AMENDED AND RESTATED CREDIT AGREEMENT Dated as of June 13, 2006 (amending and restating the Credit Agreement, dated as of December 21, 2000),

[EXECUTION COPY]

Exhibit 10.23

************************************************************

EMPIRE RESOURCES, INC.


AMENDED AND RESTATED CREDIT AGREEMENT

Dated as of June 13, 2006
(amending and restating the Credit Agreement, dated as of December 21, 2000),


JPMORGAN CHASE BANK, N.A.,
as Lead Arranger and Administrative Agent

************************************************************


TABLE OF CONTENTS

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

SECTION 1. DEFINITIONS AND ACCOUNTING MATTERS

 

1

1.01

 

Certain Defined Terms

 

1

1.02

 

Accounting Terms and Determinations

 

16

1.03

 

Classes and Types of Loans

 

17

SECTION 2. COMMITMENTS, LOANS, NOTES AND PREPAYMENTS

 

17

2.01

 

Loans

 

17

2.02

 

Borrowings

 

20

2.03

 

Letters of Credit

 

20

2.04

 

Acceptances

 

23

2.05

 

Changes of the Commitment

 

26

2.06

 

Commitment Fee

 

27

2.07

 

Lending Offices

 

27

2.08

 

Several Obligations; Remedies Independent

 

27

2.09

 

Notes

 

27

2.10

 

Optional Prepayments and Conversions or Continuations of Loans

 

28

2.11

 

Mandatory Prepayments

 

28

SECTION 3. PAYMENTS OF PRINCIPAL AND INTEREST

 

29

3.01

 

Repayment of Loans

 

29

3.02

 

Interest

 

29

SECTION 4. PAYMENTS; COMPUTATIONS; ETC

 

30

4.01

 

Payments

 

30

4.02

 

Computations

 

31

4.03

 

Pro Rata Treatment

 

31

4.04

 

Minimum Amounts

 

31

4.05

 

Certain Notices

 

32

4.06

 

Non-Receipt of Funds by the Agent

 

32

4.07

 

Sharing of Payments, etc

 

33

SECTION 5. YIELD PROTECTION, ETC

 

34

5.01

 

Additional Costs

 

34

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

5.02

 

Limitation on Types of Loans

 

36

5.03

 

Illegality

 

37

5.04

 

Compensation

 

37

5.05

 

Additional Costs in Respect of Letters of Credit

 

38

SECTION 6. CONDITIONS PRECEDENT

 

38

6.01

 

Effectiveness of Agreement

 

38

6.02

 

Initial and Subsequent Extensions of Credit

 

39

SECTION 7. REPRESENTATIONS AND WARRANTIES

 

40

7.01

 

Corporate Existence

 

40

7.02

 

Financial Condition

 

40

7.03

 

Litigation

 

41

7.04

 

No Breach

 

41

7.05

 

Action

 

41

7.06

 

Approvals

 

41

7.07

 

Use of Credit

 

41

7.08

 

ERISA

 

41

7.09

 

Taxes

 

42

7.10

 

Indebtedness and Investments

 

42

7.11

 

True and Complete Disclosure

 

42

7.12

 

Subsidiaