
within 30 days after the Closing Date, enter into, and thereafter for a period
reasonably satisfactory to Administrative Agent, one or more Interest Rate
Contracts in a notational amount of not less than $60,000,000, on such terms
and with such parties as shall be reasonably satisfactory to Administrative
Agent, the effect of which shall be to fix or limit the interest costs to
Borrowers with respect to fifty (50%) of the Commitments at any time.

 

9.1.13.               License Agreements.  Keep each License Agreement in full force
and effect for so long as any Borrower has any material amount of Inventory,
the manufacture, sale or distribution of which is in any manner governed by or
subject to such License Agreement.

 

9.1.14.                               Surveys.  On or before December 31, 2004, deliver
to Administrative Agent as-built surveys with respect to each parcel of Real
Estate, which surveys shall indicate the following:  (i) an accurate metes and bounds or lot, block and parcel
description of such parcel; (ii) the location of all buildings, structures and
other improvements on such parcel, including all streets, easements, rights of

 

46

 

way and utility lines, if any; (iii) the location of ingress and egress
from such parcel, and the location of any set-back or other building lines
affecting such parcel; (iv) a certification by a registered land surveyor in
form and substance provided to Borrowers by Administrative Agent, certifying to
the accuracy and completeness of such survey and to such other matters relating
to such parcel and survey as Administrative Agent shall reasonably require; and
which surveys shall not disclose any matters that could reasonably be expected
to have a Material Adverse Effect.  In
addition, upon receipt of such surveys, Borrowers shall deliver to
Administrative Agent such title insurance endorsements as may be reasonably
requested by Administrative Agent.

 

9.1.15.               Future Subsidiaries.  Each Obligor shall promptly notify
Administrative Agent upon any Person becoming a Subsidiary, or upon an Obligor
directly or indirectly acquiring additional Equity Interests of any existing
Subsidiary, and

 

(i)                                     such
Person shall, if it is a Domestic Subsidiary that is otherwise not an Obligor,
(a) execute and deliver to Administrative Agent a supplement to the Subsidiary
Guaranty and the Security Agreement and (b) to the extent such Domestic
Subsidiary is required to pledge Equity Interests of a Subsidiary pursuant to
clause (ii) of this Section, become a party to the Pledge Agreement, if not
already a party thereto as a pledgor, in a manner reasonably satisfactory to
Administrative Agent;

 

(ii)                                  each
Obligor and each Domestic Subsidiary that is not a Joint Venture shall,
pursuant to the Pledge Agreement, pledge to Administrative Agent all of the
outstanding Equity Interests of capital stock of each such new Subsidiary (or
66% in the case of a Foreign Subsidiary) owned directly by such Obligor or such
Domestic Subsidiary, along with undated stock powers for such certificates,
executed in blank (or, if any such shares of capital stock are uncertificated,
confirmation and evidence reasonably satisfactory to Administrative Agent that
the security interest in such uncertificated securities has been transferred to
and perfected by Administrative Agent, for the benefit of Lenders, in
accordance with Sections 8-313, 8-321 and 9-115 of the UCC or any other similar
or local or foreign law that may be applicable); and

 

(iii)                               each
Obligor and each Domestic Subsidiary that is not a Joint Venture shall,
pursuant to the Pledge Agreement, pledge to Administrative Agent for its
benefit and that of the Lenders, all intercompany notes evidencing Debt of such
new Subsidiary in favor of such Borrower or such Domestic Subsidiary (which
shall be in a form reasonably acceptable to Administrative Agent);

 

together, in each case, to the extent requested by Administrative
Agent, with such opinions of legal counsel for such Obligor (which shall be
from Proskauer Rose LLP or such other counsel reasonably satisfactory to
Administrative Agent) relating thereto, which legal opinions shall be in form
and substance reasonably satisfactory to Administrative Agent.

 

9.2.                            Negative
Covenants.  For so long as there
are any Commitments outstanding and thereafter until the Full Payment of the
Obligations, each Borrower covenants that, unless the Required Lenders (or all
Lenders, to the extent required in Section 12.9.1) have otherwise
consented in writing, it shall not and shall not permit any Subsidiary to:

 

9.2.1.                     Fundamental Changes.  Merge, reorganize, consolidate or amalgamate
with any Person, or liquidate, wind up its affairs or dissolve itself, in each
case whether in a single transaction or in a series of related transactions,
except for (i) mergers or consolidations of any Subsidiary with another
Subsidiary (ii) mergers or consolidations of any Borrower with another Borrower
or Subsidiary (provided such Borrower is the surviving entity), the dissolution
of Essex Services, Inc. and mergers and dissolutions contemplated by the Plan
of Reorganization, (iii) mergers or consolidations expressly contemplated by
the documents governing any Permitted Acquisition, or (iv) at any time the LP

 

47

 

Conversion Conditions are satisfied, the conversion of Superior into a
Delaware limited partnership; change a Borrower’s name or conduct business
under any new fictitious name; or except upon not less than 30 days prior
notice to Administrative Agent (and after compliance with Section 6.3 with respect
thereto), change a Borrower’s FEIN, organizational identification number or
state of organization.

 

9.2.2.                     Loans.  Make any loans or other advances of money to
any Person other than (i) to an officer or employee of a Borrower or a
Subsidiary for salary, travel advances, moving and other relocation expenses,
advances against commissions and other similar advances in the Ordinary Course
of Business, (ii) loans and advances not constituting a Restricted Investment,
(iii) loans and advances resulting in intercompany debt permitted by Section 9.2.3
and (iv) loans and advances constituting an Upstream Payment or Distribution
permitted by Section 9.2.7 (or loans or advances in lieu of an
Upstream Payment or Distribution permitted by Section 9.2.7).  Nothing herein shall be deemed to override,
modify or waive any requirement for Borrowers to comply at all times with the
provisions of the Sarbanes-Oxley Act.

 

9.2.3.                     Permitted Debt.  Create, incur, assume, guarantee or suffer
to exist any Debt, except:

 

(i)                                     the
Obligations;

 

(ii)                                  Debt
evidenced by the New Senior Secured Note Indenture and the New Senior Secured
Notes;

 

(iii)                               Subordinated
Debt approved in writing by the Required Lenders;

 

(iv)                              accounts
payable by such Borrower or a Subsidiary to trade creditors that are not aged
more than 90 days from billing date or more than 30 days from the due date, in
each case incurred in the Ordinary Course of Business and paid within such time
period, unless the same are being Properly Contested;

 

(v)                                 Permitted
Purchase Money Debt and Capitalized Lease Obligations (excluding the Brownwood
Lease) which do not in the aggregate exceed $12,500,000 at any time
outstanding;

 

(vi)                              Debt
for accrued payroll, Taxes and other operating expenses (other than for Money
Borrowed) incurred in the Ordinary Course of Business of such Borrower or such
Subsidiary, including Debt under any Cash Management Agreement, in each case so
long as payment thereof is not past due and payable unless, in the case of
Taxes only, such Taxes are being Properly Contested;

 

(vii)                           Permitted
Contingent Obligations;

 

(viii)                        Debt in
respect of netting services, overdraft protections and otherwise in connection
with Deposit Accounts;

 

(ix)                                Debt
in respect of the Brownwood Lease;

 

(x)                                   Debt
incurred in the Ordinary Course of Business solely to support any Borrower or
any Subsidiary’s insurance or self-insurance obligations in the Ordinary Course
of Business (including to secure worker’s compensation and other similar
insurance coverages);

 

(xi)                                Debt
of Essex International Ltd. and Temple Electrical Ltd. under or in connection
with that certain Agreement for the Purchase of Debts by and between HSBC
Invoice 

 

48

 

Finance (UK) Ltd. and Essex International
Limited as of August 16, 2001 in an amount not to exceed 900,000 Pounds
Sterling;

 

(xii)                             Debt
of a Borrower to a Borrower or of a Borrower to a Subsidiary of a Borrower;

 

(xiii)                          Debt for
Money Borrowed issued or incurred in connection with Permitted Acquisitions and
referred to in clause (h) of such definition;

 

(xiv)                         Debt
incurred by a Borrower or Subsidiary in connection with a Permitted Acquisition
(or Debt assumed at the time of a Permitted Acquisition), other than
Obligations hereunder, in an amount not to exceed $10,000,000;

 

(xv)                            Refinancing
Debt so long as each of the Refinancing Conditions is met; and

 

(xvi)                         Debt that
is not included in any of the preceding paragraphs of this Section 9.2.3, is not
secured by a Lien (unless such Lien is a Permitted Lien) and does not exceed at
any time, in the aggregate, the sum of $5,000,000 as to all Borrowers and all
of their Subsidiaries.

 

None of the provisions of this Section 9.2.3 that authorize any
Obligor to incur any Debt shall be deemed to override, modify or waive any of
the provisions of Section 9.3, which shall constitute an
independent and separate covenant and obligation of each Borrower.

 

9.2.4.                     Affiliate Transactions.  Enter into, or be a party to any transaction
with any Affiliate or stockholder, except: 
(i) the transactions contemplated by the Loan Documents; (ii) the
issuance of New Senior Secured Notes, the New Subsidiary Preferred Stock and
common stock of New Parent (and, in the case of such New Senior Secured Notes
and common stock of New Parent, the registration rights agreement applicable
thereto) to stockholders or Affiliates in accordance with the Plan of
Reorganization and the Indenture; (iii) payment of reasonable compensation to
officers and employees for services actually rendered to Borrowers or their respective
Subsidiaries; (iv) payment of customary directors’ fees and indemnities
(including payments in respect of directors’ and officers’ liability
insurance); (v) transactions with Affiliates that were consummated on or prior
to the Closing Date and have been disclosed to Agents prior to the Closing
Date; and (vi) transactions with Affiliates pursuant to the reasonable
requirements of such Borrower’s or such Subsidiary’s business and upon fair and
reasonable terms that are fully disclosed to Administrative Agent and are no
less favorable to such Borrower or such Subsidiary than such Borrower or such
Subsidiary would obtain in a comparable arm’s length transaction with a Person
not an Affiliate or stockholder of such Borrower or such Subsidiary.  Nothing herein shall be deemed to override,
modify or waive any requirement for Borrowers to comply at all times with the
provisions of the Sarbanes-Oxley Act.

 

9.2.5.                     Limitation on Liens.  Create or suffer to exist any Lien upon any
of its Property, income or profits, whether now owned or hereafter acquired,
except the following (collectively, “Permitted Liens”):

 

(i)                                     Liens
at any time granted in favor of Administrative Agent;

 

(ii)                                  Liens
for Taxes (excluding any Lien imposed pursuant to any of the provisions of ERISA)
not yet due or being Properly Contested;

 

(iii)                               statutory
Liens (excluding any Lien for Taxes, but including any Lien imposed pursuant to
any of the provisions of ERISA and landlords’, carriers’ warehousemen’s,

 

49

 

mechanics’, materialmen’s, repairmen’s or
other like Liens) arising in the Ordinary Course of Business of a Borrower or a
Subsidiary, but only if and for so long as (x) payment in respect of any such
Lien is not at the time required or the Debt secured by any such Lien is being
Properly Contested and (y) such Liens do not materially detract from the value
of the Property of such Borrower or such Subsidiary and do not materially
impair the use thereof in the operation of such Borrower’s or such Subsidiary’s
business;

 

(iv)                              Purchase
Money Liens securing Permitted Purchase Money Debt;

 

(v)                                 Liens
securing Debt of a Subsidiary of a Borrower to another Borrower or to another
such Subsidiary;

 

(vi)                              Liens
arising by virtue of the rendition, entry or issuance against such Borrower or
any of its Subsidiaries, or any Property of such Borrower or any of its
Subsidiaries, of any judgment, writ, order, or decree for so long as each such
Lien (a) is in existence for less than 20 consecutive days after it first
arises or is being Properly Contested and (b) is at all times junior in
priority to any Liens in favor of Administrative Agent;

 

(vii)                           Liens
incurred or deposits made in the Ordinary Course of Business to secure the
performance of tenders, bids, leases, contracts (other than for the repayment
of Money Borrowed), statutory obligations and other similar obligations or
arising as a result of progress payments under government contracts, provided,
that, to the extent any such Liens attach to any of the Collateral, such
Liens are at all times subordinate and junior to the Liens upon the Collateral
in favor of Administrative Agent;

 

(viii)                        easements,
rights-of-way, restrictions, covenants or other agreements of record and other
similar charges or encumbrances on real Property of such Borrower or a any of
its Subsidiaries that do not secure any monetary obligation and do not
interfere with the Ordinary Course of Business of such Borrower or such
Subsidiary;

 

(ix)                                normal
and customary rights of setoff upon deposits of cash in favor of banks and
other depository institutions and Liens of a collecting bank arising under the
UCC on Payment Items in the course of collection; Liens in existence
immediately prior to the Closing Date that are satisfied in full and released on
the Closing Date as a result of the application of such Borrower’s cash on hand
at the Closing Date or the proceeds of Loans to be made on the Closing Date;

 

(x)                                   Liens
securing the New Senior Secured Notes, subject to the terms of the
Intercreditor Agreement;

 

(xi)                                such
other Liens as appear on Schedule 9.2.5 hereto, to the extent
provided therein;

 

(xii)                             any
Lien provided for in the Plan of Reorganization or as part of any settlement or
restructuring entered into prior to the Closing Date and approved by the
Bankruptcy Court to the extent identified on Schedule 8.1.34;

 

(xiii)                          Liens
solely on any cash earnest money deposits made by the Company or any of its
Subsidiaries in connection with any letter of intent or purchase agreement
permitted hereunder;

 

50

 

(xiv)                         Liens
securing Capitalized Lease Obligations permitted to be incurred under Section 9.2.3
to the extent such Liens do not extend to any Property other than the Property
that is the subject of the underlying lease;

 

(xv)                            Licenses,
sublicenses, leases or subleases granted to other Persons in the Ordinary
Course of Business and not interfering in any material respect with the
business of any Obligor;

 

(xvi)                         Liens on
Property of a Subsidiary of a Borrower (other than an Obligor) securing Debt of
such Subsidiary;

 

(xvii)                      Liens
securing Refinancing Debt to the extent of the Liens securing the Debt
refinanced; provided, that if the Liens securing the debt refinanced are
subordinate to the Liens of Administrative Agent, then the Liens securing the
Refinancing Debt shall be subordinate on the same terms and to the same extent;

 

(xviii)                   purported Liens
evidenced by the filing of precautionary UCC financing statements relating
solely to operating leases of personal property entered into in the Ordinary
Course of Business;

 

(xix)                           Liens
in favor of customs and revenue authorities arising as a matter of law to
secure payment of customs duties in connection with the importation of goods;

 

(xx)                              Liens
on Property acquired by a Borrower or Subsidiary in connection with a Permitted
Acquisition to the extent that the Debt secured by such Liens is permitted
under Section 9.2.3(xiv) hereof; provided, that,  (i) such Liens are not incurred in
connection with, or in anticipation or contemplation of, such Permitted
Acquisition and (ii) such Liens attach solely to such Property acquired;

 

(xxi)                           Liens
on Property of Borrowers not constituting Collateral for so long as the
aggregate fair market value of such Property, and any Debt secured thereby,
does not exceed $2,500,000; and

 

(xxii)                        such other
Liens as Administrative Agent and the Required Lenders in their sole discretion
may hereafter approve in writing.

 

The foregoing negative pledge shall not apply to any Margin Stock to
the extent that the application of such negative pledge to such Margin Stock
would require filings or other actions by any Lender under Regulation U or
other regulations of the Federal Reserve Board, or otherwise result in a
violation of any such regulations.

 

9.2.6.                     Subordinated Debt.  Make any payment of all or any part of any
Subordinated Debt or take any other action or omit to take any other action in
respect of any Subordinated Debt, except in accordance with the subordination
agreement relative thereto; or amend or modify the terms of any agreement
applicable to any Subordinated Debt, other than to extend the time of payment
thereof or to reduce the rate of interest payable in connection therewith.  To the extent that any payment is permitted
to be made with respect to any Subordinated Debt pursuant to the provisions of
the subordination agreement relative thereto, as a condition precedent to
Borrowers’ authorization make any such payment, Borrowers shall provide to
Administrative Agent, not less than 5 Business Days prior to the scheduled
payment, a certificate from a Senior Officer of Borrower Agent stating that no
Default or Event of Default is in existence as of the date of the certificate
or will be in existence as of the date of such payment (both with

 

51

 

and without giving effect to the making of such payment), and
specifying the amount of principal and interest to be paid.

 

9.2.7.                     Distributions.  Declare or make any Distributions, except
for Upstream Payments and Permitted Distributions.

 

9.2.8.                     Upstream Payments.  Create or suffer to exist any encumbrance or
restriction on the ability of a Subsidiary to make any Upstream Payment, except
for encumbrances or restrictions (i) pursuant to the Loan Documents, (ii)
existing under Applicable Law, (iii) pursuant to the New Senior Secured Note
Indenture, (iv) pursuant to the Brownwood Lease and (v) identified and fully
disclosed in Schedule 9.2.8.

 

9.2.9.                     Capital Expenditures.  Make Capital Expenditures (including
expenditures by way of capitalized leases to the extent such expenditures are
treated as capital expenditures in accordance with GAAP) which in the
aggregate, as to all Borrowers and their Subsidiaries, exceed (i) $5,000,000
for the period from the Closing Date through December 31, 2003, (ii)
$16,000,000 during Borrowers’ Fiscal Year 2004, and (iii) $18,000,000 during
any Fiscal Year of Borrowers thereafter; provided, however, that
the amount of permitted Capital Expenditures for any Fiscal Year described
above will be increased by the sum of (i) the amount (if any), equal to the
difference obtained by subtracting from the Capital Expenditures limit
specified above (without giving effect to this proviso) for the immediately
preceding Fiscal Year the actual amount of Capital Expenditures during such
preceding Fiscal Year and (ii) an amount equal to $4,000,000 per Fiscal Year
(the “CapEx Addition”) for so long as at the time of or after giving effect to
the making of any such CapEx Addition (A) no Event of Default exists and (B)
Availability is not less than $20,000,000 at all times during any Fiscal
Quarter in which such CapEx Addition is made.

 

9.2.10.               Disposition of Assets.  Sell, assign, lease, consign or otherwise
dispose of any of its Properties or any interest therein, including any
disposition of Property as part of a sale and leaseback or synthetic lease
transaction, to or in favor of any Person, except (i) sales of Inventory in the
Ordinary Course of Business, (ii) dispositions of Equipment to the extent
authorized by Section 7.4.2 hereof, (iii) a transfer of Property to a
Borrower by a Subsidiary or by a Borrower to a Subsidiary Guarantor or by a
Borrower to another Borrower, (iv) non-exclusive licenses of technology and
other Intellectual Property by and among any Borrower and any of its
Subsidiaries, (v) other dispositions expressly authorized by other provisions
of the Loan Documents, (vi) Permitted Consigned Inventory, (vii) Permitted Real
Estate Dispositions and (viii) dispositions of Property referred to on Schedule 9.2.10.

 

9.2.11.               Subsidiaries.  Except as otherwise provided in Section 9.1.15
hereof or in connection with a Permitted Acquisition, form or acquire any
Subsidiary after the Closing Date or permit any existing Subsidiary to issue
any additional Equity Interests except director’s qualifying shares.

 

9.2.12.               Bill-and-Hold Sales and Consignments.  Make a sale to any customer on a
bill-and-hold, guaranteed sale, sale and return, sale on approval or
consignment basis (other than Permitted Consigned Inventory), or any sale on a
repurchase or return basis.

 

9.2.13.               Restricted Investments.  Make or have any Restricted Investment.

 

9.2.14.               Tax Consolidation.  File or consent to the filing of any
consolidated income tax return with any Person other than a Subsidiary, New
Parent and New Subsidiary.

 

9.2.15.               Accounting Changes.  Make any significant change in accounting
treatment or reporting practices, except as may be required by GAAP, or
establish a fiscal year different from the Fiscal Year.

 

52

 

9.2.16.               Organic Documents.  Amend, modify or otherwise change any of the
terms or provisions in any of its Organic Documents as in effect on the date
hereof, except for changes that do not affect in any adverse way such
Borrower’s or any of its Subsidiaries’ rights and obligations to enter into and
perform the Loan Documents to which it is a party and to pay all of the
Obligations and that do not otherwise have a Material Adverse Effect.

 

9.2.17.               Restrictive Agreements.  Enter into or become a party to any
Restrictive Agreement; provided, that the foregoing shall not
apply to (i) Restrictive Agreements existing on the date hereof and identified
on Schedule 8.1.18
(but shall apply to any amendment or modification expanding the scope of any
restriction or condition contained in any such Restrictive Agreement), (ii)
restrictions or conditions imposed by any Restrictive Agreement evidencing or
governing secured Debt that is permitted by this Agreement if such restrictions
or conditions apply only to the Properties securing such Debt, and (iii)
customary provisions in leases and other contracts restricting the assignment
thereof.

 

9.2.18.               Hedging Agreements.  Enter into any Hedging Agreement, other than
(a) Interest Rate Contracts required by Section 9.1.13 hereof and (b)  Hedging Agreements
entered into in the Ordinary Course of Business to hedge or mitigate risks to
which any Borrower or any Subsidiary is exposed in the conduct of its business
or the management of its liabilities and not for any speculative purpose.

 

9.2.19.               Cancellation of Claim.  Cancel any claim or debt owing to it, except
for reasonable consideration negotiated on an arms-length basis and in the
Ordinary Course of Business.

 

9.2.20.               Conduct of Business.  Engage in any business other than the
business engaged in by it on the Closing Date and any business or activities
which are substantially similar, related or incidental thereto.

 

9.2.21.               Plan of Reorganization.  Amend the Plan of Reorganization in any
manner which could reasonably be expected to have an adverse impact on
Administrative Agent or Lenders or otherwise could reasonably be expected to
have a Material Adverse Effect.

 

9.2.22.               Anti-Terrorism Laws. Conduct,
deal in or engage in or permit any Affiliate or agent of any Borrower to
conduct, deal in or engage in any of the following activities: (i) knowingly
conduct any business or engage in any transaction or dealing with any Blocked
Person, including the making or receiving any contribution of funds, goods or
services to or for the benefit of any Blocked Person; (ii) knowingly deal in,
or otherwise engage in any transaction relating to, any property or interests
in property blocked pursuant to Executive Order No. 13224; or (iii) knowingly engage
in on conspire to engage in any transaction that evades or avoids, or has the
purpose of evading or avoiding, or attempts to violate, any of the prohibitions
set forth in Executive Order No. 13224 or the USA Patriot Act.  Each Borrower shall deliver to
Administrative Agent and Lenders any certification or other evidence requested
from time to time by Administrative Agent or any Lender, in its reasonable
discretion, confirming such Borrower’s compliance with this Section 9.2.22.

 

9.2.23.               No Prepayment of Senior Secured Notes.  Other than (i) in connection with the
payment of interest on stated, scheduled dates for payment thereof as set forth
in the New Senior Secured Note Indenture or the New Senior Secured Notes as in
effect on the Closing Date, and (ii) in connection with a Permitted Redemption,
(A) make any payment or prepayment of principal of or premium or interest on,
any Debt evidenced by the New Senior Secured Notes; (B) redeem, retire,
purchase, repurchase, or otherwise acquire any New Senior Secured Notes (other
than payments with respect to a Permitted Redemption); or (C) make any deposit
(including the payment of amounts into a sinking fund or other similar fund)
for any of the foregoing purposes, other than any Permitted Redemption.

 

53

 

9.2.24.               Modification of Certain Agreements.  Enter into or consent to any amendment,
supplement, waiver or other modification of the terms or provisions contained
in, or applicable to the New Senior Secured Note Indenture or the New Senior
Secured Notes, to the extent that any such amendment, supplement, waiver or
modification:  (a) accelerates the dates
or increases the amount of any required repayment, prepayment or redemption of
the principal of such New Senior Secured Notes, (b) increases the rate or
accelerates the date for payment of the interest, premium (if any) or fees
payable in respect of such New Senior Secured Notes, (c) makes the covenants,
events of default or remedies in the New Senior Secured Note Indenture or the
New Senior Secured Notes more restrictive on Borrowers, or (d) could reasonably
be expected to have a materially adverse effect on the Borrowers, other
Obligors, Agents or Lenders.

 

9.2.25.               Acquisitions.  Make any Acquisition other than a Permitted
Acquisition.

 

9.3.                            Financial
Covenants.  For so long as there
are any Commitments outstanding and thereafter until the Full Payment of the
Obligations, Borrowers covenant that, unless otherwise consented to by the
Required Lenders in writing, they shall:

 

9.3.1.                     Consolidated Fixed Charge
Coverage Ratio.  If Availability
falls below $10,000,000 at any time for any period of 2 consecutive days (the
second such day being the “Trigger Date”), then Borrowers shall maintain a
Consolidated Fixed Charge Coverage Ratio of not less than 1.1 to 1.0, to be
tested as of the end of each Fiscal Quarter of Borrowers (beginning with the
Fiscal Quarter ended immediately before the Trigger Date) for the immediately
preceding four Fiscal Quarters (or, during the first Loan Year, for the period
commencing on the Closing Date and ending on last day of the applicable Fiscal
Quarter).

 

SECTION 10.                     CONDITIONS
PRECEDENT

 

10.1.                     Conditions
Precedent to Initial Credit Extensions.  Initial Lenders shall not be required to fund any Loan requested
by Borrowers, procure any Letter of Credit, or otherwise extend credit to
Borrowers, unless, on or before December 15, 2003, each of the following
conditions has been satisfied:

 

10.1.1.               Loan Documents.  Each of the Loan Documents and the
Intercreditor Agreement shall have been duly executed and delivered to
Administrative Agent by each of the signatories thereto (and, with the
exception of the Notes, in sufficient counterparts for each Lender) and
accepted by Administrative Agent and Initial Lenders and each Obligor shall be
in compliance with all of the terms thereof.

 

10.1.2.               Availability.  Agents shall have determined, and Initial
Lenders shall be satisfied that, on the Closing Date after Initial Lenders have
made the initial Revolver Loans to be made on the Closing Date, Bank has issued
the Letters of Credit to be issued on the Closing Date and Borrowers have paid
(or made provision for payment of) all closing costs incurred in connection
with the Commitments, Availability is not less than $40,000,000.

 

10.1.3.               Evidence of Perfection and Priority
of Liens.  Administrative Agent
shall have received evidence in form satisfactory to Administrative Agent and
Initial Lenders that the Liens of Administrative Agent in the Collateral
constitute valid and perfected security interests and Liens, and that there are
no other Liens upon any Collateral, except for Permitted Liens.

 

10.1.4.               Organic Documents.  Administrative Agent shall have received
copies of the Organic Documents of each Obligor, and all amendments thereto,
certified by the Secretary of State or other appropriate officials of the
jurisdiction of each Borrower’s and each other Obligor’s states of
organization.

 

54

 

10.1.5.               Good Standing Certificates.  Administrative Agent shall have received
good standing certificates for each Obligor, issued by the Secretary of State
or other appropriate official of such Obligor’s jurisdiction of organization
and each jurisdiction where the conduct of such Obligor’s business activities
or ownership of its Property necessitates qualification.

 

10.1.6.               Opinion Letters.  Administrative Agent shall have received a
written opinion of Proskauer Rose LLP and the respective local counsels to
Borrowers and Guarantors, covering, to Administrative Agent’s reasonable
satisfaction, the matters set forth on Exhibit F attached hereto.

 

10.1.7.               Insurance.  Administrative Agent shall have received
certified copies of the property and casualty insurance policies of Borrowers
with respect to the Collateral, or certificates of insurance with respect to
such policies in form reasonably acceptable to Administrative Agent, and loss
payable endorsements on Administrative Agent’s standard form of loss payee
endorsement naming Administrative Agent as lender’s loss payee and mortgagee
with respect to each such policy and certified copies of Borrowers’ liability
insurance policies, including product liability policies, together with
endorsements naming Administrative Agent as an additional insured, all as
required by the Loan Documents.

 

10.1.8.               Lockbox; Dominion and Concentration
Accounts.  Administrative Agent
shall have received the duly executed agreements establishing the lockbox and
each Dominion Account, in each case, with a financial institution acceptable to
Administrative Agent for the collection or servicing of the Accounts, and
Borrowers shall have otherwise complied with the requirements of Section 7.2.5
hereof.

 

10.1.9.               Lien Waivers.  Administrative Agent shall have received
Lien Waivers with respect to those premises at which any Collateral may be
located for which Borrowers are able to procure on or before the Closing Date,
other than locations at which Permitted Consigned Inventory is located.

 

10.1.10.                         Solvency Certificates.  Administrative Agent and Initial Lenders
shall have received certificates reasonably satisfactory to them from one or
more knowledgeable Senior Officers of each Borrower that, after giving effect
to the financing under this Agreement and the issuance of the Letters of
Credit, each Borrower is Solvent.

 

10.1.11.                         No Labor Disputes.  Agents shall have received assurances
satisfactory to it that there are no threats of strikes or work stoppages by
any employees, or organization of employees, of any Obligor which
Administrative Agent reasonably determines may have a Material Adverse Effect.

 

10.1.12.                         Compliance with Laws and
Other Agreements.  Agents shall have
determined or received assurances satisfactory to it that none of the Loan
Documents or any of the transactions contemplated thereby violate any
Applicable Law, court order or agreement binding upon any Obligor.

 

10.1.13.                         No Material Adverse Change.  No material adverse change in the financial
condition of any Debtor or any Obligor or in the quality, quantity or value of
any Collateral shall have occurred since September 30, 2003 (other than
changes resulting solely from dispositions of Inventory and collections of
Accounts in the Ordinary Course of Business).

 

10.1.14.                         Payment of Fees.  Borrowers shall have paid, or made provision
for the payment on the Closing Date of, all fees and expenses to be paid
hereunder to Agents and Lenders on the Closing Date.

 

10.1.15.                         Due Diligence.  Administrative Agent shall have completed
its legal due diligence, including a roll forward of its previous Collateral
audit, with results
reasonably acceptable to Administrative Agent.

 

55

 

10.1.16.                         Title Insurance Policies.  Administrative Agent shall have received,
had at least 5 days to review and found acceptable fully paid mortgagee title
insurance policies (or binding commitments to issue title insurance policies,
marked to Administrative Agent’s satisfaction to evidence the form of such
policies to be delivered after the Closing Date), in standard ALTA form, issued
by a title insurance company reasonably satisfactory to Administrative Agent,
each in an amount equal to not less than the fair market value of the Real
Estate or leasehold interest, as the case may be, subject to the Mortgages,
insuring the Mortgages to create a valid Lien on all Real Estate and valid
Liens on the leasehold interest described therein with no exceptions which
Administrative Agent shall not have approved in writing.

 

10.1.17.                         LC Conditions.  With respect to the procurement of any
Letter of Credit on the Closing Date, each of the LC Conditions is satisfied.

 

10.1.18.                         Bankruptcy Matters.

 

(i)                                     the Plan of
Reorganization is not amended or modified in any manner that is reasonably
deemed to be material by Agents;

 

(ii)                                  the Plan of
Reorganization shall have been confirmed, after proper notice and a hearing, by
the Confirmation Order;

 

(iii)                               the 10-day appeal period
(as calculated in accordance with Rule 9006 of the Federal Rules of Bankruptcy
Procedure (the “Appeal Period”)) shall have elapsed following the entry of the
Confirmation Order;

 

(iv)                              Administrative Agent
shall have received a current docket sheet as of the Closing Date, certified by
the Bankruptcy Court, indicating all pleadings and orders filed through the
last day of the Appeal Period;

 

(v)                                 during the period from
the date of entry of the Confirmation Order to the Closing Date, there shall
have not been filed any notice of appeal from the Confirmation Order nor any
motion to review, modify, vacate, set aside, stay or reconsider the
Confirmation Order, and the Confirmation Order shall have become a Final Order;

 

(vi)                              all of the conditions to
occurrence of the Effective Date under the Plan of Reorganization, other than
consummation of the transactions contemplated by this Agreement, shall have
occurred or have been lawfully waived, as determined by Administrative Agent
and its counsel;

 

(vii)                           Administrative Agent and its
counsel shall have determined to their satisfaction that, on the Effective Date,
the Debtors’ Plan of Reorganization shall have been implemented in a manner
that is consistent with the terms and provisions thereof;

 

(viii)                        Administrative Agent and its
counsel shall have determined to their satisfaction that, on the Effective
Date, the Debtors’, Borrowers’ and Guarantors’ corporate restructuring shall
have been consummated in a manner that is consistent with the terms and
provisions of the Plan of Reorganization, including, without limitation, the
formation of Superior, New Parent and New Subsidiary, and the merger or
dissolution of the Dissolving Debtors; and

 

(ix)                                no defaults or events
of default exist under the Plan of Reorganization.

 

10.1.19.                                 Issuance of New
Senior Secured Notes.  The New
Senior Secured Notes shall have been issued on the terms set forth in New
Senior Secured Note Indenture.

 

56

 

10.1.20.                                 Issuance of
Preferred Stock.  New Subsidiary
shall have issued the New Subsidiary Preferred Stock to the New Senior Secured
Note Holders on the terms set forth in the Plan of Reorganization.

 

10.1.21.                                 Interim Financial
Statements.  Administrative Agent
and Lenders shall have received, reviewed and found satisfactory the Borrowers’
interim financial statements for the monthly period  ending September 30, 2003.

 

10.2.                     Conditions
Precedent to All Credit Extensions. 
Lenders shall not be required to fund any Loans, procure any Letters of
Credit,  or
otherwise extend any credit to or for the benefit of Borrowers, unless and
until each of the following conditions has been and continues to be satisfied:

 

10.2.1.               No Defaults.  No Default or Event of Default exists at the
time, or would result from the funding, of any Loan or other extension of
credit.

 

10.2.2.               Satisfaction of Conditions in Other
Loan Documents.  Each of the
conditions precedent set forth in any other Loan Document shall have been and
shall remain satisfied or waived.

 

10.2.3.               No Litigation.  No action, proceeding, investigation,
regulation or legislation shall have been instituted, threatened or proposed
before any court, governmental agency or legislative body to enjoin, restrain
or prohibit, or to obtain damages in respect of, or which is related to or
arises out of, this Agreement or any of the other Loan Documents or the consummation
of the transactions contemplated hereby or thereby.

 

10.2.4.               No Material Adverse Effect.  No event shall have occurred and no
condition shall exist which has or could be reasonably expected to have a
Material Adverse Effect.

 

10.2.5.               Borrowing Base Certificate.  Administrative Agent shall have received
each Borrowing Base Certificate then required by the terms of this Agreement or
otherwise requested by Administrative Agent.

 

10.2.6.               LC Conditions.  With respect to the procurement of any
Letter of Credit after the Closing Date, each of the LC Conditions is
satisfied.

 

10.2.7.               Bankruptcy Matters.  Neither the Plan of Reorganization nor the
Confirmation Order shall have been modified in any respect reasonably deemed
material by Agents.

 

10.3.                     Inapplicability
of Conditions.  None of the
conditions precedent set forth in Sections 10.1 or 10.2 shall be conditions to
the obligation of (i) each Participating Lender to make payments to Fleet
pursuant to Section 1.3.2, (ii) each Lender to deposit with Administrative
Agent such Lender’s Pro Rata share of a Borrowing in accordance with Section 3.1.2,
(iii) each Lender to fund its Pro Rata share of a Revolver Loan to repay
outstanding Settlement Loans to Fleet as provided in Section 3.1.3(ii), (iv)
each Lender to pay any amount payable to Administrative Agent or any other
Lender pursuant to this Agreement or (v) Administrative Agent to pay any amount
payable to any Lender pursuant to this Agreement.

 

10.4.                     Limited
Waiver of Conditions Precedent. 
If Lenders shall make any Loan, procure any Letter of Credit, or
otherwise extend any credit to Borrowers under this Agreement at a time when
any of the foregoing conditions precedent are not satisfied (regardless of
whether the failure of satisfaction of any such conditions precedent was known
or unknown to Administrative Agent or Lenders), the funding of such Loan shall
not operate as a waiver of the right of Administrative Agent and Lenders to
insist upon the satisfaction of all conditions precedent with respect to each subsequent
Borrowing requested by Borrowers or a waiver of any Default or Event of Default
as a consequence of

 

57

 

the failure of any such conditions to be satisfied, unless
Administrative Agent, with the prior written consent of the Required Lenders,
in writing waives the satisfaction of any condition precedent, in which event
such waiver shall only be applicable for the specific instance given and only
to the extent and for the period of time expressly stated in such written
waiver.

 

SECTION 11.                     EVENTS
OF DEFAULT; RIGHTS AND REMEDIES ON DEFAULT

 

11.1.                     Events
of Default.  The occurrence or
existence of any one or more of the following events or conditions shall
constitute an “Event of Default” (each of which Events of Default shall be
deemed to exist unless and until waived by Administrative Agent and Lenders in
accordance with the provisions of Section 12.9 hereof):

 

11.1.1.               Payment of Obligations.  Borrowers shall fail to pay any of the
Obligations on the due date thereof (whether due at stated maturity, on demand,
upon acceleration or otherwise).

 

11.1.2.               Misrepresentations.  Any representation, warranty or other
written statement to Administrative Agent or any Lender by or on behalf of any
Obligor, whether made in or furnished in compliance with or in reference to any
of the Loan Documents (including any representation made in any Borrowing Base
Certificate), proves to have been false or misleading in any material respect
when made or furnished or when reaffirmed pursuant to Section 8.2 hereof.

 

11.1.3.               Breach of Specific Covenants.  Any Borrower shall fail or neglect to
perform, keep or observe any covenant contained in Sections 7.1.1, 7.2.4, 7.2.5, 7.2.6,
7.5, 9.1.1, 9.1.3(i), (ii), (iii) or (iv), 9.1.6, 9.1.11, 9.1.13, 9.2 or 9.3
hereof on the date that such Borrower is required to perform, keep or observe
such covenant.

 

11.1.4.               Breach of Other Covenants.  Any Borrower shall fail or neglect to
perform, keep or observe any covenant contained in this Agreement (other than a
covenant which is dealt with specifically elsewhere in Section 11.1 hereof) and
the breach of such other covenant is not cured to Administrative Agent’s and
the Required Lender’s satisfaction within 30 days after the sooner to occur of
any Senior Officer’s receipt of notice of such breach from Administrative Agent
or the date on which such failure or neglect first becomes known to any Senior
Officer; provided, however, that such notice and opportunity to
cure shall not apply in the case of any failure to perform, keep or observe any
covenant which is not capable of being cured at all or within such 30-day
period or which is a willful and knowing breach by any Borrower.

 

11.1.5.               Default Under Security
Documents/Other Agreements.  Any
Borrower or any other Obligor shall default in the due and punctual observance
or performance of any liability or obligation to be observed or performed by it
under any of the Other Agreements or Security Documents (after giving effect to
any applicable grace periods).

 

11.1.6.               Other Defaults.  There shall occur any default or event of
default on the part of any Borrower or any Subsidiary under any agreement,
document or instrument to which such Borrower or such Subsidiary is a party or
by which such Borrower or such Subsidiary or any of their respective Properties
is bound, creating or relating to any Debt (other than the Obligations) in
excess of $2,500,000 if such default or event of default relates to any payment
thereof or if the payment or maturity of such Debt may be accelerated in
consequence of such event of default or demand for payment of such Debt may be
made.

 

11.1.7.               Uninsured Losses.  Any loss, theft, damage or destruction of
any of the Collateral not fully covered (subject to such deductibles as are currently
in effect under the insurance policies referred to in Section 9.1.8) by
insurance if (i) the amount not covered by insurance exceeds $5,000,000

 

58

 

and (ii) Administrative Agent (at the direction of the Required
Lenders) notifies Borrowers in writing of Administrative Agent’s election to
treat such occurrence as an Event of Default.

 

11.1.8.               Material Adverse Effect.  There shall occur any event or condition
that has a Material Adverse Effect.

 

11.1.9.               Solvency.  Any Borrower shall cease to be Solvent.

 

11.1.10.                 Insolvency Proceedings.  Any Insolvency Proceeding shall be commenced
by any Obligor; an Insolvency Proceeding is commenced against any Obligor and
any of the following events occur:  such
Obligor consents to the institution of the Insolvency Proceeding against it,
the petition commencing the Insolvency Proceeding is not timely contested by
such Obligor, the petition commencing the Insolvency Proceeding is not
dismissed within 45 days after the date of the filing thereof (provided,
that, in any event, during the pendency of any such period, Lenders
shall be relieved from their obligation to make Loans or otherwise extend
credit to or for the benefit of Borrowers hereunder), an interim trustee is
appointed to take possession all or a substantial portion of the Properties of
such Obligor or to operate all or any substantial portion of the business of
such Obligor or an order for relief shall have been issued or entered in
connection with such Insolvency Proceeding; or any Obligor shall make an offer
of settlement extension or composition to its unsecured creditors generally.

 

11.1.11.                         Business Disruption;
Condemnation.  There shall occur a
cessation of a substantial part of the business of any Obligor for a period
which could reasonably be expected to have a Material Adverse Effect; or any
Obligor shall suffer the loss or revocation of any license or permit now held
or hereafter acquired by such Obligor which loss or revocation could reasonably
be expected to have a Material Adverse Effect; or any Obligor shall be
enjoined, restrained or in any way prevented by court, governmental or
administrative order from conducting all or any material part of its business
affairs; or any material lease or agreement pursuant to which any Obligor
leases or occupies any premises on which any Collateral is located shall be
canceled or terminated prior to the expiration of its stated term and such
cancellation or termination has a Material Adverse Effect or results in an
Out-of-Formula Condition; or any material part of the Collateral shall be taken
through condemnation or the value of such Property shall be materially impaired
through condemnation.

 

11.1.12.                         Change of Control.  A Change of Control shall occur.

 

11.1.13.                 ERISA.  A Reportable Event shall occur which
Administrative Agent, in its reasonable discretion, shall determine constitutes
grounds for the termination by the Pension Benefit Guaranty Corporation of any
Plan or for the appointment by the appropriate United States district court of
a trustee for any Plan, or if any Plan shall be terminated or any such trustee
shall be requested or appointed, or if any Borrower, any Subsidiary or any
Obligor is in “default” (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from such Borrower’s,
such Subsidiary’s or such Obligor’s complete or partial withdrawal from such
Plan.

 

11.1.14.                         Challenge to Loan Documents.  Any Obligor or any of its Affiliates shall
challenge or contest in any action, suit or proceeding the validity or
enforceability of any of the Loan Documents, the legality or enforceability of
any of the Obligations or the perfection or priority of any Lien granted to
Administrative Agent, or any of the Loan Documents ceases to be in full force
or effect for any reason other than a full or partial waiver or release or
other written agreement by Administrative Agent and Lenders in accordance with
the terms thereof.

 

11.1.15.                         Judgment.  One or more judgments or orders for the
payment of money in an amount that exceeds, individually or in the aggregate,
$500,000 shall be entered against any Borrower or any other Obligor and (i)
enforcement proceedings shall have been commenced by any creditor upon such
judgment or order, (ii) there shall be any period of 30 consecutive days during
which a stay of

 

59

 

enforcement of such judgment or order, by reason of a pending appeal or
otherwise, shall not be in effect or (iii) results in the creation or
imposition of a Lien upon any of the Collateral that is not a Permitted Lien.

 

11.1.16.                         Repudiation of or Default
Under Guaranty.  Any Guarantor shall
revoke or attempt to revoke the Guaranty signed by such Guarantor, shall
repudiate such Guarantor’s liability thereunder, or shall be in default under
the terms thereof, or shall fail to confirm in writing, promptly after receipt
of Administrative Agent’s written request therefor, such Guarantor’s ongoing
liability under the Guaranty in accordance with the terms thereof.

 

11.1.17.                 Criminal Forfeiture.  Any Obligor shall be convicted under any
criminal law that could reasonably be expected to lead to a forfeiture of any
Property of such Obligor with an aggregate value of $250,000 or more.

 

11.1.18.         New Senior Secured Note Indenture and New
Senior Secured Notes.  Any event of
default shall occur and continue to exist beyond any applicable grace or any
cure period under the New Senior Secured Note Indenture or the New Senior
Secured Notes.

 

11.2.                     Acceleration
of Obligations; Termination of Commitments.  Without in any way limiting the right of Administrative Agent to
demand payment of any portion of the Obligations payable on demand in
accordance with this Agreement:

 

11.2.1.               Upon or at any time after the occurrence
of an Event of Default (other than pursuant to Section 11.1.10 hereof)
and for so long as such Event of Default shall exist, Administrative Agent may
in its discretion (and, upon receipt of written instructions to do so from the
Required Lenders, shall) (a) declare the principal of and any accrued interest
on the Loans and all other Obligations owing under any of the Loan Documents to
be, whereupon the same shall become without further notice or demand (all of
which notice and demand each Borrower expressly waives), forthwith due and
payable and Borrowers shall forthwith pay to Administrative Agent the entire
principal of and accrued and unpaid interest on the Loans and other Obligations
plus reasonable attorneys’ fees and court costs if such principal and interest
are collected by or through an attorney-at-law and (b) terminate the
Commitments.

 

11.2.2.               Upon the occurrence of an Event of
Default specified in Section 11.1.10 hereof, all of the
Obligations shall become automatically due and payable without declaration,
notice or demand by Administrative Agent to or upon any Borrower and the
Commitments shall automatically terminate as if terminated by Administrative
Agent pursuant to Section 5.2.1 hereof and with the
effects specified in Section 5.2.4 hereof; provided,
however, that, if Administrative Agent or Lenders shall continue to make
Loans or otherwise extend credit to Borrowers pursuant to this Agreement after
an automatic termination of the Commitments by reason of the commencement of an
Insolvency Proceeding by or against Borrowers, such Loans and other credit
shall nevertheless be governed by this Agreement and enforceable against and
recoverable from each Obligor as if such Insolvency Proceeding had never been
instituted.

 

11.3.                     Other
Remedies.  Upon and after the
occurrence of an Event of Default and for so long as such Event of Default
shall exist, Administrative Agent may in its discretion (and, upon receipt of
written direction of the Required Lenders, shall) exercise from time to time
the following rights and remedies (without prejudice to the rights of
Administrative Agent or any Lender to enforce its claim against any or all
Obligors):

 

11.3.1.               All of the rights and remedies of a
secured party under the UCC or under other Applicable Law, and all other legal
and equitable rights to which Administrative Agent may be entitled under this
Agreement, the Security Agreement or any of the other Loan Documents, all of
which rights and remedies shall be cumulative and shall be in addition to any
other rights or remedies contained in this Agreement or any of the other Loan
Documents, and none of which shall be exclusive.

 

60

 

11.3.2.               The right to require Borrowers to Cash
Collateralize outstanding Letters of Credit and, if Borrowers fail promptly to
make such deposit, Lenders may (and shall upon the direction of the Required
Lenders) advance such amount as a Revolver Loan (whether or not an
Out-of-Formula Condition exists or is created thereby).  Any such deposit or advance shall be held by
Administrative Agent in the Cash Collateral Account to fund future payments on
any LC Support.  At such time as the LC
Support has been paid or terminated and all Letters of Credit have been drawn
upon or expired, any amounts remaining in such reserve shall be applied against
any outstanding Obligations, or, after Full Payment of all Obligations,
returned to Borrowers.

 

11.4.                     Setoff.  In addition to any Liens granted under any
of the Loan Documents and any rights now or hereafter available under
Applicable Law, Administrative Agent and each Lender (and each of their
respective Affiliates) is hereby authorized by Borrowers at any time that an
Event of Default exists, without notice to Borrowers or any other Person (any
such notice being hereby expressly waived), to set off and to appropriate and
apply any and all deposits, general or special (including Debt evidenced by
certificates of deposit whether matured or unmatured (but not including trust
accounts)) and any other Debt at any time held or owing by such Lender or any
of their Affiliates to or for the credit or the account of any Borrower against
and on account of the Obligations of Borrowers arising under the Loan Documents
to Administrative Agent, such Lender or any of their Affiliates, including all
Loans and LC Outstandings and all claims of any nature or description arising
out of or in connection with this Agreement, irrespective of whether or not (i)
Administrative Agent or such Lender shall have made any demand hereunder, (ii)
Administrative Agent, at the request or with the consent of the Required
Lenders, shall have declared the principal of and interest on the Loans and
other amounts due hereunder to be due and payable as permitted by this Agreement
and even though such Obligations may be contingent or unmatured or (iii) the
Collateral for the Obligations is adequate. 
Notwithstanding the foregoing, each of Administrative Agent and Lenders
agree with each other that it shall not, without the express consent of the
Required Lenders, and that it shall (to the extent that it is lawfully entitled
to do so) upon the request of the Required Lenders, exercise its setoff rights
hereunder against any accounts of any Borrower now or hereafter maintained with
Administrative Agent, such Lender or any Affiliate of any of them, but no
Borrower shall have any claim or cause of action against Administrative Agent
or any Lender for any setoff made without the consent of the Required Lenders
and the validity of any such setoff shall not be impaired by the absence of
such consent.  If any party (or its
Affiliate) exercises the right of setoff provided for hereunder, such party
shall be obligated to share any such setoff in the manner and to the extent
required by Section 12.5.

 

11.5.                     Remedies
Cumulative; No Waiver.

 

11.5.1.               All covenants, conditions, provisions,
warranties, guaranties, indemnities, and other undertakings of Borrowers
contained in this Agreement and the other Loan Documents, or in any document
referred to herein or contained in any agreement supplementary hereto or in any
schedule or in any Guaranty given to Administrative Agent or any Lender or
contained in any other agreement between Administrative Agent or any Lender and
Borrowers, heretofore, concurrently, or hereafter entered into, shall be deemed
cumulative to and not in derogation or substitution of any of the terms,
covenants, conditions, or agreements of Borrowers herein contained.  The rights and remedies of Administrative
Agent and Lenders under this Agreement and the other Loan Documents shall be
cumulative and not exclusive of any rights or remedies that Administrative
Agent or any Lender would otherwise have.

 

11.5.2.               The failure or delay of Administrative
Agent or any Lender to require strict performance by Borrowers of any provision
of any of the Loan Documents or to exercise or enforce any rights, Liens,
powers or remedies under any of the Loan Documents or with respect to any
Collateral shall not operate as a waiver of such performance, Liens, rights,
powers and remedies, but all such requirements, Liens, rights, powers, and
remedies shall continue in full force and effect until all Loans and all other
Obligations owing or to become owing from Borrowers to Agents and Lenders shall
have

 

61

 

been fully satisfied.  None of
the undertakings, agreements, warranties, covenants and representations of
Borrowers contained in this Agreement or any of the other Loan Documents and no
Event of Default by any Borrower under this Agreement or any other Loan
Documents shall be deemed to have been suspended or waived by Administrative
Agent or any Lender, unless such suspension or waiver is by an instrument in
writing specifying such suspension or waiver and is signed by a duly authorized
representative of Administrative Agent or such Lender and directed to
Borrowers.

 

11.5.3.               If Administrative Agent or any Lender
shall accept performance by a Borrower, in whole or in part, of any obligation
that a Borrower is required by any of the Loan Documents to perform only when a
Default or Event of Default exists, or if Administrative Agent or any Lender
shall exercise any right or remedy under any of the Loan Documents that may not
be exercised other than when a Default or Event of Default exists,
Administrative Agent’s or Lender’s acceptance of such performance by a Borrower
or Administrative Agent’s or Lender’s exercise of any such right or remedy
shall not operate to waive any such Event of Default or to preclude the
exercise by Administrative Agent or any Lender of any other right or remedy,
unless otherwise expressly agreed in writing by Administrative Agent or such
Lender, as the case may be.

 

SECTION 12.                     AGENTS

 

12.1.                     Appointment,
Authority and Duties of Agents.

 

12.1.1.               Each Lender hereby irrevocably appoints
and designates Fleet as Administrative Agent to act as herein specified.  Administrative Agent may, and each Lender by
its acceptance of a Note shall be deemed irrevocably to have authorized
Administrative Agent to, enter into all Loan Documents to which Administrative
Agent is or is intended to be a party and all amendments hereto and all
Security Documents at any time executed by any Borrower, for its benefit and
the Pro Rata benefit of Lenders and, except as otherwise provided in this Section 12,
to exercise such rights and powers under this Agreement and the other Loan
Documents as are specifically delegated to Administrative Agent by the terms
hereof and thereof, together with such other rights and powers as are
reasonably incidental thereto.  Each
Lender hereby appoints GECC as Syndication Agent, provided, however,
that Syndication Agent shall not have any rights, power, obligation, liability,
responsibility or duty under this Agreement or any of the other Loan Documents
other than as expressly provided for herein. 
Each Lender agrees that any action taken by Administrative Agent or the
Required Lenders in accordance with the provisions of this Agreement or the
other Loan Documents, and the exercise by Administrative Agent or the Required
Lenders of any of the powers set forth herein or therein, together with such
other powers as are reasonably incidental thereto, shall be authorized and
binding upon all Lenders.  Without
limiting the generality of the foregoing, Administrative Agent shall have the
sole and exclusive right and authority to (a) act as the disbursing and
collecting agent for Lenders with respect to all payments and collections
arising in connection with this Agreement and the other Loan Documents; (b)
execute and deliver as Administrative Agent each Loan Document and accept
delivery of each such agreement delivered by any or all Borrowers or any other
Obligor; (c) act as collateral agent for Lenders for purposes of the perfection
of all security interests and Liens created by this Agreement or the Security
Documents with respect to all material items of the Collateral and, subject to
the direction of the Required Lenders, for all other purposes stated therein, provided,
that Administrative Agent hereby appoints, authorizes and directs each
Lender to act as a collateral sub-agent for Agents and the other Lenders for
purposes of the perfection of all security interests and Liens with respect to
a Borrower’s Deposit Accounts maintained with, and all cash and Cash
Equivalents held by, such Lender; (d) subject to the direction of the Required
Lenders, manage, supervise or otherwise deal with the Collateral; and (e)
except as may be otherwise specifically restricted by the terms of this
Agreement and subject to the direction of the Required Lenders, exercise all
remedies given to Administrative Agent with respect to any of the Collateral
under the Loan Documents relating thereto, Applicable Law or otherwise.  The duties of Administrative Agent shall be
ministerial and administrative in nature, and no Agent shall have by reason of
this Agreement or any other Loan

 

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Document a fiduciary relationship with any Lender (or any Lender’s
participants).  Unless and until its
authority to do so is revoked in writing by Required Lenders, Administrative
Agent alone shall be authorized to determine whether any Accounts or Inventory
constitute Eligible Accounts or Eligible Inventory (basing such determination
in each case upon the meanings given to such terms in Appendix A), or whether
to impose or release any discretionary reserve, and to exercise its own credit
judgment in connection therewith, which determinations and judgments, if
exercised in good faith, shall exonerate Administrative Agent from any
liability to Lenders or any other Person for any errors in judgment.

 

12.1.2.               No Agent (which term, as used in this
sentence, shall include reference to each Agent’s officers, directors,
employees, attorneys, agents and Affiliates and to the officers, directors,
employees, attorneys and agents of each Agent’s Affiliates) shall:  (a) have any duties or responsibilities
except those expressly set forth in this Agreement and the other Loan Documents
or (b) be required to take, initiate or conduct any litigation, foreclosure or
collection proceedings hereunder or under any of the other Loan Documents,
except to the extent directed to do so by the Required Lenders during the
continuance of any Event of Default. 
The conferral upon Administrative Agent of any right hereunder shall not
imply a duty on Administrative Agent’s part to exercise any such right unless
instructed to do so by the Required Lenders in accordance with this Agreement.

 

12.1.3.               Administrative Agent may perform any of
its duties by or through its agents and employees and may employ one or more
Agent Professionals and shall not be responsible for the negligence or
misconduct of any such Agent Professionals selected by it with reasonable care.  Borrowers shall promptly (and in any event, on demand)
reimburse Administrative Agent for all reasonable expenses (including all
Extraordinary Expenses) incurred by Administrative Agent pursuant to any of the
provisions hereof or of any of the other Loan Documents or in the execution of
any of Administrative Agent’s duties hereby or thereby created or in the
exercise of any right or power herein or therein imposed or conferred upon it
or Lenders (excluding, however, general overhead expenses), and each Lender
agrees promptly to pay to Administrative Agent, on demand, such Lender’s Pro
Rata share of any such reimbursement for expenses (including Extraordinary
Expenses) that is not timely made by Borrowers to Administrative Agent.

 

12.1.4.               The rights, remedies, powers and privileges
conferred upon Administrative Agent hereunder and under the other Loan
Documents may be exercised by Administrative Agent without the necessity of the
joinder of any other parties unless otherwise required by Applicable Law.  If Administrative Agent shall request
instructions from the Required Lenders with respect to any act or action
(including the failure to act) in connection with this Agreement or any of the
other Loan Documents, Administrative Agent shall be entitled to refrain from
such act or taking such action unless and until Administrative Agent shall have
received instructions from the Required Lenders; and Administrative Agent shall
not incur liability to any Person by reason of so refraining.  Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Administrative Agent as a
result of Administrative Agent acting or refraining from acting hereunder or
under any of the Loan Documents pursuant to or in accordance with the
instructions of the Required Lenders except for Administrative Agent’s own
gross negligence or willful misconduct in connection with any action taken by
it.  Notwithstanding anything to the
contrary contained in this Agreement, Administrative Agent shall not be
required to take any action that is in its opinion contrary to Applicable Law
or the terms of any of the Loan Documents or that would in its reasonable
opinion subject it or any of its officers, employees or directors to personal
liability; provided, however, that if Administrative Agent shall
fail or refuse to take action that is not contrary to Applicable Law or to any
of the terms of any of the Loan Documents even if such action in Administrative
Agent’s opinion would subject it to potential liability, the Required Lenders
may remove Administrative Agent and appoint a successor Administrative Agent in
the same manner and with the same effects as is provided in this Agreement with
respect to Administrative Agent’s resignation.

 

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12.1.5.               Administrative Agent shall promptly,
upon receipt thereof, forward to each Lender (i) copies of any significant
written notices, reports, certificates and other information received by
Administrative Agent from any Obligor (but only if and to the extent such
Obligor is not required by the terms of the Loan Documents to supply such
information directly to Lenders) and (ii) copies of the results of any field
audits by Administrative Agent with respect to Borrowers.  Administrative Agent shall conduct Orderly
Liquidation Appraisals at any time or times reasonably requested by any Lender
(but in no event shall Administrative Agent be obliged to honor such requests
more frequently than once a calendar year unless an Event of Default exists).  Administrative Agent shall have no liability
to any Lender for any errors in or omissions from any field audit or other
examination of Borrowers or the Collateral, unless such error or omission was
the direct result of Administrative Agent’s willful misconduct or gross negligence.

 

12.2.                     Agreements
Regarding Collateral and Examination Reports.

 

12.2.1.               Lenders hereby irrevocably authorize
Administrative Agent, at its option and in its discretion, to release any Lien
upon any Collateral (i) upon the termination of the Commitments and payment or
satisfaction of all of the Obligations, (ii) constituting Equipment sold or
disposed of in accordance with the terms of this Agreement if Borrowers certify
to Administrative Agent that the disposition is made in compliance with the terms
of this Agreement (and Administrative Agent may rely conclusively on any such
certificate, without further inquiry), or (iii) if approved or ratified by the
Required Lenders.  Administrative Agent
shall have no obligation whatsoever to any of the Lenders to assure that any of
the Collateral exists or is owned by a Borrower or is cared for, protected or
insured or has been encumbered, or that Administrative Agent’s Liens have been
properly, sufficiently or lawfully created, perfected, protected or enforced or
entitled to any particular priority or to exercise any duty of care with
respect to any of the Collateral.

 

12.2.2.               Administrative Agent shall furnish each
Lender, promptly after the same becomes available, a copy of each field audit
or examination report (each a “Report” and collectively, “Reports”) prepared by
or on behalf of Administrative Agent. 
Each Lender agrees that neither Fleet nor Administrative Agent makes any
representation or warranty as to the accuracy or completeness of any Report and
shall not be liable for any information contained in or omitted from any such
Report; agrees that the Reports are not intended to be comprehensive audits or
examinations, and that Fleet or Administrative Agent or any other Person
performing any audit or examination will inspect only specific information
regarding Borrowers or the Collateral and will rely significantly upon
Borrowers’ books and records as well as upon representations of Borrowers’
officers and employees; subject to Section 14.19 hereof, agrees to keep
all Reports confidential and strictly for its internal use and not to
distribute the Reports to any Person (except to its Participants, attorneys,
accountants and other Persons with whom such Lender has a confidential
relationship) or use any Report in any other manner; and, without limiting the
generality of any other indemnification contained herein, agrees to hold
Administrative Agent and any other Person preparing a Report harmless from any
action that the indemnifying Lender may take or conclusion the indemnifying
Lender may reach or draw from any Report in connection with any Loans or other
credit accommodations that the indemnifying Lender has made or may make to
Borrowers, or the indemnifying Lender’s participation in, or its purchase of, a
loan or loans of Borrowers, and to pay and protect, and indemnify, defend and
hold Administrative Agent and each other such Person preparing a Report
harmless from and against all claims, actions, proceedings, damages, costs,
expenses and other amounts (including attorneys’ fees) incurred by
Administrative Agent and any such other Person preparing a Report as the direct
or indirect result of any third parties who might obtain all or any part of any
Report through the indemnifying Lender.

 

12.3.                     Reliance
By Administrative Agent. 
Administrative Agent shall be entitled to rely, and shall be fully
protected in so relying, upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram, telecopier message or
cable) believed by it to be genuine and

 

64

 

correct and to have been signed, sent or made by or on behalf of the
proper Person or Persons, and upon advice and statements of Agent Professionals
selected by Administrative Agent.  As to
any matters not expressly provided for by this Agreement or any of the other
Loan Documents, Administrative Agent shall in all cases be fully protected in
acting or refraining from acting hereunder and thereunder in accordance with
the instructions of the Required Lenders, and such instructions of the Required
Lenders and any action taken or failure to act pursuant thereto shall be
binding upon Lenders.

 

12.4.                     Action
Upon Default.  Administrative
Agent shall not be deemed to have knowledge of the occurrence of a Default or
an Event of Default unless it has received written notice from a Lender or any
or all Borrowers specifying the occurrence and nature of such Default or Event
of Default.  If Administrative Agent
shall receive such a notice of a Default or an Event of Default or shall
otherwise acquire actual knowledge of any Default or Event of Default,
Administrative Agent shall promptly notify Lenders in writing and
Administrative Agent shall take such action and assert such rights under this
Agreement and the other Loan Documents, or shall refrain from taking such
action and asserting such rights, as the Required Lenders shall direct from
time to time.  If any Lender shall
receive a notice of a Default or an Event of Default or shall otherwise acquire
actual knowledge of any Default or Event of Default, such Lender shall promptly
notify Administrative Agent and the other Lenders in writing.  As provided in Section 12.3 hereof,
Administrative Agent shall not be subject to any liability by reason of acting
or refraining to act pursuant to any request of the Required Lenders except for
its own willful misconduct or gross negligence in connection with any action
taken by it.  Before directing
Administrative Agent to take or refrain from taking any action or asserting any
rights or remedies under this Agreement and the other Loan Documents on account
of any Event of Default, the Required Lenders shall consult with and seek the
advice of (but without having to obtain the consent of) each other Lender, and
promptly after directing Administrative Agent to take or refrain from taking
any such action or asserting any such rights, the Required Lenders will so
advise each other Lender of the action taken or refrained from being taken and,
upon request of any Lender, will supply information concerning actions taken or
not taken.  In no event shall the
Required Lenders, without the prior written consent of each Lender, direct
Administrative Agent to accelerate and demand payment of the Loans held by one
Lender without accelerating and demanding payment of all other Loans or to
terminate the Commitments of one or more Lenders without terminating the
Commitments of all Lenders.  Each Lender
agrees that, except as otherwise provided in any of the Loan Documents or with
the written consent of the Required Lenders, it will not take any legal action
or institute any action or proceeding against any Obligor with respect to any
of the Obligations or Collateral or accelerate or otherwise enforce its portion
of the Obligations.  Without limiting
the generality of the foregoing, no Lender (individually), without the prior
written consent of the Required Lenders, may exercise any right that it might
otherwise have under Applicable Law to credit bid at foreclosure sales, UCC
sales or other similar sales or dispositions of any of the Collateral (provided
that nothing herein shall be construed to limit in any respect the right of all
Lenders, collectively, to credit bid). 
Notwithstanding anything to the contrary set forth in this Section 12.4
or elsewhere in this Agreement, (i) each Lender shall be authorized to take
such action to preserve or enforce its rights against any Obligor where a
deadline or limitation period is otherwise applicable and would, absent the
taking of specified action, bar the enforcement of Obligations held by such
Lender against such Obligor, including the filing of proofs of claim in any
Insolvency Proceeding and (ii) Administrative Agent shall not be authorized to
take any action to foreclose on any of the Real Estate without the prior
written consent of GECC (which consent shall not be unreasonably withheld or
delayed, and which consent shall be provided by GECC at such time as GECC
reasonably determines that no material environmental matters affect such Real
Estate (which determination may be made, in GECC’s reasonable credit judgment,
with or without the requirement of an environmental audit or assessment with
respect to such Real Estate).

 

12.5.                     Ratable
Sharing.  If any Lender shall
obtain any payment or reduction (including any amounts received as adequate
protection of a bank account deposit treated as cash collateral under the
Bankruptcy Code) of any Obligation of Borrowers hereunder (whether voluntary,
involuntary, through the exercise of any right of set-off or otherwise) in
excess of its Pro Rata share of payments or reductions on

 

65

 

account of such Obligations obtained by all of the Lenders, such Lender
shall forthwith (i) notify the other Lenders and Administrative Agent of such
receipt and (ii) purchase from the other Lenders such participations in the
affected Obligations as shall be necessary to cause such purchasing Lender to
share the excess payment or reduction, net of costs incurred in connection
therewith, on a Pro Rata basis, provided, that if all or any
portion of such excess payment or reduction is thereafter recovered from such
purchasing Lender or additional costs are incurred, the purchase shall be
rescinded and the purchase price restored to the extent of such recovery or
such additional costs, but without interest. 
Each Borrower agrees that any Lender so purchasing a participation from
another Lender pursuant to this Section 12.5 may, to the fullest
extent permitted by Applicable Law, exercise all of its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Lender were the direct creditor of Borrowers in the amount of such
participation.

 

12.6.                     Indemnification
of Agent Indemnitees.

 

12.6.1.               Each Lender agrees to indemnify and
defend the Agent Indemnitees (to the extent not reimbursed by Borrowers under
this Agreement, but without limiting the indemnification obligation of
Borrowers under this Agreement), on a Pro Rata basis, and to hold each of the
Agent Indemnitees harmless from and against, any and all Indemnified Claims
which may be imposed on, incurred by or asserted against any of the Agent
Indemnitees in any way related to or arising out of this Agreement or any of
the other Loan Documents or any other document contemplated by or referred to
herein or therein or the transactions contemplated hereby or thereby (including
the costs and expenses which Borrowers are obligated to pay under Section 14.2
hereof or amounts Administrative Agent may be called upon to pay in connection
with any lockbox or Dominion Account arrangement contemplated hereby or under
any indemnity, guaranty or other assurance of payment or performance given by
Administrative Agent with respect to Cash Management Agreements and Hedging
Agreements with financial institutions other than Fleet, Bank or any Affiliate
of Fleet or Bank, and Letters of Credit) or the enforcement of any of the terms
hereof or thereof or of any such other documents, provided, that no
Lender shall be liable to an Agent Indemnitee for any of the foregoing to the
extent that they result solely from the willful misconduct or gross negligence
of such Agent Indemnitee or to the extent arising from Bank Products or any
Banking Relationship Debt.

 

12.6.2.               Without limiting the generality of the
foregoing provisions of this Section 12.6, if Administrative Agent
should be sued by any receiver, trustee in bankruptcy, debtor-in-possession or
other Person on account of any alleged preference or fraudulent transfer
received or alleged to have been received from any Borrower or any other
Obligor as the result of any transaction under the Loan Documents, then in such
event any monies paid by Administrative Agent in settlement or satisfaction of
such suit, together with all Extraordinary Expenses incurred by Administrative
Agent in the defense of same, shall be promptly reimbursed to Administrative
Agent by Lenders to the extent of each Lender’s Pro Rata share.

 

12.6.3.               Without limiting the generality of the foregoing
provisions of this Section 12.6, if at any time (whether
prior to or after the Commitment Termination Date) any action or proceeding
shall be brought against any of the Agent Indemnitees by an Obligor or by any
other Person claiming by, through or under an Obligor, to recover damages for
any act taken or omitted by Administrative Agent under any of the Loan
Documents or in the performance of any rights, powers or remedies of
Administrative Agent against any Obligor, any Account Debtor, the Collateral or
with respect to any Loans, or to obtain any other relief of any kind on account
of any transaction involving any Agent Indemnitees under or in relation to any
of the Loan Documents, each Lender agrees to indemnify, defend and hold the
Agent Indemnitees harmless with respect thereto and to pay to the Agent
Indemnitees such Lender’s Pro Rata share of such amount as any of the Agent
Indemnitees shall be required to pay by reason of a judgment, decree, or other
order entered in such action or proceeding or by reason of any compromise or
settlement agreed to by the Agent Indemnitees, including all interest and costs
assessed

 

66

 

against any of the Agent Indemnitees in defending or compromising such
action, together with attorneys’ fees and other legal expenses paid or incurred
by the Agent Indemnitees in connection therewith; provided, however,
that no Lender shall be liable to any Agent Indemnitee for any of the foregoing
to the extent that they arise solely from the willful misconduct or gross
negligence of such Agent Indemnitee.  In
Administrative Agent’s discretion, Administrative Agent may also reserve for or
satisfy any such judgment, decree or order from proceeds of Collateral prior to
any distributions therefrom to or for the account of Lenders.

 

12.7.                     Limitation
on Responsibilities of Administrative Agent.  Administrative Agent shall in all cases be fully justified in
failing or refusing to act hereunder unless it shall have received further
assurances to its satisfaction from Lenders of their indemnification
obligations under Section 12.6 hereof against any and
all Indemnified Claims which may be incurred by Administrative Agent by reason
of taking or continuing to take any such action.  Administrative Agent shall not be liable to Lenders (or any
Lender’s participants) for any action taken or omitted to be taken under or in
connection with this Agreement or the other Loan Documents except as a result
of actual gross negligence or willful misconduct on the part of Administrative
Agent.  Administrative Agent assumes no
responsibility for any failure or delay in performance or breach by any Obligor
or any Lender of its obligations under this Agreement or any of the other Loan
Documents.  Administrative Agent does
not make to Lenders, and no Lender makes to Administrative Agent or the other
Lenders, any express or implied warranty, representation or guarantee with
respect to the Loans, the Collateral, the Loan Documents or any Obligor.  Neither Administrative Agent nor any of its
officers, directors, employees, attorneys or agents shall be responsible to
Lenders, and no Lender nor any of its agents, attorneys or employees shall be
responsible to Administrative Agent or the other Lenders, for:  (i) any recitals, statements, information,
representations or warranties contained in any of the Loan Documents or in any
certificate or other document furnished pursuant to the terms hereof; (ii) the
execution, validity, genuineness, effectiveness or enforceability of any of the
Loan Documents; (iii) the validity, genuineness, enforceability,
collectibility, value, sufficiency or existence of any Collateral, or the
perfection or priority of any Lien therein; or (iv) the assets, liabilities,
financial condition, results of operations, business, creditworthiness or legal
status of any Obligor or any Account Debtor. 
Neither Administrative Agent nor any of its officers, directors,
employees, attorneys or agents shall have any obligation to any Lender to
ascertain or inquire into the existence of any Default or Event of Default, the
observance or performance by any Obligor of any of the duties or agreements of
such Obligor under any of the Loan Documents or the satisfaction of any
conditions precedent contained in any of the Loan Documents.  Administrative Agent may consult with and
employ legal counsel, accountants and other experts and shall be entitled to
act upon, and shall be fully protected in any action taken in good faith
reliance upon, any advice given by such experts.

 

12.8.                     Successor
Administrative Agent and Co- Agents.

 

12.8.1.               Subject to the appointment and
acceptance of a successor Administrative Agent as provided below, an
Administrative Agent may resign at any time by giving at least 30 days written
notice thereof to each Lender and Borrowers. 
Upon receipt of any notice of such resignation, the Required Lenders,
after prior consultation with (but without having to obtain consent of) each
Lender, shall have the right to appoint a successor Administrative Agent which
shall be (i) a Lender, (ii) a United States based affiliate of a Lender, or
(iii) a commercial bank or other financial institution that is organized under
the laws of the United States or of any State thereof and has a combined
capital surplus of at least $500,000,000 and, provided no Default or Event of
Default then exists, is reasonably acceptable to Borrowers (and for purposes
hereof, any successor to Fleet or GECC shall be deemed acceptable to
Borrowers).  Upon the acceptance by a
successor Administrative Agent of an appointment to serve as Administrative
Agent hereunder, such successor Administrative Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Administrative Agent without further act, deed or conveyance, and the
retiring Administrative Agent, as applicable, shall be discharged from its
duties and obligations hereunder.  After
any retiring Administrative Agent’s

 

67

 

resignation hereunder as Administrative Agent, the provisions of this Section 12
(including the provisions of Section 12.6 hereof) shall continue in
effect for its benefit in respect of any actions taken or omitted to be taken
by it while it was acting as Administrative Agent.  Notwithstanding anything to the contrary contained in this
Agreement, any successor by merger or acquisition of the stock or assets of
Fleet or GECC shall continue to be an Agent hereunder without further act on
the part of the parties hereto unless such successor shall resign in accordance
with the provisions hereof.

 

12.8.2.               It is the purpose of this Agreement that
there shall be no violation of any Applicable Law denying or restricting the
right of financial institutions to transact business as agent or otherwise in
any jurisdiction.  It is recognized
that, in case of litigation under any of the Loan Documents, or in case
Administrative Agent deems that by reason of present or future laws of any
jurisdiction Administrative Agent might be prohibited from exercising any of
the powers, rights or remedies granted to Administrative Agent or Lenders
hereunder or under any of the Loan Documents or from holding title to or a Lien
upon any Collateral or from taking any other action which may be necessary hereunder
or under any of the Loan Documents, Administrative Agent may appoint an
additional Person as a separate collateral agent or co-collateral agent which
is not so prohibited from taking any of such actions or exercising any of such
powers, rights or remedies.  If
Administrative Agent shall appoint an additional Person as a separate
collateral agent or co-collateral agent as provided above, each and every
remedy, power, right, claim, demand or cause of action intended by any of the
Loan Documents to be exercised by or vested in or conveyed to Administrative
Agent with respect thereto shall be exercisable by and vested in such separate
collateral agent or co-collateral agent, but only to the extent necessary to
enable such separate collateral agent or co-collateral agent to exercise such
powers, rights and remedies, and every covenant and obligation necessary to the
exercise thereof by such separate collateral agent or co-collateral agent shall
run to and be enforceable by either of them. 
Should any instrument from Lenders be required by the separate
collateral agent or co-collateral agent so appointed by Administrative Agent in
order more fully and certainly to vest in and confirm to him or it such rights,
powers, duties and obligations, any and all of such instruments shall, on
request, be executed, acknowledged and delivered by Lenders whether or not a
Default or Event of Default then exists. 
In case any separate collateral agent or co-collateral agent, or a successor
to either, shall die, become incapable of acting, resign or be removed, all the
estates, properties, rights, powers, duties and obligations of such separate
collateral agent or co-collateral agent, so far as permitted by Applicable Law,
shall vest in and be exercised by the Administrative Agent until the
appointment of a new collateral agent or successor to such separate collateral
agent or co-collateral agent.

 

12.9.                     Consents,
Amendments and Waivers; Out-of-Formula Loans.

 

12.9.1.               No amendment or modification of any
provision of this Agreement shall be effective without the prior written
agreement of the Required Lenders and Borrowers, and no waiver of any Default
or Event of Default shall be effective without the prior written consent of the
Required Lenders; provided, however, that (i) without the prior
written consent of Administrative Agent, no amendment or waiver shall be
effective with respect to any provision in any of the Loan Documents (including
this Section 12)
to the extent such provision relates to the rights, duties, immunities or
discretion of Administrative Agent; (ii) without the prior written consent of
Fleet, no amendment or waiver with respect to the provisions of Sections
1.3 or
3.1.3 shall be effective; (iii) without the prior written consent of
all Lenders, no waiver of any Default or Event of Default shall be effective if
the Default or Event of Default relates to any Borrower’s failure to observe or
perform any covenant that may not be amended without the unanimous written
consent of Lenders (and, where so provided hereinafter, the written consent of
Administrative Agent) as hereinafter set forth in this Section 12.9.1; and (iv)
written agreement of all Lenders (except a defaulting Lender as provided in
Section 3.2 of this Agreement) shall be required to effectuate
any amendment, modification or waiver that would (a) alter the provisions of Sections
2.2, 2.6, 2.7, 2.8, 2.10, 4.5, 4.7, 4.9, 4.10, 5.1, 7.4.2, 9.2.10, 12.9, 14.2,
14.3 or 14.16, (b) amend the definitions of “Pro Rata,” “Required
Lenders,” “Availability Reserve”, “Borrowing

 

68

 

Base”, “Permitted Acquisition”, “Permitted Real Estate Disposition”,
“Permitted Redemption” or “Permitted Redemption Conditions” (and the other
defined terms used in such definitions), or any provision of this Agreement
obligating Administrative Agent to take certain actions at the direction of the
Required Lenders, or any provision of any of the Loan Documents regarding the
Pro Rata treatment or obligations of Lenders, (c) increase or otherwise modify
any of the Commitments (other than to reduce proportionately each Lender’s
Commitment in connection with any overall reduction in the amount of the
Commitments), (d) alter or amend (other than to increase) the rate of interest
payable in respect of the Loans (except as may be expressly authorized by the
Loan Documents or as may be necessary, in Administrative Agent’s judgment, to
comply with Applicable Law), (e) waive or agree to defer collection of any fee,
termination charge or other charge provided for under any of the Loan Documents
(except to the extent that the Required Lenders agree after and during the
continuance of any Event of Default to a waiver or deferral of any termination
charge provided for in Section 5.2.3 hereof) or the unused
line fee in Section 2.2.3 hereof, (f) subordinate the payment of any
of the Obligations to any other Debt or the priority of any Liens granted to
Administrative Agent under any of the Loan Documents to Liens granted to any
other Person, except as currently provided in or contemplated by the Loan
Documents in connection with Borrowers’ incurrence of Permitted Purchase Money
Debt, and except for Liens granted by an Obligor to financial institutions with
respect to amounts on deposit with such financial institutions to cover
returned items, processing and analysis charges and other charges in the
Ordinary Course of Business that relate to deposit accounts with such financial
institutions, (g) alter the time or amount of repayment of any of the Loans
(except a moratorium or deferral of payment pursuant to a forbearance agreement
entered into by Administrative Agent and the Required Lenders with Borrowers at
any time an Event of Default exists) or waive any Event of Default resulting
from nonpayment of the Loans on the due date thereof (or within any applicable
period of grace), (h) forgive any of the Obligations, except any portion of the
Obligations held by a Lender who consents in writing to such forgiveness, or
(i) release any Obligor from liability for any of the Obligations except to the
extent expressly permitted by the Loan Documents.  No Lender shall be authorized to amend or modify any Note held by
it, unless such amendment or modification is consented to in writing by all
Lenders; provided, however, that the foregoing shall not be
construed to prohibit an amendment or modification to any provision of this
Agreement that may be effected pursuant to this Section 12.9.1 by
agreement of Borrowers and the Required Lenders even though such an amendment
or modification results in an amendment or modification of the Notes by virtue
of the incorporation by reference in each of the Notes of this Agreement.  The making of any Loans hereunder by any
Lender during the existence of a Default or Event of Default shall not be
deemed to constitute a waiver of such Default or Event of Default.  Any waiver or consent granted by Lenders
hereunder shall be effective only if in writing and then only in the specific
instance and for the specific purpose for which it was given.

 

12.9.2.               No Borrower will, directly or
indirectly, pay or cause to be paid any remuneration or other thing of value,
whether by way of supplemental or additional interest, fee or otherwise, to any
Lender (in its capacity as a Lender hereunder) as consideration for or as an
inducement to the consent to or agreement by such Lender with any waiver or
amendment of any of the terms and provisions of this Agreement or any of the
other Loan Documents to the extent that the agreement of all Lenders to any
such waiver or amendment is required, unless such remuneration or thing of
value is concurrently paid, on the same terms, on a Pro Rata basis to all
Lenders; provided, however, that Borrowers may contract to pay a
fee only to those Lenders who actually vote in writing to approve any waiver or
amendment of the terms and provisions of this Agreement or any of the other
Loan Documents to the extent that such waiver or amendment may be implemented
by vote of the Required Lenders and such waiver or amendment is in fact approved.

 

12.9.3.               Any request, authority or consent of any
Person who, at the time of making such request or giving such a authority or
consent, is a Lender, shall be conclusive and binding upon any Assignee of such
Lender.

 

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12.9.4.               Unless otherwise directed in writing by
the Required Lenders, Administrative Agent may require Lenders to honor
requests by Borrowers for Out-of-Formula Loans (in which event, and
notwithstanding anything to the contrary set forth in Section 1.2 or elsewhere
in this Agreement, Lenders shall continue to make Revolver Loans up to their
Pro Rata share of the Commitments) and to forbear from requiring Borrowers to
cure an Out-of-Formula Condition, (1) when no Event of Default exists (or if an
Event of Default exists, when the existence of such Event of Default is not
known by Administrative Agent), if and for so long as (i) such Out-of-Formula
Condition does not continue for a period of more than 30 consecutive days,
following which no Out-of-Formula Condition exists for at least 30 consecutive
days before another Out-of-Formula Condition exists, (ii) the amount of the
Revolver Loans outstanding at any time does not exceed the aggregate of the
Commitments at such time, and (iii) the Out-of-Formula Condition is not known
by Administrative Agent at the time in question to exceed $6,000,000; and (2)
regardless of whether or not an Event of Default exists, if Administrative
Agent discovers the existence of an Out-of-Formula Condition not previously
known by it to exist, Lenders shall be obligated to continue making such
Revolver Loans as directed by Administrative Agent only (A) if the amount of
the Out-of-Formula Condition is not increased by more than $4,000,000 above the
amount determined by Administrative Agent to exist on the date of discovery
thereof and (B) for a period not to exceed 15 Business Days; provided, however,
that without the consent of all Lenders, the aggregate amount of the
Out-of-Formula Condition permitted under this Section 12.9.4 may not
exceed $10,000,000 at any time.  If any
Out-of-Formula Condition shall continue to exist at any time after the
expiration of the periods set forth in clauses (1) or (2) above, Administrative
Agent may (and shall at the request of the Required Lenders) demand payment
thereof.  In no event shall any Borrower
or any other Obligor be deemed to be a beneficiary of this Section 12.9.4 or
authorized to enforce any of the provisions of this Section 12.9.4.  The provisions of this Section 12.9.4 shall be
in addition to the provisions of Section 1.2.7 hereof.

 

12.10.              Due
Diligence and Non-Reliance. 
Each Lender hereby acknowledges and represents that it has,
independently and without reliance upon any Agent or the other Lenders, and
based upon such documents, information and analyses as it has deemed
appropriate, made its own credit analysis of each Obligor and its own decision
to enter into this Agreement and to fund the Loans to be made by it hereunder
and to purchase participations in the LC Outstandings pursuant to Section 1.3.2
hereof, and each Lender has made such inquiries concerning the Loan Documents,
the Collateral and each Obligor as such Lender feels necessary and appropriate,
and has taken such care on its own behalf as would have been the case had it
entered into the other Loan Documents without the intervention or participation
of the other Lenders or Administrative Agent. 
Each Lender hereby further acknowledges and represents that the other Lenders
and Administrative Agent have not made any representations or warranties to it
concerning any Obligor, any of the Collateral or the legality, validity,
sufficiency or enforceability of any of the Loan Documents.  Each Lender also hereby acknowledges that it
will, independently and without reliance upon the other Lenders or
Administrative Agent, and based upon such financial statements, documents and
information as it deems appropriate at the time, continue to make and rely upon
its own credit decisions in making Loans and in taking or refraining to take
any other action under this Agreement or any of the other Loan Documents.  Except for notices, reports and other
information expressly required to be furnished to Lenders by Administrative
Agent hereunder, Administrative Agent shall not have any duty or responsibility
to provide any Lender with any notices, reports or certificates furnished to
Administrative Agent by any Obligor or any credit or other information
concerning the affairs, financial condition, business or Properties of any Obligor
(or any of its Affiliates) which may come into possession of Administrative
Agent or any of Administrative Agent’s Affiliates.

 

12.11.              Representations
and Warranties of Lenders.  By
its execution of this Agreement, each Lender hereby represents and warrants to
each Borrower and the other Lenders that it has the power to enter into and
perform its obligations under this Agreement and the other Loan Documents, and
that it has taken all necessary and appropriate action to authorize its
execution and performance of this Agreement and the other Loan Documents to
which it is a party, each of which will be binding upon it and the

 

70

 

obligations imposed upon it herein or therein will be enforceable
against it in accordance with the respective terms of such documents.

 

12.12.              The
Required Lenders.  As to any
provisions of this Agreement or the other Loan Documents under which action may
or is required to be taken upon direction or approval of the Required Lenders, the
direction or approval of the Required Lenders shall be binding upon each Lender
to the same extent and with the same effect as if each Lender had joined
therein.  Notwithstanding anything to
the contrary contained in this Agreement, Borrowers shall not be deemed to be a
beneficiary of, or be entitled to enforce, sue upon or assert as a defense to
any of the Obligations, any provisions of this Agreement that requires
Administrative Agent or any Lender to act, or conditions their authority to
act, upon the direction or consent of the Required Lenders; and any action
taken by Administrative Agent or any Lender that requires the consent or
direction of the Required Lenders as a condition to taking such action shall,
insofar as Borrowers are concerned, be presumed to have been taken with the
requisite consent or direction of the Required Lenders.

 

12.13.              Several
Obligations.  The obligations
and commitments of each Lender under this Agreement and the other Loan
Documents are several and neither Administrative Agent nor any Lender shall be
responsible for the performance by the other Lenders of its obligations or
commitments hereunder or thereunder. 
Notwithstanding any liability of Lenders stated to be joint and several to
third Persons under any of the Loan Documents, if any, such liability shall be
shared, as among Lenders, Pro Rata according to the respective Commitments of
Lenders.

 

12.14.              Agents
in their Individual Capacity. 
With respect to its obligation to lend under this Agreement, the Loans
made by it and each Note issued to it, each Agent shall have the same rights
and powers hereunder and under the other Loan Documents as any other Lender or
holder of a Note and may exercise the same as though it were not performing the
duties specified herein; and the terms “Lenders,” “Required Lenders,” or any
similar term shall, unless the context clearly otherwise indicates, include
each Agent in its capacity as a Lender. 
Each Agent and its Affiliates may each accept deposits from, maintain
deposits or credit balances for, invest in, lend money to, act as trustee under
indentures of, serve as financial advisor to, and generally engage in any kind
of business with any Borrower or any other Obligor, or any Affiliate of any
Borrower or any other Obligor, as if it were any other bank and without any
duty to account therefor (or for any fees or other consideration received in
connection therewith) to the other Lenders. 
Fleet and GECC or any of their respective Affiliates may receive
information regarding any Borrower or any of such Borrower’s Affiliates and
account debtors (including information that may be subject to confidentiality
obligations in favor of Borrowers or any of their Affiliates) and Lenders
acknowledge that no Agent nor Fleet or GECC shall be under any obligation to
provide such information to Lenders to the extent acquired by Fleet or GECC in
its individual capacity and not as an Agent hereunder.

 

12.15.              No
Third Party Beneficiaries.  This
Section 12
is not intended to confer any rights or benefits upon Borrowers or any other
Person except Lenders and Administrative Agent, and no Person (including any or
all Borrowers) other than Lenders and Administrative Agent shall have any right
to enforce any of the provisions of this Section 12 except as expressly provided
in Section 12.8
and Section 12.17
hereof.  As between Borrowers and
Administrative Agent, any action that Administrative Agent may take or purport
to take on behalf of Lenders under any of the Loan Documents shall be
conclusively presumed to have been authorized and approved by Lenders as herein
provided.

 

12.16.              Notice
of Transfer.  Administrative
Agent may deem and treat a Lender party to this Agreement as the owner of such
Lender’s portion of the Revolver Loans for all purposes, unless and until a
written notice of the assignment or transfer thereof executed by such Lender
has been received and accepted by Administrative Agent in accordance with the
terms hereof.

 

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12.17.              Replacement
of Certain Lenders.  If a Lender
(“Affected Lender”) shall have (i) failed to fund its Pro Rata share of any
Revolver Loan requested (or deemed requested) by Borrowers which such Lender is
obligated to fund under the terms of this Agreement and which such failure has
not been cured, (ii) requested compensation from Borrowers under Section 2.7
to recover increased costs incurred by such Lender (or its parent or
holding company) which are not being incurred generally by the other Lenders
(or their respective parents or holding companies), (iii) requested
compensation from Borrowers under Section 2.8 to compensate for a
reduction in the return of capital suffered by such Lender (or its parent or
holding company) which are not being incurred generally by other Lenders (or their
respective parents or holding companies), (iv) requested payment from Borrowers
under Section 4.8
in connection with a tax gross-up payable to such Lender (or its parent or
holding company) which are not incurred generally by other Lenders (or their respective
parents or holding companies) or (v) delivered a notice pursuant to Section 2.6
hereof claiming that such Lender is unable to extend LIBOR Loans to Borrowers
for reasons not generally applicable to the other Lenders, then, in any such
case and in addition to any other rights and remedies that Administrative
Agent, any other Lender or any Borrower may have against such Affected Lender,
any Borrower or Administrative Agent may make written demand on such Affected
Lender (with a copy to Administrative Agent in the case of a demand by
Borrowers and a copy to Borrowers in the case of a demand by Administrative
Agent) for the Affected Lender to assign, and such Affected Lender shall assign
pursuant to one or more duly executed Assignment and Acceptances within 5
Business Days after the date of such demand, to one or more Lenders willing to
accept such assignment or assignments, or to one or more Eligible Assignees
designated by Administrative Agent, all of such Affected Lender’s rights and
obligations under this Agreement (including its Commitments and all Loans owing
to it) in accordance with Section 13 hereof.  Administrative Agent is hereby irrevocably
authorized to execute one or more Assignment and Acceptances as
attorney-in-fact for any Affected Lender which fails or refuses to execute and
deliver the same within 5 Business Days after the date of such demand.  The Affected Lender shall be entitled to
receive, in cash and concurrently with execution and delivery of each such
Assignment and Acceptance, all amounts owed to the Affected Lender hereunder or
under any other Loan Document, including the aggregate outstanding principal
amount of the Revolver Loans owed to such Lender, together with accrued
interest thereon and fees and expenses accrued through the date of such
assignment.  Upon the replacement of any
Affected Lender pursuant to this Section 12.17, such Affected Lender
shall cease to have any participation in, entitlement to, or other right to
share in the Liens of Administrative Agent in any Collateral and such Affected
Lender shall have no further liability to Administrative Agent, any Lender or
any other Person under any of the Loan Documents (except as provided in Section 12.6
hereof as to events or transactions which occur prior to the replacement of
such Affected Lender), including any commitment to make Loans or purchase
participations in LC Outstandings.

 

12.18.              Remittance
of Payments and Collections.

 

12.18.1.                         All payments by any Lender to
Administrative Agent shall be made not later than the time set forth elsewhere
in this Agreement on the Business Day such payment is due; provided, however,
that if such payment is due on demand by Administrative Agent and such demand
is made on the paying Lender after 11:00 a.m. on such Business Day, then
payment shall be made by 11:00 a.m. on the next Business Day.  Payment by Administrative Agent to any
Lender shall be made by wire transfer, promptly following Administrative
Agent’s receipt of funds for the account of such Lender and in the type of funds
received by Administrative Agent; provided, however, that if
Administrative Agent receives such funds at or prior to 12:00 noon,
Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on such
Business Day, but if Administrative Agent receives such funds after 12:00 noon,
Administrative Agent shall pay such funds to such Lender by 2:00 p.m. on the
next Business Day.

 

12.18.2.                         With respect to the payment of
any funds from Administrative Agent to a Lender or from a Lender to
Administrative Agent, the party failing to make full payment when due pursuant
to the terms hereof shall, on demand by the other party, pay such amount
together with interest

 

72

 

thereon at the Federal Funds Rate. 
In no event shall Borrowers be entitled to receive any credit for any
interest paid by Administrative Agent to any Lender, or by any Lender to
Administrative Agent, at the Federal Funds Rate as provided herein.

 

12.18.3.                         If Administrative Agent pays
any amount to a Lender in the belief or expectation that a related payment has
been or will be received by Administrative Agent from an Obligor and such
related payment is not received by Administrative Agent, then Administrative
Agent shall be entitled to recover such amount from each Lender that receives
such amount.  If Administrative Agent
determines at any time that any amount received by it under this Agreement or
any of the other Loan Documents must be returned to an Obligor or paid to any
other Person pursuant to any Applicable Law, court order or otherwise, then,
notwithstanding any other term or condition of this Agreement or any of the
other Loan Documents, Administrative Agent shall not be required to distribute
such amount to any Lender.

 

12.19.              No
Reliance on Administrative Agent’s Customer Identification Program.
Each Lender acknowledges and agrees that neither such Lender, nor any of its
Affiliates, Participants, Transferees or assignees, may rely on Administrative
Agent to carry out such Lender’s, Affiliate’s, Participant’s, Transferee’s or
assignee’s customer identification program, or other obligations required or
imposed under or pursuant to the USA Patriot Act or the regulations thereunder,
including the regulations contained in 31 CFR 103.121 (as hereafter amended or
replaced, the “CIP Regulations”), or any other Anti-Terrorism Law, including
any programs involving any of the following items relating to or in connection
with Borrower, its Affiliates or its agents, the Loan Documents or the
transactions hereunder:  (1) any
identity verification procedures, (2) any recordkeeping, (3) any comparisons
with government lists, (4) any customer notices or (5) any other procedures
required under the CIP Regulations or such other laws

 

12.20.              USA
Patriot Act. Each Lender or Transferee or Participant or assignee of a
Lender that is not incorporated under the laws of the United States of America
or a state thereof (and is not excepted from the certification requirement
contained in Section 313 of the USA Patriot Act and the applicable
regulations because it is both (i) an affiliate of a depository institution or
foreign bank that maintains a physical presence in the United States or foreign
country, and (ii) subject to supervision by a banking authority regulating such
affiliated depository institution or foreign bank) shall deliver to the
Administrative Agent the certification, or, if applicable, recertification,
certifying that such Lender is not a “foreign shell bank” and certifying to
other matters as required by Section 313 of the USA Patriot Act and the
applicable regulations:  (1) within 10
days after the Closing Date and (2) at such other times as are required under
the USA Patriot Act.

 

12.21.              Co-Agents.  Neither Administrative Agent, Syndication
Agent nor any of the Persons identified on the facing page or signatures pages
of this Agreement as a “co-agent” or a “co-lead arranger” shall have, in such
capacities, any rights, power, obligation, liability, responsibility or duty
under this Agreement or any of the other Loan Documents other than as expressly
provided for herein.  Without limiting
the foregoing, neither Syndication Agent nor any of the Persons so identified
as a “co-agent” or a “co-lead arranger” shall have or be deemed to have any
fiduciary relationship with any Lender. 
Each Lender acknowledges that it has not relied, and will not rely, upon
any of the Persons so identified in deciding to enter into this Agreement or in
taking or not taking any action hereunder. 
Each Party hereto acknowledges and agrees that Co-Lead Arrangers are not
signatories to this Agreement, and that the signatures of Co-Lead Arrangers
shall not be required on any amendment, extension, restatement or other
modification to this Agreement or any of the other Loan Documents.

 

SECTION 13.                     BENEFIT
OF AGREEMENT; ASSIGNMENTS AND PARTICIPATIONS

 

13.1.                     Successors
and Assigns.  This Agreement
shall be binding upon and inure to the benefit of Borrowers, Agents and Lenders
and their respective successors and assigns (which, in the case of

 

73

 

Administrative Agent, shall include any successor Administrative Agent
appointed pursuant to Section 12.8 hereof), except that (i)
no Borrower shall have the right to assign its rights or delegate performance
of any of its obligations under any of the Loan Documents and (ii) any
assignment by any Lender must be made in compliance with Section 13.3
hereof.  Administrative Agent may treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until such payee complies with Section 13.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with Administrative Agent.  Any assignee or transferee of a Note agrees by acceptance thereof
to be bound by all the terms and provisions of the Loan Documents.  Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of a Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.

 

13.2.                     Participations.

 

13.2.1.               Permitted Participants; Effect.  Any Lender may, in the ordinary course of
its business and in accordance with Applicable Law, at any time sell to one or
more banks or other financial institutions (each a “Participant”) a
participating interest in any of the Obligations owing to such Lender, any
Commitment of such Lender or any other interest of such Lender under any of the
Loan Documents.  In the event of any
such sale by a Lender of participating interests to a Participant, such
Lender’s obligations under the Loan Documents shall remain unchanged, such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of any
Note for all purposes under the Loan Documents, all amounts payable by
Borrowers under this Agreement and any of the Notes shall be determined as if
such Lender had not sold such participating interests, and Borrowers and
Administrative Agent shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under the Loan
Documents.  If a Lender sells a
participation to a Person other than an Affiliate of such Lender, then such
Lender shall give prompt written notice thereof to Borrowers and the other
Lenders.  A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of Section 4.9
unless Borrowers are notified of the participation sold to Participant and such
Participant agrees, for the benefit of Borrowers, to comply with Section 4.9
as though such Participant were a Lender.

 

13.2.2.               Voting Rights.  Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment, modification or
waiver of any provision of the Loan Documents other than an amendment,
modification or waiver with respect to any Loans or Commitment in which such
Participant has an interest which forgives principal, interest or fees or
reduces the stated interest rate or the stated rates at which fees are payable
with respect to any such Loan or Commitment, postpones the Commitment
Termination Date, or any date fixed for any regularly scheduled payment of
interest or fees on such Revolver Loan or Commitment, or releases from
liability any Borrower or any Guarantor or releases any substantial portion of
any of the Collateral.

 

13.2.3.               Benefit of Set-Off.  Each Borrower agrees that each Participant
shall be deemed to have the right of set-off provided in Section 11.4 hereof in
respect of its participating interest in amounts owing under the Loan Documents
to the same extent and subject to the same requirements under this Agreement
(including Section 12.5) as if the amount of its participating
interest were owing directly to it as a Lender under the Loan Documents, provided,
that each Lender shall retain the right of set-off provided in Section 11.4
hereof with respect to the amount of participating interests sold to each
Participant.  Lenders agree to share
with each Participant, and each Participant by exercising the right of set-off
provided in Section 11.4 agrees to share with each Lender, any amount
received pursuant to the exercise of its right of set-off, such amounts to be
shared in accordance with Section 12.5 hereof as if each
Participant were a Lender.

 

74

 

13.2.4.               Notices.  Each Lender shall be solely responsible for
notifying its Participants of any matters relating to the Loan Documents to the
extent that any such notice may be required, and neither Administrative Agent
nor any Lender shall have any obligation, duty or liability to any Participant
of any other Lender.  Without limiting
the generality of the foregoing, neither Administrative Agent nor any Lender
shall have any obligation to give notices or to provide documents or
information to a Participant of another Lender.

 

13.3.                     Assignments.

 

13.3.1.               Permitted Assignments.  Subject to its compliance with Section 13.3.2,
a Lender may, in accordance with Applicable Law, at any time assign to any
Eligible Assignee all or any part of its rights and obligations under the Loan
Documents, so long as (i) each assignment is of a constant, and not a varying,
ratable percentage of all of the transferor Lender’s rights and obligations
under the Loan Documents with respect to the Loans and the LC Outstandings and,
in the case of a partial assignment, is in a minimum principal amount of
$5,000,000 (unless otherwise agreed by Administrative Agent in its sole
discretion) and integral multiples of $5,000,000 in excess of that amount; (ii)
except in the case of an assignment in whole of a Lender’s rights and
obligations under the Loan Documents or an assignment by one original signatory
to this Agreement to another such signatory, immediately after giving effect to
any assignment, the aggregate amount of the Commitments retained by the
transferor Lender shall in no event be less than $15,000,000 (unless otherwise
agreed by Administrative Agent in its sole discretion); and (iii) the parties
to each such assignment shall execute and deliver to Administrative Agent, for
its acceptance and recording, an Assignment and Acceptance.  Nothing contained herein shall limit in any
way the right of a Lender to assign all or any portion of the Obligations owing
to it to any Federal Reserve Bank or the United States Treasury as collateral
security pursuant to Regulation A of the Board of Governors and any Operating
Circular issued by such Federal Reserve Bank, provided, that any
payment by Borrowers to the assigning Lender in respect of such assigned
Obligations in accordance with the terms of this Agreement shall satisfy
Borrowers’ obligations hereunder in respect of such assigned Obligations to the
extent of such payment, and no such assignment shall release the assigning
Lender from its obligations hereunder.

 

13.3.2.               Effect; Effective Date.  Upon (i) delivery to Administrative Agent of
a notice of assignment substantially in the form attached as Exhibit H
hereto, together with any consents required by Section 13.3.1, and (ii)
payment of a $5,000 fee to the Administrative Agent for processing any
assignment to an Eligible Assignee that is not an Affiliate of the transferor
Lender, such assignment shall become effective on the effective date specified
in such notice of assignment.  On and
after the effective date of such assignment, such Eligible Assignee shall for all
purposes be a Lender party to this Agreement and any other Loan Document
executed by the Lenders and shall have all the rights and obligations of the
Lender under the Loan Documents to the same extent as if it were an original
party thereto, and no further consent or action by Borrowers, Lenders or
Administrative Agent shall be required to release the transferor Lender with
respect to the Commitment (or portion thereof) of such Lender and Obligations
assigned to such Eligible Assignee. 
Upon the consummation of any assignment to an Eligible Assignee pursuant
to this Section 13.3,
the transferor Lender, Administrative Agent and Borrowers shall make
appropriate arrangements so that replacement Notes are issued to such
transferor Lender and new Notes or, as appropriate, replacement Notes, are issued
to such Eligible Assignee, in each case in principal amounts reflecting their
respective Commitments, as adjusted pursuant to such assignment.  If the transferor Lender shall have assigned
all of its interests, rights and obligations under this Agreement pursuant to Section 13.3.1
hereof, such transferor Lender shall no longer have any obligation to indemnify
any Agent Indemnitee with respect to any transactions, events or occurrences
that transpire after the effective date of such assignment, and each Eligible
Assignee to which such transferor shall make an assignment shall be responsible
to Agents to indemnify Agents in accordance with this Agreement with respect to
transactions, events and occurrences transpiring on and after the effective
date of such assignment to it.

 

75

 

13.3.3.               Dissemination of Information.  Each Borrower authorizes each Lender and
Administrative Agent to disclose to any Participant, any Eligible Assignee or
any other Person acquiring an interest in the Loan Documents by operation of
law (each a “Transferee”), and any prospective Transferee, any and all
information in Administrative Agent’s or such Lender’s possession concerning
each Borrower, the Subsidiaries of each Borrower or the Collateral, subject to
appropriate and customary confidentiality undertakings on the part of such
Transferee.

 

13.4.                     Tax
Treatment.  If any interest in
any Loan Document is transferred to any Transferee that is organized under the
laws of any jurisdiction other than the United States or any State thereof, the
transferor Lender shall cause such Transferee, concurrently with the
effectiveness of such transfer, to comply with the provisions of Section 4.9
hereof.

 

SECTION 14.                     MISCELLANEOUS

 

14.1.                     Power
of Attorney.  Each Borrower
hereby irrevocably designates, makes, constitutes and appoints Administrative
Agent (and all Persons designated by Administrative Agent) as such Borrower’s
true and lawful attorney (and agent-in-fact) and Administrative Agent, or Administrative
Agent’s designee, may, without notice to such Borrower and in either such
Borrower’s or Administrative Agent’s name, but at the cost and expense of
Borrowers:

 

14.1.1.               At such time or times as Administrative
Agent or said designee, may determine, endorse such Borrower’s name on any
Payment Item or proceeds of the Collateral which come into the possession of
Administrative Agent or under Administrative Agent’s control.

 

14.1.2.               At any time that an Event of Default
exists: (i) demand payment of the Accounts from the Account Debtors, enforce
payment of the Accounts by legal proceedings or otherwise, and generally
exercise all of such Borrower’s rights and remedies with respect to the
collection of the Accounts; (ii) settle, adjust, compromise, discharge or
release any of the Accounts or other Collateral or any legal proceedings
brought to collect any of the Accounts or other Collateral; (iii) sell or
assign any of the Accounts and other Collateral upon such terms, for such
amounts and at such time or times as Administrative Agent deems advisable; (iv)
take control, in any manner, of any item of payment or proceeds relating to any
Collateral; (v) prepare, file and sign such Borrower’s name to a proof of claim
in bankruptcy or similar document against any Account Debtor or to any notice
of Lien, assignment or satisfaction of Lien or similar document in connection
with any of the Collateral; (vi) receive, open and deal with of all mail
addressed to such Borrower and to notify postal authorities to change the
address for delivery thereof to such address as Administrative Agent may
designate; (vii) endorse the name of such Borrower upon any of the items of
payment or proceeds relating to any Collateral and deposit the same to the
account of Administrative Agent on account of the Obligations; (viii) endorse
the name of such Borrower upon any chattel paper, document, instrument,
invoice, freight bill, bill of lading or similar document or agreement relating
to any Accounts or Inventory of any Obligor and any other Collateral; (ix) use
such Borrower’s stationery and sign the name of such Borrower to verifications
of the Accounts and notices thereof to Account Debtors; (x) use the information
recorded on or contained in any data processing equipment and computer hardware
and software relating to the Accounts, Inventory, Equipment or any other
Collateral; (xi) make and adjust claims under policies of insurance; (xii) sign
the name of such Borrower on any proof of claim in bankruptcy against Account
Debtors and on notices of Liens, claims of mechanic’s Liens or assignments or
releases of mechanic’s Liens securing any Accounts; (xiii) take all action as
may be necessary to obtain the payment of any letter of credit or banker’s
acceptance of which such Borrower is a beneficiary; and (xiv) do all other acts
and things necessary, in Administrative Agent’s determination, to fulfill such
Borrower’s obligations under this Agreement.

 

14.2.                     General
Indemnity.  Each Borrower hereby
agrees to indemnify and defend the Indemnitees against and to hold the
Indemnitees harmless from any Indemnified Claim that may be

 

76

 

instituted or asserted against or incurred by any of the Indemnitees
and that either (i) arises out of or relates to this Agreement or any of the
other Loan Documents (including any transactions entered into pursuant to any
of the Loan Documents, Administrative Agent’s Lien upon the Collateral, or the
performance by Administrative Agent or Lenders of their duties or the exercise
of any of their rights or remedies under this Agreement or any of the other
Loan Documents), or (ii) results from a Borrower’s failure to observe, perform
or discharge any of such Borrower’s covenants or duties hereunder.  Without limiting the generality of the
foregoing, this indemnity shall extend to any Indemnified Claims instituted or
asserted against or incurred by any of the Indemnitees by any Person under any
Environmental Laws by reason of any Borrower’s or any other Person’s failure to
comply with Environmental Laws applicable to solid or hazardous waste materials
or other toxic substances or any Real Estate. 
Additionally, if any Taxes (excluding Taxes imposed upon or measured
solely by the net income or gross receipts of Administrative Agent and Lenders,
but including any intangibles tax, stamp tax or recording tax) shall be payable
by Administrative Agent or any Obligor on account of the execution or delivery
of this Agreement, or the execution, delivery, issuance or recording of any of
the other Loan Documents, or the creation or repayment of any of the
Obligations hereunder, by reason of any Applicable Law now or hereafter in
effect, Borrowers will pay (or will promptly reimburse Administrative Agent and
Lenders for the payment of) all such Taxes, including any interest and
penalties thereon, and will indemnify and hold Indemnitees harmless from and
against all liability in connection therewith. 
The foregoing indemnities shall not apply to Indemnified Claims incurred
by any Indemnitee as a direct and proximate result of its own gross negligence
or willful misconduct.

 

14.3.                     Survival
of All Indemnities. 
Notwithstanding anything to the contrary in this Agreement or any of the
other Loan Documents, the obligation of each Borrower and each Lender with
respect to each indemnity given by it in this Agreement, whether given by any
or all Borrowers to Agent Indemnitees, Lender Indemnitees or Fleet Indemnitees
or by any Lender to any Agent Indemnitees or Fleet Indemnitees, shall survive
the Full Payment of the Obligations and the termination of any of the
Commitments.

 

14.4.                     Modification
of Agreement.  This Agreement
may not be modified, altered or amended, except by an agreement in writing
signed by Borrowers, Administrative Agent and Lenders (or, where otherwise
expressly allowed by Section 12 hereof, the Required
Lenders in lieu of Administrative Agent and Lenders); provided, however,
that no consent, written or otherwise, of Borrowers shall be necessary or
required in connection with any amendment of any of the provisions of Sections
1.3.2, 3.1.3, 4.5, or 12 (other than Section 12.8.1, the
definition of “Required Lenders” or Section 12.17), or any other provision
of this Agreement that affects only the rights, duties and responsibilities of
Lenders and Administrative Agent as among themselves so long as no such
amendment imposes any additional obligations on Borrowers.

 

14.5.                     Severability.  Wherever possible, each provision of this
Agreement shall be interpreted in such manner as to be effective and valid
under Applicable Law, but if any provision of this Agreement 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.

 

14.6.                     Cumulative
Effect; Conflict of Terms.  The
provisions of the Other Agreements and the Security Documents are hereby made
cumulative with the provisions of this Agreement.  Without limiting the generality of the foregoing, the parties
acknowledge that this Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or similar
matters and that such limitations, tests and measures are cumulative and each
must be performed, except as may be expressly stated to the contrary in this
Agreement.  Except as otherwise provided
in any of the other Loan Documents by specific reference to the applicable provision
of this Agreement, if any

 

77

 

provision contained in this Agreement is in direct conflict with, or
inconsistent with, any provision in any of the other Loan Documents, the
provision contained in this Agreement shall govern and control.

 

14.7.                     Execution
in Counterparts.  This Agreement
and any amendments hereto may be executed in any number of counterparts and by
different parties hereto in separate counterparts, each of which when so
executed and delivered shall be deemed to be an original and all of which
counterparts taken together shall constitute but one and the same instrument.

 

14.8.                     Consent.  Whenever Administrative Agent’s, Lenders’ or
Required Lenders’ consent is required to be obtained under this Agreement or
any of the other Loan Documents as a condition to any action, inaction,
condition or event, Administrative Agent and each Lender shall be authorized to
give or withhold its consent in its sole and absolute discretion and to
condition its consent upon the giving of additional collateral security for the
Obligations, the payment of money or any other matter.

 

14.9.                     Notices.
All notices, requests and demands to or upon a party hereto shall be in writing
and shall be sent by certified or registered mail, return receipt requested,
personal delivery against receipt or by telecopier or other facsimile
transmission and shall be deemed to have been validly served, given or
delivered when delivered against receipt or, in the case of facsimile
transmission, when received (if on a Business Day and, if not received on a
Business Day, then on the next Business Day after receipt) at the office where
the noticed party’s telecopier is located, in each case addressed to the
noticed party at the address shown for such party on the signature page hereof
or, in the case of a Person who becomes a Lender after the Closing Date, at the
address shown on the Assignment and Acceptance by which such Person became a
Lender.  Notwithstanding the foregoing,
no notice to or upon Administrative Agent pursuant to Sections 1.3, 2.1.2, 3.1 or 5.2.2 shall
be effective until after actually received by the individual to whose attention
at Administrative Agent such notice is required to be sent.  Any written notice, request or demand that
is not sent in conformity with the provisions hereof shall nevertheless be
effective on the date that such notice, request or demand is actually received
by the individual to whose attention at the noticed party such notice, request
or demand is required to be sent.

 

14.10.              Performance
of Borrowers’ Obligations.  If
any Borrower shall fail to discharge any covenant, duty or obligation hereunder
or under any of the other Loan Documents, Administrative Agent may, in its sole
discretion at any time or from time to time, for such Borrower’s account and at
Borrowers’ expense, pay any amount or do any act required of Borrowers
hereunder or under any of the other Loan Documents or otherwise lawfully
requested by Administrative Agent to (i) enforce any of the Loan Documents or
collect any of the Obligations, (ii) preserve, protect, insure or maintain or
realize upon any of the Collateral, or (iii) preserve, defend, protect or
maintain the validity or priority of Administrative Agent’s Liens in any of the
Collateral, including the payment of any judgment against any Borrower, any
insurance premium, any warehouse charge, any finishing or processing charge, or
any landlord claim, any other Lien upon or with respect to any of the
Collateral (whether or not a Permitted Lien). 
All payments that Administrative Agent may make under this
Section and all out-of-pocket costs and expenses (including Extraordinary
Expenses) that Administrative Agent pays or incurs in connection with any
action taken by it hereunder shall be reimbursed to Administrative Agent by Borrowers
on demand with interest from the date such payment is made or such costs or
expenses are incurred to the date of payment thereof at the Default Rate
applicable for Revolver Loans that are Base Rate Loans. Any payment made or
other action taken by Administrative Agent under this Section shall be
without prejudice to any right to assert, and without waiver of, an Event of
Default hereunder and to without prejudice to Administrative Agent’s right
proceed thereafter as provided herein or in any of the other Loan
Documents.  To the extent that
Administrative Agent makes any payment on Borrowers’ behalf as permitted under
this Section, Administrative Agent shall endeavor in good faith to provide
prompt notice thereof to Borrowers, but the failure to provide such notice
shall not effect Borrowers reimbursement obligations hereunder.

 

78

 

14.11.              Credit
Inquiries.  Subject to Section 14.18
and Section 14.19,
each Borrower hereby authorizes and permits Administrative Agent and Lenders
(but Administrative Agent and Lenders shall have no obligation) to respond to
usual and customary credit inquiries from third parties concerning such
Borrower or any of its Subsidiaries.

 

14.12.              Time
of Essence.  Time is of the
essence of this Agreement, the Other Agreements and the Security Documents.

 

14.13.              Indulgences
Not Waivers.  Administrative
Agent’s or any Lender’s failure at any time or times hereafter, to require
strict performance by Borrowers of any provision of this Agreement shall not
waive, affect or diminish any right of such party thereafter to demand strict
compliance and performance therewith.

 

14.14.              Entire
Agreement; Appendix A, Exhibits and Schedules.  This Agreement and the other Loan Documents,
together with all other instruments, agreements and certificates executed by
the parties in connection therewith or with reference thereto, embody the
entire understanding and agreement between the parties hereto and thereto with
respect to the subject matter hereof and thereof and supersede all prior
agreements, understandings and inducements, whether express or implied, oral or
written.  Appendix A, each of the
Exhibits and each of the Schedules attached hereto are incorporated into this
Agreement and by this reference made a part hereof.

 

14.15.              Interpretation.  No provision of this Agreement or any of the
other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having, or being deemed to have, structured,
drafted or dictated such provision.

 

14.16.              Obligations
of Lenders Several.  The
obligations of each Lender hereunder are several, and no Lender shall be
responsible for the obligations or Commitment of any other Lender.  Nothing contained in this Agreement and no
action taken by Lenders pursuant hereto shall be deemed to constitute the
Lenders to be a partnership, association, joint venture or any other kind of
entity.  The amounts payable at any time
hereunder to each Lender shall be a separate and independent debt, and each
Lender shall be entitled, to the extent not otherwise restricted hereunder, to
protect and enforce its rights arising out of this Agreement and any of the
other Loan Documents and it shall not be necessary for Administrative Agent or
any other Lender to be joined as an additional party in any proceeding for such
purpose.

 

14.17.              Advertising
and Publicity.  With the prior
consent of Borrowers (which shall not be unreasonably withheld or delayed),
Administrative Agent, on behalf of Lenders, may issue and disseminate to the
public (by advertisement or otherwise) information describing the credit
accommodations made available by Lenders pursuant to this Agreement, including
the name and address of each Borrower, the amount and security for the credit
accommodations and the general nature of each Borrower’s business, provided,
that detail regarding terms (such as interest rate) may be provided only
to industry publications, such as the “LPC Gold Sheets.”

 

14.18.              Confidentiality.  Subject to Section 14.19 below,
Administrative Agent and Lenders each agrees to take normal and reasonable
precautions to keep any confidential or non-public information that is
delivered or made available by Borrowers to it, including information made
available to Administrative Agent or any Lender in connection with a visit or
investigation by any Person contemplated in Section 9.1.1 hereof,
confidential from any Person other than their respective Affiliates and
individuals employed or retained by Administrative Agent or such Lender who are
or are expected to become engaged in evaluating, approving, structuring,
administering or otherwise giving professional advice with respect to any of
the Loans or Collateral, including any of their respective legal counsel,
auditors or other professional advisors; provided, however, that
nothing herein shall prevent

 

79

 

Administrative Agent or any Lender from disclosing such confidential
information (i) to any party to this Agreement from time to time or any
Participant, (ii) pursuant to the order of any court or administrative agency,
(iii) upon the request or demand of any regulatory agency or authority having
jurisdiction over Administrative Agent or such Lender, (iv) which has been
publicly disclosed other than by an act or omission of Administrative Agent or
any Lender (or any of their agents), except as permitted herein or which
becomes available to Administrative Agent or any Lender on a non-confidential
basis from a source other than Obligors, (v) to the extent reasonably required
in connection with any litigation (with respect to any of the Loan Documents or
any of the transactions contemplated thereby) to which Administrative Agent,
any Lender or their respective Affiliates may be a party, (vi) to the extent
reasonably required in connection with the exercise of any remedies hereunder,
(vii) to any Agent Professionals or any Lender’s legal counsel or auditors,
(viii) to any actual or proposed Participant, Assignee, counterparty or
advisors to any swap or derivative transactions relating to Obligors and the
Obligations, or any other Transferee of all or part of a Lender’s rights
hereunder so long as such Person has agreed in writing to be bound by the
provisions of this Section, (viii) to the National Association of Insurance
Commissioners or any similar organization or to any nationally recognized
rating agency that requires access to information about a Lender’s portfolio in
connection with ratings issued with respect to such Lender, (ix) to the extent
reasonably required by Applicable Law or (x) with the consent of
Borrowers.  Notwithstanding the
foregoing, the terms of the confidentiality provisions set forth in this Section 14.18
shall terminate on the second anniversary of the effective date of the
termination of the Commitments.

 

14.19.              Disclosure.  Notwithstanding anything herein to the
contrary, any party subject to confidentiality obligations hereunder or under any
other related document (any employee, representative or other agent of such
party) may disclose to any Governmental Authority, without limitation of any
kind, the U.S. federal income tax treatment of the U.S. federal income tax
structure of the transactions contemplated herein and all materials of any kind
(including opinions or other tax analyses) that are provided to it relating to
such tax treatment and tax structure.

 

14.20.              Governing
Law; Consent to Forum. This Agreement has been negotiated and delivered at
and shall be deemed to have been made in Atlanta, Georgia.  This Agreement shall be governed by and
construed in accordance with the laws of the State of Georgia; provided,
however, that, if any of the Collateral shall be located in any jurisdiction
other than Georgia, the laws of such jurisdiction shall govern the method,
manner and procedure for foreclosure of Administrative Agent’s Lien upon such
Collateral and the enforcement of Administrative Agent’s other remedies in
respect of such Collateral to the extent that the laws of such jurisdiction are
different from or inconsistent with the laws of the State of Georgia.  As part of the consideration for new value
received, and regardless of any present or future domicile or principal place
of business of any Borrower, any Lender or Administrative Agent, each Borrower
hereby consents and agrees that the Superior Court of Cobb County, Georgia, or,
at Administrative Agent’s option, the United States District Court for the
Northern District of Georgia, Atlanta Division, shall have jurisdiction to hear
and determine any claims or disputes among any or all Borrowers,  Administrative Agent and Lenders pertaining
to this Agreement or to any matter arising out of or related to this
Agreement.  Each Borrower expressly
submits and consents in advance to such jurisdiction in any action or suit
commenced in any such Court, and each Borrower hereby waives any objection that
such Borrower 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 Borrower 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, complaint and other process may be
made by certified mail addressed to such Borrower at the address set forth in
this Agreement and that service so made shall be deemed completed upon the
earlier of such Borrower’s actual receipt thereof or 3 days after deposit in
the U.S. mails, proper postage prepaid. 
Nothing in this Agreement shall be deemed or operate to affect the right
of

 

80

 

Administrative Agent
to serve legal process in any other manner permitted by law, or to preclude the
enforcement by Administrative Agent of any judgment or order obtained in such
forum or the taking of any action under this Agreement to enforce same in any
other appropriate forum or jurisdiction.

 

14.21.              Waivers
by Borrowers.  To the fullest extent
permitted by Applicable Law, each Borrower waives (i) the right to trial by
jury (which Administrative Agent and each Lender hereby also waives) in any
action, suit, proceeding or counterclaim of any kind arising out of or related
to any of the Loan Documents, the Obligations or the Collateral; (ii)
presentment, demand and protest and notice of presentment, protest, default,
non payment, 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 Administrative Agent on which
such Borrower may in any way be liable and hereby ratifies and confirms
whatever Administrative Agent may do in this regard; (iii) notice prior to
taking possession or control of the Collateral or any bond or security which
might be required by any court prior to allowing Administrative Agent to
exercise any of Administrative Agent’s remedies; (iv) the benefit of all
valuation, appraisement and exemption laws; (v) any claim against
Administrative Agent or any Lender, on any theory of liability, for special,
indirect, consequential, exemplary or punitive damages (as opposed to direct or
actual damages) arising out of, in connection with, or as a result of, any of
the Loan Documents, any transaction thereunder or the use of the proceeds of
any Loans; and (vi) notice of acceptance hereof.  Each Borrower acknowledges that the foregoing waivers are a
material inducement to Agents’ and Lenders’ entering into this Agreement and
that Agents and Lenders are relying upon the foregoing waivers in their future
dealings with Borrowers.  Each Borrower
warrants and represents that it has reviewed the foregoing waivers with its
legal counsel and has knowingly and voluntarily waived its jury trial rights
following consultation with legal counsel. 
In the event of litigation, this Agreement may be filed as a written
consent to a trial by the Court.

 

 

[Remainder of page
intentionally left blank; signatures on the following page]

 

81

 

IN
WITNESS WHEREOF, 
this Agreement has been duly executed on the day and year specified at
the beginning of this Agreement.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
  ATTEST:

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC

  
	
   

  	
   

  
	
   /s/ Stewart H. Wahrsager

  	
   

  	
  By:

  	
   /s/ David S. Aldridge

  	
   

  
	
  Secretary

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
  [COMPANY
  SEAL]

  	
  Address:

  
	
   

  	
  150 Interstate North Parkway, Suite 300

  
	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
  Attention:

  	
  Chief Financial Officer

  
	
   

  	
  Telecopier No.:

  	
  (770) 303-8892

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  ESSEX GROUP, INC.

  
	
   

  	
   

  
	
   /s/ Stewart H. Wahrsager

  	
   

  	
  By:

  	
   /s/ David S. Aldridge

  	
   

  
	
  Secretary

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
  [COMPANY
  SEAL]

  	
  Address:

  
	
   

  	
  c/o Superior Essex Communications LLC

  
	
   

  	
  150 Interstate North Parkway, Suite 300

  
	
   

  	
  Atlanta, Georgia 30339

  
	
   

  	
  Attention:

  	
  Chief Financial Officer

  
	
   

  	
  Telecopier No.:

  	
  (770) 303-8892

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL CORPORATION

  
	
   

  	
   

  
	
  Revolver
  Commitment:                        $60,000,000

  	
  By:

  	
   /s/ John Getz

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  LIBOR Lending Office:

  
	
   

  	
  300
  Galleria Parkway, Suite 800

  Atlanta, Georgia 30339

  Attention:  Loan Administration
  Manager

  
	
   

  	
  Telecopier No.: 
  (770) 839-2483

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION

  
	
   

  	
   

  
	
  Revolver
  Commitment:                        $60,000,000

  	
  By:

  	
  /s/
  Curtis J. Correa

  	
   

  
	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  	
   

  
								

 

82

 

	
   

  	
  LIBOR
  Lending Office:

  
	
   

  	
  1100 Abernathy Road, Suite 900

  Atlanta, Georgia 30328

  
	
   

  	
  Attention: 
  Superior Telecommunications

  Account Manager

  
	
   

  	
  Telecopier No.:  (678) 320-8902

  
	
   

  	
   

  
	
   

  	
  ADMINISTRATIVE AGENT:

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL CORPORATION

  as Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Getz

  	
   

  
	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
  Address:

  
	
   

  	
  300 Galleria Parkway, Suite 800

  Atlanta, Georgia 30339

  
	
   

  	
  Attention: 
  Loan Administration Manager

  Telecopier No.:  (770) 859-2483

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SYNDICATION AGENT:

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as
  Syndication Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Curtis J. Correa

  	
   

  
	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  	
   

  
	
   

  	
   

  
	
   

  	
  Addresses:

  
	
   

  	
  1100 Abernathy Road, Suite 900

  Atlanta, Georgia 30328

  
	
   

  	
  Attention: 
  Superior Telecommunications

  Account Manager

  
	
   

  	
  Telecopier No.:  (678)
  320-8902

  

  201 High Ridge Road

  Stamford, Connecticut 06926-5100

  
	
   

  	
  Attention: 
  Corporate Counsel – Commercial

  Finance

  
	
   

  	
  Telecopier: (203) 316-7889

  
						

 

83

 

APPENDIX
A

GENERAL
DEFINITIONS

 

When used in the Credit Agreement dated November 10, 2003 (as at
any time amended, the “Agreement”), by and among SUPERIOR ESSEX COMMUNICATIONS LLC (individually
“Superior”, and in its capacity as the representative of the other Borrowers
pursuant to Section 3.4 of the Agreement, “Borrower Agent”), a
Delaware limited liability company; ESSEX GROUP, INC., a Michigan corporation
(“Essex”; Superior and Essex being referred to collectively as “Borrowers,” and
individually as a “Borrower”); each financial institution listed on the
signature pages attached thereto and its successors and assigns which become
“Lenders” as provided therein (such financial institutions and their respective
successors and assigns referred to collectively herein as “Lenders” and
individually as a “Lender”); FLEET CAPITAL CORPORATION, a Rhode Island
corporation, in its capacity as collateral and administrative agent for the
Lenders (together with its successors in such capacity, “Administrative
Agent”); GENERAL
ELECTRIC CAPITAL CORPORATION, a Delaware corporation, in its
capacity as syndication agent for the Lenders (together with its successors in
such capacity, “Syndication Agent”; Administrative Agent and Syndication Agent
are each hereafter referred to from time to time individually as an “Agent” and
collectively as “Agents”); and FLEET SECURITIES, INC., a Delaware
corporation, and GECC CAPITAL MARKETS GROUP, INC., a Delaware corporation, in
their joint capacities as co-lead arrangers (in such capacities, the “Co-Lead
Arrangers”), the following terms shall have the following meanings (terms
defined in the singular to have the same meaning when used in the plural and
vice versa):

 

Account - shall have
the meaning ascribed to “account” in the UCC and shall include any and all
rights of a Borrower to payment for goods sold or leased or for services
rendered that are not evidenced by an Instrument or Chattel Paper, whether or
not they have been earned by performance.

 

Account Debtor - a
Person who is or becomes obligated under or on account of an Account.

 

Accounts Formula Amount
- on any date of determination thereof, an amount equal to the lesser of (i)  the Revolver
Commitments on such date or (ii) 85% of the net amount of Eligible Accounts on
such date.  As used herein, the phrase
“net amount of Eligible Accounts” shall mean the face amount of such Accounts
on any date less any and all returns, rebates, discounts (which may, at Administrative
Agent’s option, be calculated on shortest terms then being offered by the
applicable Borrower), credits, allowances or Taxes (including sales, excise or
other taxes, but excluding income or franchise taxes of the Account Debtor) at
any time issued, owing, claimed by Account Debtors, granted, outstanding or
payable in connection with, or any interest accrued on the amount of, such
Accounts at such date.  Administrative
Agent shall have the right at any time to decrease the advance rate percentage in
its reasonable credit judgment; provided, that any such decrease in the
advance rate percentages shall not be effective until 3 Business Days after
written notice thereof is provided to Borrowers by Administrative Agent.

 

ACH Transactions -
any cash management or related services including the automated clearinghouse
transfer of funds by Bank or Fleet or any of their Affiliates for the account
of a Borrower pursuant to an agreement.

 

Acquisition - any
transaction, or any series of transactions, by which a Borrower or any
Subsidiary Guarantor directly or indirectly (a) acquires any ongoing business
or all or substantially all of the assets of any Person, whether through the
purchase of assets, merger or otherwise, (b) acquires (in one transaction or as
the most recent transaction in a series of

 

 

transactions) control of at least a majority in voting power of the
Equity Interests of any Person or (c) acquires control of 50% or more ownership
interest in any partnership or joint venture (excluding any Foreign Venture
Investment).

 

Adjusted LIBOR Rate
- with respect to each Interest Period for a LIBOR Loan, an interest rate per
annum (rounded upwards, to the next 1/16th of 1%) equal to the quotient of (a)
the LIBOR Rate in effect for such Interest Period divided by (b) a percentage
(expressed as a decimal) equal to 100% minus Statutory Reserves.

 

Affiliate - a Person
(other than a Subsidiary):  (i) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, another Person; (ii) which
beneficially owns or holds 10% or more of any class of the Equity Interests of
a Person; or (iii) 10% or more of the Equity Interests with power to vote of
which is beneficially owned or held by another Person or a Subsidiary of
another Person.  For purposes hereof,
“control” means the possession, directly or indirectly, of the power to direct
or cause the direction of the management and policies of a Person, whether
through the ownership of any Equity Interest, by contract or otherwise.  Notwithstanding the foregoing, for purposes
of this Agreement, none of Fleet Capital Corporation, General Electric Capital
Corporation or AP-ST LLC (or their respective affiliates) or Essex Electric,
Inc. shall constitute an “Affiliate” of any Borrower.

 

Agent Indemnitees -
Administrative Agent in its capacity as collateral and administrative agent for
the Lenders under the Loan Documents and all of Administrative Agent’s present
and future officers, directors, agents and attorneys and Syndication Agent in
its capacity as syndication agent for the Lenders under the Loan Documents and
all of Syndication Agent’s present and future officers, directors, agents and
attorneys.

 

Agent Professionals
- attorneys, accountants, appraisers, business valuation experts, environmental
engineers or consultants, turnaround consultants and other professionals or
experts retained by Administrative Agent or Syndication Agent.

 

Agreement - the
Credit Agreement referred to in the first sentence of this Appendix A, all
Exhibits and Schedules thereto and this Appendix A.

 

Anti-Terrorism Laws
- any laws relating to terrorism or money laundering, including Executive Order
No. 13224 and the USA Patriot Act.

 

Applicable Law - all
laws, rules and regulations applicable to the Person, conduct, transaction,
covenant, Loan Document or Material Contract in question, including all
applicable common law and equitable principles; all provisions of all
applicable state, federal and foreign constitutions, statutes, rules,
regulations and orders of Governmental Authorities; and all orders, judgments
and decrees of all courts and arbitrators.

 

Applicable Margin -
a percentage equal to 0.75% with respect to Revolver Loans that are Base Rate
Loans, 2.25% with respect to Revolver Loans that are LIBOR Loans,  and 0.50% with respect to the unused line
fee payable to Lenders pursuant to Section 2.2.2 of the Agreement), provided,
that, commencing May 10, 2004, the Applicable Margin shall be
increased or decreased, based upon Average Availability, as follows:

 

2

 

	
   

  	
   

  	
  Revolver
  Loans

  Outstanding
  as

  	
   

  	
  Unused
  Line

  Fee

  	
   

  
	
  Average Availability

  	
   

  	
  Base Rate
  Loan

  	
   

  	
  LIBOR Loan

  	
   

  	
   

  	
   

  
	
  Less than $30,000,000

  	
   

  	
  1.25

  	
  %

  	
  2.75

  	
  %

  	
  0.625

  	
  %

  
	
  If equal to or less than $40,000,000 but greater
  than or equal to $30,000,000

  	
   

  	
  1.00

  	
  %

  	
  2.50

  	
  %

  	
  0.500

  	
  %

  
	
  If equal to or less than $50,000,000 but greater
  than $40,000,000

  	
   

  	
  0.75

  	
  %

  	
  2.25

  	
  %

  	
  0.500

  	
  %

  
	
  If equal to or less than $60,000,000 but greater
  than $50,000,000

  	
   

  	
  0.50

  	
  %

  	
  2.00

  	
  %

  	
  0.500

  	
  %

  
	
  If greater than $60,000,000

  	
   

  	
  0.25

  	
  %

  	
  1.75

  	
  %

  	
  0.375

  	
  %

  

 

The Applicable Margin shall be subject to reduction or increase, as
applicable and as set forth in the table above, on a quarterly basis according
to the performance of Borrowers as measured by Borrowers’ Average Availability  for the immediately
preceding Fiscal Quarter of Borrowers. 
Any such increase or reduction in the Applicable Margin provided for
herein shall be effective 3 Business Days after the end of each Fiscal Quarter
of Borrowers.

 

Assignment and Acceptance
- an Assignment and Acceptance entered into by a Lender and an Eligible
Assignee and accepted by Administrative Agent, in the form of Exhibit G
to the Agreement.

 

Availability - on
any date, the amount that Borrowers are entitled to borrow as Revolver Loans on
such date, such amount being equal to (i) the Borrowing Base on such date, minus
(ii) the principal amount of Revolver Loans then outstanding (including any
amounts that Administrative Agent or Lenders may have paid for the account of
Borrowers pursuant to any of the Loan Documents that have not been reimbursed
by Borrowers and any outstanding Settlement Loans).  If the amount outstanding is equal to or greater than the
Borrowing Base, Availability is zero.

 

Availability Reserve
- on any date of determination thereof, an amount equal to the sum of the
following (without duplication): (i) an amount equal to the product of the then
applicable Inventory advance rate percentage (as set forth in the definition of
“Inventory Formula Amount”) multiplied by the sum of (1) the Inventory Reserve,
(2) the Toll/Price Adjustment Reserve and (3) the Forward Revaluation Reserve;
(ii) the Rent Reserve and all amounts of past due rent, fees or other charges
owing at such time by any Obligor to any landlord of any premises where any of
the Collateral is located or to any processor, repairman, mechanic or other
Person who is in possession of any Collateral or has asserted any Lien or claim
thereto; (iii) any amounts which any Obligor is obligated to pay pursuant to
the provisions of any of the Loan Documents that Administrative Agent or any
Lender elects to pay for the account of such Obligor in accordance with
authority contained in any of the Loan Documents; (iv) the LC Reserve; (v) the
aggregate amount of reserves established by Administrative Agent in its
reasonable discretion in respect of

 

3

 

Banking Relationship Debt; (vi) an amount equal to the product of the
then applicable Accounts advance rate percentage (as set forth in the
definition of “Accounts Formula Amount”) multiplied by the sum of (1) all
customer deposits or other prepayments held by Borrowers, (2) all sales Taxes
accrued and owing by Borrowers and (3) all accrued discounts, rebates and
allowances; (vii) the aggregate amount of all liabilities and obligations that
are secured by Liens upon any of the Collateral that are senior in priority to
Administrative Agent’s Liens if such Liens are not Permitted Liens (provided,
that the imposition of a reserve hereunder on account of such Liens
shall not be deemed a waiver of any Event of Default that may arise from the
existence of such Liens) or are Permitted Liens under Section 9.2.5(vii) of
the Agreement; (viii) an amount equal to any outstanding personal property
taxes owing by Superior in the State of Kansas on the Closing Date; and (ix)
such additional reserves, in such amounts and with respect to such matters, as
Administrative Agent in its reasonable credit judgment may elect to impose from
time to time.  Notwithstanding anything
in the immediately preceding sentence to the contrary, no Availability Reserve
shall be instituted with respect to clauses (i) or (vi) above to the extent
that any such items are used as a basis for not classifying an Account or any
Inventory as an Eligible Account or as Eligible Inventory, as the case may be.

 

Average Availability
- for any period, an amount obtained by adding the aggregate of the actual
amount of Availability on each day during such period (as determined in good
faith by Administrative Agent) and by dividing such sum by the number of days
in such period.

 

Average Revolver Loan Balance
- for any period, the amount obtained by adding the aggregate of the unpaid
balance of Revolver Loans and LC Outstandings at the end of each day for the
period in question and by dividing such sum by the number of days in such
period.

 

Bank - Fleet
National Bank.

 

Bank Products - any
one or more of the following types of services or facilities extended to any
Borrower by Bank or any Affiliate of Bank or Fleet in reliance on Fleet’s
agreement to indemnify Bank or such Affiliate: (i) credit cards; (ii) merchant
card services; (iii) ACH Transactions; (iv) Cash Management Agreements; (v)
Currency Contracts; (vi) Hedging Agreements; and (vii) such other banking
products or services provided by Bank or any Affiliate of Bank or Fleet as may
be requested by any Borrower (on behalf of itself or its Subsidiaries).

 

Banking Relationship Debt
- Debt or other obligations of a Borrower to Bank or Fleet (or any Affiliate of
Bank or Fleet) arising out of or relating to Bank Products.

 

Bankruptcy Code -
title 11 of the United States Code.

 

Bankruptcy Court -
the United States Bankruptcy Court for the District of Delaware.

 

Bankruptcy Rules -
the Federal Rules of Bankruptcy Procedure, as prescribed by the United States
Supreme Court, and local rules of the Bankruptcy Court, as the context may
require.

 

Base Rate - the rate
of interest announced or quoted by Bank from time to time as its prime rate.
The prime rate announced by Bank is a reference rate and does not necessarily
represent the lowest or best rate charged by Bank.  Bank may make loans or other extensions of credit at, above or
below its announced prime rate.  If the
prime rate is discontinued by Bank as a standard, a comparable reference rate
designated by Bank as a substitute therefor shall be the Base Rate.

 

4

 

Base Rate Loan - a
Loan, or portion thereof, during any period in which it bears interest at a
rate based upon the Base Rate.

 

Blocked Person -
shall have the meaning set forth in Section 8.1.34 of the Agreement.

 

Board of Governors -
the Board of Governors of the Federal Reserve System.

 

Borrower Agent -
shall have the meaning given to such term in the introductory paragraph to this
Agreement and in Section 3.4 of this Agreement.

 

Borrowing - a
borrowing consisting of Loans of one Type made on the same day by Lenders (or
by Fleet in the case of a Borrowing funded by Settlement Loans) or a conversion
of a Loan or Loans of one Type from Lenders on the same day.

 

Borrowing Base - on
any date of determination thereof, an amount equal to the lesser of: (a) the
aggregate amount of the Revolver Commitments on such date minus the LC
Outstandings on such date, or (b) an amount equal to (i) the sum of the
Accounts Formula Amount plus the Inventory Formula Amount on such date minus
(ii) the Availability Reserve on such date.

 

Borrowing Base Certificate
- a certificate, in the form requested by Administrative Agent (which
certificate shall be substantially consistent with certificates required by
Administrative Agent from its other customers in the same or similar business
as Borrowers (other than changes necessary due to Borrowers’ specific business
operations)), by which Borrowers shall certify to Administrative Agent and
Lenders, with such frequency as provided in Section 7.5 of the
Agreement, the amount of the Borrowing Base as of the date of the certificate
(which date shall be no earlier than the last Business Day of the immediately
preceding week) and the calculation of such amount.

 

Brownwood Lease -
the Lease Agreement, dated as of December 16, 1993, as amended, between
Superior (f/k/a Superior Telecommunications Inc.) and ST (TX) LP.

 

Business Day - any
day excluding Saturday, Sunday and any other day that is a legal holiday under
the laws of the State of Georgia or the State of New York or is a day on which
banking institutions located in such state are closed; provided, however,
that when used with reference to a LIBOR Loan (including the making,
continuing, prepaying or repaying of any LIBOR Loan), the term “Business Day”
shall also exclude any day on which banks are not open for dealings in Dollar
deposits on the London interbank market.

 

Business Interruption Insurance Assignment
- the Collateral Assignment of Business Interruption Insurance to be executed
by Borrowers on or after the Closing Date in favor of Administrative Agent, in
form and substance reasonably satisfactory to Administrative Agent, as security
for the payment of the Obligations.

 

Capital Expenditures
- expenditures made or liabilities incurred for the acquisition of any fixed
assets or improvements, replacements, substitutions or additions thereto which
have a useful life of more than one year, including the total principal portion
of Capitalized Lease Obligations, but excluding the Insurance Expenditure
Amount.

 

Capitalized Lease Obligation
- any Debt represented by obligations under a lease that is required to be
capitalized for financial reporting purposes in accordance with GAAP.

 

5

 

Cash Collateral -
cash or Cash Equivalents, and any interest or other income earned thereon, that
is deposited with Administrative Agent in accordance with the Agreement for the
Pro Rata benefit of Lenders in order to Cash Collateralize any LC Outstandings.

 

Cash Collateral Account
- a demand deposit, money market or other account established by Administrative
Agent at such financial institution as Administrative Agent may select in its
discretion, which account shall be in Administrative Agent’s name and subject
to Administrative Agent’s Liens for the Pro Rata benefit of Lenders.

 

Cash Collateralize -
with respect to a Letter of Credit outstanding on any date, the deposit of immediately
available funds into the Cash Collateral Account in an amount equal to 105% of
the Stated Amount of such Letter of Credit plus all related fees and other
amounts due or to become due in connection with such Letter of Credit.

 

Cash Equivalents -
(i) marketable direct obligations issued or unconditionally guaranteed by the
United States government and backed by the full faith and credit of the United
States government having maturities of not more than 12 months from the date of
acquisition; (ii) domestic certificates of deposit and time deposits having
maturities of not more than 12 months from the date of acquisition, bankers’
acceptances having maturities of not more than 12 months from the date of
acquisition and overnight bank deposits, in each case issued by any commercial
bank organized under the laws of the United States, any state thereof or the
District of Columbia, which at the time of acquisition are rated A-1 (or
better) by S&P or P-1 (or better) by Moody’s, and (unless issued by a Lender)
not subject to offset rights in favor of such bank arising from any banking
relationship with such bank; (iii) repurchase obligations with a term of not
more than 30 days for underlying securities of the types described in clauses
(i) and (ii) entered into with any financial institution meeting the
qualifications specified in clause (ii) above; (iv) commercial paper having at
the time of investment therein or a contractual commitment to invest therein a
rating of A-1 (or better) by S&P or P-1 (or better) by Moody’s, and having
a maturity within 9 months after the date of acquisition thereof; and (v)
shares of any money market fund that (a) has substantially all of its assets
invested continuously in the types of investments referred to in clauses (i) -
(iv), (b) has net assets not less than $500,000,000 and (c) has the highest
rating obtainable from either Moody’s or S&P.

 

Cash Management Agreements
- any agreement entered into from time to time between any Borrower or any of
its Subsidiaries, on the one hand, and Bank, Fleet, or any of their Affiliates
or any other banking or financial institution, on the other, in connection with
cash management services for demand deposit, operating, collections, payroll
and trust accounts of such Borrower or its Subsidiaries provided by such
banking or financial institution, including automated clearinghouse services,
controlled disbursement services, electronic funds transfer services,
information reporting services, lockbox services, stop payment services and
wire transfer services.

 

Catch-up Pension Contributions
– any contributions made by Borrowers to the Underfunded Pension Plans over the
amount of any contributions with respect to the Underfunded Pension Plan shown
as expenses on Borrowers’ income statements for such period and/or calculated
in Borrowers’ Consolidated net income for such period.

 

CERCLA - the
Comprehensive Environmental Response Compensation and Liability Act, 42 U.S.C.
§ 9601 et seq. and its implementing regulations.

 

6

 

Change of Control  – 
the occurrence of any of the following events after the date of this
Agreement: (a) New Parent shall cease to own 100% of the common stock of New
Subsidiary, (b) New Subsidiary shall cease to own directly or indirectly 100%
of the common stock of Superior or Essex; (c) Essex shall cease to own 100% of
any of its now existing and wholly-owned Subsidiaries (other than as a result
of (i) the merger of any such Subsidiary with Essex and/or any Subsidiary
Guarantor, (ii) the merger, dissolution or liquidation of any Dissolving Debtor
in accordance with or as contemplated by the Plan of Reorganization or (iii)
the dissolution of Essex Services, Inc.); or (d) any “Change of Control,”
“Change in Control” or similar event or circumstance, however defined or
designated, under the New Senior Secured Note Indenture.

 

Chapter 11 Case -
the bankruptcy cases commenced by each of the Debtors, being jointly
administered and being styled:  In
re:  Superior TeleCom Inc., et  al.,
Case No. 03-10607 (JWV).

 

Chattel Paper -
shall have the meaning given to “chattel paper” in the UCC.

 

CIP Regulations -
shall have the meaning set forth in Section 12.19 of the Agreement.

 

Closing Date - the
date on which all of the conditions precedent in Section 10 of the
Agreement are satisfied or waived and the initial Loans are made under the
Agreement.

 

Co-Lead Arranger –
each of the Persons identified as co-lead arrangers in the initial paragraph of
the Agreement.

 

Collateral - all of
the Property and interests in Property described in the Security Agreement; all
Property described in any of the other Security Documents as security for the
payment or performance of any of the Obligations; and all other Property and
interests in Property that now or hereafter secure (or are intended to secure)
the payment and performance of any of the Obligations.

 

Commitment - at any
date for any Lender, the Revolver Commitment on such date, and “Commitments”
means the aggregate amount of all Revolver Commitments.

 

Commitment Termination Date
- the date that is the soonest to occur of (i) the last day of the Term; (ii)
the date on which either Borrowers or Administrative Agent terminates the
Commitments pursuant to Section 5.2 of the Agreement; or (iii)
the date on which the Commitments are automatically terminated pursuant to Section 11.2
of the Agreement.

 

Compliance Certificate
- a Compliance Certificate to be provided by Borrowers to Administrative Agent
in accordance with, and in the form annexed as Exhibit E to, the Agreement,
and the supporting schedules to be annexed thereto, which Compliance
Certificate shall include a calculation of Borrowers’ Consolidated Fixed Charge
Coverage Ratio, regardless of whether such ratio is to be tested for such
period pursuant to Section 9.3.

 

Confirmation Order -
the order of the Bankruptcy Court confirming the Plan of Reorganization
pursuant to Section 1129 of the Bankruptcy Code.

 

Consigned Inventory
- Inventory of a Borrower that is in the possession of another Person on a
consignment or other basis that does not constitute a final sale and acceptance
of such Inventory.

 

7

 

Consigned Inventory Conditions
– the following conditions:  (i) the
Inventory is owned by a Borrower, (ii) the Inventory has been consigned to an
Eligible Consignee, (iii) the Inventory is located at a location set forth on Schedule 7.1.1,
and (iv) the Inventory would otherwise constitute Eligible Inventory if it were
not Consigned Inventory.

 

Consolidated - the
consolidation in accordance with GAAP of the accounts or other items as to
which such term applies.

 

Consolidated Adjusted Net Earnings
- with respect to any fiscal period, means the net earnings (or loss) for such
fiscal period of Borrowers, all as reflected on the financial statement of such
Borrower supplied to Administrative Agent pursuant to Section 9.1.3 of the
Agreement, but excluding, without duplication: (i) any gain or loss arising
from the sale of capital assets; (ii) any gain arising from any write-up of
assets during such period; (iii) 
earnings of any Subsidiary accrued prior to the date it became a
Subsidiary; (iv) earnings of any Person, substantially all the assets of which
have been acquired in any manner by such Borrower, realized by such Person prior
to the date of such acquisition; (v) net earnings of any entity (other than a
Subsidiary of such Borrower) in which such Borrower has an ownership interest
unless such net earnings have actually been received by such Borrower in the
form of cash Distributions; (vi)  any
portion of the net earnings of any Subsidiary which for any reason is
unavailable for payment of Distributions to such Borrower; (vii) the earnings
of any Person to which any assets of such Borrower shall have been sold,
transferred or disposed of, or into which such Borrower shall have merged, or
been a party to any consolidation or other form of reorganization, prior to the
date of such transaction; (viii) any gain arising from the acquisition of any
Securities of such Borrower; and (ix) 
any gain arising from extraordinary or non-recurring items, all as
determined in accordance with GAAP.

 

Consolidated EBITDA
- for any period of Borrowers, on a Consolidated basis (without duplication),
an amount equal to the sum for such fiscal period of (i) Consolidated Adjusted
Net Earnings plus (ii) provision for Taxes based on income plus
(iii) Consolidated Interest Expense, plus (iv) depreciation and
amortization plus (v) other non-cash expenses (including non-cash
compensation expenses relating to restricted stock and stock-option grants) plus
(vi) any non-cash charge attributable to a loss or write-off incurred in
connection with the sale, transfer, disposition or liquidation of Essex’s
investment in Essex International Ltd. and Temple Electrical Ltd. (or the
property and assets thereof), but not to exceed $7,000,000 plus (vii) to
the extent deducted in determining Consolidated Adjusted Net Earnings, any
non-recurring charge or restructuring charge in connection with the
implementation of the Plan of Reorganization (including, without limitation,
(1) all fees and expenses incurred in connection with the execution, delivery
and performance of the Indenture; (2) payments made to Rothschild Inc. in its
capacity as financial advisor to the Debtors; and (3) all other reorganization
and restructuring costs and expenses incurred prior to the Effective Date); plus
(viii) plus fees and expenses (including any signing bonus and the fees and
expenses of any executive search firm) in respect of the retention of a Chief
Executive Officer of New Parent and the selection of the members of the Board
of Directors of New Parent plus (ix) fees and expenses (including SEC
filing fees, New York Stock Exchange or other exchange or market listing fees
and related professional fees) incurred in connection with the initial filing
on Form 10 of New Parent and the other filings required to be made by New
Parent pursuant to (1) the Registration Rights Agreement, dated the Closing
Date, entered into by and among New Parent, the New Senior Secured Noteholders
and the other signatories thereto with respect to the common stock of New
Parent and (2) the Registration Rights Agreement dated the Closing Date entered
into by and among Superior, Essex, the other signatories thereto and certain
holders of the New Senior Secured Notes with respect to the New Senior Secured
Notes; provided, that for purposes of this definition the amount of
clauses (vii)

 

8

 

through (ix), including all accrued but unpaid expenses referred to
therein as of the Closing Date and all such expenses accrued and paid after the
Closing Date, shall not exceed $16,000,000 in the aggregate.

 

Consolidated Fixed Charge Coverage Ratio
- with respect to any period, the ratio of (a) the sum of (i) Consolidated
EBITDA for such period minus (ii) Unfinanced Capital Expenditures made
during such period minus (iii) cash expended on Foreign Venture
Investments during such Period minus (iv) Tax Distributions during such
period minus (v) Catch-up Pension Contributions made during such period
to (b) all principal and cash interest payments on Money Borrowed for such
period.

 

Consolidated Interest Expense
- for any period, the total interest expense of Borrowers during such period,
determined on a Consolidated basis in accordance with GAAP.

 

Contingent Obligation
- with respect to any Person, any obligation of such Person arising from any
guaranty, indemnity or other assurance of payment or performance of any Debt,
lease, dividend or other obligation (“primary obligations”) of any other Person
(the “primary obligor”) in any manner, whether directly or indirectly,
including (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 obligations 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, 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 (i) any product warranties extended in the Ordinary Course of
Business, (ii) indemnities made to officers and directors of any such Person
whether pursuant to the governing organizational documents of such Person or
otherwise and (iii) any environmental indemnities identified on Schedule 8.1.29.  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.

 

Control or controlled
by or under common control - possession, directly or indirectly, of
the power to direct or cause the direction of management or policies (whether
through ownership of voting securities, by contract or otherwise, but not
solely by being an officer or director of that Person); provided, however,
that any Person which beneficially owns, directly or indirectly, 25% or more
(in number of votes) of the Equity Interests having ordinary Voting Power with
respect to a corporation shall be conclusively presumed to control such
corporation.

 

Controlled Disbursement Account
- a demand deposit account maintained by Borrowers at Bank and to which
proceeds of Loans will be wired from time to time.

 

9

 

Copyright Security Agreement
- each copyright security agreement to be executed by an Obligor in favor of
Administrative Agent or before the Closing Date and by which such Obligor shall
grant to Administrative Agent, for its benefit as Administrative Agent and for
the Pro Rata Benefit of Lenders, on security for the obligations, a Lien on all
of the right, title and interest of such Obligor in and to the copyrights
described therein.

 

Currency Contract -
any forward contract, futures contract, foreign exchange contract, currency
swap agreement and other similar agreements and arrangements at any time
entered into by a Borrower with Fleet, Bank or any Affiliate of Fleet that is
designed to protect such Borrower against fluctuations in foreign exchange
rates.

 

Customer Contract Inventory
– inventory of another Person at any time in the possession of any Borrower for
processing, repairing or otherwise.

 

CWA - the Clean
Water Act (33 U.S.C. §§ 1251 et  seq.).

 

Debt - as applied to
a Person means, without duplication: 
(i) all items which in accordance with GAAP would be included in
determining total liabilities as shown on the liability side of a balance sheet
of such Person as of the date as of which Debt is to be determined, including
Capitalized Lease Obligations; (ii) all Contingent Obligations of such Person;
(iii) all reimbursement obligations in connection with letters of credit or
letter of credit guaranties issued for the account of such Person; and (iv) in
the case of a Borrower (without duplication), the Obligations.  The Debt of a Person shall include any
recourse Debt of any partnership or joint venture in which such Person is a
general partner or joint venturer.

 

Debtor – each of
Superior TeleCom Inc., Superior Telecommunications Inc., Superior
Telecommunications Realty Company, Essex International Inc., Essex Group, Inc.,
Superior Essex Realty Company, Active Industries, Inc., Diamond Wire &
Cable Co., Essex Funding, Inc., Essex Services, Inc., Essex Canada, Inc., Essex
Technology, Inc., Essex Wire Corporation, Essex Group, Inc., Essex Group Mexico
Inc. and Essex Mexico Holdings, L.L.C., and, collectively, “Debtors”.

 

Default - an event
or condition the occurrence of which would, with the lapse of time or the
giving of notice, or both, become an Event of Default.

 

Default Rate - on
any date, a rate per annum that is equal to (i) in the case of each Loan
outstanding on such date, 2.0% in excess of the rate otherwise applicable to
such Loan on such date, and (ii) in the case of any of the other Obligations
outstanding on such date, the Base Rate in effect on such date, plus the
highest Applicable Margin for Base Rate Loans plus 2.0%.

 

Deposit Account –
shall have the meaning ascribed to “deposit account” in the UCC and shall
include all of a Person’s demand, time, savings, passbook, money market or
other depository accounts, and all certificates of deposit, maintained by such
Person with any bank, savings and loan association, credit union or other
depository institution.

 

Deposit Account Control Agreements
- the Deposit Account Control Agreements at any time executed by each Borrower,
Administrative Agent, and each depository bank at which such Borrowers’ Deposit
Accounts are maintained and pursuant to which Administrative Agent shall be
granted “control” sufficient under the UCC and otherwise reasonably acceptable
to Administrative Agent to perfect Administrative Agent’s Lien in such Deposit
Accounts and all monies at any time deposited therein.

 

10

 

DIP Loan Agreement –
the Revolving Credit, Guarantee and Security Agreement among Superior, as Borrower,
certain Debtors, as Guarantors, certain financial institutions, as Lenders,
GECC, as Syndication Agent and Deutsche Bank Trust Company Americas, as
Administrative Agent, dated as of March 4, 2003.

 

Disclosure Statement
- the Amended Disclosure Statement Pursuant to Section 1125 of the
Bankruptcy Code for the Debtors’ Joint Plan of Reorganization Under Chapter 11
of the Bankruptcy Code, dated August 28, 2003, filed by Borrowers with the
Bankruptcy Court in the Chapter 11 Case.

 

Dissolving Debtors –
Each of Diamond Wire & Cable Co., an Illinois corporation; Essex Funding,
Inc., a Delaware corporation; Active Industries, a Delaware corporation;
Superior Essex Realty Company, a Delaware corporation; and Superior
Telecommunications Realty Company, a Delaware corporation.

 

Distribution - in
respect of any entity, (i) any payment of any dividends or other distributions
on Equity Interests of the entity (except distributions made by means of any
such Equity Interests) and (ii) any purchase, redemption or other acquisition
or retirement for value of any Equity Interests of the entity or any Affiliate
of the entity unless (x) made substantially contemporaneously from the net
proceeds of the sale of Equity Interests or (y) such purchase, redemption or
other acquisition or retirement was effected solely by the exchange of other
Equity Interests therefor.

 

Document - shall
have the meaning given to” document” in the UCC.

 

Dollar Equivalent -
with respect to any monetary amount in any foreign currency at any date for the
determination thereof, the amount of Dollars obtained by converting such
foreign currency into Dollars at the spot rate for the purchase of Dollars with
such foreign currency as quoted by Bank at approximately 11:00 a.m. on the date
of determination thereof.

 

Dollars and the sign $
- lawful money of the United States of America.

 

Domestic Subsidiary
- a Subsidiary of a Borrower (other than a Subsidiary that is a Borrower) that
is incorporated under the laws of a state of the United States or the District
of Columbia.

 

Dominion Account - a
special account of Administrative Agent established by Borrowers at a bank
selected by Borrowers, but reasonably acceptable to Administrative Agent and
Lenders in their discretion, and over which Administrative Agent shall have
sole and exclusive access and control for withdrawal purposes.

 

Effective Date -
shall have the meaning given to the term “Effective Date” in the Plan of
Reorganization.

 

Eligible Account -
an Account which arises in the Ordinary Course of Business of a Borrower from
the sale of goods, is payable in Dollars, is subject to Administrative Agent’s
duly perfected Lien, and is deemed by Administrative Agent, in its reasonable
credit judgment, to be an Eligible Account. 
Without limiting the generality of the foregoing, no Account shall be an
Eligible Account if:  (i) it arises out
of a sale made by a Borrower to a Subsidiary or an Affiliate of any Borrower or
to a Person controlled by an Affiliate of any Borrower; (ii) it is unpaid for
more than 60 days after the original due date shown on the invoice; (iii) it is
due or unpaid more

 

11

 

than 120 days after the original invoice date; (iv) 50% or more of the
Accounts from the applicable Account Debtor do not constitute Eligible Accounts
hereunder at any time of determination; (v) the total unpaid Accounts of the
Account Debtor exceed 20% of the aggregate amount of all Eligible Accounts, to
the extent of such excess; (vi) any covenant, representation or warranty
contained in the Agreement with respect to such Account has been breached;
(vii) the Account Debtor is also such Borrower’s creditor or supplier, or the
Account Debtor has disputed liability with respect to such Account, or the
Account Debtor has made any claim with respect to any other Account due from
such Account Debtor to such Borrower, or the Account otherwise is subject to
any right of setoff, counterclaim, recoupment, reserve or chargeback, provided,
that, the Accounts of such Account Debtor shall be ineligible only to
the extent of such offset, counterclaim, disputed amount, reserve or
chargeback; (viii) an Insolvency Proceeding has been commenced by or against
the Account Debtor or the Account Debtor has failed, suspended business or
ceased to be Solvent; (ix) it arises from a sale to an Account Debtor with its
principal office, assets or place of business outside the United States or the
Commonwealth of Puerto Rico, unless the sale is backed (A) by an irrevocable
letter of credit issued or confirmed by a bank reasonably acceptable to
Administrative Agent and that is in form and substance reasonably acceptable to
Administrative Agent and payable in the full amount of the Account in freely
convertible Dollars at a place of payment within the United States and, if
requested by Administrative Agent, such letter of credit, or amounts payable
thereunder, is assigned to Administrative Agent (with such assignment
acknowledged by the issuing or confirming bank) or (B) is backed by credit
insurance in form and substance acceptable to all Lenders and Administrative
Agent is named as sole loss payee with respect thereto; (x) it arises from a
sale to the Account Debtor on a bill-and-hold, guaranteed sale, sale-or-return,
sale-on-approval, consignment or any other repurchase or return basis; (xi) the
Account Debtor is the United States of America or any department, agency or
instrumentality thereof, unless the applicable Borrower is not prohibited from
assigning the Account and does assign its right to payment of such Account to
Administrative Agent, in a manner reasonably satisfactory to Administrative
Agent, so as to comply with the Assignment of Claims Act of 1940 (31 U.S.C.
§3727 and 41 U.S.C. §15), or is a state, county or municipality, or a political
subdivision or agency thereof and Applicable Law disallows or restricts an
assignment of Accounts on which it is the Account Debtor; (xii) the Account
Debtor is located in any state which imposes conditions on the right of a
creditor to collect accounts receivable unless the applicable Borrower has
either qualified to transact business in such state as a foreign entity or
filed a Notice of Business Activities Report or other required report with the
appropriate officials in those states for the then current year; (xiii) the
Account Debtor is located in a state in which such Borrower is deemed to be
doing business under the laws of such state and which denies creditors access
to its courts in the absence of qualification to transact business in such
state or of the filing of any reports with such state, unless such Borrower has
qualified as a foreign entity authorized to transact business in such state or
has filed all required reports; (xiv) the Account is subject to a Lien other
than a Permitted Lien; (xv) the goods giving rise to such Account have not been
delivered to and accepted by the Account Debtor or the services giving rise to
such Account have not been performed by such Borrower and accepted by the
Account Debtor or the Account otherwise does not represent a final sale; (xvi)
the Account is evidenced by a “memo” or is otherwise the subject of memo
billing; (xvi) the Account is evidenced by Chattel Paper or an Instrument of
any kind (unless such Chattel Paper or Instrument has been created in the
Ordinary Course of Business and not as a result of credit problems, has been
delivered to Administrative Agent fully endorsed, and is subject to a first
priority perfected Lien in favor of Administrative Agent) or has been reduced
to judgment; (xviii) the Account represents a progress billing or a retainage;
(xix) such Borrower has made any agreement with the Account Debtor for any
deduction therefrom, except for discounts or allowances which are made in the
Ordinary Course of Business for prompt payment and which discounts or
allowances are reflected in the calculation of the face value of each

 

12

 

invoice related to such Account; (xx) such Borrower has made an
agreement with the Account Debtor to extend the time of payment thereof beyond
the periods provided in clauses (ii) and (iii) above; (xxi) the Account
represents, in whole or in part, a billing for interest, fees or late charges, provided,
that such Account shall be ineligible only to the extent of the amount
of such billing; (xxii) the Account Debtor has made a partial payment with
respect to such Account; (xxiii) it arises from the sale of any Inventory that
is not Eligible Inventory pursuant to clause (ii) of the definition of
“Eligible Inventory”; (xxiv) the Account is an Account acquired pursuant to a
Permitted Acquisition, unless Administrative Agent has completed a field audit
and examination with respect to such Account and has satisfied itself that such
Account should be treated as an Eligible Account; (xxv) it arises from a retail
sale of Inventory to a Person who is purchasing the same primarily for
personal, family or household purposes; or (xxvi) upon and at all times after
the exercise by Borrowers of the warrant to purchase shares of the common stock
of Essex Electric Inc., the total unpaid Accounts for which the Account Debtor
is Essex Electric Inc. exceed $8,000,000, to the extent of such excess.   For the purposes of Borrowers’ reporting
requirements and representations contained herein, “Eligible Accounts” shall be
based on the criteria set forth herein without regard to Accounts included or
excluded solely in the exercise of Administrative Agent’s reasonable credit
judgment, except to the extent that Borrowers are notified of such
determination in writing.

 

Eligible Assignee -
a Person that is a Lender or a U.S. based Affiliate of a Lender; a commercial
bank, finance company, insurance company or other financial institution, in
each case that is organized under the laws of the United States or any state,
has total assets in excess of $5 billion, extends credit of the type
contemplated herein in the Ordinary Course of Business and whose becoming an
assignee would not constitute a prohibited transaction under Section 4975
of the Internal Revenue Code, Section 406 of ERISA or any other Applicable
Law, is acceptable to Administrative Agent (such acceptance not to be
unreasonably withheld or delayed) and, unless a Default or an Event of Default
exists, Borrowers (such approval by Borrowers, when required, not to be
unreasonably withheld or delayed and to be deemed given by Borrowers if no
objection is received by the assigning Lender and Administrative Agent from
Borrowers within 2 Business Days after notice of such proposed assignment has
been provided by the assigning Lender as set forth in Section 13.3 of the
Agreement); and, at any time that an Event of Default exists, any other Person
acceptable to Administrative Agent in its reasonable business judgment.

 

Eligible Consignee -
a consignee which Administrative Agent, in its reasonable credit judgment,
deems to be an eligible consignee. 
Without limiting the generality of the foregoing, no consignee will be
an Eligible Consignee unless:  (i) such
consignee shall have executed a consignment agreement, in form and scope
acceptable to Administrative Agent, granting the applicable Borrower and its
assigns a purchase money lien and security interest in all Consigned Inventory
that is consigned by such Borrower to such consignee, together with the cash
and non-cash proceeds thereof; (ii) consignee and such Borrower shall have
executed or otherwise authorized the filing of UCC financing statements, in
form acceptable to Administrative Agent, based upon the requirements of the
filing jurisdiction, naming such consignee as debtor and such Borrower as
secured party (and, if requested by Administrative Agent, naming Administrative
Agent as assignee), covering the Consigned Inventory and the cash and non-cash
proceeds thereof; such financing statement shall have been filed of record in
all appropriate filing locations for the perfection of a first priority
security interest in such Consigned Inventory and the cash and non-cash
proceeds thereof; and, after filing of such financing statements, such Borrower
shall have conducted searches of all filings made against such consignee in
such filing offices and taken such other action as Administrative Agent may
reasonably request, including notification pursuant to Section 9-324 of
the UCC to each holder of a conflicting Lien in such Consigned Inventory, which
shall confirm that the security interest in the Consigned Inventory in favor of

 

13

 

such Borrower that such Borrower has assigned to Administrative Agent,
together with the cash and non-cash proceeds thereof, is and shall be a first
priority Lien;  (iii) if requested by
Administrative Agent, Administrative Agent shall have received the originals of
the consignment agreement, the filed UCC financing statements and the UCC
searches referred to in clauses (i) and (ii) above, and such other instruments,
documents, certificates, opinions or assurances, and such Borrower shall have
taken such other action as Administrative Agent may have reasonably requested
in connection with the consignee; (iv) consignee shall maintain the Consigned
Inventory at a location set forth on Schedule 7.1.1; and (v) the
creditworthiness of such consignee is acceptable to Administrative Agent, in
Administrative Agent’s reasonable credit judgment.

 

Eligible Inventory -
Inventory which is owned by a Borrower (other than packaging materials, labels,
samples, bags, scrap, reels and supplies) and which Administrative Agent, in
its reasonable credit judgment, deems to be Eligible Inventory.  Without limiting the generality of the
foregoing, no Inventory shall be Eligible Inventory unless: (i) it is raw
materials or finished goods, or work-in-process that is, in Administrative
Agent’s reasonable credit judgment, readily marketable in its current form;
(ii) it is owned by a Borrower and it is not held by such Borrower on
consignment from or subject to any guaranteed sale, sale-or-return,
sale-on-approval or repurchase agreement with any supplier; (iii) it is in
saleable condition and is not damaged or defective; (iv) it does not constitute
Customer Contract Inventory or Toll Copper Inventory;  (v) it is not slow-moving, obsolete or
unmerchantable; (vi) it meets all standards imposed by any Governmental
Authority; (vii) it conforms in all respects to the warranties and representations
set forth in the Agreement and is fully insured in the manner required by the
Agreement; (viii) it is at all times subject to Administrative Agent’s duly
perfected, first priority security interest and no other Lien except a
Permitted Lien; (ix) it is in such Borrower’s possession and control at an
Eligible Inventory Location in compliance with the Agreement, is not in transit
or outside the continental United States and is not consigned to any Person
unless all of the Consigned Inventory Conditions are satisfied with respect to
such Inventory; (x) it is not the subject of a negotiable warehouse receipt or
other negotiable Document; (xi) it has not been sold or leased and such
Borrower has not received any deposit or down payment in respect thereof in
anticipation of a sale; (xii) it is not subject to any License Agreement or
other agreement that limits, conditions or restricts such Borrower’s or
Administrative Agent’s right to sell or otherwise dispose of such Inventory
unless the Licensor has entered into a Licensor/Lender Agreement with
Administrative Agent; (xiii) it is not the subject of an Intellectual Property
Claim; (xv) in the case of Inventory acquired pursuant to a Permitted
Acquisition, Administrative Agent has completed a field audit and examination
with respect to such Inventory and has satisfied itself that such Inventory
should be treated as Eligible Inventory; and (xiv) it is not the subject of a
store closing, liquidation, going-out-of business or similar sale.  For the purposes of Borrowers’ reporting
requirements and representations contained herein, “Eligible Inventory” shall
be based upon the criteria set forth herein without regard to Inventory
included or excluded solely in the exercise of Agent’s reasonable credit
judgment, except to the extent that Borrowers are notified of such
determination in writing.

 

Eligible Inventory Location
– any location at which Borrowers maintain Inventory with a Value of more than
$100,000.

 

Environmental Laws -
all federal, state, local and foreign laws, rules, regulations, codes,
ordinances, orders and consent decrees (together with all permits and guidance
documents promulgated by regulatory agencies, to the extent having the force of
law), now or hereafter in effect,  that
relate to public health (but excluding occupational safety and health, to the
extent

 

14

 

regulated by OSHA) or the protection or pollution of the environment,
whether new or hereafter in effect, including CERCLA, RCRA and CWA.

 

Environmental Lien -
a Lien imposed by and in favor of any Governmental Authority for any (i)
liabilities arising under any Environmental Laws or (ii) environmental damages
arising from, or costs incurred by such Governmental Authority in response to,
a contamination or threatened contamination.

 

Environmental Release
- a release as defined in CERCLA or under any other applicable Environmental
Laws.

 

Equipment - all of a
Borrower’s machinery, apparatus, equipment, fittings, furniture, fixtures,
motor vehicles and other tangible personal Property (other than Inventory) of
every kind and description, whether now owned or hereafter acquired by such
Borrower and wherever located, and all parts, accessories and special tools
therefor, all accessions thereto, and all substitutions and replacements
thereof.

 

Equity Interest -
the interest of (i) a shareholder in a corporation, (ii) a partner (whether
general or limited) in a partnership (whether general, limited or limited
liability), (iii) a member in a limited liability company, or (iv) any other
Person having any other form of equity security or ownership interest.

 

ERISA - the Employee
Retirement Income Security Act of 1974 and all rules and regulations from time
to time promulgated thereunder.

 

ERISA Affiliate -
any entity that would be deemed a “single employer” with any Borrower or any of
its subsidiaries under sections 414(b) and (c) of the Internal Revenue Code.

 

Event of Default -
as defined in Section 11 of the Agreement.

 

Executive Order No. 13224
- Executive Order No. 13224 on Terrorist Financing, effective
September 24, 2001, as the same has been, or shall hereafter be, renewed,
extended, amended or replaced.

 

Extraordinary Expenses
- all costs, expenses, fees (including fees incurred to Agent Professionals) or
advances that Administrative Agent or any Lender may suffer or incur, whether
prior to or after the occurrence of an Event of Default, and whether prior to,
after or during the pendency of an Insolvency Proceeding of an Obligor, on
account of or in connection with (i) the audit, inspection, repossession,
storage, repair, appraisal, insuring, completion of the manufacture of,
preparing for sale, advertising for sale, selling, collecting or otherwise
preserving or realizing upon any Collateral; (ii) the defense of Administrative
Agent’s Lien upon any Collateral or the priority thereof or any adverse claim
with respect to the Loans, the Loan Documents or the Collateral asserted by any
Obligor, any receiver or trustee for any Obligor or any creditor or
representative of creditors of any Obligor; (iii) the settlement or
satisfaction of any Liens upon any Collateral (whether or not such Liens are
Permitted Liens); (iv) the collection or enforcement of any of the Obligations;
(v) the negotiation, documentation, and closing of any restructuring or
forbearance agreement with respect to the Loan Documents or Obligations; (vi)
amounts advanced by Administrative Agent pursuant to Section 7.1.3 of the
Agreement; (vii) the enforcement of any of the provisions of any of the Loan
Documents; or (viii) any payment under a guaranty, indemnity or other payment
agreement provided by Administrative Agent or (with Administrative Agent’s
consent) any Lender, which is reimbursable to Administrative Agent or

 

15

 

such Lender by Borrowers pursuant to Section 2.4.2 of the
Agreement.  Such costs, expenses and
advances may include transfer fees, taxes, storage fees, insurance costs,
permit fees, utility reservation and standby fees, legal fees, appraisal fees,
brokers’ fees and commissions, auctioneers’ fees and commissions, accountants’
fees, environmental study fees, wages and salaries paid to employees of any
Borrower or independent contractors in liquidating any Collateral, travel
expenses, all other fees and expenses payable or reimbursable by Borrowers or
any other Obligor under any of the Loan Documents, and all other fees and
expenses associated with the enforcement of rights or remedies under any of the
Loan Documents, but excluding compensation paid to employees (including inside
legal counsel who are employees) of Administrative Agent.

 

Federal Funds Rate -
for any period, a fluctuating interest rate per annum equal for each date
during such period to the weighted average of the rates on overnight federal
funds transactions with members of the Federal Reserve System arranged by
federal funds brokers, as published for such day (or, if such day is not a
Business Day, for the next preceding Business Day) in Atlanta, Georgia by the
Federal Reserve Bank of Atlanta, or if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Administrative Agent from 3 federal funds brokers of
nationally recognized standing selected by Administrative Agent.

 

Fee Letter - the fee
letter agreement between Administrative Agent and Superior TeleCom Inc. dated
October 22, 2003, as superseded by the fee letter agreement among
Administrative Agent and Borrowers dated on or about the date hereof.

 

FEIN - with respect
to any Person, the Federal Employer Identification Number of such Person.

 

Final Order - an
order or judgment of a court of competent jurisdiction as entered on its docket
that has not been reversed, stayed pursuant to Bankruptcy Rule 8005 or any
other applicable rule of civil or appellate procedure, modified or amended, and
as to which the time to appeal, petition for certiorari, or seek reargument or
rehearing has expired, and as to which no notice of appeal, petition for
certiorari or motion for reargument or rehearing has been timely filed, or as
to which any right to appeal, petition for certiorari or reargument or
rehearing has been waived in writing in a manner satisfactory to Administrative
Agent or, if a notice of appeal, petition for certiorari or motion for
reargument or rehearing was timely filed, the order or judgment has been
affirmed by the highest court to which the order or judgment was appealed or
from which the reargument or rehearing was sought, or certiorari has been
denied, and the time to file any further appeal or to petition for certiorari
or to seek further reargument or rehearing has expired; provided, however,
that the possibility that a motion under Rule 59 or 60 of the Federal Rules of
Civil Procedure or analogous rule under the Federal Rules of Bankruptcy
Procedure could be filed shall not cause such order not to be a Final Order
(for so long as such motion has not been actually filed).

 

Fiscal Quarter -
each consecutive period of 13 weeks beginning on the first day of a Fiscal Year
(and, in the case of any Fiscal Year of 53 weeks, the 14-week period occurring
at the end thereof).

 

Fiscal Year - the
fiscal year of Borrowers and their Subsidiaries for accounting and tax
purposes, which ends on December 31 of each calendar year.

 

Fleet - Fleet
Capital Corporation, a Rhode Island corporation.

 

16

 

Fleet Indemnitees -
Fleet and all of its present and future officers, directors and agents.

 

FLSA - the Fair
Labor Standards Act of 1938.

 

Foreign Lender - any
Lender that is organized under the laws of a jurisdiction other than the laws
of the United States, any state thereof or the District of Columbia.

 

Foreign Subsidiary -
a Subsidiary that is not a Domestic Subsidiary.

 

Foreign Venture Investment
– investments made in any Person by one or more Borrowers in connection with
the development, construction and operation of a joint venture which will
produce magnet wire in China and abroad; provided, however, that
(i) the total investment of Borrowers in any such joint venture shall not
exceed $15,000,000 in the aggregate at any time, and (ii) Administrative Agent
shall be granted a perfected, first priority Lien in such Foreign Venture
Investment as Collateral for the Obligations, unless and to the extent such a
Lien would (A) cause the imposition of taxes under Section 956 or any
other applicable provision of the Internal Revenue Code of 1986 as amended (B)
violate the documents governing such Joint Venture Investment (provided that
Borrowers do not request any provision prohibiting such a Lien for the purpose
of avoiding any obligation to grant such Lien) or (C) would otherwise violate
Applicable Law.

 

Forward Revaluation Amount
- an amount equal to any positive difference between the standard cost at which
Borrowers purchase copper Inventory and the actual cost paid for forward copper
contracts.

 

Forward Revaluation Reserve
– a reserve equal to the amount, if any, by which the Value of Borrowers’ Inventory
consisting of copper has been reduced by the Forward Revaluation Amount.

 

Full Payment - with
respect to any of the Obligations the full, final and indefeasible payment in
full of all of such Obligations, which, (i) in the case of any Contingent Obligations
owing by Obligors to Fleet or any other Lender with respect to any outstanding
Letters of Credit, shall not be deemed to have occurred until Obligors shall
Cash Collateralize each such outstanding Letter of Credit or obtained a
“back-to-back” letter of credit in respect thereof in an amount equal to 105%
of the face amount of such outstanding Letter of Credit in form and substance
and from a bank reasonably acceptable to the Administrative Agent and (ii) in
the case of any other Contingent Obligations for which no demand has been made
shall not be deemed to have occurred until Obligors have provided security or
other customary assurances of payment reasonably satisfactory to Administrative
Agent and Lenders in their sole and absolute discretion.

 

GAAP - generally
accepted accounting principles in the United States of America in effect from
time to time.

 

GECC – General
Electric Capital Corporation, a Delaware corporation.

 

Governmental Approvals
- all authorizations, consents, approvals, licenses and exemptions of,
registrations and filings with, and reports to, all Governmental Authorities.

 

Governmental Authority
-  any federal, state, municipal,
national, foreign or other governmental department, commission, board, bureau,
court, agency or instrumentality or political subdivision thereof or any entity
or officer exercising executive, legislative, judicial,

 

17

 

regulatory or administrative functions of or pertaining to any
government or any court, in each case, whether associated with a state of the
United States, the District of Columbia or a foreign entity or government.

 

Guarantors – New
Parent; New Subsidiary; Essex International, Inc., a Delaware corporation; each
direct and indirect Domestic Subsidiary of each Borrower, and each other Person
who guarantees payment or performance of the whole or any part of the
Obligations.

 

Guaranty - each
guaranty agreement now or hereafter executed by a Guarantor in favor of
Administrative Agent with respect to any of the Obligations.

 

Hedging Agreement -
any Interest Rate Contract, foreign currency exchange agreement, commodity
price protection agreement or other interest or currency exchange rate or
commodity price hedging arrangement.

 

Indemnified Amount -
in the case of Agent Indemnitees, the amount of any loss, cost, expenses or
damages suffered or incurred by Agent Indemnitees and against which Lenders or
any Obligor have agreed to indemnify Agent Indemnitees pursuant to the terms of
the Agreement or any of the other Loan Documents; in the case of Lender
Indemnitees, the amount of any loss, cost, expenses or damages suffered or
incurred by Lender Indemnitees and against which Lender or any Obligor have
agreed to indemnify Lender Indemnitees pursuant to the terms of the Agreement
or any of the other Loan Documents; and, in the case of Fleet Indemnitees, the
amount of any loss, cost, expenses or damages suffered or incurred by Fleet
Indemnitees and against which Lenders or any Obligor have agreed to indemnify Fleet
Indemnitees pursuant to the terms of the Agreement or any of the other Loan
Documents.

 

Indemnified Claim -
any and all claims, demands, liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, awards, remedial response costs, expenses
or disbursements of any kind or nature whatsoever (including reasonable
attorneys’, accountants’, consultants’ or paralegals’ fees and expenses),
whether arising under or in connection with the Loan Documents, any Applicable
Law (including any Environmental Laws) or otherwise, that may now or hereafter
be suffered or incurred by any Indemnitee and whether suffered or incurred in
or as a result of any investigation, litigation, arbitration or other judicial
or non-judicial proceeding or any appeals related thereto, except to the extent
resulting from the gross negligence or willful misconduct of any Indemnitee.

 

Indemnitees - the
Agent Indemnitees, the Lender Indemnitees and the Fleet Indemnitees.

 

Initial Lenders -
Fleet and GECC, each in its capacity as a Lender under the Agreement on the
Closing Date.

 

Insolvency Proceeding
- any action, case or proceeding commenced by or against a Person under any
state, federal or foreign law, or any agreement of such Person, for (i) the
entry of an order for relief under any chapter of the Bankruptcy Code or other
insolvency or debt adjustment law (whether state, federal or foreign), (ii) the
appointment of a receiver (or administrative receiver), trustee, liquidator
administrator, conservator or other custodian for such Person or any part of
its Property, (iii) an assignment or trust mortgage for the benefit of
creditors of such Person, or (iv) the liquidation, dissolution or winding up of
the affairs of such Person.

 

Instrument - shall
have the meaning ascribed to the term “instrument” in the UCC.

 

18

 

Insurance Expenditure Amount
– an amount equal to the amount expended by Borrowers’ to repair or replace
damaged or destroyed fixed assets to the extent of insurance proceeds received
in respect of such damaged or destroyed fixed assets.

 

Intellectual Property
- all intellectual and similar Property of a Person of every kind and
description, including inventions, designs, patents, patent applications,
copyrights, trademarks, service marks, tradenames, mask works, trade secrets,
confidential or proprietary information, know-how, software and databases and
all embodiments or fixations thereof and related documentation, registrations
and franchises, all books and records describing or used in connection with the
foregoing and all licenses, or other rights to use any of the foregoing.

 

Intellectual Property Claim
- the assertion by any Person of a claim (whether asserted in writing, by
action, suit or proceeding or otherwise) that any Borrower’s ownership, use,
marketing, sale or distribution of any Inventory, Equipment, Intellectual
Property or other Property is violative of any ownership or right to use any
Intellectual Property of such Person.

 

Intercreditor Agreement
– the Intercreditor Agreement among Administrative Agent, on behalf of itself
and the Lenders, the New Senior Secured Note Holder Agent, on behalf of itself
and the New Senior Secured Note Holders, and the New Senior Secured Note
Trustee dated on or about the date hereof, as at any time amended.

 

Interest Period -
shall have the meaning ascribed to it in Section 2.1.3 of the Agreement.

 

Interest Rate Contract
- any interest rate agreement, interest rate collar agreement, interest rate
swap agreement, or other agreement or arrangement at any time entered into by
any or all Borrowers with Fleet, Bank or any of their Affiliates that is
designed to protect against fluctuations in interest rates.

 

Inventory - shall
have the meaning ascribed to the term “inventory” in the UCC and shall include
all goods intended for sale or lease by a Borrower, or for display or
demonstration; all work in process, all raw materials and other materials and
supplies of every nature and description used or which might be used in
connection with the manufacture, printing, packing, shipping, advertising,
selling, leasing or furnishing such goods or otherwise used or consumed in such
Borrower’s business (but excluding Equipment).

 

Inventory Formula Amount
- on any date of determination thereof, an amount equal to the lesser of (a)
$60,000,000 or (b) the sum of (i) the lesser of (A) 65% of the Value of
Eligible Inventory on such date consisting of raw materials, work in process
and finished goods and (B) the product of 85% multiplied by the Net Orderly
Liquidation Value Percentage multiplied by the Value of Eligible Inventory on
such date consisting of raw materials, work in process and finished goods.  Administrative Agent shall have the right at
any time to decrease the advance rate percentage in its reasonable credit
judgment; provided, that any such decrease in the advance rate
percentages shall not be effective until 3 Business Days after written notice
thereof is provided to Borrowers by Administrative Agent.

 

Inventory Reserve -
such reserves as may be established from time to time by Administrative Agent
in its reasonable credit judgment to reflect changes in the salability of any
Eligible Inventory in the Ordinary Course of Business or such other factors as
may negatively impact the Value of any Eligible Inventory.  Without limiting the generality of the
foregoing, such reserves may include reserves based on obsolescence,
seasonality, theft or other shrinkage, imbalance, change in composition or mix,
or markdowns.

 

19

 

LC Application - an
application by any or all Borrowers to Bank (on which Fleet may be a
co-applicant), pursuant to a form approved by Bank, for the issuance of a
Letter of Credit, that is submitted to Bank at least 5 Business Days prior to
the requested issuance of such Letter of Credit.

 

LC Conditions - the
following conditions, the satisfaction of each of which is required before
Fleet shall be obligated to provide any LC Support to Bank for the issuance of
a Letter of Credit: (i) each of the conditions set forth in Section 10
of the Agreement has been and continues to be satisfied, including the absence
of any Default or Event of Default; (ii) after giving effect to the issuance of
the requested Letter of Credit and all other unissued Letters of Credit for
which an LC Application has been signed by Fleet, the LC Outstandings would not
exceed $25,000,000 and no Out-of-Formula Condition would exist, and, if no
Revolver Loans are outstanding, the LC Outstandings do not, and would not upon
the issuance of the requested Letter of Credit, exceed the Borrowing Base;
(iii) such Letter of Credit has an expiration date that is no more than 365
days from the date of issuance in the case of standby letters of credit and no
more than 150 days from the date of issuance in the case of documentary letters
of credit and, in either event, such expiration date is at least 10 days prior
to the last Business Day of the Term; and (iv) the currency in which payment is
to be made under the Letter of Credit is Dollars.

 

LC Documents - any
and all agreements, instruments and documents (other than an LC Application or
an LC Support) required by Bank to be executed by Borrowers or any other Person
and delivered to Bank for the issuance of a Letter of Credit.

 

LC Facility - a
subfacility of the Revolver Facility established pursuant to Section 1.3
of the Agreement.

 

LC Outstandings - on
any date of determination thereof, an amount (in Dollars) equal to the sum of
(i) all amounts then due and payable by any Obligor on such date by reason of
any (without duplication) payment that is made by Bank under a Letter of Credit
and that has not been repaid to Bank by Fleet under an LC Support, (ii) all
amounts then due and payable by any Obligor on such date by reason of any
payment that is made on or before such date by Fleet under any LC Support and
that has not been repaid to Fleet, on or before such date by Fleet under any LC
Support (iii) the aggregate undrawn amount of all Letters of Credit which are
then outstanding or for which an LC Application has been delivered to and
accepted by Bank under an LC Application theretofore submitted to Bank and (iv)
all fees and other amounts due or to become due in respect of Letters of Credit
outstanding on such date pursuant to the Agreement.

 

LC Request - a
Letter of Credit Procurement Request from Borrowers to Fleet in the form of Exhibit I
annexed hereto.

 

LC Reserve - at any
date, the aggregate of all LC Outstandings on such date, other than LC
Outstandings that are fully secured by Cash Collateral.

 

LC Support - a
guaranty or other support agreement from Fleet in favor of Bank pursuant to
which Fleet shall guarantee or otherwise assure the payment or performance by
the parties (other than Fleet, if a party) to an LC Application of such
parties’ obligations with respect to such Letter of Credit, including the
obligation of such parties to reimburse Bank for any payment made by Bank under
such Letter of Credit.

 

Lender Indemnitee -
a Lender in its capacity as a lender under the Agreement and its present and
future officers, directors, agents and attorneys.

 

20

 

Lenders - Fleet
(whether in its capacity as a provider of Loans under Section 1 of the
Agreement, as the provider of Settlement Loans under Section 3.1.3 of the
Agreement, or as the procurer of Letters of Credit under Section 1.3 of the
Agreement) and any other Person who may from time to time become a “Lender”
under the Agreement.

 

Letter of Credit -
any standby letter of credit or documentary letter of credit issued by Bank for
the account of Borrowers.

 

LIBOR Lending Office
- with respect to a Lender, the office designated as a LIBOR Lending Office for
such Lender on the signature page hereof (or on any Assignment and Acceptance,
in the case of an assignee) and such other office of such Lender or any of its
Affiliates that is hereafter designated by written notice to Administrative
Agent.

 

LIBOR Loan - a Loan,
or portion thereof, during any period in which it bears interest at a rate
based upon the applicable Adjusted LIBOR Rate.

 

LIBOR Rate - with
respect to an Interest Period, the rate per annum reported to Administrative
Agent by Bank as the rate at which deposits of U.S. Dollars approximately equal
in principal amount to or comparable to the amount of the LIBOR Loan to which
such Interest Period relates and for a term comparable to such Interest Period
are offered to Bank by prime banks in the London interbank foreign currency
deposits market at approximately 11:00 a.m., London time, 2 Business Days prior
to the commencement of such Interest Period. 
Each determination by Administrative Agent of any LIBOR Rate shall, in
the absence of any manifest error, be conclusive.

 

License Agreement -
any agreement between a Borrower and a Licensor pursuant to which such Borrower
is authorized to use any Intellectual Property in connection with the
manufacturing, marketing, sale or other distribution of any Inventory of such
Borrower, except for any “off the shelf” Intellectual Property generally
available to the public.

 

Licensor - any
Person from whom a Borrower obtains the right to use (whether on an exclusive
or non-exclusive basis) any Intellectual Property in connection with such
Borrower’s manufacture, marketing, sale or other distribution of any Inventory,
except for any “off the shelf” Intellectual Property generally available to the
public.

 

Licensor/Lender Agreement
- an agreement between Administrative Agent and a Licensor by which
Administrative Agent is given the right, vis-à-vis such Licensor, to enforce
Administrative Agent’s Liens with respect to and to dispose of a Borrower’s
Inventory with the benefit of any Intellectual Property applicable thereto,
irrespective of such Borrower’s default under any License Agreement with such
Licensor and which is otherwise in form and substance satisfactory to
Administrative Agent.

 

Lien - any interest
in Property securing an obligation owed to, or a claim by, a Person other than
the owner of the Property, whether such interest is based on common law,
statute or contract.  The term “Lien”
shall also include reservations, exceptions, encroachments, easements,
rights-of-way, covenants, conditions, restrictions, leases and other title
exceptions and encumbrances affecting Property.  For the purpose of the Agreement, a Borrower shall be deemed to
be the owner of any Property which it has acquired or holds subject to a
conditional sale agreement or other arrangement pursuant to which title to the
Property has been retained by or vested in some other Person for security
purposes.

 

21

 

Lien Waiver -  an agreement duly executed in favor of
Administrative Agent, in form and content reasonably acceptable to
Administrative Agent, by which (i) for locations leased by an Obligor, an owner
or mortgagee of premises upon which any Property of an Obligor is located
agrees to waive or subordinate any Lien it may have with respect to such
Property in favor of Administrative Agent’s Lien therein and to permit Administrative
Agent to enter upon such premises and remove such Property or to use such
premises to store or dispose of such Property, or (ii) for locations at which
any Obligor places Inventory with a warehouseman or a processor, such
warehouseman or processor agrees to waive or subordinate any Lien it may have
with respect to such Property in favor of Administrative Agent’s Lien therein
and to permit Administrative Agent to enter upon such premises and remove such
Property or to use such premises to store or dispose of such Property.

 

Loan - a Revolver
Loan (and each Base Rate Loan or LIBOR Loan comprising such Loan).

 

Loan Account - the
loan account established by each Lender on its books pursuant to Section 4.7
of the Agreement.

 

Loan Documents - the
Agreement, the Other Agreements and the Security Documents.

 

Loan Year - a period
commencing each calendar year on the same month and day as the Closing Date and
ending on the same month and day in the immediately succeeding calendar year,
with the first such period (i.e. the first Loan Year) to commence on the
Closing Date.

 

LP Conversion Conditions
- each of the following conditions the satisfaction of each of which is a
condition to Superior’s conversion from a limited liability company to a
limited partnership (such converted entity being referred to herein as
“Converted LP”):  (i) no Default or
Event of Default exists prior to or after giving effect to such conversion,
(ii) Borrowers’ shall have provided Administrative Agent with written notice of
such conversion not less than 15 days prior to the effective date of such
conversion, (iii) such conversion shall be effectuated under Chapter 389,
Section 18-216 of the Delaware Limited Liability Company Act; (iv) such
conversion shall be effectuated in compliance with all other Applicable Laws,
(v) Converted LP shall have entered into such documents as Administrative Agent
and Lenders shall request, in their sole and absolute discretion, to evidence
Converted LP’s obligations and indebtedness under the Loan Documents to the
same extent and on the same terms as are applicable to Superior, including the
execution by Converted LP and delivery to Administrative Agent of a joinder
agreement pursuant to which Converted LP shall become a Borrower under the
Credit Agreement and other Loan Documents and shall ratify and affirm all
representations and warranties, covenants, indebtedness and obligations of
Converted LP as a Borrower under the Loan Documents, and which other documents
and agreement shall be acknowledged and agreed to by all Obligors; (vi)  Administrative Agent shall have received
evidence satisfactory to it and the Lenders that Administrative Agent’s Liens
in the Collateral (as supplemented with the assets of Converted LP) constitute
duly perfected and first priority Liens; (vii) Administrative Agent shall have
received opinions of legal counsel for Converted LP (which shall be from
Proskauer Rose LLP, Richards, Layton & Finger, LLP, or such other counsel
reasonably satisfactory to Administrative Agent) relating to such conversion
and all matters on which legal opinions are delivered to Agent for Borrowers on
the Closing Date.

 

Margin Stock - shall
have the meaning ascribed to it in Regulation U and of the Board of Governors.

 

22

 

Material Adverse Effect
- the effect of any event, condition, action, omission or circumstance, which,
alone or when taken together with other events, conditions, actions, omissions
or circumstances occurring or existing concurrently therewith, (i) has a
material adverse effect upon the business, operations, Properties or condition
(financial or otherwise) of any Borrower, individually, or any of the Obligors,
taken as a whole; (ii) has or could be reasonably expected to have any material
adverse effect whatsoever upon the validity or enforceability of the Agreement
or any of the other Loan Documents; (iii) has any material adverse effect upon
the value of the whole or any material part of the Collateral, the Liens of
Administrative Agent with respect to the Collateral or the priority of any such
Liens; (iv) materially impairs the ability of any other Obligor to perform its
obligations under this Agreement or any of the other Loan Documents, including
repayment of any of the Obligations when due; or (v) materially impairs the
ability of Administrative Agent or any Lender to enforce or collect the
Obligations or realize upon any of the Collateral in accordance with the Loan
Documents and Applicable Law.

 

Material Contract -
an agreement to which an Obligor is a party (other than the Loan Documents) (i)
which is deemed to be a material contract as provided in Regulation S-K
promulgated by the SEC under the Securities Act of 1933 or (ii) for which
breach, termination, cancellation, nonperformance or failure to renew could
reasonably be expected to have a Material Adverse Effect.

 

Maximum Rate - the
maximum non-usurious rate of interest permitted by Applicable Law that at any
time, or from time to time, may be contracted for, taken, reserved, charged or
received on the Debt in question or, to the extent that at any time Applicable
Law may thereafter permit a higher maximum non-usurious rate of interest, then
such higher rate.  Notwithstanding any
other provision hereof, the Maximum Rate shall be calculated on a daily basis
(computed on the actual number of days elapsed over a year of 365 or 366 days,
as the case may be).

 

Money Borrowed - as
applied to any Obligor, without duplication, (i) Debt arising from the lending
of money by any other Person to such Obligor; (ii) Debt, whether or not in any
such case arising from the lending of money by another Person to such Obligor,
(A) which is represented by notes payable or drafts accepted that evidence
extensions of credit, (B) which constitutes obligations evidenced by bonds,
debentures, notes or similar instruments, or (C) upon which interest charges
are customarily paid (other than accounts payable) or that was issued or
assumed as full or partial payment for Property; (iii) Debt that constitutes a
Capitalized Lease Obligation; (iv) reimbursement obligations with respect to
letters of credit or guaranties of letters of credit; and (v) Debt of such
Obligor under any guaranty of obligations that would constitute Debt for Money
Borrowed under clauses (i) through (iii) hereof, if owed directly by such
Obligor.

 

Moody’s - Moody’s
Investors Service, Inc. or any successor thereto.

 

Mortgage - each
mortgage, deed of trust or deed to secure debt to be executed by an Obligor in
favor of Administrative Agent and pursuant to which such Obligor shall grant
and convey to Administrative Agent, for its benefit as Administrative Agent and
for the Pro Rata benefit of Lenders, Liens upon the Real Estate of such
Obligor, including the Real Estate located in (i) Tampa, Florida (ii) Rockford,
Illinois, (iii) Ft. Wayne, Franklin, Kendallville and Vincennes, Indiana, (iv)
Hoistington, Kansas, (v) Tarboro, North Carolina, and (vi) Chester, South
Carolina, in each case, as security for the payment of the Obligations.

 

Multiemployer Plan -
has the meaning set forth in Section 4001(a)(3) of ERISA.

 

23

 

Net Disposition Proceeds
- with respect to a disposition of any Collateral, proceeds (including cash
receivable (when received) by way of deferred payment) received by a Borrower
in cash from the sale, lease, transfer or other disposition of Collateral,
including insurance proceeds and awards of compensation received with respect
to the destruction or condemnation of all or part of the Collateral, net of:
(i) the reasonable and customary costs and expenses of such sale, lease,
transfer or other disposition (including legal fees, brokerage fees and sales
commissions); (ii) all Taxes to the extent payable as a consequence of any such
sale;  (iii) amounts
applied to repayment of Debt (other than the Obligations) secured by a
Permitted Lien on such Collateral disposed of that is senior to Administrative
Agent’s Liens; (iv) deduction of reasonable amounts, determined in accordance
with GAAP, required to be provided by such Borrower as a reserve against
liabilities associated with such Collateral (as of the sale date) and retained
by such Borrower; and (v) in connection with any sale of Collateral, a
reasonable reserve (not to exceed 10% of the total purchase price) for
post-closing adjustments to the purchase price, provided, that
upon the expiration of not more than 120 days after the sale any remaining
reserve balance is remitted to Administrative Agent for application to the
Obligations.

 

Net Orderly Liquidation Value Percentage
– at any time, with respect to any Inventory, as determined by the most recent
Orderly Liquidation Value Appraisal, the percentage of the value of such
Inventory expected to be realized at an orderly negotiated sale of such Inventory
held within a reasonable period of time.

 

New Parent –
Superior Essex Inc., a Delaware corporation.

 

New Senior Secured Notes
– the 9.5% Senior Secured Notes due 2008 in the aggregate principal amount of
$145,000,000, issued on or before the Closing Date, plus any additional
promissory notes of like tenor issued as a payment in kind distribution in
accordance with the terms thereof and otherwise in accordance with the terms of
the New Senior Secured Note Indenture.

 

New Senior Secured Note Holder Agent
– The Bank of New York, together with its successors, in its capacity as agent
for the New Senior Secured Notes Holders.

 

New Senior Secured Note Holder Trustee
– The Bank of New York, together with its successors, in its capacity as
trustee under the New Senior Secured Note Indenture for the New Senior Secured
Notes Holders.

 

New Senior Secured Note Holders
– the holders of the New Senior Secured Notes and any agent or trustee for such
holders.

 

New Senior Secured Note Indenture
– the Indenture dated on or about the Closing Date, among Superior, the other
Obligors listed therein and the New Senior Secured Note Holder Trustee.

 

New Subsidiary -
Superior Essex Holding Corp., a Delaware corporation.

 

New Subsidiary Preferred Stock
– 5,000,000 shares of 9.5% preferred stock of New Subsidiary having a par value
of at least $1 per share and representing equity of at least $5,000,000,  to be issued on or before the Closing Date,
plus any additional shares of preferred stock issued as a payment in kind
distribution in accordance with the Certificate of Designation thereof and
otherwise on terms set forth in the Plan of Reorganization.

 

24

 

Notes - each
Revolver Note and any other promissory note executed by Borrowers at
Administrative Agent’s request to evidence any of the Obligations.

 

Notice of Borrowing
- as defined in Section 3.1.1(i) of the Agreement.

 

Notice of Conversion/Continuation
- as defined in Section 2.1.2(ii) of the Agreement.

 

Obligations - in
each case, whether now in existence or hereafter arising, (i) the principal of,
and interest and premium, if any, on, the Loans; (ii) all LC Outstandings and
all other obligations of any Obligor to Administrative Agent, Fleet or Bank
arising in connection with the issuance of any Letter of Credit; and (iii) all
other Debts, covenants, duties and obligations (including Contingent
Obligations) now or at any time or times hereafter owing by any Obligor to
Administrative Agent or any Lender under or pursuant to the Agreement or any of
the other Loan Documents or owing by any Obligor to Bank or Fleet (or any
Affiliate of Bank or Fleet) with respect to Banking Relationship Debt, whether
evidenced by any note or other writing, whether arising from any extension of
credit, opening of a letter of credit, acceptance, loan, guaranty,
indemnification or otherwise and whether direct or indirect, absolute or
contingent, due or to become due, primary or secondary, or joint or several,
including all interest, charges, expenses, fees or other sums (including
Extraordinary Expenses) chargeable to any or all Obligors under the Agreement
or under any of the other Loan Documents.

 

Obligor - each
Borrower and each Guarantor, and any other Person that is at any time liable
for the payment of the whole or any part of the Obligations or that has granted
in favor of Administrative Agent a Lien upon any of any of such Person’s assets
to secure payment of any of the Obligations.

 

Orderly Liquidation Value Appraisal
– an appraisal, in form and substance consistent with industry standards,
conducted by an appraisal company acceptable to Administrative Agent, pursuant
to which such appraisal company determines the expected percentage of the value
of Inventory to be realized at an orderly negotiated sale of the Inventory held
within a reasonable period of time.

 

Ordinary Course of Business
- with respect to any transaction involving any Person, the ordinary course of
such Person’s business (other than practices substantially modified during the
pendency of the Chapter 11 Case) undertaken by such Person in good faith and
not for the purpose of evading any covenant or restriction in any Loan
Document.

 

Organic Documents -
with respect to any Person, its charter, certificate or articles of
incorporation or formation, bylaws, articles of organization, limited liability
agreement, operating agreement, members agreement, shareholders agreement,
partnership agreement, certificate of partnership, certificate of formation,
voting trust, or similar agreement or instrument governing the formation or
operation of such Person.

 

OSHA - the
Occupational Safety and Hazard Act of 1970.

 

Other Agreements -
the Notes, each LC Support, the Fee Letter, each Interest Rate Contract with
Fleet or with Bank and subject to credit enhancement from Fleet and any and all
agreements, instruments and documents (other than the Agreement and the
Security Documents), heretofore, now or hereafter executed by any Borrower, any
other Obligor or any other Person and delivered to Administrative Agent or any
Lender in respect of the transactions contemplated by the Agreement.

 

25

 

Out-of-Formula Condition
- as defined in Section 1.2.2 of the Agreement.

 

Out-of-Formula Loan
- a Revolver Loan made or existing when an Out-of-Formula Condition exists or
the amount of any Revolver Loan which, when funded, results in an
Out-of-Formula Condition.

 

Participant - as
defined in Section 13.2.1.

 

Participating Lender
- as defined in Section 1.3.2(i) of the Agreement.

 

Patent Security Agreement
- each Patent Security Agreement to be executed by an Obligor in favor of
Administrative Agent on or before the Closing Date and by which such Obligor
shall grant to Administrative Agent, for its benefit as Administrative Agent
and for the Pro Rata benefit of Lenders, as security for the Obligations, a
Lien on all of the right, title and interest of such Obligor in and to the
patents described therein.

 

Payment Account - an
account maintained by Administrative Agent to which all monies from time to
time deposited to a Dominion Account shall be transferred and all other
payments shall be sent in immediately available federal funds.

 

Payment Items - all
checks, drafts, or other items of payment payable to a Borrower, including
proceeds of any of the Collateral.

 

Pending Revolver Loans
- at any date, the aggregate principal amount of all Revolver Loans which have
been requested in any Notice of Borrowing received by Administrative Agent but
which have not theretofore been advanced by Administrative Agent or Lenders.

 

Permitted Acquisition
- any acquisition by a Borrower or any of its Subsidiaries of the assets or
Equity Interests of a Person in which each of the following conditions is
satisfied:  (a) the business of the
Person that is the subject of such acquisition is related or substantially
similar to the business of Borrowers on the Closing Date; (b) in connection
with such acquisition there will be no Liens on any of such Borrower’s or such
Subsidiary’s assets after the acquisition other than Permitted Liens; (c)
immediately before and after giving effect to such acquisition, no Default or
Event of Default shall have occurred or would result therefrom; (d)
Availability during the 90 day period immediately preceding the closing date of
such acquisition and on such closing date of and after giving pro forma effect
to such acquisition is not less than $30,000,000; (e) Borrowers’ Consolidated
Fixed Charge Coverage Ratio on and after giving pro forma effect to such
acquisition is not less than 1.25 to 1.0, to be tested as of the end of the
Fiscal Quarter immediately preceding the closing date of any such acquisition
for the immediately preceding four Fiscal Quarters (or, during the first Loan
Year, for the period commencing on the Closing Date and ending on the last day
of the applicable Fiscal Quarter) (f) each Borrower is Solvent after giving pro
forma effect to the consummation of such acquisition; (g) the aggregate amount
of consideration for such acquisition, when added to the consideration for all
other such acquisitions during the term of the Agreement shall not exceed
$35,000,000; (h) any purchase price amounts payable with respect to earnouts,
notes payable to the sellers, covenants not to compete, consulting contracts or
other affiliated contracts are unsecured and are and will remain subordinate to
the Full Payment of the Obligations on terms satisfactory to Administrative
Agent; (i) Administrative Agent shall have received, by a date sufficiently in
advance of the closing date of such acquisition to allow Administrative Agent
to review the same, executed copies of the final purchase documents, including
all exhibits and schedules thereto, among the parties to such acquisition, and
Administrative Agent shall have found the terms thereof reasonably acceptable;

 

26

 

and (j) Borrowers shall have delivered to Administrative Agent, not
less than 3 Business Days prior to the proposed closing date of any such
acquisition, written evidence of the pro forma satisfaction of the other
conditions set forth above after giving effect to such acquisition.

 

Permitted Consigned Inventory
– Consigned Inventory, the Value of which shall not exceed $18,000,000 in the
aggregate at any time, and which is the subject of a properly filed UCC
financing statement in favor of Borrower with respect to such Consigned
Inventory.

 

Permitted Contingent Obligations
- Contingent Obligations arising from endorsements of Payment Items for
collection or deposit in the Ordinary Course of Business; Contingent
Obligations arising from Interest Rate Contracts entered into in the Ordinary
Course of Business pursuant to this Agreement or with Administrative Agent’s
prior written consent;  Contingent Obligations arising from Hedging Agreements
(other than Interest Rate Contracts) entered into in the Ordinary Course of
Business; Contingent Obligations of any Borrower and its Subsidiaries existing
as of the Closing Date, including extensions and renewals thereof that do not increase
the amount of such Contingent Obligations as of the date of such extension or
renewal; Contingent Obligations incurred in the Ordinary Course of Business
with respect to surety bonds, appeal bonds, performance bonds and other similar
obligations;  Contingent
Obligations arising under indemnity agreements to title insurers to cause such
title insurers to issue to Administrative Agent title insurance policies;
Contingent Obligations with respect to customary indemnification obligations in
favor of purchasers in connection with dispositions of Equipment permitted
under Section 7.4.2
of the Agreement; Contingent Obligations consisting of reimbursement
obligations from time to time owing by any Borrower to Bank with respect to
Letters of Credit (but in no event to include reimbursement obligations at any
time owing by a Borrower to any other Person that may issue letters of credit
for the account of Borrowers); Contingent Obligations incurred to support any
Debt of any other Obligor if such Debt of the other Obligor is permitted to be
incurred by the terms of the Agreement; and other Contingent Obligations not to
exceed $5,000,000 in the aggregate at any time.

 

Permitted Distributions
-  (i) any dividend or distribution by
any Borrower directly or indirectly to New Subsidiary the proceeds of which are
used by New Subsidiary to make payment of dividends with respect to the New
Preferred Stock; (ii) distributions made by Subsidiaries of New Subsidiary to
New Subsidiary to pay fees and expenses incurred in the ordinary course of
business including, without limitation, franchise taxes and similar costs;
(iii) distributions made by Subsidiaries of New Parent to New Parent solely for
the purpose of paying foreign, federal, state or local taxes owed by New Parent
and its consolidated Subsidiaries; (iv) distributions made by Subsidiaries of
New Parent to pay fees and expenses of New Parent incurred in the Ordinary
Course of Business (including, without limitation (x) franchise taxes and
similar costs, (y) any such Subsidiary’s proportionate share of any fees and
expenses payable to directors of New Parent and (z) insurance premiums in
respect of directors’ and officers’ liability insurance) and other costs and
expenses in connection with New Parent being a publicly traded company
(including, without limitation, fees and expense of professional and regulatory
compliance); (v) distributions made by Subsidiaries of New Parent to pay the
corporate employees of New Parent; (vi) 
distributions made by Subsidiaries of New Parent to New Parent to pay
the exercise price under the warrant to purchase shares of the common stock of
Essex Electric Inc.; provided, that, no Default or Event of
Default exists at the time of and after giving effect to such distributions;  and (vii) distributions
or other payments provided for in the Plan of Reorganization.

 

Permitted Lien - a
Lien of a kind specified in Section 9.2.5 of the Agreement.

 

27

 

Permitted Purchase Money Debt
- Purchase Money Debt of Borrowers and their Subsidiaries that is secured by no
Lien or only by a Purchase Money Lien, provided, that the
aggregate amount of Purchase Money Debt, together with Capitalized Lease
Obligations, outstanding at any time does not exceed $12,500,000 and the
incurrence of such Purchase Money Debt does not violate any limitation in the
Loan Documents regarding Capital Expenditures. 
For the purposes of this definition, the principal amount of any
Purchase Money Debt consisting of capitalized leases shall be computed as a
Capitalized Lease Obligation.

 

Permitted Real Estate Disposition
– a sale or other disposition of an Obligor’s Real Estate; provided, that
(i) at the time of and after giving effect to such sale or other disposition no
Event of Default exists, (ii) Administrative Agent shall have received from
Borrowers a certificate with respect to the fair market value of the relevant
Real Estate, (iii) the sale or other disposition yields a cash amount not less
than the fair market value of the relevant portion of the Real Estate, (iv) the
sale price of any such sale or other disposition, when combined with all other
Permitted Real Estate Dispositions, does not exceed $5,000,000 in the
aggregate, (v) Administrative Agent shall have received and reviewed the documentation
evidencing the sale or other disposition of the Real Estate, which
documentation shall be in form and substance reasonably acceptable to
Administrative Agent, and (vi) all Net Disposition Proceeds thereof are
remitted to Administrative Agent immediately upon receipt for application to
the Obligations.

 

Permitted Redemption
– a redemption or purchase of the New Senior Secured Notes pursuant to the
terms of Section 4.10 of the New Senior Secured Note Indenture, provided,
that on any proposed date of any redemption or purchase, the Permitted
Redemption Conditions are satisfied.

 

Permitted Redemption Conditions
– the following conditions, the satisfaction of each of which shall be a
condition precedent to any Permitted Redemption:  (i) such redemption or purchase is required to be made by the
terms of Section 4.10 of the New Senior Secured Note Indenture as in
effect on the Closing Date, (ii) the amount of New Senior Secured Notes
proposed to be redeemed or purchased on such date shall not exceed the amount
required to be redeemed by Section 4.10 of the New Senior Secured Note
Indenture as in effect on the Closing Date, (iii) Average Availability during
the 90 day period immediately preceding the proposed date of such redemption or
purchase and on the date thereof, in each case after giving effect thereto,
shall be at least $30,000,000, (iv) to the extent that the underlying
disposition of Property giving rise to the proceeds to be the basis of such
redemption or purchase is not otherwise permitted under this Agreement,
Administrative Agent and Lenders, in their sole and absolute discretion, shall
have consented to such underlying asset disposition, (v) no Event of Default
shall exist on the date of and after giving effect to such redemption or purchase;
and (vi) Borrowers shall have delivered to each of Administrative Agent and New
Senior Secured Note Agent a certificate certifying that the above conditions
have been satisfied and that the redemption or purchase is otherwise permitted
by the terms of the Agreement.

 

Person - an
individual, partnership, corporation, limited liability company, limited
liability partnership, joint stock company, land trust, business trust,
unincorporated organization, or a Governmental Authority.

 

Plan - an employee
benefit plan now or hereafter maintained for employees of a Borrower that is
covered by Title IV of ERISA.

 

28

 

Plan of Reorganization
- Debtors’ Amended Joint Plan of Reorganization Under Chapter 11 of the Bankruptcy
Code dated October 22, 2003, filed by Debtors with the Bankruptcy Court in
the Chapter 11 Case on October 22, 2003.

 

Pledge Agreement -
each pledge agreement pursuant to which an Obligor pledges to Administrative
Agent, for the benefit of itself and Lenders, all of the Equity Interests of
the Subsidiary or Subsidiaries of such Obligor, in form and substance
satisfactory to Administrative Agent.

 

Pro Rata - a share
of or in all Loans, participations in LC Outstandings,  liabilities, payments,
proceeds, collections, Collateral and Extraordinary Expenses, which share for
any Lender on any date shall be a percentage (expressed as a decimal, rounded
to the ninth decimal place) arrived at by dividing the amount of the Commitment
of such Lender on such date by the aggregate amount of the Commitments of all
Lenders on such date.

 

Projections - (i)
prior to the Closing Date and thereafter until Administrative Agent and Lenders
receive new projections pursuant to Section 9.1.5 hereof, the projections
of Borrowers’ financial condition, results of operations, cash flow and
Projected Availability, prepared on a monthly basis for the Fiscal Year ending
December 31, 2003, and on an annual basis for the Fiscal Years ending
2004, 2005, 2006 and 2007; and (ii) thereafter, the projections most recently
received by Administrative Agent and Lenders pursuant to and as required by Section 9.1.5
of the Agreement.

 

Properly Contested -
in the case of any Debt of an Obligor (including any Taxes) that is not paid as
and when due or payable by reason of such Obligor’s bona fide dispute
concerning its liability to pay same or concerning the amount thereof, (i) such
Debt is being properly contested in good faith by appropriate proceedings
promptly instituted and diligently conducted; (ii) such Obligor has established
appropriate reserves (if any) as shall be required in conformity with GAAP;
(iii) the non-payment of such Debt will not have a Material Adverse Effect and
will not result in a forfeiture or sale of any material assets of such Obligor;
(iv) no Lien is imposed upon any of such Obligor’s assets with respect to such
Debt unless such Lien is at all times junior and subordinate in priority to the
Liens in favor of Administrative Agent (except only with respect to property
taxes that have priority as a matter of applicable state law) and enforcement
of such Lien is stayed during the period prior to the final resolution or
disposition of such dispute; (v) if the Debt results from, or is determined by
the entry, rendition or issuance against an Obligor or any of its assets of a
judgment, writ, order or decree, enforcement of such judgment, writ, order or
decree is stayed pending a timely appeal or other judicial review; and (vi) if
such contest is abandoned, settled or determined adversely (in whole or in
part) to such Obligor, such Obligor forthwith pays such Debt and all penalties,
interest and other amounts due in connection therewith.

 

Property - any
interest in any kind of property or asset, whether real, personal or mixed and
whether tangible or intangible.

 

Purchase Money Debt
- means and includes (i) Debt (other than the Obligations) for the payment of
all or any part of the purchase price of any fixed assets, (ii) any Debt (other
than the Obligations) incurred at the time of or within 20 days prior to or
after the acquisition of any fixed assets for the purpose of financing all or
any part of the purchase price thereof, and (iii) any renewals, extensions or
refinancings (but not any increases in the principal amounts) thereof outstanding
at the time.

 

29

 

Purchase Money Lien
- a Lien upon fixed assets which secures Purchase Money Debt, but only if such
Lien shall at all times be confined solely to the fixed assets acquired through
the incurrence of the Purchase Money Debt secured by such Lien and such Lien
constitutes a purchase money security interest under the UCC.

 

RCRA - the Resource
Conservation and Recovery Act (42 U.S.C. §§ 6991-6991i) and all rules and
regulations promulgated pursuant thereto.

 

Real Estate - all
right, title and interest of Obligors (whether as owner, lessor or lessee) at
any time or times held by Obligors in any real Property or any buildings,
structures, parking areas or other improvements thereon, including the real
Property owned by Borrowers and located in (i) Tampa, Florida (ii) Rockford,
Illinois, (iii) Ft. Wayne, Franklin, Kendallville and Vincennes, Indiana, (iv)
Hoistington, Kansas, (v) Tarboro, North Carolina, and (vi) Chester, South
Carolina.

 

Real Property Documents
- means the following as to each parcel of Real Estate (except that the
Administrative Agent may in its discretion waive or suspend the requirement for
delivery of certain of the Real Property Documents for any of the Real Estate
(other than, unless directed by the Required Lenders, one or more Mortgages)):

 

(i)                                     an
owner’s/lessee’s affidavit for each parcel or tract of such Real Estate;

 

(ii)                                  a
Mortgage for each parcel or tract of owned Real Estate;

 

(iii)                               such
consents, acknowledgments, intercreditor or attornment and subordination
agreements as Administrative Agent may require from any Person with respect to
any portion of such Real Estate (but the failure to obtain any of the foregoing
from any third party shall not result in a Default or Event of Default under
the Agreement or any other Loan Document except to the extent otherwise
expressly provided for therein);

 

(iv)                              a
certificate as to the insurance required by the related Mortgage, to the extent
not theretofore furnished pursuant to the Agreement;

 

(v)                                 if
a Default or Event of Default exists or Administrative Agent or the Required
Lenders determine in good faith that it is required by applicable banking or
other regulatory law or regulations, an appraisal of such Real Estate, prepared
by an appraiser satisfactory to Administrative Agent and engaged by and on
behalf of the Administrative Agent and Lenders;

 

(vi)                              any
revenue ruling or similar assurance from the department of revenue or taxation
requested by the Administrative Agent with respect to any stamp, intangible or
other taxes payable in connection with the filing for record of any of the
Mortgages; and

 

(vii)                           the
surveys, title insurance and flood insurance required by Sections 9.1.14 and 10.1.16.

 

Refinancing Conditions
- the following conditions, each of which must be satisfied before Refinancing
Debt shall be permitted under Section 9.2.3 of the Agreement: (i)
the Refinancing Debt is in an aggregate principal amount that does not exceed
the aggregate principal amount of the Debt being extended, renewed or
refinanced, (ii) the Refinancing Debt has a later or equal final maturity and a
longer or equal weighted average life than the Debt being extended, renewed or
refinanced, (iii) the Refinancing Debt does not bear a rate of interest that
exceeds a

 

30

 

market rate (as determined in good faith by a Senior Officer of
Borrower Agent) as of the date of such extension, renewal or refinancing, (iv)
if the Debt or Liens securing such Debt being extended, renewed or refinanced
or the related Liens are subordinate to the Obligations, the Refinancing Debt
or Liens securing the same are subordinated to the same extent, (v) the
covenants contained in any instrument or agreement relating to the Refinancing
Debt are no less favorable to Borrowers than those relating to the Debt being
extended, renewed or refinanced, and (vi) at the time of and after giving
effect to such extension, renewal or refinancing, no Default or Event of
Default shall exist.

 

Refinancing Debt -
Debt for Money Borrowed that is permitted by Section 9.2.3 and that
is the subject or the result of an extension, renewal or refinancing.

 

Regulated Substances
- any substances, chemicals, materials or elements that are prohibited, limited
or regulated by the Environmental Laws, or any other substances, chemicals,
materials or elements that are defined as “hazardous” or “toxic,”  under Environmental Laws.  Without limiting the generality of the
foregoing, the term “Regulated Substances” shall also include any substance,
chemical, material or element (i) defined as a “hazardous substance;” (ii)
defined as a “regulated substance” within the meaning of Subtitle I of the
RCRA; (iii) designated as a “hazardous substance” pursuant to Section 311
of the CWA, or listed pursuant to Section 307 of the CWA; (iv) defined as
“hazardous”, “toxic”, or otherwise regulated, under any Environmental Laws
adopted by the state in which the Real Estate is located, or its agencies or
political subdivisions; (v) which is petroleum, petroleum products or
derivatives or constituents thereof; (vi) which is asbestos or
asbestos-containing materials; (vii) the presence of which requires
notification, investigation or remediation under any Environmental Laws; (viii)
the presence of which on the Real Estate causes or threatens to cause a
nuisance upon the Real Estate or to adjacent properties or poses or threatens
to pose a hazard to the health or safety of Persons on or about the Real
Estate; (ix) the presence of which on adjacent properties would constitute a
trespass by Indemnitor; (x) which is urea formaldehyde foam insulation or urea
formaldehyde foam insulation-containing materials (lead base paint or lead base
paint-containing materials, polychlorinated biphenyls or polychlorinated
biphenyl-containing materials, radon or radon-containing or producing
materials, radioactive substances, methane or volatile hydrocarbons; or (xi)
which by any Environmental Laws requires special handling in its collection,
storage, treatment, or disposal.

 

Regulation D -
Regulation D of the Board of Governors.

 

Register - the
register maintained by Administrative Agent in accordance with Section 4.8.2
of the Agreement.

 

Reimbursement Date -
as defined in Section 1.3.1(iii) of the Agreement.

 

Rent Reserve – such
reserve as may be established from time to time by Administrative Agent in its
reasonable credit judgment in an amount approximately equal to three (3) times
the aggregate monthly rent charges and fees payable by Borrowers for leased locations
at which Borrowers keep, store or maintain any Collateral and for which
Administrative Agent has not received a Lien Waiver; provided, however,
that in no event shall the rent reserve at any leased location exceed the value
of the Collateral maintained at such location..

 

Reportable Event -
any of the events set forth in Section 4043(c) of ERISA.

 

31

 

Required Lenders -
at any date of determination thereof, at least 2 Lenders (each of which holds
not less than 5% of the aggregate Commitments) having Commitments representing
at least 51% of the aggregate Commitments at such time; provided, however,
that if any Lender shall be in breach of any of its obligations hereunder to
Borrowers or Administrative Agent, including any breach resulting from its
failure to honor its Commitment in accordance with the terms of this Agreement,
then, for so long as such breach continues, the term “Required Lenders” shall
mean at least 2 Lenders (each of which holds not less than 5% of the aggregate
Commitments), but excluding each Lender that is in breach of its obligations
under the Agreement, having Commitments representing at least 51% of the
aggregate Commitments (excluding the Commitments of each Lender that is in breach
of its obligations under the Agreement) at such time; provided  further,
however, that if the Commitments have been terminated, the term
“Required Lenders” shall mean at least 2 Lenders (each of which holds not less
than 5% of the aggregate Commitments), but excluding each Lender that is in
breach of its obligations hereunder holding Loans (including Settlement Loans)
representing at least 51% of the aggregate principal amount of Loans (including
Settlement Loans) outstanding at such time.

 

Restricted Investment
- any acquisition of Property by a Borrower or any of its Subsidiaries in
exchange for cash or other Property, whether in the form of an acquisition of
Equity Interests or Debt, or the purchase or acquisition by such Borrower or
any of its Subsidiaries of any other Property, or a loan, advance, capital
contribution or subscription, except acquisitions of the following: (i) fixed
assets to be used in the Ordinary Course of Business of such Borrower or any of
its Subsidiaries so long as the acquisition costs thereof constitute Capital
Expenditures permitted hereunder; (ii) goods held for sale or lease or to be
used in the manufacture of goods or the provision of services by such Borrower
or any of its Subsidiaries in the Ordinary Course of Business (including
inventory); (iii) current assets arising from the sale or lease of goods or the
rendition of services in the Ordinary Course of Business of such Borrower or
any of its Subsidiaries; (iv) investments in Subsidiaries and Essex Electric
Inc. to the extent existing on the Closing Date (such investments in
Subsidiaries being the only investments permitted to be made by a Borrower in
any Subsidiary pursuant to this definition (except as set forth in clause (vi)
below)), and  distributions
made by Subsidiaries of New Parent to New Parent in an amount not to exceed
$1,000,000 in the aggregate to pay the exercise price under the warrant to
purchase shares of the common stock of Essex Electric Inc.; and (v) Cash
Equivalents to the extent they are not subject to rights of offset in favor of
any Person other than Administrative Agent or a Lender; (vi) loans and other
advances of money to the extent not prohibited by Section 9.2.2; (vii)
investments in any Securities received in satisfaction or partial satisfaction
thereof from financially troubled Account Debtors, (viii) Foreign Venture
Investments; (ix) deposits, prepayments and other credits to suppliers, lessors
and landlords made in the Ordinary Course of Business; and (x) Permitted
Acquisitions.

 

Restrictive Agreement
- an agreement (other than any of the Loan Documents, the New Senior Secured
Note Indenture and the Brownwood Lease) that, if and for so long as an Obligor
or any Subsidiary of such Obligor is a party thereto, would prohibit, condition
or restrict such Obligor’s or Subsidiary’s right to (i) incur or repay Debt for
Money Borrowed (including any of the Obligations); (ii) grant Liens upon any of
such Obligor’s or Subsidiary’s assets (including Liens granted in favor of
Administrative Agent pursuant to the Loan Documents); (iii) declare or make
Distributions; (iv) amend, modify, extend or renew any agreement evidencing
Debt for Money Borrowed (including any of the Loan Documents); or (v) repay any
Debt owed to another Obligor.

 

Revolver Commitment
- at any date for any Lender, the obligation of such Lender to make Revolver
Loans and to purchase participations in LC Outstandings pursuant to the terms

 

32

 

and conditions of the Agreement, which shall not exceed the principal
amount set forth opposite such Lender’s name under the heading “Revolver
Commitment” on the signature pages of the Agreement or the signature page of
the Assignment and Acceptance by which it became a Lender, as modified from
time to time pursuant to the terms of the Agreement or to give effect to any
applicable Assignment and Acceptance; and “Revolver Commitments” means
the aggregate principal amount of the Revolver Commitments of all Lenders, the
maximum amount of which shall be $120,000,000, as reduced from time to time
pursuant to Section 1.2.5 hereof.

 

Revolver Loan - a
loan made by Lenders as provided in Section 1.2 of the Agreement
(including any Out-of-Formula Loan) or a Settlement Loan funded solely by
Fleet.

 

Revolver Note - a Revolver
Note to be executed by Borrowers in favor of each Lender in the form of Exhibit A
attached hereto, which shall be in the face amount of such Lender’s Revolver
Commitment and which shall evidence all Revolver Loans (other than Settlement
Loans)  made
by such Lender to Borrowers pursuant to the Agreement.

 

S&P - Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies, Inc.,
or any successor thereto.

 

Sarbanes-Oxley Act –
the Sarbanes-Oxley Act of 2002.

 

Schedule of Accounts
- as defined in Section 7.2.1 of the Agreement.

 

SEC - Securities and
Exchange Commission.

 

Secured Parties -
Agents, Lenders, Fleet as the procurer of Letters of Credit, Fleet as the
provider of Settlement Loans, Bank as the issuer of Letters of Credit or Fleet,
Bank or any of their Affiliates as the obligee with respect to any Banking
Relationship Debt, and each counterparty to an Interest Rate Contract that it
(or at the time of such Interest Rate Contract was entered into, was) a Lender
or an Affiliate of a Lender.

 

Security - shall
have the same meaning as in Section 2(1) of the Securities Act of 1933.

 

Security Agreement -
the Security Agreement of even date herewith between Borrowers and
Administrative Agent and the other parties thereto pursuant to which, among
other things, each Borrower has granted a security interest in and Lien upon
all of the Collateral in favor of Administrative Agent as security for the
payment of Obligations.

 

Security Documents –
the Security Agreement, the Mortgages and other Real Property Documents, each
Guaranty, the Pledge Agreements,  the
Patent Security Agreements, the Trademark Security Agreements,  the Copyright
Security Agreements, the Deposit Account Control Agreements, the Business
Interruption Insurance Assignment and all other instruments and agreements now
or at any time hereafter securing the whole or any part of the Obligations.

 

Senior Officer - the
chairman of the board of directors, the president, the chief financial officer,
controller or treasurer of, or in-house legal counsel to, a Borrower.

 

Settlement Date - as
defined in Section 3.1.3(i) of the Agreement.

 

Settlement Loan - as
defined in Section 3.1.3(ii) of the Agreement.

 

33

 

Settlement Report -
a report delivered by Administrative Agent to Lenders summarizing the amount of
the outstanding Revolver Loans as of the Settlement Date and the calculation of
the Borrowing Base as of such Settlement Date.

 

Solvent - as to any
Person, such Person (i) owns Property whose fair salable value (as defined
below) is greater than the amount required to pay all of such Person’s debts
(including contingent, subordinated, unmatured and unliquidated liabilities),
(ii) owns Property whose present fair salable value is greater than the
probable total liabilities (including contingent, subordinated, unmatured and
unliquidated liabilities), of such Person as they become absolute and matured,
(iii) is able to pay all of its debts as such debts mature in the ordinary
course, (iv) has capital that is not unreasonably small for its business and is
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage, (v) is not “insolvent” within the
meaning of Section 101(32) of the Bankruptcy Code, and (vi) has not
incurred (by way of assumption or otherwise) any obligations or liabilities
(contingent or otherwise) under any of the Loan Documents, or made any
conveyance pursuant to or in connection therewith, with actual intent to
hinder, delay or defraud either present or future creditors of such Person or
any of its Subsidiaries.  As used
herein, the term “fair salable value” of a Person’s assets means the amount
that may be realized within a reasonable time, either through collection or
sale of such assets at the regular market value, based upon the amount that
could be obtained for such assets within such period by a capable and diligent
seller from an interested buyer who is willing (but is under no compulsion) to
purchase under ordinary selling conditions.

 

Stated Amount - on
any date and with respect to a particular Letter of Credit, the total amount
then available to be drawn under such Letter of Credit in Dollars.

 

Statutory Reserves -
on any date, the percentage (expressed as a decimal) established by the Board
of Governors which is the then stated maximum rate for all reserves (including
all basic, emergency, supplemental or other marginal reserve requirements and
taking into account any transitional adjustments or other scheduled in reserve
requirements) actually imposed on such date on any member bank of the Federal
Reserve System in respect to Eurocurrency Liabilities (or any successor
category of liabilities under Regulation D). 
Such reserve percentage shall include those imposed pursuant to said
Regulation D.  The Statutory Reserve
shall be adjusted automatically on and as of the effective date of any change
in such percentage.

 

Subordinated Debt -
unsecured Debt incurred by a Borrower that is expressly subordinated and made
junior to the payment and performance in full of the Obligations and contains
terms and conditions (including terms relating to interest, fees, repayment and
subordination) satisfactory to Administrative Agent and the Required Lenders.

 

Subsidiary - any
Person in which more than 50% of its outstanding Voting Securities or more than
50% of all Equity Interests is owned directly or indirectly by a Borrower, by
one or more other Subsidiaries of such Borrower or by a Borrower and one or
more other Subsidiaries.

 

Subsidiary Guarantor
- any Subsidiary of a Borrower that now is or hereafter becomes a Guarantor.

 

Taxes - any present
or future taxes, levies, imposts, duties, fees, assessments, deductions,
withholdings or other charges of whatever nature, including income, receipts,
excise, property, sales, use, transfer, license, payroll, withholding, social
security and franchise taxes now or hereafter imposed or levied by the United
States or any other Governmental Authority and all interest, penalties,
additions to tax and similar liabilities with respect thereto, but excluding,
in the

 

34

 

case of each Lender, taxes imposed on or measured by the net income,
overall gross receipts or franchise of such Lender.

 

Term - as defined in
Section 5.1
of the Agreement.

 

Toll Copper Inventory
– “toll copper” owned by another Person at any time in the possession of any
Borrower for processing or otherwise.

 

Toll/Price Adjustment Reserve
– a reserve equal to the Borrowers’ reserve for copper billed for but not
shipped or delivered to a customer plus Borrowers’ reserve for purchase
price adjustments.

 

Trademark Security Agreement
- the Trademark Security Agreement to be executed by an Obligor in favor of
Administrative Agent on or before the Closing Date and by which such Obligor
shall grant to Administrative Agent, for its benefit as Administrative Agent
and for the Pro Rata benefit of Lenders, as security for the Obligations, a
Lien on all of the right, title and interest of such Obligor in and to all of
its trademarks.

 

Transferee - as
defined in Section 13.3.3 of the Agreement.

 

Trigger Date – shall
have the meaning ascribed to such term in Section 9.3.1 of the Agreement.

 

Type - any type of a
Loan determined with respect to the interest option applicable thereto, which
shall be either a LIBOR Loan or a Base Rate Loan.

 

UCC -  the Uniform Commercial Code (or any
successor statute) as adopted and in force in the State of Georgia or, when the
laws of any other state govern the method or manner of the perfection or
enforcement of any security interest in any of the Collateral, the Uniform
Commercial Code (or any successor statute) of such state.

 

Underfunded Pension Plans
– the Retirement Income Plan for Salaried Employees of Essex Group, Inc. and
the Retirement Plan for Hourly Employees of Essex Group, Inc.

 

Unfinanced Capital Expenditures
- for any period, the Capital Expenditures of a Person financed by Debt (other
than Loans).

 

Upstream Payment - a
payment or distribution of cash or other Property by a Subsidiary of a Borrower
to such Borrower, whether in repayment of Debt owed by such Subsidiary to such
Borrower, as a dividend or distribution on account of such Borrower’s ownership
of Equity Interests, or otherwise.

 

USA Patriot Act -
the Uniting and Strengthening America by Providing Appropriate Tools Required
to Intercept and Obstruct Terrorism Act of 2001, Pub. L. No. 107-56, 115 Stat.
272 (2001), as the same has been, or shall hereafter be, renewed, extended,
amended or replaced.

 

Value - with
reference to the value of Eligible Inventory, value determined by
Administrative Agent in its reasonable credit judgment on the basis the lower
of cost or market of such Eligible Inventory, with the cost thereof calculated
on a first-in, first-out basis in accordance with GAAP; provided that
the Value of Eligible Inventory shall not include the portion of the

 

value of the Eligible Inventory equal to the profit earned by any
Affiliate on the sale thereof to a Borrower.

 

Voting Power - with
respect to any Person, the power ordinarily (without the occurrence of a
contingency) to elect the members of the Board of Directors (or persons
performing similar functions) of such Person.

 

Voting Securities -
Equity Interests of any class or classes of a corporation or other entity the
holders of which are ordinarily, in the absence of contingencies, entitled to
elect a majority of the corporate directors or Persons performing similar
functions.

 

Accounting
Terms. 
Unless otherwise specified herein, all terms of an accounting character
used in the Agreement shall be interpreted, all accounting determinations under
the Agreement shall be made, and all financial statements required to be
delivered under the Agreement shall be prepared in accordance with GAAP, applied
on a basis consistent with the most recent audited Consolidated financial
statements of Borrowers and their Subsidiaries heretofore delivered to
Administrative Agent and Lenders and using the same method for inventory
valuation as used in such audited financial statements, except for any change
required by GAAP; provided, however, that for purposes of
determining Borrowers’ compliance with financial covenants contained in Section 9.3
of the Agreement, all accounting terms shall be interpreted and all accounting
determinations shall be made in accordance with GAAP as in effect on the date
of the Agreement and applied on a basis consistent with the application used in
the financial statements referred to in Section 8.1.9 of the Agreement.

 

Other
Terms.  All
other terms contained in the Agreement shall have, when the context so
indicates, the meanings provided for by the UCC to the extent the same are used
or defined therein.

 

Certain
Matters of Construction.  The terms “herein,” “hereof” and “hereunder” and other words of
similar import refer to the Agreement as a whole and not to any particular
section, paragraph or subdivision.  Any
pronoun used shall be deemed to cover all genders.  In the computation of periods of time from a specified date to a
later specified date, the word “from” means “from and including” and the words
“to” and “until” each means “to but excluding.”  The section titles, table of contents and list of exhibits
appear as a matter of convenience only and shall not affect the interpretation
of the Agreement.  All references to
statutes and related regulations shall include any amendments of same and any
successor statutes and regulations; to any agreement, instrument or other
documents (including any of the Loan Documents and exhibits and scheduled
thereto) shall include any and all modifications and supplements thereto and
any and all restatements, extensions or renewals thereof to the extent such
modifications, supplements, restatements, extensions or renewals of any such
documents are permitted by the terms thereof; to any Person (including
Administrative Agent, a Borrower, a Lender or Fleet) shall mean and include the
successors and permitted assigns of such Person; to “including” and “include”
shall be understood to mean “including, without limitation” (and, for purposes
of the Agreement and each other Loan Document, the parties agree that the rule
of ejusdem
generis shall not be applicable to limit a general statement, which
is followed by or referable to an enumeration of specific matters to matters
similar to the matters specifically mentioned); or to the time of day shall
mean the time of day on the day in question in Atlanta, Georgia, unless
otherwise expressly provided in the Agreement. 
A Default or an Event of Default shall be deemed to exist at all times
during the period commencing on the date that such Default or Event of Default
occurs to the date on which such Default or Event of Default is waived in
writing by Administrative Agent pursuant to the Agreement or, in the case of a Default,  is cured within any period of cure expressly
provided in this Agreement; and an Event of Default shall “continue” or be
“continuing” until such Event of Default has been waived in writing by
Administrative Agent.  All calculations
of Value shall be in Dollars, all Loans shall be funded in Dollars and all
Obligations shall be repaid in Dollars. 
Whenever in the Agreement and the other Loan Documents reference is made
to attorneys’ fees and expenses that are incurred by an Agent or a Lender and
that are to be reimbursed to an Agent or a Lender by Borrowers, such reference
shall be understood to mean the reasonable attorneys’ fees and expenses which
are incurred by such Agent or such Lender for services actually rendered by
attorneys selected by such Agent or such Lender on such Agent’s or such
Lender’s behalf.  Whenever the phrase
“to the best of a

 

35

 

Borrower’s knowledge,” “to Borrower’s knowledge” or words of similar
import relating to the knowledge or the awareness of a Borrower are used in the
Agreement or other Loan Documents, such phrase shall mean and refer to (i) the
actual knowledge of a Senior Officer or member or manager of any Borrower or
(ii) the knowledge that a Senior Officer or member or manager would have
obtained if they had engaged in good faith and diligent performance of his
duties.  Any Lien referred to in the
Agreement or any of the other Loan Documents as having been created in favor of
Administrative Agent, any agreement entered into by Administrative Agent
pursuant to the Agreement or any of the other Loan Documents, any payment made
by or to, or funds received by, Administrative Agent pursuant to or as
contemplated by any of the Loan Documents, or any other act taken or omitted to
be taken by Administrative Agent shall, unless otherwise expressly provided, be
created, entered into, made or received, or taken or omitted for the benefit or
account of the Administrative Agent and the Secured Parties.

 

 

IN WITNESS WHEREOF, this Appendix has been duly executed on
November 10, 2003.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
  ATTEST:

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC

  
	
   

  	
   

  
	
   /s/ Stewart H. Wahrsager

  	
   

  	
  By:

  	
   /s/ David S. Aldridge

  	
   

  
	
  Secretary

  	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
  [COMPANY
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  ESSEX GROUP, INC.

  
	
   

  	
   

  
	
   /s/ Stewart H. Wahrsager

  	
   

  	
  By:

  	
   /s/ David S. Aldridge

  	
   

  
	
  Secretary

  	
   

  	
  Title:

  	
  Vice
  President

  	
   

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  LENDERS:

  
	
   

  	
   

  
	
   

  	
  FLEET CAPITAL CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Getz

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Curtis J. Correa

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  	
   

  
							

 

[Signatures Continue on Following Page]

 

36

 

	
   

  	
  ADMINISTRATIVE
  AGENT:

  
	
   

  	
   

  
	
   

  	
  FLEET
  CAPITAL CORPORATION,

  as Administrative
  Agent

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ John Getz

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Senior
  Vice President

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  SYNDICATION
  AGENT:

  
	
   

  	
   

  
	
   

  	
  GENERAL ELECTRIC CAPITAL

  CORPORATION, as
  Syndication Agent 

  
	
   

  	
   

  
	
   

  	
  By:

  	
   /s/ Curtis J. Correa

  	
   

  
	
   

  	
   

  	
  Title:

  	
  Duly
  Authorized Signatory

  	
   

  
						

 

37

 

EXHIBIT A

 

FORM
OF REVOLVER NOTE

 

November     ,
2003

 

	
  U.S.
  $           .    

  	
   

  	
  Atlanta, Georgia

  

 

FOR VALUE RECEIVED, the undersigned, SUPERIOR ESSEX COMMUNICATIONS LLC (hereinafter
referred to as “Superior” and “Borrower Agent”), a Delaware limited liability
company, with its chief executive office and principal place of business at 150
Interstate North Parkway, Suite 300, Atlanta, Georgia 30339, and ESSEX GROUP,
INC., a Michigan corporation (“Essex”), with its chief executive
office and principal place of business at 1601 Wall Street, Fort Wayne,
Indiana  46802 (Superior and Essex
collectively as “Borrowers” and individually as a “Borrower”), hereby
unconditionally, and jointly and severally, promise to pay to the order of
                                  
(herein, together with any permitted subsequent holder hereof, called the
“Holder”) the principal sum of $                                  
or such lesser sum as may constitute Holder’s Pro Rata share of the outstanding
principal amount of all Revolver Loans pursuant to the terms of the Credit
Agreement (as defined below) on the date on which such outstanding principal
amounts become due and payable pursuant to Section 4.2 of the Credit Agreement,
in strict accordance with the terms thereof. 
Borrowers likewise unconditionally, and jointly and severally, promise
to pay to Holder interest from and after the date hereof on Holder’s Pro Rata
share of the outstanding principal amount of Revolver Loans at such interest
rates, payable at such times, and computed in such manner as are specified in Section 2.1
of the Credit Agreement, in strict accordance with the terms thereof.

 

This Revolver Note (“Note”) is issued pursuant to, and is one of the
“Revolver Notes” referred to in, the Credit Agreement dated
November        , 2003 (as the same may
be amended from time to time, the “Credit Agreement”), among Borrowers, Fleet
Capital Corporation, as collateral and administrative agent (in such capacity,
“Administrative Agent”) for itself and the financial institutions from time to
time parties thereto as lenders (“Lenders”), such Lenders and the other parties
named therein, and Holder is and shall be entitled to all benefits thereof and
of all Loan Documents executed and delivered in connection therewith.  This Note is subject to certain restrictions
on transfer or assignment as provided in the Credit Agreement.  All capitalized terms used herein, unless
otherwise defined herein, shall have the meanings ascribed to such terms in the
Credit Agreement.

 

The repayment of the principal balance of this Note is subject to the
provisions of Section 4.2 of the Credit Agreement.  The entire unpaid principal balance and all
accrued interest on this Note shall be due and payable immediately upon the
termination of the Commitments as set forth in Section 5.2 of the
Credit Agreement.

 

All payments of principal and interest shall be made in Dollars in
immediately available funds as specified in the Credit Agreement.

 

Upon or after the occurrence of an Event of Default and for so long as
such Event of Default exists, the principal balance and all accrued interest of
this Note may be declared (or shall become) due and payable in the manner and
with the effect provided in the Credit Agreement, and the unpaid principal balance
hereof shall bear interest at the Default Rate as and when provided in Section 2.1.5
of the Credit Agreement.  Borrowers
jointly and severally agree to pay, and save Holder harmless against, any
liability for the payment of, all costs and expenses, including, but not
limited to, reasonable attorneys’ fees, if this Note is collected by or through
an attorney-at-law.

 

All principal amounts of Revolver Loans made by Holder to Borrowers
pursuant to the Credit Agreement, and all accrued and unpaid interest thereon,
shall be deemed outstanding under this Note and

 

 

shall continue to be owing by Borrowers until paid in accordance with
the terms of this Note and the Credit Agreement.

 

In no contingency or event whatsoever, whether by reason of advancement
of the proceeds hereof or otherwise, shall the amount paid or agreed to be paid
to Holder for the use, forbearance or detention of money advanced hereunder
exceed the highest lawful rate permissible under any law which a court of
competent jurisdiction may deem applicable hereto; and, in the event of any
such payment inadvertently paid by Borrowers or inadvertently received by
Holder, such excess sum shall be, at Borrowers’ option, returned to Borrowers
forthwith or credited as a payment of principal, but shall not be applied to
the payment of interest.  It is the
intent hereof that Borrowers not pay or contract to pay, and that Holder not
receive or contract to receive, directly or indirectly in any manner
whatsoever, interest in excess of that which may be paid by Borrowers under
Applicable Law.

 

Time is of the essence of this Note. 
To the fullest extent permitted by Applicable Law, each Borrower, for
itself and its legal representatives, successors and assigns, expressly waives
presentment, demand, protest, notice of dishonor, notice of non-payment, notice
of maturity, notice of protest, presentment for the purpose of accelerating
maturity, diligence in collection, and the benefit of any exemption or
insolvency laws.

 

Wherever possible each provision of this Note shall be interpreted in
such a manner as to be effective and valid under Applicable Law, but if any
provision of this Note shall be prohibited or invalid under Applicable Law,
such provision shall be ineffective to the extent of such prohibition or invalidity
without invalidating the remainder of such provision or remaining provisions of
this Note.  No delay or failure on the
part of Holder in the exercise of any right or remedy hereunder shall operate
as a waiver thereof, nor as an acquiescence in any default, nor shall any
single or partial exercise by Holder of any right or remedy preclude any other
right or remedy.  Holder, at its option,
may enforce its rights against any Collateral securing this Note without
Administrative Agent or Holder enforcing its rights against any Borrower, any
Guarantor of the indebtedness evidenced hereby or any other property or
indebtedness due or to become due to any Borrower.  Each Borrower agrees that, without releasing or impairing any
Borrower’s liability hereunder, Holder or Administrative Agent may at any time
release, surrender, substitute or exchange any Collateral securing this Note
and may at any time release any party primarily or secondarily liable for the
indebtedness evidenced by this Note.

 

The rights of Holder and obligations of Borrowers hereunder shall be
construed in accordance with and governed by the laws (without giving effect to
the conflict of law principles thereof) of the State of Georgia.  This Note is intended to take effect as an
instrument under seal under Georgia law.

 

 

[Remainder of page
intentionally left blank; signatures on the following page]

 

40

 

IN WITNESS WHEREOF, each Borrower has caused this Note to be executed
under seal and delivered by its duly authorized officers on the date first
above written.

 

	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
  ATTEST:

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  [COMPANY
  SEAL]

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ATTEST:

  	
  ESSEX GROUP, INC.

  
	
   

  	
   

  
	
   

  	
   

  	
  By:

  	
   

  	
   

  
	
  Secretary

  	
   

  	
  Title:

  	
   

  	
   

  
	
   

  	
   

  
	
  [CORPORATE
  SEAL]

  	
   

  
							

 

41

 

EXHIBIT B

 

RESERVED

 

 

 

EXHIBIT C

 

Form
of Notice of Conversion/Continuation

 

Date                     ,       

 

Fleet Capital Corporation, as Administrative Agent

300 Galleria Parkway

Suite 800

Atlanta, Georgia  30339

Attention: Loan Administration Officer

 

Re:                               Credit
Agreement dated November       , 2003, by
and among Superior Essex Communications LLC (“Superior” and “Borrower Agent”)
and Essex Group, Inc. (“Essex”, and collectively with Superior, “Borrowers”),  Fleet Capital
Corporation, as collateral and administrative agent (in such capacity,
“Administrative Agent”) for itself and the financial institutions from time to
time parties thereto as lenders (“Lenders”) such Lenders and the other parties
named therein (as at any time amended, the “Credit Agreement”)

 

Gentlemen:

 

This Notice of Conversion/Continuation is delivered to you pursuant to Section 2.1.2
of the Credit Agreement.  Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
attributable thereto in the Credit Agreement. 
Borrowers hereby give notice of their request as follows:

 

Check as applicable:

 

A conversion of Loans from one Type to another, as follows:

 

(i)                                     The
requested date of the proposed conversion
is                               ,
20        (the “Conversion Date”);

 

(ii)                                  The
Type of Loans to be converted pursuant hereto are presently
                                     [select either LIBOR Loans or Base Rate
Loans]
in the principal amount of
$                                     
outstanding as of the Conversion Date;

 

(iii)                               The
portion of the aforesaid Loans to be converted on the Conversion Date is
$                                     
(the “Conversion Amount”);

 

(iv)                              The
Conversion Amount is to be converted into a
                               
[select either a LIBOR Loan or a Base
Rate Loan]
(the “Converted Loan”) on the Conversion Date.

 

(v)                                 [In the event
a Borrower selects a LIBOR Loan:] Borrowers hereby request that
the Interest Period for such Converted Loan be for a duration of
             [insert length of Interest Period].

 

A continuation of LIBOR Loans for new Interest Period, as follows:

 

42

 

 

(i)                                     The
requested date of the proposed continuation is
                                   ,
20      (the “Continuation Date”);

 

(ii)                                  The
aggregate amount of the LIBOR Loans subject to such continuation is
$                                     ;

 

(iii)                               The
duration of the selected Interest Period for the LIBOR Loans which are the subject
of such continuation
is:                                
[select duration of applicable Interest
Period];

 

Borrower Agent hereby ratifies and reaffirms all of the Borrowers’
liabilities and obligations under the Loan Documents and certifies that no Default
or Event of Default exists on the date hereof.

 

Borrower Agent has caused this Notice of Conversion/Continuation to be
executed and delivered by its duly authorized representative,
this                day
of                             ,
20    .

 

	
   

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC,

  as Borrower Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

EXHIBIT D

 

Form
of Notice of Borrowing

 

Date                    ,
20   

 

Fleet Capital Corporation, as Administrative Agent

300 Galleria Parkway

Suite 800

Atlanta, Georgia  30339

Attention: Loan Administration Officer

 

Re:                               Credit
Agreement dated November       , 2003, by
and among Superior Essex Communications LLC (“Superior” and “Borrower Agent”)
and Essex Group, Inc. (“Essex”, and collectively with Superior, “Borrowers”),  Fleet Capital
Corporation, as collateral and administrative agent (in such capacity,
“Administrative Agent”) for itself and the financial institutions from time to
time parties thereto as lenders (“Lenders”) such Lenders and the other parties
named therein (as at any time amended, the “Credit Agreement”)

 

Gentlemen:

 

This Notice of Borrowing is delivered to you pursuant to Section 3.1.1
of the Credit Agreement.  Unless
otherwise defined herein, capitalized terms used herein shall have the meanings
attributable thereto in the Credit Agreement. 
Borrowers hereby request a Revolver Loan in the aggregate principal
amount of
$                            ,
to be made
on                           ,           ,
and to consist of:

 

Check as
applicable:                                    Base
Rate Loans in the aggregate principal amount of
$                        

 

LIBOR Loans in the aggregate principal amount of
$                      ,
with Interest Periods as follows:

 

(i)                                     As
to
$                      ,
an Interest Period of
             month(s);

 

(ii)                                  As
to
$                      ,
an Interest Period of
            
months;

 

(iii)                               As
to
$                      ,
an Interest Period of
            
months.

 

Borrower Agent hereby ratifies and reaffirms all of Borrowers’
liabilities and obligations under the Loan Documents and hereby certifies that
no Default or Event of Default exists on the date hereof.

 

 

Borrower Agent has caused this Notice of Borrowing to be executed and
delivered by its duly authorized representative, this
                      
day
of                           , 20    .

 

	
   

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC,

  as Borrower Agent

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

EXHIBIT E

 

COMPLIANCE CERTIFICATE

 

[Letterhead of Borrower Agent]

 

                     , 20  

 

Fleet Capital Corporation, as Administrative Agent

300 Galleria Parkway, N.W.

Suite 800

Atlanta, Georgia  30339

 

The undersigned, the chief financial officer of Superior Essex Communications LLC,
a Delaware limited liability company (“Borrower Agent”), as Borrower Agent, on
behalf of itself and the other Borrowers, gives this certificate to Fleet
Capital Corporation (“Administrative Agent”) in accordance with the
requirements of Section 9.1.3 of that certain Credit Agreement dated
                    ,
20    , among Borrowers, Administrative Agent, as
collateral and administrative agent (in such for itself and the financial
institutions from time to time parties thereto as lenders (“Lenders”), such
Lenders and the other parties named therein (as at any time amended, the “Credit
Agreement”).  Capitalized terms used in
this Certificate, unless otherwise defined herein, shall have the meanings
ascribed to them in the Credit Agreement.

 

1.                                       Based
upon my review of the balance sheets and statements of income of Borrowers and
their Subsidiaries for the [Fiscal Year]  [quarterly period]
ending                                     , 20    ,
copies of which are attached hereto, I hereby certify that:

 

(a)                     Consolidated Fixed Charge Coverage
Ratio
was          to         ;

 

(b)                   Average Availability during the
period was
$                        ;

 

 (c)                  Capital Expenditures for Borrowers
during the period and for the Fiscal Year to date total
$                  
and $                    ,
respectively; and

 

 (c)                  Foreign Venture Investments during
the period and for the Fiscal Year to date total
$                    
and $                    ,
respectively.

 

2.                                       No
Default exists on the date hereof, other
than:                                                                                                         [if
none, so state]; and

 

3.                                       No
Event of Default exists on the date hereof, other
than                                                                                                         [if
none, so state].

 

4.                                       As
of the date hereof, each Borrower is current in its payment of all accrued rent
and other charges to Persons who own or lease any premises where any of the
Collateral is located, and there are no pending disputes or claims regarding
any Borrower’s failure to pay or delay in payment of any such rent or other
charges.

 

 

5.                                       Attached
hereto is a schedule showing the calculations that support Borrowers’
compliance [non-compliance]
with the financial covenants, as shown above.

 

	
   

  	
  Very
  truly yours,

  
	
   

  	
   

  
	
   

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC,

  
	
   

  	
  as
  Borrower Agent

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  Chief
  Financial Officer

  

 

 

EXHIBIT F

 

OPINION LETTER REQUIREMENTS

 

With respect to each Borrower and each Guarantor, Borrowers’ and such
Guarantor’s counsel’s opinion letter should address the following in a manner
satisfactory to Administrative Agent:

 

1.                                       Each
Borrower’s and each Guarantor’s due incorporation, valid existence, good
standing and qualification as a foreign corporation.

 

2.                                       Corporate
name of each Borrower and each Guarantor.

 

3.                                       Each
Borrower’s and each Guarantor’s corporate power to execute, deliver and perform
the Loan Documents to which it is a signatory.

 

4.                                       Each
Borrower’s and each Guarantor’s due authorization to execute, deliver and
perform the Loan Documents to which it is a signatory, and its due execution
and delivery thereof.

 

5.                                       Each
Borrower’s and each Guarantor’s execution, delivery and performance of the Loan
Documents do not (a) violate the articles or bylaws, (b) cause a breach or
default by such Borrower or such Guarantor under any agreement, (c) violate any
law, regulation, judgment or order, or (d) result in or require a Lien or other
encumbrance other than in favor of Administrative Agent.

 

6.                                       The
number of issued and outstanding shares of stock of each Borrower.

 

7.                                       The
Loan Documents as legal, valid and binding obligations, enforceable against all
Obligors in accordance with their respective terms, subject to standard
bankruptcy and other creditor’s rights and equity exceptions.

 

8.                                       Counsel’s
lack of knowledge of pending or threatened litigation or other proceedings,
except as disclosed in Credit Agreement.

 

9.                                       Absence
of any registration, filing, consent or approval requirement of a Governmental
Authority in connection with the execution, delivery and performance of the
Loan Documents.

 

10.                                 Non-violation
by the Loan Documents of any Applicable Law relating to interest or usury.

 

11.                                 Due
payment of all applicable taxes and fees required to be paid in connection with
the Loans, the Loan Documents, UCC financing statements and other Security
Documents.

 

12.                                 Creation
in favor of Administrative Agent of a duly perfected security interest in the
Collateral described in the Credit Agreement and the Security Documents.

 

13.                                 Absence
of violation of Section 7 of the Securities Exchange Act of 1934, as
amended, any regulations issued pursuant thereto, or Regulations T, U and X of
the Board of Governors of the Federal Reserve System, by the transactions
contemplated by the Loan Documents.

 

14.                                 Absence
of requirement under the laws of applicable states for Administrative Agent or
Lenders to qualify in such states to enter into or enforce the provisions of
the Loan Documents.

 

 

15.                                 No
Borrower nor any Guarantor is an “investment company” or a company “controlled”
by an “investment company” within the meaning of the Investment Company Act of
1940, or a “holding company” or a “subsidiary company” of a “holding company”
or an “affiliate,” of a “holding company” or of a “subsidiary company” of a
“holding company” within the meaning of the Public Utilities Holding Company
Act of 1935.

 

16.                                 The
status of the confirmation order as a Final Order.

 

17.                                 The
consummation of all of the transactions contemplated by the New Senior Secured
Note Indenture in accordance with the terms thereof.

 

18.                                 Local
counsel opinions.

 

 

EXHIBIT G

 

FORM
OF ASSIGNMENT AND ACCEPTANCE

 

 

Dated as of
          ,
20     

 

Reference is made to the Credit Agreement dated
November      , 2003 (at any time amended, the
“Credit Agreement”), among SUPERIOR ESSEX COMMUNICATIONS LLC (hereinafter
referred to as “Superior” and “Borrower Agent”), a Delaware limited liability
company,  ESSEX GROUP, INC., a Michigan
corporation (hereinafter referred to as “Essex”; Superior and Essex being
referred to collectively as “Borrowers,” and individually as a “Borrower”), FLEET
CAPITAL CORPORATION, as collateral and administrative agent (in such
capacity, “Administrative Agent”) for itself and the financial institutions
from time to time parties thereto as lenders (“Lenders”), GENERAL ELECTRIC CAPITAL CORPORATION,
as syndication agent for Lenders, and such Lenders.  Capitalized terms used herein and not otherwise defined shall
have the meanings assigned to such terms in the Credit Agreement.

 

                                                                                                  (the
“Assignor”) and                                                   
                      (the
“Assignee”) agree as follows:

 

1.                                       Assignor
hereby assigns to Assignee and Assignee hereby purchases and assumes from
Assignor (i) a principal amount of
$                 
of the outstanding Revolver Loans held by Assignor [and $                     of participations of Assignor in LC
Outstandings] (which amount[s], according to the records of Administrative Agent,
represent[s]               %
of the total principal amount of outstanding Revolver Loans [and LC Outstandings])
and (ii) a principal amount of
$                 
of Assignor’s Revolver Commitment (which amount includes Assignor’s outstanding
Revolver Loans being assigned to Assignee pursuant to clause (i) above and
which, according to the records of Administrative Agent, represents
(         %) of the total Revolver
Commitments of Lenders under the Credit Agreement (]the “Assigned Interest”), together with an
interest in the Loan Documents corresponding to the Assigned Interest.  This Agreement shall be effective from the
date (the “Assignment Effective Date”) on which Assignor receives both (x) the
principal amount of the Assigned Interest in the Loans on the Assignment Effective
Date, if any, and (y) a copy of this Agreement duly executed by Assignee.  From and after the Assignment Effective
Date, Assignee hereby expressly assumes, and undertakes to perform, all of
Assignor’s obligations in respect of Assignor’s Commitments to the extent, and
only to the extent, of Assignee’s Assigned Interest, and all principal,
interest, fees and other amounts which would otherwise be payable to or for
Assignor’s account in respect of the Assigned Interest shall be payable to or
for Assignee’s account, to the extent such amounts have accrued subsequent to
the Assignment Effective Date.

 

2.                                                                                       Assignor
(i) represents that as of the date hereof, the aggregate of its Commitments
under the Credit Agreement (without giving effect to assignments thereof, which
have not yet become effective) is
$                 ,
and the outstanding balance of its Loans [and participations in LC Outstandings]
(unreduced by any assignments thereof, which have not yet become effective) is
$                    ;
(ii) makes no representation or warranty and assumes no responsibility with
respect to any statements, warranties or representations made in or in
connection with the Credit Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or
any other instrument or document furnished pursuant thereto, other than that
Assignor is the legal and

 

 

beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; [and] (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of Borrowers, the performance or observance by Borrowers of
any of their obligations under the Credit Agreement or any of the Loan
Documents[; and (iv)
attaches the Notes held by it and requests that Administrative Agent exchange
such Notes for new Notes payable to Assignee and the Assignor in the principal
amounts set forth on Schedule A hereto].

 

3.                                                                                       Assignee
(i) represents and warrants that it is legally authorized to enter into this
Assignment and Acceptance; (ii) confirms that it has received a copy of the
Credit Agreement, together with copies of the most recent financial statements
delivered pursuant to Section 9.1.3 thereof, and copies of
such other Loan Documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment and
Acceptance; (iii) agrees that it shall, independently and without reliance upon
the Assignor 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 the Credit Agreement; (iv) confirms that it is eligible
to become an Assignee; (v)  appoints and
authorizes Administrative Agent to take such action as agent on its behalf and
to exercise such powers under the Credit Agreement as are delegated to
Administrative Agent by the terms thereof, together with such powers as are
incidental thereto; (vi) agrees that it will strictly observe and perform all
the obligations that are required to be performed by it as a “Lender” under the
terms of the Credit Agreement and the other Loan Documents; and (vii) agrees
that it will keep confidential all information with respect to Borrowers
furnished to it by Borrowers or the Assignor to the extent provided in the
Credit Agreement.

 

4.                                       Assignor
acknowledges and agrees that it will not sell or otherwise dispose of the
Assigned Interest or any portion thereof, or grant any participation therein,
in a manner which, or take any action in connection therewith which, would
violate the terms of any of the Loan Documents.

 

5.                                       This
Agreement and all rights and obligations shall be interpreted in accordance
with and governed by the laws of the State of Georgia.  If any provision hereof would be invalid
under Applicable Law, then such provision shall be deemed to be modified to the
extent necessary to render it valid while most nearly preserving its original
intent; no provision hereof shall be affected by another provision’s being held
invalid.

 

6.                                       Each
notice or other communication hereunder shall be in writing, shall be sent by
messenger, by telecopy or facsimile transmission or by first-class mail, shall
be deemed given when sent and shall be sent as follows:

 

(a)                                  If to Assignee, to
the following address (or to such other address as Assignee may designate from
time to time):

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

(b)                                 If to Assignor, to the following address (or
to such other address as Assignor may designate from time to time):

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  

 

 

Payments hereunder shall be
made by wire transfer of immediately available Dollars as follows:

 

If to Assignee, to the
following account (or to such other account as Assignee may designate from time
to time):

 

 

	
   

  	
   

  
	
  ABA
  No.

  	
   

  	
   

  
	
   

  	
   

  
	
  Account
  No.

  	
   

  	
   

  
	
  Reference:

  	
   

  	
   

  
								

 

If to Assignor, to the
following account (or to such other account as Assignor may designate from time
to time):

 

	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  ABA
  No.

  	
   

  	
   

  
	
  For
  Account of:

  	
   

  	
   

  
	
  Reference:

  	
   

  	
   

  
								

 

IN WITNESS WHEREOF, the parties hereto have caused this Assignment and
Acceptance to be executed and delivered by their respective duly authorized
officers, as of the date first above written.

 

	
   

  	
   

  	
   

  
	
   

  	
  (“Assignor”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

	
   

  	
   

  	
   

  
	
   

  	
  (“Assignee”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  Title:

  	
   

  	
   

  
					

 

 

SCHEDULE A
TO ASSIGNMENT AND ACCEPTANCE

 

 

EXHIBIT H

 

FORM
OF NOTICE

 

Reference is made to (i) the Credit Agreement dated
November       , 2003 (as at any time
amended, the “Credit Agreement”) among SUPERIOR ESSEX COMMUNICATIONS LLC (hereinafter
referred to as “Superior” and “Borrower Agent”), a Delaware limited liability
company,  ESSEX GROUP, INC., a Michigan
corporation (hereinafter referred to as “Essex”; Superior and Essex being
referred to collectively as “Borrowers,” and individually as a “Borrower”), FLEET
CAPITAL CORPORATION, as collateral and administrative agent (in such
capacity, “Administrative Agent”) for itself and the financial institutions
from time to time parties thereto as lenders (“Lenders”), such Lenders and the
other parties named therein, and (ii) the Assignment and Acceptance dated as
of                         , 20     (the “Assignment Agreement”) between
                                                   
(the “Assignor”) and
                                     
(the “Assignee”).  Except as otherwise
defined herein, capitalized terms used herein which are defined in the Credit
Agreement are used herein with the respective meanings specified therein.

 

The Assignor hereby notifies Borrowers and Administrative Agent of
Assignor’s intent to assign to Assignee pursuant to the Assignment Agreement a
principal amount of (i)
$                 
of the outstanding Revolver Loans and participations in LC Outstandings held by
Assignor, and (ii)
$                 
of Assignor’s Revolver Commitment (which amount includes the Assignor’s
outstanding Revolver Loans being assigned to Assignee pursuant to clause (i)
above), together with an interest in the Loan Documents corresponding to the
interest in the Loans and Commitment so assigned.  Pursuant to the Assignment Agreement, Assignee has expressly
assumed all of Assignor’s obligations under the Credit Agreement to the extent
of the Assigned Interest (as defined in the Assignment Agreement).

 

For purposes of the Credit Agreement, Administrative Agent shall deem
Assignor’s share of the Revolver Commitment to be reduced by
$                 
[and $                 ,
respectively], and Assignee’s share of the Revolver Commitment to be
increased by
$                 
[and $                 ,
respectively].

 

The address of the Assignee to which notices, information and payments
are to be sent under the terms of the Credit Agreement is:

 

 

	
   

  
	
   

  
	
   

  
	
   

  

 

Assignee’s
LIBOR Lending Office address is as follows:

 

	
   

  
	
   

  
	
   

  
	
   

  

 

This Notice is being
delivered to Borrowers and Administrative Agent pursuant to Section 13.3 of the Credit
Agreement.  Please acknowledge your
receipt of this Notice by executing and returning to Assignee and Assignor a
copy of this Notice.

 

 

IN WITNESS WHEREOF, the
undersigned have caused the execution of this Notice, as of
                       ,
20    .

 

	
   

  	
   

  	
   

  
	
   

  	
  (“Assignor”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

 

	
   

  	
   

  	
   

  
	
   

  	
  (“Assignee”)

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  	
   

  
							

 

ACKNOWLEDGED AND AGREED TO

AS OF THE DATE SET FORTH ABOVE:

 

BORROWERS AGENT:

 

SUPERIOR ESSEX
COMMUNICATIONS LLC,

as Borrower Agent

 

 

 

	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
						

 

* No signature required by Borrower Agent when an Event of Default
exists.

 

FLEET CAPITAL
CORPORATION,

as Administrative Agent

 

 

	
  By:

  	
   

  	
   

  	
   

  
	
  Title:

  	
   

  	
   

  	
   

  
						

 

 

EXHIBIT I

 

LETTER
OF CREDIT PROCUREMENT REQUEST

 

Fleet Capital Corporation, as Administrative Agent

Suite 800

300 Galleria Parkway

Atlanta, Georgia 30339

Attention:

 

This Letter of Credit Procurement Request is delivered to you pursuant
to the Credit Agreement, dated November     , 2003,
among SUPERIOR
ESSEX COMMUNICATIONS LLC (hereinafter referred to as “Superior” or
“Borrower Agent”), a Delaware limited liability company,  ESSEX GROUP, INC., a Michigan corporation
(hereinafter referred to as “Essex”; Superior and Essex being referred to
collectively as “Borrowers,” and individually as a “Borrower”), FLEET
CAPITAL CORPORATION, as collateral and administrative agent (in such
capacity, “Administrative Agent”) for itself and the financial institutions
from time to time parties thereto as lenders (“Lenders”), such Lenders and the
other parties named therein (as the same may be amended, supplemented, restated
or otherwise modified from time to time, the “Credit Agreement”).  Unless otherwise defined herein, terms used
herein have the meanings assigned to them in the Credit Agreement.

 

Borrowers hereby request Fleet to provide an LC Support to induce Bank
to issue a Letter of Credit, as follows:

 

	
  (1)

  	
  Borrower’s/Account
  Party’s Name

  	
   

  	
   

  
	
  (2)

  	
  Amount
  of Letter of Credit:

  	
   

  	
  $

  
	
  (3)

  	
  Issuance
  Date:

  	
   

  	
   

  
	
  (4)

  	
  Beneficiary’s
  Name:

  	
   

  	
   

  
	
  (5)

  	
  Beneficiary’s
  Address:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (6)

  	
  Expiry
  Date:

  	
   

  	
   

  
	
  (7)

  	
  Draw
  Conditions:

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (8)

  	
  Single
  draw : or Multiple draw :

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  (9)

  	
  Purpose
  of Letter of Credit:

  	
   

  	
   

  

 

Attached hereto is the Bank’s form of LC Application, completed with
the details of the Letter of Credit requested herein.

 

 

Borrower Agent hereby certifies that each of the LC Conditions is now,
and will on the date of issuance of the Letter of Credit, be satisfied in all
respects and that no Default or Event of Default exists.  Borrower Agent hereby ratifies and reaffirms
all of the Loan Documents and Obligations arising thereunder.

 

IN WITNESS WHEREOF, Borrower Agent has caused this Letter of Credit
Procurement Request to be executed and delivered by its duly authorized
officer,
this        day of                                   , 20    .

 

	
   

  	
  SUPERIOR ESSEX COMMUNICATIONS LLC

  (“Borrower Agent”)

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  	
   

  
	
   

  	
   

  	
  Title:Exhibit 10(b)

 

EXECUTION COPY

 

 

 

REGISTRATION RIGHTS AGREEMENT

 

by and among

 

SUPERIOR ESSEX INC.

 

and

 

THE HOLDERS NAMED HEREIN

 

Dated as of November 10, 2003

 

 

 

 

Table of Contents

 

	
  1.

  	
  Definitions

  	
   

  
	
   

  	
   

  	
   

  
	
  2.

  	
  Initial
  Registration Under the Securities Act

  	
   

  
	
   

  	
  (a)     Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  3.

  	
  Securities Act
  Registration on Request.

  	
   

  
	
   

  	
  (a)     Request

  	
   

  
	
   

  	
  (b)     Shelf Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  4.

  	
  Piggyback
  Registration

  	
   

  
	
   

  	
   

  	
   

  
	
  5.

  	
  Expenses.

  	
   

  
	
   

  	
   

  	
   

  
	
  6.

  	
  General.

  	
   

  
	
   

  	
  (a)     Registration
  of Other Securities

  	
   

  
	
   

  	
  (b)     Registration Statement
  Form

  	
   

  
	
   

  	
  (c)     Effective
  Registration Statement

  	
   

  
	
   

  	
  (d)     Selection of
  Underwriters

  	
   

  
	
   

  	
  (e)     Priority
  in Requested Registration

  	
   

  
	
   

  	
  (f)      Registration
  Procedures

  	
   

  
	
   

  	
   

  	
   

  
	
  7.

  	
  Underwritten
  Offerings

  	
   

  
	
   

  	
  (a)     Requested
  Underwritten Offerings

  	
   

  
	
   

  	
  (b)     Piggyback
  Underwritten Offerings: Priority

  	
   

  
	
   

  	
  (c)     Holders
  of Registrable Common Stock to be Parties to Underwriting Agreement

  	
   

  
	
   

  	
  (d)     Holdback
  Agreements

  	
   

  
	
   

  	
   

  	
   

  
	
  8.

  	
  Preparation: Reasonable
  Investigation

  	
   

  
	
   

  	
  (a)     Registration
  Statements

  	
   

  
	
   

  	
  (b)     Confidentiality

  	
   

  
	
   

  	
   

  	
   

  
	
  9.

  	
  Postponements

  	
   

  
	
   

  	
   

  	
   

  
	
  10.

  	
  Indemnification

  	
   

  
	
   

  	
  (a)     Indemnification by the
  Company

  	
   

  
	
   

  	
  (b)     Indemnification
  by the Offerors and Sellers

  	
   

  
	
   

  	
  (c)     Notices
  of Losses, etc.

  	
   

  
	
   

  	
  (d)     Contribution

  	
   

  
	
   

  	
  (e)     Other
  Indemnification

  	
   

  
	
   

  	
  (f)      Indemnification
  Payments

  	
   

  
	
   

  	
   

  	
   

  
	
  11.

  	
  Registration Rights to
  Others

  	
   

  

 

i

 

	
  12.

  	
  Adjustments
  Affecting Registrable Common Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  13.

  	
  Rule
  144 and Rule 144A

  	
   

  
	
   

  	
   

  	
   

  
	
  14.

  	
  Amendments
  and Waivers

  	
   

  
	
   

  	
   

  	
   

  
	
  15.

  	
  Nominees for Beneficial
  Owners

  	
   

  
	
   

  	
   

  	
   

  
	
  16.

  	
  Assignment

  	
   

  
	
   

  	
   

  	
   

  
	
  17.

  	
  Calculation
  of Percentage or Number of Shares of Registrable Common Stock

  	
   

  
	
   

  	
   

  	
   

  
	
  18.

  	
  Termination of
  Registration Rights

  	
   

  
	
   

  	
   

  	
   

  
	
  19.

  	
  Miscellaneous.

  	
   

  
	
   

  	
  (a)     Further
  Assurances

  	
   

  
	
   

  	
  (b)     Headings

  	
   

  
	
   

  	
  (c)     Remedies

  	
   

  
	
   

  	
  (d)     Entire Agreement

  	
   

  
	
   

  	
  (e)     Notices

  	
   

  
	
   

  	
  (f)      Governing Law

  	
   

  
	
   

  	
  (g)     Severability

  	
   

  
	
   

  	
  (h)     Counterparts

  	
   

  
	
   

  	
  (i)      Additional Management
  Holders

  	
   

  
	
   

  	
   

  	
   

  
	
  SCHEDULES:

  	
   

  
	
   

  	
   

  
	
  SCHEDULE A – HOLDERS OF REGISTRABLE COMMON
  STOCK

  	
   

  
	
   

  	
   

  
	
  SCHEDULE B – NOTICES

  	
   

  

 

ii

 

REGISTRATION
RIGHTS AGREEMENT

 

REGISTRATION RIGHTS AGREEMENT, dated as of
November 10, 2003 (this “Agreement”), by and among Superior Essex Inc., a Delaware corporation (the “Company”), and the holders of Registrable
Common Stock (as hereinafter defined) who are listed on Schedule A to this
Agreement (the “Original Holders”), the holders of the Warrants (as
hereinafter defined) and such other Persons who may become a party hereto
pursuant to Section 16 or 19(i) hereof.

 

This Agreement is being entered into in
connection with the acquisition of Common Stock (as hereinafter defined) by (i)
the Original Holders pursuant to the Plan (as hereinafter defined), (ii)
Management Holders (as hereinafter defined) pursuant to any grant of a stock
option and/or award from the Company and (iii) the holders of the Warrants
pursuant to the Warrant Agreement (as hereinafter defined).  Upon
the issuance of the Common Stock pursuant to the Plan, each Original Holder
will own the number of shares of Common Stock specified with respect to such
Original Holder in Schedule A hereto.

 

To induce the Original Holders to vote in
favor of the Plan and to accept the Common Stock under the Plan, the Company is
herewith agreeing to register Registrable Common Stock (as hereinafter defined)
under the Securities Act (as hereinafter defined) and to take certain other
actions with respect to the Registrable Common Stock, subject to the terms and
conditions of such undertaking of this Agreement.

 

In consideration of the premises and the
mutual agreements set forth herein, the parties hereto hereby agree as follows:

 

1.                Definitions. 
Unless otherwise defined herein, capitalized terms used herein and in
the recitals above shall have the following meanings:

 

“Affiliate” of a Person means any
Person that directly, or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such other
Person.  For purposes of this
definition, “control” means the ability of one Person to direct the
management and policies of another Person.

 

“Agreement” has the meaning set forth
in the preamble hereto.

 

“Business Day” means any day except a
Saturday, Sunday or other day on which commercial banks in New York City are
authorized or required by law to be closed.

 

“Commission” means the U.S. Securities
and Exchange Commission.

 

“Common Stock” means the shares of
common stock, $.01 par value per share, of the Company, as adjusted to reflect
any merger, consolidation, recapitalization, reclassification, split-up, stock
dividend, rights offering or reverse stock split made, declared or effected with respect
to the Common Stock.

 

“Company”
has the meaning set forth in the preamble hereto.

 

“Company
Indemnitee” has the meaning set forth in Section 10(a) hereof.

 

 

“Effective Date” means the effective
date of the Plan pursuant to the terms thereof.

 

“Exchange Act” means the Securities
Exchange Act of 1934, as amended, and the rules and regulations thereunder, or
any similar or successor statute.

 

“Expenses” means all expenses incident
to the Company’s performance of or compliance with its obligations under this
Agreement, including, without limitation, all registration, filing, listing,
stock exchange and NASD fees (including, without limitation, all fees and
expenses of any “qualified independent underwriter” required by the rules of
the NASD), all fees and expenses of complying with state securities or blue sky
laws (including the reasonable fees, disbursements and other charges of counsel
for the underwriters in connection with blue sky filings), all word processing,
duplicating and printing expenses, messenger, telephone and delivery expenses,
all rating agency fees, the fees, disbursements and other charges of counsel
for the Company and of its independent public accountants, including the
expenses incurred in connection with “cold comfort” letters required by or
incident to such performance and compliance, the fees and expenses incurred in
connection with the listing of the securities to be registered on each
securities exchange or national market system on which similar securities
issued by the Company are then listed (if any) the reasonable fees,
disbursements and other charges of one firm of counsel (per registration
statement prepared in accordance with the terms hereof) to the holders of
Registrable Common Stock selling shares of such stock under such registration
statement pursuant to Section 2, Section 3(a), Section 3(b) or Section 4 hereof
(selected by the Holders holding a majority of the shares of Registrable Common
Stock covered by such registration), the fees and expenses of any special experts retained by the Company
in connection with such registration, and the fees and expenses of other
persons retained by the Company, but excluding underwriting discounts
and commissions and applicable transfer taxes, if any, which discounts,
commissions and transfer taxes shall be borne by the seller or sellers of
Registrable Common Stock in all cases; provided, that, if the
Company shall, in accordance with Section 4 or Section 9 hereof, not register
any securities with respect to which it had given written notice of its
intention to register to holders of Registrable Common Stock, notwithstanding
anything to the contrary in the foregoing, all reasonable out-of-pocket
expenses incurred by Requesting Holders in connection with such registration
(other than the reasonable fees, disbursements and other charges of counsel
other than the one firm of counsel referred to above), if any, shall be deemed
to be Expenses.

 

“Holders” means the Original Holders,
the Warrant Stock Holders and such other Persons who may become party hereto
pursuant to Section 16 or 19(i) hereof.

 

“Holder Indemnitee” has the meaning
set forth in Section 10(b) hereof.

 

“Initial Registration Period” has the
meaning set forth in Section 2(a) hereof.

 

“Initial Registration Statement” has
the meaning set forth in Section 2(a) hereof.

 

“Initiating Request” has the meaning
set forth in Section 3(a) hereof.

 

“Loss” and “Losses” have the
meanings set forth in Section 10(a) hereof.

 

2

 

“Management Holders” means Holders of
Registrable Common Stock who are directors or officers of the Company.

 

“NASD” means the National Association of
Securities Dealers, Inc.

 

“NASDAQ” means the National
Association of Securities Dealers, Inc. Automated Quotation System.

 

“Offering Documents” has the meaning
set forth in Section 10(a) hereof.

 

“Original Holders” has the meaning set
forth in the preamble hereto.

 

“Person” means any individual,
corporation, limited liability company, partnership, firm, joint venture,
association, joint stock company, trust, unincorporated organization,
governmental or regulatory body or subdivision thereof or other entity.

 

“Piggyback Requesting Holder” has the
meaning set forth in Section 4 hereof.

 

“Plan” means the Joint Plan of
Reorganization under Chapter 11 of the United States Bankruptcy Code for
Superior Telecom Inc. and certain of its domestic subsidiaries, as the same may
be amended, modified or supplemented from time to time in accordance with the
terms thereof.

 

“Public Offering” means a public
offering and sale of Common Stock pursuant to an effective registration
statement under the Securities Act.

 

“Registrable Common Stock” means any
of the Common Stock issued (i) pursuant to the Plan and owned by the Holders
from time to time, (ii) to a Management Holder from time to time or (iii)
pursuant to the exercise of Warrants from time to time, provided,
however, that a share of Common Stock will cease to be Registrable Common Stock
after it has been sold under a registration statement effected pursuant hereto
(or, in the case of a Management Holder, a registration statement on Form S-8)
or pursuant to Rule 144 promulgated under the Securities Act or has otherwise
been Transferred without a valid assignment by the Transferor to the Transferee
of the rights and obligations hereunder pursuant to Section 16 hereof.

 

“Requesting
Holders” means one or more Holders which, together with their Affiliates,
collectively beneficially own at least 15% of the outstanding shares of Common
Stock.

 

“Securities Act” means the Securities
Act of 1933, as amended, and the rules and regulations thereunder, or any
similar or successor statute.

 

“Selling Holders” means the holders of
Registrable Common Stock that have requested that some or all of their shares
be registered pursuant hereto.

 

“Shelf Registration” has the meaning
set forth in Section 3(b) hereof.

 

3

 

“Shelf Registration Statement” has the
meaning set forth in Section 3(b) hereof.

 

“Shelf Request Date” has the meaning
set forth in Section 3(b) hereof.

 

“Transfer” means any transfer, sale,
assignment, pledge, hypothecation or other disposition of any interest.  “Transferor” and “Transferee” have
correlative meanings.

 

“Warrant
Agreement” means the Warrant Agreement, dated as of November __, 2003,
between the Company and American Stock Transfer & Trust Company, as the
Warrant Agent.

 

“Warrant
Stock Holders” means Holders of Registrable Common Stock issued upon
exercise of Warrants, in their capacity as such.

 

“Warrants”
means warrants issued pursuant to the Plan that are exercisable for Common
Stock.

 

2.                Initial Registration Under the Securities
Act.

 

(a)  Registration.  The Company shall use its reasonable best
efforts to file and have declared effective by the Commission, as promptly as
practicable after the Company’s registration statement on Form 10 becomes
effective under the Exchange Act (but in no event more than 30 days
thereafter), which registration statement on Form 10 shall be filed with the
Commission as promptly as practicable after the Effective Date (but in no event
more than 30 days thereafter), a shelf registration statement on Form S-1
pursuant to Rule 415 promulgated under the Securities Act (the “Initial
Registration Statement”) providing for the sale by the Holders of all of
the Registrable Common Stock.  The
Company agrees to use its reasonable best efforts to have such Form 10 declared
effective as promptly as practicable after it is filed.  Subject to Section 9(b), the Company agrees
to use its reasonable best efforts to keep the Initial Registration Statement
continuously current and effective until the third anniversary of the date such
Initial Registration Statement is declared effective by the Commission (plus a
number of Business Days equal to the number of Business Days, if any, that the
Initial Registration Statement is not kept effective after the initial date of
its effectiveness and prior to the third anniversary thereof) or such shorter
period which will terminate when all of the Registrable Common Stock covered by
the Initial Registration Statement has been sold pursuant to the Initial
Registration Statement or such shares of Common Stock covered by the
Registration Statement cease to be Registrable Common Stock (the “Initial
Registration Period”).  As promptly
as practicable after becoming eligible to file a registration statement on Form
S-3 under the Securities Act, the Company shall amend the Initial Registration
Statement utilizing Form S-3.   Holders
may effect underwritten offerings pursuant to the Initial Registration
Statement without reducing the number of registrations that the Company is
required to effect pursuant to Section 3 hereof, provided that at least
180 days must elapse between the initiation of an underwritten offering and the
closing of a prior underwritten offering.

 

3.                Securities Act Registration on
Request.

 

(a)  Request.  At any time and from time to time during the
period commencing 180 days after the expiration of the Initial Registration
Period, the Requesting Holders may make

 

4

 

a written request (the “Initiating Request”) to the Company for
the registration with the Commission under the Securities Act of all or part of
such Requesting Holders’ Registrable Common Stock, which Initiating Request
shall specify the number of shares to be disposed of by such Requesting Holders
and the proposed plan of distribution therefor.  Upon the receipt of any Initiating Request for registration
pursuant to this Section 3(a), the Company promptly shall notify in writing all
other Holders (including the Management Holders and all holders of Warrants) of
the receipt of such request and will use its reasonable best efforts to effect,
at the earliest practicable date, such registration under the Securities Act,
including a Shelf Registration, if applicable, of

 

(i)                                     the
Registrable Common Stock which the Company has been so requested to register by
such Requesting Holder or Holders, and

 

(ii)                                  all
other Registrable Common Stock which the Company has been requested to register
by any other Holders by written request given to the Company within 30 days
after the giving of written notice by the Company to such other Holders and
holders of Warrants of the Initiating Request,

 

all to the
extent necessary to permit the disposition (in accordance with Section 6(c)
hereof) of the Registrable Common Stock so to be registered; provided, that,

 

(A)  the Company shall not be
required to effect more than a total of four registrations pursuant to this
Section 3(a) (including a Shelf Registration effected pursuant to Section
3(b)),

 

(B)  if the intended method of
distribution is an underwritten Public Offering, the Company shall not be
required to effect such registration pursuant to this Section 3(a) unless such
underwriting shall be conducted on a “firm commitment” basis,

 

(C)  if the Company shall have
previously effected a registration pursuant to this Section 3(a) (including one
registration effected pursuant to Section 3(b)) or shall have previously
effected a registration of which notice has been given to the Holders pursuant
to Section 4 hereof, the Company shall not be required to effect any
registration or file a Registration Statement pursuant to this Section 3(a)
until a period of 180 days shall have elapsed from the date on which the
previous such registration ceased to be effective,

 

(D)  any Holder whose Registrable
Common Stock was to be included in any such registration pursuant to this
Section 3(a), by written notice to the Company, may withdraw such request and,
on receipt of such notice of the withdrawal of such request from Holders
holding a percentage of Registrable Common Stock, such that the Holders that
have not elected to withdraw do not hold, in the aggregate, the requisite
percentage of the Registrable Common Stock to initiate a request under this
Section 3(a), the Company shall not effect such registration,

 

5

 

(E)  the Company shall not be
required to effect any registration pursuant to this Section 3(a) unless at
least 15% of the shares of Registrable Common Stock outstanding at the time of
such request are to be included in such registration, and

 

(F)  Warrant Stock Holders shall
not be entitled to participate in more than a total of two registrations
pursuant to Section 3(a) (including a Shelf Registration effected pursuant to
Section 3(b)).

 

(b)  Shelf Registration.  One Initiating Request may be made for a
shelf registration statement (a “Shelf Registration Statement”) pursuant
to Rule 415 promulgated under the Securities Act (a “Shelf Registration”)
providing for the sale by the Holders of any or all of the Registrable Common
Stock (the date of such request, the “Shelf Request Date”).  After the Shelf Request Date, the Company
shall (i) use its reasonable best efforts to file, at the earliest practicable
date, such Shelf Registration Statement under the Securities Act and (ii) use
its reasonable best efforts to have such Shelf Registration Statement
thereafter declared effective by the Commission at the earliest practicable
date, but in any event not later than 120 days after the Shelf Request Date or,
if a Shelf Registration Statement is reviewed by the Staff of the Commission,
not later than 180 days after the Shelf Request Date.  Subject to Section 9(b), the Company agrees to use its reasonable
best efforts to keep the Shelf Registration Statement continuously effective
under Rule 415 of the Securities Act until the earliest to occur of (i) the
first anniversary of the date such Shelf Registration Statement initially is
declared effective by the Commission (plus a number of Business Days equal to the
number of Business Days, if any, that the Shelf Registration Statement is not
kept effective after the initial date of its effectiveness and prior to the
first anniversary thereof), (ii) the day after the date on which all of the
Registrable Common Stock covered by the Shelf Registration Statement has been
sold pursuant to the Shelf Registration Statement or (iii) the first date on
which there shall cease to be any Registrable Common Stock.

 

4.                Piggyback Registration.  If the Company, at any time when the Initial
Registration Statement or a Shelf Registration Statement covering all
outstanding shares of Registrable Common Stock is not effective, proposes to
register any of its securities under the Securities Act by registration on any
forms other than Form S-4 or S-8 (or any successor or similar form(s)), whether
or not pursuant to registration rights granted to other holders of its
securities and whether or not for sale for its own account, it shall give
prompt written notice to all of the Holders of the Registrable Common Stock and
all holders of Warrants of its intention to do so and of such Holders’ rights
(if any) under this Section 4, which notice, shall be given at least 30 days
prior to such proposed registration. 
Upon the written request of any Holder that is a holder of Registrable
Common Stock receiving notice of such proposed registration (a “Piggyback
Requesting Holder”) made within 20 days after the receipt of any such
notice (10 days if the Company states in such written notice to the relevant
security holders stating that (i) such registration will be on Form S-3 and
(ii) such shorter period of time is required because of a planned filing date),
which request shall specify the Registrable Common Stock intended to be
disposed of by such Piggyback Requesting Holder and, in the case of an
underwritten offering the minimum offering price per share at which such
Piggyback Requesting Holder is willing to sell its Registrable Common Stock,
the Company shall, subject to Section 7(b) hereof, effect the

 

6

 

registration under the Securities Act of all Registrable Common Stock
which the Company has been so requested to register by the Piggyback Requesting
Holders thereof; provided, that,

 

(A)  prior to the effective date
of the registration statement filed in connection with such registration
pursuant to this Section 4, promptly following receipt of notification by the
Company from the managing underwriter (if an underwritten offering) of the
price or range of prices at which such securities are proposed to be sold, the
Company shall so advise each Piggyback Requesting Holder of such price, and if
such price is below the minimum price which any Piggyback Requesting Holder
shall have indicated to be acceptable to such Piggyback Requesting Holder, such
Piggyback Requesting Holder shall then have the right irrevocably to withdraw
its request to have its Registrable Common Stock included in such registration
statement, by delivery of written notice of such withdrawal to the Company
within one (1) Business Day of its being notified in writing of such price,
without prejudice to the rights of any holder or holders of Registrable Common
Stock to include Registrable Common Stock in any future registration (or registrations)
pursuant to this Section 4 or to cause such registration to be effected as a
registration under Section 3(a) hereof, as the case may be;

 

(B)  if at any time after giving
written notice of its intention to register any securities and prior to the effective
date of the registration statement filed in connection with such registration,
the Company shall determine for any reason not to register or to delay
registration of all of such securities, the Company may, at its election, give
written notice of such determination to each Piggyback Requesting Holder and
(i) in the case of a determination not to register, shall be relieved of its
obligation to register any Registrable Common Stock in connection with such
registration (but not from any obligation of the Company to pay the Expenses in
connection therewith), without prejudice, however, to the rights of any Holder
to include Registrable Common Stock in any future registration (or
registrations) pursuant to this Section 4 or to cause such registration to be
effected as a registration under Section 3 hereof, as the case may be, and (ii)
in the case of a determination to delay registering, shall be permitted to
delay registering any Registrable Common Stock, for the same period as the
delay in registering such other securities; and

 

(C)  if such registration was
initiated by the Company for its own account and involves an underwritten
offering, each Piggyback Requesting Holder that does not withdraw its request
as provided in Section 4(A) shall sell its Registrable Common Stock on the same
terms and conditions as those that apply to the Company, and the underwriters
of such underwritten offering (including the Registrable Common Stock sold by
each Piggyback Requesting Holder) shall be an underwriter (or underwriters)
selected by the Company in its sole and absolute discretion.

 

No registration effected under this Section 4
shall relieve the Company of its obligation to effect any registration upon
request under Section 3(a) or 3(b) hereof and no

 

7

 

registration effected pursuant to this Section 4 shall be deemed to
have been effected pursuant to Section 3(a) or 3(b) hereof.

 

Notwithstanding anything in this Agreement to
the contrary, the Company shall have no obligation under this Section 4 to make
any offering of its securities, or to complete an offering of its securities
that it proposes to make, and shall incur no liability to any Holder for its
failure to do so.

 

5.                Expenses.

 

(a)                       The Company
shall pay all Expenses in connection with any registration initiated pursuant
to Section 2, 3 or 4 hereof, whether or not such registration shall become
effective and whether or not all or any portion of the Registrable Common Stock
originally requested to be included in such registration are ultimately
included in such registration.

 

(b)                      Notwithstanding
anything in Section 5(a) to the contrary, the Company shall not be required to
pay for any Expenses of any registration proceeding begun pursuant to Section 2
or 3 if the registration request is subsequently withdrawn at the request of
Holders of a majority of the Registrable Common Stock to be registered (in
which case all participating Holders shall bear such expenses pro rata based
upon the number of shares of Registrable Common Stock that were requested to be
included in the withdrawn registration), unless (i) in the case of a
registration requested under Section 3, the Holders of a majority of the
Registrable Common Stock agree to forfeit their right to one demand registration
pursuant to Section 3 or (ii) such withdrawal was effected in accordance with
Section 9 hereof.

 

6.                General.

 

(a)  Registration
of Other Securities.  Whenever
the Company shall effect a registration pursuant to Section 2 or 3 hereof, no
securities other than (i) Registrable Common Stock and (ii) subject to Section
6(e), Common Stock to be sold by the Company for its own account shall be
included among the securities covered by any such registration pursuant to
Section 3(a) unless the Selling Holders holding not less than a majority of the
shares of Registrable Common Stock to be covered by such registration shall
have consented in writing to the inclusion of such other securities.

 

(b)  Registration
Statement Form.  Registrations
under Section 2 or 3 hereof shall be on such appropriate registration form
prescribed by the Commission under the Securities Act as shall be selected by
the Company and as shall permit the disposition of the Registrable Common Stock
pursuant to an underwritten offering unless the Selling Holders holding at
least a majority of the shares of Registrable Common Stock requested to be
included in such registration statement determine otherwise, in which case
pursuant to the method of disposition determined by such Selling Holders.  The Company agrees to include in any such
registration statement filed pursuant to Section 2 or 3 hereof all information
which the Selling Holders holding a majority of shares of the Registrable
Common Stock covered by such registration statement effected pursuant hereto,
upon advice of counsel, shall reasonably request.  The Company may, if permitted by law, effect any registration
requested under Section 2 or 3 by the filing of a

 

8

 

registration statement on Form S-3 (or any successor or similar short
form registration statement).

 

(c)  Effective
Registration Statement.  A
registration requested pursuant to Section 2 or 3 hereof shall not be deemed to
have been effected

 

(i)                                     unless
a registration statement with respect thereto has been declared effective by
the Commission and remains effective in compliance with the provisions of the
Securities Act and the laws of any state or other jurisdiction applicable to
the disposition of Registrable Common Stock covered by such registration
statement until such time as all of such Registrable Common Stock has been
disposed of in accordance with the method of disposition set forth in such
registration statement or there shall cease to be any Registrable Common Stock,
provided, that, except with respect to the Initial Registration
or Shelf Registration, such period need not exceed 90 days, and, provided,
further, that with respect to the Initial Registration or Shelf
Registration, such period need not extend beyond the applicable period provided
for in Section 2 or, as the case may be, 3(b) hereof,

 

(ii)                                  if,
after it has become effective, such registration is interfered with by any stop
order, injunction or other order or requirement of the Commission or other
governmental or regulatory agency or court for any reason other than a
violation of applicable law or regulation solely by any Selling Holder and has
not thereafter become effective or

 

(iii)                               if,
in the case of an underwritten offering pursuant to a registration statement
requested under Section 3 (a) hereof, the conditions to closing specified in an
underwriting agreement to which the Company is a party are not satisfied or
waived other than by reason of any breach or failure by any Selling Holder, or
are not otherwise waived.

 

The Holders of Registrable Common Stock to be
included in a registration statement may at any time terminate a request for
registration made pursuant to Section 3(a) in accordance with Section
3(a)(ii)(D).

 

(d)  Selection
of Underwriters.  The underwriter
or underwriters of each underwritten offering, if any, of the Registrable
Common Stock pursuant to a registration statement effected under Section 2 or 3
hereof shall be mutually selected by the Selling Holders owning at least a
majority of the shares of Registrable Common Stock to be registered and the
Company.

 

(e)  Priority
in Requested Registration. 
If a registration under Section 3(a) hereof involves an underwritten
Public Offering or if an underwritten Public Offering is being effected pursuant
to a shelf registration statement, and the managing underwriter of such
underwritten offering shall advise the Company in writing (with a copy to each
Selling Holder requesting that Registrable Common Stock be included in such
underwritten offering) that, in its opinion, the number of shares of
Registrable Common Stock requested to be included in such underwritten offering
exceeds the number of such securities that can be sold in such offering within
a price

 

9

 

range stated to such managing underwriter by Selling Holders owning at
least a majority of the shares of Registrable Common Stock requested to be
included in such underwritten offering to be acceptable to such Selling
Holders, the Company shall include in such underwritten offering, to the extent
of the number and type of securities which the Company is advised can be sold
in such offering, all Registrable Common Stock requested to be included, pro
rata among the Selling Holders requested to be included in such underwritten
offering on the basis of the number of shares of Registrable Common Stock
requested to be included by all such Selling Holders, and no other shares of
Common Stock, whether to be sold by the Company or any other Person.

 

(f)                                    Registration Procedures.  If and whenever the Company is required to
effect any registration under the Securities Act as provided in Section 2, 3 or
4 hereof, the Company shall, as expeditiously as possible:

 

(i)                                     prepare
and file with the Commission (promptly and, in the case of any registration
pursuant to Section 3(a), in any event on or before the date that is (A) 90
days after the date that an Initiating Request is made in accordance with
Section 3(a) or (B) if, as of such ninetieth day, the Company does not have any
audited financial statements required to be included in the registration
statement, 30 days after the receipt by the Company from its independent public
accountants of such audited financial statements, which the Company shall use
its reasonable best efforts to obtain as promptly as practicable) the requisite
registration statement to effect such registration and thereafter use its
reasonable best efforts to cause such registration statement to become and
remain effective; provided, however, that the Company may
discontinue any registration of its securities that are not shares of
Registrable Common Stock (and, under the circumstances specified in Sections 4
and 9(b) hereof, its securities that are shares of Registrable Common Stock) at
any time prior to the effective date of the registration statement relating
thereto;

 

(ii)                                  prepare
and file with the Commission such amendments and supplements to such
registration statement and the prospectus used in connection therewith as may
be necessary to keep such registration statement effective and to comply with
the provisions of the Securities Act and the Exchange Act with respect to the
disposition of all Registrable Common Stock covered by such registration
statement until such time as all of such Registrable Common Stock has been
disposed of in accordance with the method of disposition set forth in such
registration statement; provided, that, except with respect to
any Initial Registration or Shelf Registration, such period need not extend
beyond 90 days after the effective date of the registration statement; and provided,
further, that with respect to the Initial Registration or Shelf
Registration, such period need not extend beyond the applicable period provided
for in Section 2 or, as the case may be, 3(b) hereof;

 

(iii)                               furnish
to each seller of Registrable Common Stock covered by such registration
statement and their representatives designated pursuant to Section 8(a), if
any, and each underwriter, if any, such number of copies of such drafts and final
conformed versions of such registration statement and of each such amendment
and supplement thereto (in each case including all exhibits and any documents
incorporated

 

10

 

by reference), such number of copies of such drafts and final versions
of the prospectus contained in such registration statement (including each
preliminary prospectus and any summary prospectus) and any other prospectus
filed under Rule 424 under the Securities Act, in conformity with the
requirements of the Securities Act, and such other documents, including without
limitation notification of whether such registration statement or amendment or
supplement thereto will be reviewed by the Commission or any other regulatory
authority and any oral or written comments on such registration statement or
amendment or supplement thereto delivered to the Company by the Commission or
any other regulatory authority, as the sellers of a majority of the Registrable
Common Stock covered by such registration statement or any underwriter may
reasonably request in writing; provided, that all drafts of such
registration statement or amendment or supplement thereto shall be furnished to
each seller of Registrable Common Stock covered by such registration statement
and their representatives designated pursuant to Section 8(a) whether or not so
requested;

 

(iv)                              use
its reasonable best efforts (i) to register or qualify all Registrable Common
Stock and other securities, if any, covered by such registration statement
under such other securities or blue sky laws of such states or other
jurisdictions of the United States of America as the sellers of a majority of
the Registrable Common Stock covered by such registration statement shall
reasonably request in writing, (ii) to keep such registration or qualification
in effect for so long as such registration statement remains in effect and
(iii) to take any other action that may be necessary or reasonably advisable to
enable such sellers to consummate the disposition in such jurisdictions of the
securities to be sold by such sellers, except that the Company shall not for
any such purpose be required to qualify generally to do business as a foreign
corporation in any jurisdiction wherein it would not but for the requirements
of this Section 6(f)(iv) be obligated to be so qualified, to subject itself to
taxation in such jurisdiction or to consent to general service of process in
any such jurisdiction;

 

(v)                                 use
its reasonable best efforts to cause all Registrable Common Stock and other
securities, if any, covered by such registration statement to be registered
with or approved by such other federal or state governmental agencies or
authorities as may be necessary in the opinion of counsel to the Company and
counsel to the seller or sellers of Registrable Common Stock to enable the
seller or sellers thereof to consummate the disposition of such Registrable
Common Stock;

 

(vi)                              furnish
to each seller of Registrable Common Stock, and each such seller’s
underwriters, if any, a signed

 

(A)                              opinion
of counsel for the Company, dated the effective date of such registration
statement (and, if such registration involves an underwritten offering, dated
the date of the closing under the underwriting agreement and addressed to the
underwriters), reasonably satisfactory (based on the customary form and
substance of opinions of issuers’ counsel customarily given in such an
offering) in form and substance to such Selling Holders holding a majority of
the Registrable Common Stock being sold, and

 

11

 

(B)                                “cold
comfort” letter, dated the effective date of such registration statement (and,
if such registration involves an underwritten offering, dated the date of the
closing under the underwriting agreement and addressed to the underwriters) and
signed by the independent public accountants who have certified the Company’s
financial statements included or incorporated by reference in such registration
statement, reasonably satisfactory (based on the customary form and substance
of “cold comfort” letters of issuers’ independent public accountant customarily
given in such an offering) in form and substance to Selling Holders holding a
majority of the Registrable Common Stock being sold, in each case, covering
substantially the same matters with respect to such registration statement (and
the prospectus included therein) and, in the case of the accountants’ comfort
letter, with respect to events subsequent to the date of such financial
statements, as are customarily covered in accountants’ comfort letters
delivered to underwriters in underwritten Public Offerings of securities;

 

(vii)                           notify
each seller of Registrable Common Stock and other securities covered by such
registration statement, if any, at any time when a prospectus relating thereto
is required to be delivered under the Securities Act, upon discovery that, or
upon the happening of any event as a result of which, the prospectus included
in such registration statement, as then in effect, includes an untrue statement
of a material fact or omits to state any material fact required to be stated
therein or necessary to make the statements therein not misleading in the light
of the circumstances under which they were made, and, at the written request of
any such seller of Registrable Common Stock, promptly prepare and furnish to it
a reasonable number of copies of a supplement to or an amendment of such
prospectus as may be necessary so that, as thereafter delivered to the
purchasers of such securities, such prospectus, as supplemented or amended,
shall not include an untrue statement of a material fact or omit to state a
material fact required to be stated therein or necessary to make the statements
therein not misleading in the light of the circumstances under which they were
made;

 

(viii)                        use
its reasonable best efforts to obtain the withdrawal of any order suspending
the effectiveness of a registration statement relating to the Registrable
Common Stock at the earliest possible moment;

 

(ix)                                otherwise
comply with all applicable rules and regulations of the Commission and any
other governmental agency or authority having jurisdiction over the offering,
and make available to its security holders, as soon as reasonably practicable
but in no event later than 60 days following the end of the earnings period, an
earnings statement covering the period of at least 12 months, but not more than
18 months, beginning with the first full calendar month after the effective
date of such registration statement, which earnings statement shall satisfy the
provisions of Section 11(a) of the Securities Act and Rule 158 promulgated
thereunder, and furnish to each seller of Registrable Common Stock and to the
managing underwriter, if any, at least ten days prior to the filing thereof (or
such shorter period as may be necessary to comply with applicable rules and
regulations or to correct any material misstatement or deficiency) a copy of
any amendment or supplement to such registration statement or prospectus;

 

12

 

(x)                                   subject
to the Company being able to comply with the listing and other requirements of
a national securities exchange or NASDAQ, use its reasonable best efforts to
cause all Registrable Common Stock covered by a Registration Statement (i) to
be listed on a national securities exchange on which similar securities issued
by the Company are then listed, if the listing of such Registrable Common Stock
is then permitted under the rules of such exchange, or (ii) if the Company is
not required pursuant to clause (i) above to list Registrable Common Stock on a
national securities exchange, use its reasonable best efforts to secure
designation of all Registrable Common Stock as a NASDAQ “national market system
security” within the meaning of Rule 11Aa2-1 of the Commission or, failing
that, to secure NASDAQ authorization for the Registrable Common Stock and,
without limiting the generality of the foregoing, to arrange for at least two
market makers to register with the NASD as such with respect to such
Registrable Common Stock;

 

(xi)                                provide
a transfer agent, registrar and CUSIP number for the Registrable Common Stock
covered by a Registration Statement no later than the effective date thereof;

 

(xii)                             enter
into such agreements (including an underwriting agreement in customary form)
and take such other actions as the Holders holding a majority of the shares of
Registrable Common Stock covered by such registration statement shall
reasonably request in order to expedite or facilitate the disposition of such
Registrable Common Stock, including customary indemnification;

 

(xiii)                          if
requested by the managing underwriter(s) or the Holders holding a majority of
the shares of Registrable Common Stock being sold in connection with an
underwritten offering, subject to applicable law, promptly incorporate in a
prospectus supplement or post-effective amendment such information as the
managing underwriter(s) and the Holders of a majority of the Registrable Common
Stock being sold agree should be included therein relating to the plan of
distribution with respect to such Registrable Common Stock, including without
limitation, information with respect to the number of shares of Registrable
Common Stock being sold to such underwriters, the purchase price being paid
therefor by such underwriters and with respect to any other terms of the
underwritten offering of the Registrable Common Stock to be sold in such
offering; and make all required filings of such prospectus supplement or
post-effective amendment as soon as notified of the matters to be incorporated
in such prospectus supplement or post-effective amendment; and

 

(xiv)                         if
requested by the Selling Holders holding a majority of the shares of
Registrable Common Stock being sold, reasonably cooperate with the Selling
Holders of Registrable Common Stock and the managing underwriter(s), if any, to
facilitate the timely preparation and delivery of certificates representing
Registrable Common Stock to be sold and not bearing any restrictive legends;
and enable such Registrable Common Stock to be in such share amounts and
registered in such names as the managing underwriter(s) or, if none, the
Selling Holders holding a majority of the shares of Registrable Common Stock
being sold, may request at least three Business Days prior to any sale of
Registrable Common Stock to the underwriters.

 

13

 

As a condition to the obligations of the
Company to complete any registration pursuant to this Agreement with respect to
the Registrable Common Stock of a Holder, such Holder must furnish to the
Company in writing such information regarding itself, the Registrable Common
Stock held by it and the intended methods of disposition of the Registrable
Common Stock held by it as is necessary to effect the registration of such
Holders’ Registrable Common Stock and is requested in writing by the
Company.  At least 20 days prior to the
first anticipated filing date of a Registration Statement for any registration
under this Agreement, the Company will notify in writing each Holder of the
information referred to in the preceding sentence which the Company is
requesting from that Holder whether or not such Holder has elected to have any
of its Registrable Common Stock included in the Registration Statement.  If, within 10 days prior to the anticipated
filing date, the Company has not received the requested information from a
Holder, then the Company may file the Registration Statement without including
Registrable Common Stock of that Holder, if, in the opinion of the Company’s
counsel, such information is required to be included in such Registration
Statement.

 

Each Holder agrees that as of the date that a
final prospectus is made available to it for distribution to prospective
purchasers of Registrable Common Stock it shall cease to distribute copies of
any preliminary prospectus prepared in connection with the offer and sale of
such Registrable Common Stock.  Each
Holder further agrees that, upon receipt of any written notice from the Company
of the happening of any event of the kind described in Section 6(f)(vii), such
Holder shall forthwith discontinue such Holder’s disposition of Registrable
Common Stock pursuant to the registration statement relating to such
Registrable Common Stock until such Holder’s receipt of the copies of the
supplemented or amended prospectus contemplated by Section 6(f)(vii) and, if so
directed by the Company, shall deliver to the Company (at the Company’s
expense) all copies, other than permanent file copies, then in such Holder’s
possession of the prospectus relating to such Registrable Common Stock current
at the time of receipt of such notice. 
If any event of the kind described in Section 6(f)(vii) occurs and such
event is the fault solely of a Holder (or Holders), such Holder (or Holders)
shall pay all Expenses attributable to the preparation, filing and delivery of
any supplemented or amended prospectus contemplated by Section 6(f)(vii).

 

7.                Underwritten Offerings.

 

(a)  Requested
Underwritten Offerings. 
If requested by the underwriters in connection with an underwritten
Public Offering pursuant to a registration under Section 2 or 3 hereof, the
Company shall enter into a firm commitment underwriting agreement with such
underwriters for such offering, such agreement to be reasonably satisfactory in
substance and form to the Company and a majority of the Selling Holders whose
Registered Common Stock is included in such offering, and the underwriters and
to contain such representations and warranties by the Company and the Selling
Holders and such other terms as are customary in agreements of that type,
including, without limitation, indemnification and contribution to the effect
and to the extent provided in Section 10 hereof.

 

(b)  Piggyback Underwritten Offerings:
Priority.

 

(i)                                     If
the Company proposes to register any of its securities under the Securities Act
for its own account as contemplated by Section 4 hereof and such

 

14

 

securities are to be distributed by or through one or more
underwriters, and if the managing underwriter of such underwritten offering
shall advise the Company in writing (with a copy to the Piggyback Requesting
Holders) that if all the Registrable Common Stock requested to be included in such
registration were so included, in its opinion, the number and type of
securities proposed to be included in such registration would exceed the number
and type of securities which could be sold in such offering within a price
range acceptable to the Company (such writing to state the basis of such
opinion and the approximate number and type of securities which may be included
in such offering without such effect), then the Company shall include in such
registration pursuant to Section 4, to the extent of the number and type of
securities which the Company is so advised can be sold in such offering, (i)
first, securities that the Company proposes to issue and sell for its own
account, (ii) second, pro  rata among holders of registration
rights, if any, other than holders of Registrable Common Stock and all
Piggyback Requesting Holders (excluding Warrant Stock Holders) on the basis of
the number of securities requested to be registered by such other Holders
having registration rights and by the number of shares of Registrable Common
Stock (other than shares held by Warrant Stock Holders) requested to be
registered by all such holders of registration rights and all Piggyback
Requesting Holders (excluding Warrant Stock Holders), (iii) third, pro  rata
among Warrant Stock Holders on the basis of the number of shares of Registrable
Common Stock properly requested to be registered by such Warrant Stock Holders
and (iv) fourth, other securities, if any.

 

(ii)                                  In
the case of any other registration contemplated by Section 4 involving an
underwritten Public Offering, if the managing underwriter of such underwritten
offering shall advise the Company in writing (with a copy to the Piggyback
Requesting Holders) that if all Registrable Common Stock requested to be
included in such registration were so included, in its opinion, the number and
type of securities proposed to be included in such registration would exceed
the number and type of securities which would be sold in such offering within a
price range stated to such managing underwriter by Selling Holders owning at
least a majority of the shares of Registrable Common Stock requested to be
included in such registration to be acceptable to such Selling Holders (such
writing to state the basis of such opinion and the approximate number and type
of securities which may be included in such offering without such effect), then
the Company shall include in such registration pursuant to Section 4, to the
extent of the number and type of securities which the Company is so advised can
be sold in such offering, (i) first, pro  rata among Piggyback
Requesting Holders (excluding Warrant Stock Holders) on the basis of the number
of shares of Registrable Common Stock requested to be registered by all such
Piggyback Requesting Holders, (ii) second, pro  rata among Warrant
Stock Holders on the basis of the number of shares of Registrable Common Stock
properly requested to be registered by such Warrant Stock Holders, (iii) third,
securities that the Company proposed to issue and sell for its own account and
(iv) fourth, other securities.

 

Any Holder may withdraw its request to have
all or any portion of its Registrable Common Stock included in any such
offering by notice to the Company within 10 Business Days after receipt of a
copy of a notice from the managing underwriter pursuant to this Section 7(b).

 

15

 

(c)  Holders
of Registrable Common Stock to be Parties to Underwriting Agreement.  The holders of Registrable Common Stock to
be distributed by underwriters in an underwritten offering contemplated by
Section 7(a) or (b) shall be parties to the underwriting agreement between the
Company and such underwriters and any such Holder, at its option, may
reasonably require that any or all of the representations and warranties by,
and the other agreements on the part of, the Company to and for the benefit of
such underwriters shall also be made to and for the benefit of such Holders and
that any or all of the conditions precedent to the obligations of such
underwriters under such underwriting agreement be conditions precedent to the
obligations of such Holders.  No such
Holder shall be required to make any representations or warranties to or
agreements with the Company or the underwriters other than representations,
warranties or agreements regarding such Holder, such Holder’s Registrable
Common Stock and such Holder’s intended method of distribution; provided
that any liability of such Holder shall be limited to the proceeds received
from such distribution in accordance with Section 10(b) or (d) hereof.

 

(d)  Holdback
Agreements.  Each Holder agrees,
unless otherwise agreed to by the managing underwriter for any underwritten
offering pursuant to this Agreement, not to effect any sale or distribution of
any equity securities of the Company or securities convertible into or
exchangeable or exercisable for equity securities of the Company, including any
sale under Rule 144 under the Securities Act, during the 10 days prior to the
date on which an underwritten registration of Registrable Common Stock pursuant
to Section 2, 3 or 4 hereof has become effective and until 180 days after the
effective date of such underwritten registration, except as part of such
underwritten registration or to the extent that such Holder is prohibited by
applicable law from agreeing to withhold securities from sale or is acting in
its capacity as a fiduciary or an investment adviser.  Without limiting the scope of the term “fiduciary,” a holder
shall be deemed to be acting as a fiduciary or an investment adviser if its
actions or the securities proposed to be sold are subject to the Employee
Retirement Income Security Act of 1974, as amended, the Investment Company Act
of 1940, as amended, or the Investment Advisers Act of 1940, as amended, or if
such securities are held in a separate account under applicable insurance law
or regulation.

 

The Company agrees (i) not to effect any
Public Offering or distribution of any equity securities of the Company, or
securities convertible into or exchangeable or exercisable for equity
securities of the Company, during the 10 days prior to the date on which any
underwritten registration pursuant to Section 2, 3(a), 3(b) or 4 hereof has
become effective and until 180 days after the effective date of such
underwritten registration, except as part of such underwritten registration,
and (ii) to cause each holder of any equity securities, or securities
convertible into or exchangeable or exercisable for equity securities, in each
case, acquired from the Company at any time on or after the date of this
Agreement (other than in a Public Offering), to agree not to effect any Public
Offering or distribution of such securities, during such period.

 

8.                Preparation: Reasonable Investigation.

 

(a)  Registration
Statements.  In connection with
the preparation and filing of each registration statement under the Securities
Act pursuant to this Agreement, the Company shall (i) give representatives
(designated to the Company in writing) of each Holder or group of Holders
holding at least 10% of the shares of Registrable Common Stock registered under
such

 

16

 

registration statement, the underwriters, if any, and one firm of
counsel, one firm of accountants and one firm of other agents retained on
behalf of all underwriters and one firm of counsel, one firm of accountants and
one firm of other agents retained on behalf of Holders holding a majority of
the shares of Registrable Common Stock covered by such registration statement,
the reasonable opportunity to participate in the preparation of such
registration statement, each prospectus included therein or filed with the
Commission, and each amendment thereof or supplement thereto, (ii) upon
reasonable advance notice to the Company, give each of them such reasonable
access to all financial and other records, corporate documents and properties
of the Company and its subsidiaries, as shall be necessary, in the reasonable
opinion of such Holders’ and such underwriters’ counsel, to conduct a
reasonable due diligence investigation for purposes of the Securities Act, and
(iii) upon reasonable advance notice to the Company, provide such reasonable
opportunities to discuss the business of the Company with its officers,
directors, employees and the independent public accountants who have certified
its financial statements as shall be necessary, in the reasonable opinion of
such Holders’ and such underwriters’ counsel, to conduct a reasonable due
diligence investigation for purposes of the Securities Act.

 

(b)  Confidentiality.  Each Holder of Registrable Common Stock
shall maintain, and shall cause its agents referred to in Section 8(a) to
maintain, the confidentiality of any confidential information received from or
otherwise made available by the Company to such Holder of Registrable Common
Stock.  Information that (i) is or
becomes available to a Holder of Registrable Common Stock from a public source
other than as a result of a disclosure by such Holder or any of its Affiliates,
(ii) is disclosed to a Holder of Registrable Common Stock by a third-party
source who the Holder of Registrable Common Stock reasonably believes is not
bound by an obligation of confidentiality to the Company or (iii) is or becomes
required to be disclosed by a Holder of Registrable Common Stock by law,
including by court order, shall not be deemed to be confidential information
for purposes of this Agreement.  The
Holders of Registrable Common Stock shall not grant access, and the Company
shall not be required to grant access, to information under this Section 8 to
any Person who will not agree to maintain the confidentiality (to the same
extent a Holder is required to maintain confidentiality) of any confidential
information received from or otherwise made available to it by the Company or
the holders of Registrable Common Stock under this Agreement.

 

9.                Postponements.

 

(a)  If the Company shall fail to file or delay
filing for more than 90 days after receipt of any Initiating Request any
registration statement to be filed pursuant to a request for registration under
Section 3 hereof (whether or not pursuant to Section 9(b)), the Holders
requesting such registration shall have the right to withdraw the request for
registration if such withdrawal shall be made by Holders of Common Stock
holding an amount of Common Stock such that the Holders that have not elected
to withdraw do not hold the requisite percentage of shares of Common Stock to
initiate a request under Section 3.  Any
such withdrawal shall be made by giving written notice to the Company within 20
days after, in the case of a request pursuant to Section 3 hereof, the date on
which a registration statement would otherwise have been required to have been
filed with the Commission under clause (A) of Section 6(f)(i) hereof (i.e.,
20 days after the date that is 90 days after the conclusion of the period
within which requests for registration may be given to the Company, or, if, as
of such ninetieth day, the Company does not have the audited financial
statements required to be included in the

 

17

 

registration statement, 30 days after the receipt by the Company from
its independent public accountants of such audited financial statements).  In the event of such withdrawal, the request
for registration shall not be counted for purposes of determining the number of
registrations to which Holders are entitled pursuant to Section 3 hereof.

 

(b)  The Company shall not be obligated to file
any registration statement, or file any amendment or supplement to any
registration statement, and may suspend any Selling Holder’s rights to make
sales pursuant to any effective registration statement, at any time (but not to
exceed one time in any 12 month period) when the Company, in the good faith
judgment of its Board of Directors, reasonably believes that the filing thereof
at the time requested, or the offering of securities pursuant thereto, would
adversely affect a pending or proposed Public Offering of the Company’s
securities, a material financing, or a material acquisition, merger,
recapitalization, consolidation, reorganization or similar transaction, or
negotiations, discussions or pending proposals with respect thereto or would
require the disclosure of material non-public information that, in the good
faith judgment of the Board of Directors, individually or in the aggregate,
would have a material adverse effect on the Company and its subsidiaries taken
as a whole.  The filing of a registration
statement, or any amendment or supplement thereto, by the Company cannot be
deferred, and the Selling Holders’ rights to make sales pursuant to an
effective registration statement cannot be suspended, pursuant to the
provisions of the preceding sentence for more than 10 days after the abandonment
or consummation of any of the foregoing proposals or transactions or for more
than 90 days after the date of the Board’s determination referenced in the
preceding sentence.  If the Company
suspends the sellers’ rights to make sales pursuant hereto, the applicable
registration period shall be extended by the same number of days of such
suspension.

 

10.          Indemnification.

 

(a)  Indemnification
by the Company.  In connection
with any registration statement filed by the Company pursuant to Section 2, 3 or
4 hereof, to the fullest extent permitted by law the Company shall, and hereby
agrees to, indemnify and hold harmless, each Holder of any Registrable Common
Stock covered by such registration statement and each other Person, if any, who
controls (within the meaning of the Exchange Act) such Holder, and their
respective stockholders, directors, officers, employees, partners, agents and
Affiliates (each, a “Company Indemnitee” for purposes of this Section
10(a)), against any losses, claims, damages, liabilities (or actions or
proceedings, whether commenced or threatened, in respect thereof and whether or
not such Indemnified Party is a party thereto), joint or several, and expenses,
including, without limitation, the reasonable fees, disbursements and other charges
of legal counsel and reasonable costs of investigation, to which such Company
Indemnitee may become subject under the Securities Act or otherwise
(collectively, a “Loss” or “Losses”), insofar as such Losses
arise out of or are based upon any untrue statement or alleged untrue statement
of any material fact contained in any registration statement under which such
securities were registered or otherwise offered or sold under the Securities
Act or otherwise, any preliminary prospectus, final prospectus or summary
prospectus related thereto, or any amendment or supplement thereto
(collectively, “Offering Documents”), or any omission or alleged
omission to state therein a material fact required to be stated therein or
necessary to make the statements therein in the light of the circumstances in
which they were made not misleading, or any violation by the Company of any
federal or state law, rule or regulation applicable to the Company and relating
to action

 

18

 

required of or inaction by the Company in connection with any such
registration; provided, that, the Company shall not be liable in any
such case to the extent that any such Loss arises out of or is based upon an
untrue statement or omission made in such Offering Documents in reliance upon
and in conformity with information furnished to the Company in a writing duly
executed by a Company Indemnitee specifically stating that it is expressly for
use therein; and provided, further, that the Company shall not be liable to any
Person who participates as an underwriter in the offering or sale of
Registrable Common Stock or any other person, if any, who controls (within the
meaning of the Exchange Act) such underwriter, in any such case to the extent
that any such Loss arises out of such Person’s failure to send or give a copy
of the final prospectus (including any documents incorporated by reference
therein), as the same may be then supplemented or amended, to the Person
asserting an untrue statement or alleged untrue statement or omission or
alleged omission at or prior to the written confirmation of the sale of
Registrable Common Stock to such Person if such statement or omission was
corrected in such final prospectus. 
Such indemnity shall remain in full force and effect regardless of any
investigation made by or on behalf of a Company Indemnitee and shall survive
the transfer of such securities by such Company Indemnitee.

 

(b)  Indemnification
by the Offerors and Sellers. 
In connection with any registration statement filed by the Company
pursuant to Section 2, 3 or 4 hereof in which a Holder has registered for sale
Registrable Common Stock, each such Holder of Registrable Common Stock shall,
and hereby agrees to, indemnify and hold harmless to the fullest extent
permitted by law the Company and each of its directors, officers, employees,
agents, partners, stockholders, Affiliates and each other Person, if any, who
controls (within the meaning of the Exchange Act) the Company and each other
seller under such registration statement and such seller’s employees,
directors, officers, stockholders, partners, agents and Affiliates (each, a “Holder
Indemnitee” for purposes of this Section 10(b)), against all Losses insofar
as such Losses arise out of or are based upon any untrue statement of a
material fact contained in any Offering Documents (or any document incorporated
by reference therein) or any omission to state therein a material fact required
to be stated therein or necessary to make the statements therein in the light
of circumstances in which they were made not misleading, if such untrue
statement or omission was made in reliance upon and in conformity with
information furnished to the Company in a writing duly executed by such Holder
of Registrable Common Stock specifically stating that it is expressly for use
therein; provided, however, that the liability of such
indemnifying party under this Section 10(b) shall be limited to the amount of
the net proceeds received by such indemnifying party in the sale of Registrable
Common Stock giving rise to such liability. 
Such indemnity shall remain in full force and effect, regardless of any
investigation made by or on behalf of a Holder Indemnitee and shall survive the
transfer of such securities by such indemnifying party.

 

(c)  Notices of Losses,
etc.  Promptly after receipt by an
indemnified party of written notice of the commencement of any action or
proceeding involving a Loss referred to in Section 10(a) or (b), such
indemnified party will, if a claim in respect thereof is to be made against an
indemnifying party, give written notice to the latter of the commencement of
such action; provided, however, that the failure of any
indemnified party to give notice as provided herein shall not relieve the
indemnifying party of its obligations under Section 10(a) or (b), except to the
extent that the indemnifying party is materially and actually prejudiced by
such failure to give notice.  In case
any such action is brought against an indemnified party, the

 

19

 

indemnifying party shall be entitled to participate in and, unless in
such indemnified party’s reasonable judgment, after consultation with its
separate counsel, a conflict of interest between such indemnified and indemnifying
parties may exist in respect of such Loss, to assume and control the defense
thereof, in each case at its own expense, jointly with any other indemnifying
party similarly notified, to the extent that it may wish, with counsel
reasonably satisfactory to such indemnified party, and after its assumption of
the defense thereof, the indemnifying party shall not be liable to such
indemnified party for any legal or other expenses subsequently incurred by the
latter in connection with the defense thereof other than reasonable costs of
investigation, unless in such indemnified party’s reasonable judgment, after
consultation with its separate counsel, a conflict of interest between such
indemnified and indemnifying parties arises in respect of such claim after the
assumption of the defense thereof, in which event the indemnifying party shall
be liable for the legal expenses of one counsel (plus local counsel)
representing the indemnified party or parties. 
No indemnifying party shall be liable for any settlement of any action
or proceeding effected without its written consent, which shall not be
unreasonably withheld.  No indemnifying
party shall, without the consent of the indemnified party, consent to entry of
any judgment or enter into any settlement which does not include as an
unconditional term thereof the giving by the claimant or plaintiff to such
indemnified party of a release from all liability in respect of such Loss or
which requires action on the part of such indemnified party or otherwise
subjects the indemnified party to any obligation or restriction to which it
would not otherwise be subject.

 

(d)  Contribution.  If the indemnification provided for in this
Section 10 shall for any reason be unavailable to an indemnified party under
Section 10(a) or (b) in respect of any Loss, then, in lieu of the amount paid
or payable under Section 10(a) or (b), the indemnified party and the
indemnifying party under Section 10(a) or (b) shall contribute to the aggregate
Losses (including legal or other expenses reasonably incurred in connection
with investigating the same) (i) in such proportion as is appropriate to
reflect the relative fault of the Company and the prospective sellers of
Registrable Common Stock covered by the registration statement which resulted in
such Loss or action in respect thereof, with respect to the statements,
omissions or action which resulted in such Loss or action in respect thereof,
as well as any other relevant equitable considerations, or (ii) if the
allocation provided by clause (i) above is not permitted by applicable law, in
such proportion as shall be appropriate to reflect the relative benefits
received by the Company, on the one hand, and such prospective sellers, on the
other hand, from their sale of Registrable Common Stock; provided, that,
for purposes of this clause (ii), the relative benefits received by the
prospective sellers shall be deemed not to exceed the amount received by such
sellers in the sale of their Registrable Common Stock.  No Person guilty of fraudulent misrepresentation
(within the meaning of Section 11(f) of the Securities Act) shall be entitled
to contribution from any Person who was not guilty of such fraudulent
misrepresentation.  The obligations, if
any, of the selling holders of Registrable Common Stock to contribute as
provided in this Section 10(d) are several in proportion to the relative value
of their respective Registrable Common Stock covered by such registration
statement and not joint.  In addition,
no Person shall be obligated to contribute hereunder any amounts in payment for
any settlement of any action or Loss effected without such Person’s consent.

 

(e)  Other
Indemnification.  The Company
and, in connection with the Initial Registration Statement, each Holder,
severally and not jointly, shall, and, in connection with any registration
statement filed by the Company pursuant to Section 3 or 4, each Holder who has

 

20

 

registered for sale Registrable Common Stock, severally and not
jointly, shall, with respect to any required registration or other
qualification of securities under any Federal or state law or regulation of any
governmental authority other than the Securities Act, indemnify Holder
Indemnitees and Company Indemnitees, respectively, against Losses, or, to the
extent that indemnification shall be unavailable to a Holder Indemnitee or
Company Indemnitee, contribute to the aggregate Losses of such Holder
Indemnitee or Company Indemnitee in a manner similar to that specified in the
preceding subsections of this Section 10 (with appropriate modifications).

 

(f)  Indemnification
Payments.  The indemnification
and contribution required by this Section 10 shall be made by periodic payments
of the amount thereof during the course of any investigation or defense, as and
when any Loss is incurred and is due and payable.

 

11.          Registration Rights to Others.

 

If the Company shall at any time hereafter
provide to any holder of any securities of the Company rights with respect to
the registration of such securities under the Securities Act or the Exchange
Act, such rights shall not be in conflict with or adversely affect any of the
rights provided to the holders of Registrable Common Stock in, or conflict (in
a manner that adversely affects holders of Registrable Common Stock) with any
other provisions included in, this Agreement.

 

12.          Adjustments Affecting Registrable
Common Stock.

 

Without the written consent of Holders of a
majority of the outstanding shares of Registrable Common Stock, the Company shall
not effect or permit to occur any combination, subdivision or reclassification
of Registrable Common Stock that would materially adversely affect the ability
of the Holders to include such Registrable Common Stock in any registration of
its securities under the Securities Act contemplated by this Agreement or the
marketability of such Registrable Common Stock under any such registration or
other offering.

 

13.          Rule 144 and Rule 144A.

 

The Company shall take all actions reasonably
necessary to enable Holders to sell Registrable Common Stock without
registration under the Securities Act within the limitation of the exemptions
provided by (a) Rule 144 under the Securities Act, as such Rule may be amended
from time to time, (b) Rule 144A under the Securities Act, as such Rule may be
amended from time to time, or (c) any similar rules or regulations hereafter
adopted by the Commission, including, without limiting the generality of the
foregoing, filing on a timely basis all reports required to be filed under the
Exchange Act.  Upon the written request
of any Holder, the Company shall deliver to such Holder a written statement as
to whether it has complied with such requirements.

 

14.          Amendments and Waivers.

 

Any provision of this Agreement may be
amended, modified or waived if, but only if, the written consent to such
amendment, modification or waiver has been obtained from (i) except as provided
in clause (ii) below, the Holder or Holders of at least a majority of the
shares of Registrable Common Stock affected by such amendment, modification or
waiver and

 

21

 

(ii) in the case of any amendment, modification or waiver of any
provision of Section 2, 5, 9 or 10 or any provisions as to the number of
requests for registration to which holders of Registrable Common Stock are
entitled under Section 3 or 4 hereof, or this Section 14, the written consent
of each Holder so affected; provided, however, that the rights of
Warrant Stock Holders cannot be materially adversely affected in a manner
different from Holders of Registrable Common Stock generally without the prior
written consent of the holders of a majority of the shares of Registrable
Common Stock issued and issuable upon the exercise of Warrants.

 

15.          Nominees for Beneficial Owners.

 

Except as provided otherwise below, a person
or entity is deemed to be a holder of Registrable Common Stock whenever such
person or entity owns of record such Registrable Common Stock.  If any Registrable Common Stock is held by a
nominee for the beneficial owner thereof, the beneficial owner thereof may, at
its election in writing delivered to the Company, be treated as the Holder of
such Registrable Common Stock for purposes of any request or other action by
any Holder or Holders pursuant to this Agreement or any determination of the
number or percentage of shares of Registrable Common Stock held by any Holder
or Holders contemplated by this Agreement. 
The Company may require assurances reasonably satisfactory to it of such
owner’s beneficial ownership of such Registrable Common Stock.  If the Company receives conflicting
instructions, notices or elections from two or more persons or entities with
respect to the same Registrable Common Stock, the Company will act upon the
basis of instructions, notice or election received from the registered owner of
such Registrable Common Stock.

 

16.          Assignment.

 

The provisions of this Agreement shall be
binding upon and inure to the benefit of the parties hereto and their
respective heirs, successors and permitted assigns.  Any Holder may assign to any permitted Transferee (as permitted
under applicable law) of its Registrable Common Stock its rights and
obligations under this Agreement, provided  that after giving
effect to such Transfer, such Transferee shall hold 5% or more of the
outstanding shares of Common Stock or shall be a director or an executive
officer of the Company; and, provided  further, that such
Transferee shall agree in writing with the parties hereto prior to the
assignment to be bound by this Agreement as if it were an original party
hereto, whereupon such assignee shall for all purposes be deemed to be a Holder
(and, in the case of a Transferee of a Management Holder, a Warrant Stock
Holder or a Transferee thereof, a Management Holder or a Warrant Stock Holder,
as the case may be) under this Agreement. 
Except as provided above or otherwise permitted by this Agreement,
neither this Agreement nor any right, remedy, obligation or liability arising hereunder
or by reason hereof shall be assignable by any Holder without the prior written
consent of the other parties hereto. 
The Company may not assign this Agreement or any right, remedy,
obligation or liability arising hereunder or by reason hereof.

 

17.          Calculation of Percentage or Number
of Shares of Registrable Common Stock.  For purposes of this Agreement, all references to a percentage or
number of shares of Registrable Common Stock or Common Stock shall be
calculated based upon the number of shares of Registrable Common Stock or Common
Stock, as the

 

22

 

case may be, outstanding at the time such calculation is made and shall
exclude any Registrable Common Stock or Common Stock, as the case may be, owned
by the Company or any subsidiary of the Company.  For the purposes of calculating any percentage or number of
shares of Registrable Common Stock or Common Stock as contemplated by the
previous sentence, the terms “Holder”, “Management Holder”, “Warrant
Stock Holder” and “Original Holder” shall include all Affiliates
thereof owning any shares of Registrable Common Stock or Common Stock.

 

18.          Termination of Registration Rights.  The Company’s obligations under Sections 2,
3 and 4 hereof to register Common Stock for sale under the Securities Act shall
terminate on the earlier to occur of (i) the first date on which no shares of
Registrable Common Stock are held by any Original Holder or their permitted
Transferees or (ii) the first date on which (A) no Holder of Common Stock,
together with its Affiliates, holds 5% or more of the outstanding shares of
Common Stock or (B) less than 25% of the aggregate number of shares of Common
Stock issued pursuant to the Plan are held by the Original Holders or their
Affiliates.

 

19.          Miscellaneous.

 

(a)  Further Assurances.  Each of the parties hereto shall execute
such documents and other papers and perform such further acts as may be
reasonably required or advisable to carry out the provisions of this Agreement
and the transactions contemplated hereby.

 

(b)  Headings.  The headings in this Agreement are for
convenience of reference only and shall not control or affect the meaning or
construction of any provisions hereof.

 

(c)  Remedies.  Each Holder, in addition to being entitled
to exercise all rights granted by law, including recovery of damages, will be
entitled to specific performance of its rights under this Agreement.  The Company agrees that monetary damages
would not be adequate compensation for any loss incurred by reason of a breach
by it of the provisions of this Agreement and the Company hereby agrees to
waive the defense in any action for specific performance that a remedy at law
would be adequate.

 

(d)  Entire Agreement.  This Agreement constitutes the entire
agreement and understanding of the parties hereto with respect to the subject
matter hereof, and there are no restrictions, promises, representations,
warranties, covenants or undertakings with respect to the subject matter
hereof, other than those expressly set forth or referred to herein.  This Agreement supersedes all prior
agreements and understandings among the parties hereto with respect to the
subject matter hereof.

 

(e)  Notices.  Any notices or other communications to be
given hereunder by any party to another party shall be in writing, shall be
delivered personally, by telecopy, by certified or registered mail, postage
prepaid, return receipt requested, or by Federal Express or other comparable
delivery service, to the address of the party set forth on Schedule B hereto or
to such other address as the party to whom notice is to be given may provide in
a written notice to the other parties hereto, a copy of which shall be on file
with the Secretary of the Company. 
Notice shall be effective when delivered if given personally, when
receipt is acknowledged if telecopied, three days after mailing if given by
registered or certified mail as described above, and one business day after
deposit if given by Federal Express or comparable delivery service.

 

23

 

(f)  Governing Law.  This Agreement shall be governed by and
construed in accordance with the laws of the State of New York.

 

(g)  Severability.  Notwithstanding any other provision of this
Agreement, neither the Company nor any other party hereto shall be required to
take any action which would be in violation of any applicable Federal or state
securities law.  The invalidity or
unenforceability of any provision of this Agreement in any jurisdiction shall
not affect the validity, legality or enforceability of any other provision of
this Agreement in such jurisdiction or the validity, legality or enforceability
of this Agreement, including any such provision, in any other jurisdiction, it
being intended that all rights and obligations of the parties hereunder shall
be enforceable to the fullest extent permitted by law.

 

(h)  Counterparts.  This Agreement may be executed in two or
more counterparts, each of which shall be deemed an original but all of which
shall constitute one and the same Agreement.

 

(i)  Additional
Management Holders.  Without any
further action of any of the parties hereto, an officer, director, employee or
consultant of the Company who on or after the date hereof receives a grant of
any stock option and/or stock award from the Company shall execute a
counterpart of this Agreement and thereafter shall be deemed to be a
“Management Holder” for all purposes of this Agreement.

 

24

 

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

 

	
   

  	
  SUPERIOR
  ESSEX INC.

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  MANAGEMENT HOLDERS:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  HOLDERS OF WARRANTS:

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				

 

25

 

SCHEDULE A

 

 

HOLDERS OF REGISTRABLE COMMON STOCK

 

	
  Original Holder

  	
   

  	
   

  	
   

  	
  Number of

  Shares Owned

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Bank Investor Group

  	
   

  	
   

  	
   

  	
  562,697

  	
   

  
	
  Deutsche Bank Trust Company Americas

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Deutsche Cayman

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Amex Investor Group

  	
   

  	
   

  	
   

  	
  547,904

  	
   

  
	
  Amex—Centurion CDO I, Ltd.

  	
   

  	
  (18,278

  	
  )

  	
   

  	
   

  
	
  Amex—KZH Cypress Tree-1

  	
   

  	
  (196,613

  	
  )

  	
   

  	
   

  
	
  Amex KZH ING-2 LLC

  	
   

  	
  (130,726

  	
  )

  	
   

  	
   

  
	
  Amex KZH Sterling LLC

  	
   

  	
  (202,287

  	
  )

  	
   

  	
   

  
	
  Silver Oak Capital, LLC

  	
   

  	
   

  	
   

  	
  1,204,542

  	
   

  
	
  AP-ST LLC

  	
   

  	
   

  	
   

  	
  2,477,288

  	
   

  
	
  Babson Investor Group

  	
   

  	
   

  	
   

  	
  423,799

  	
   

  
	
  Babson Apex

  	
   

  	
  (38,070

  	
  )

  	
   

  	
   

  
	
  Babson—ELC

  	
   

  	
  (58,403

  	
  )

  	
   

  	
   

  
	
  Babson—ELC (Cayman) 1999-I

  	
   

  	
  (37,719

  	
  )

  	
   

  	
   

  
	
  Babson—ELC (Cayman) 1999-II

  	
   

  	
  (77,495

  	
  )

  	
   

  	
   

  
	
  Babson—ELC (Cayman) 1999-III

  	
   

  	
  (63,020

  	
  )

  	
   

  	
   

  
	
  Babson—ELC (Cayman) 2000-I

  	
   

  	
  (96,718

  	
  )

  	
   

  	
   

  
	
  Babson—Tryon CLO

  	
   

  	
  (52,374

  	
  )

  	
   

  	
   

  
	
  Bear Stearns Securities Corp.

  	
   

  	
   

  	
   

  	
  480,175

  	
   

  
	
  Castlerigg Master Investments Ltd.

  	
   

  	
   

  	
   

  	
  868,918

  	
   

  
	
  General Electric Investor Group

  	
   

  	
   

  	
   

  	
  2,491,318

  	
   

  
	
  General Electric Capital Corporation

  	
   

  	
  (2,178,201

  	
  )

  	
   

  	
   

  
	
  General Electric Capital Corporation CFE

  	
   

  	
  (313,117

  	
  )

  	
   

  	
   

  
	
  Mellon HBV SPV LLC

  	
   

  	
   

  	
   

  	
  597,189

  	
   

  
	
  PIMCO Investor Group

  	
   

  	
   

  	
   

  	
  626,664

  	
   

  
	
  PIMCO—Addison

  	
   

  	
  (58,901

  	
  )

  	
   

  	
   

  
	
  PIMCO—Athena

  	
   

  	
  (69,832

  	
  )

  	
   

  	
   

  
	
  PIMCO—Bedford

  	
   

  	
  (72,349

  	
  )

  	
   

  	
   

  
	
  PIMCO—Captiva III

  	
   

  	
  (87,289

  	
  )

  	
   

  	
   

  
	
  PIMCO—Captiva IV

  	
   

  	
  (70,032

  	
  )

  	
   

  	
   

  
	
  PIMCO—Catalina

  	
   

  	
  (44,509

  	
  )

  	
   

  	
   

  
	
  PIMCO—Delano

  	
   

  	
  (104,747

  	
  )

  	
   

  	
   

  
	
  PIMCO—Jissekikun

  	
   

  	
  (31,716

  	
  )

  	
   

  	
   

  
	
  PIMCO-Royalton Co.

  	
   

  	
  (87,289

  	
  )

  	
   

  	
   

  
	
  Strategic Value Master Fund Ltd

  	
   

  	
   

  	
   

  	
  895,213

  	
   

  
	
  TRS Thebe LLC

  	
   

  	
   

  	
   

  	
  431,180

  	
   

  
	
  York Capital Management, L.P.

  	
   

  	
   

  	
   

  	
  576,011

  	
   

  

 

26

 

	
  Management Holders

  	
   

  	
   

  	
   

  	
  Number of

  Shares Owned

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  [To be
  added]

  	
   

  	
   

  	
   

  	
   

  	
   

  

 

27

 

SCHEDULE B

 

 

NOTICES

 

If to the
Company, to:

 

Superior Essex
Inc.

Attention: Chief Executive Officer

150 Interstate North Parkway

Suite 300

Atlanta, Georgia  30339

 

Tel:                            (770)
953-8338

Fax:                           (770)
303-8892

 

with a copy
to:

 

Proskauer Rose
LLP

Attention: Ronald R. Papa, Esq.

1585 Broadway

New York, New York 10036-8299

 

Tel:                            (212) 969-3000

Fax:                           (212) 969-2900

 

If to the Holders,
to:

 

such Holder,
at such Holder’s address or to such Holder’s telephone or telecopy number
reflected in the Company’s books and records

 

with a copy
to:

 

Simpson
Thacher & Bartlett LLP

Attention:  Peter J. Gordon, Esq. 

425 Lexington Avenue

New York, New York 10017

 

Tel:                            (212)
455-2605

Fax:                           (212)
455-2502

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00059-of-00352.parquet"}]]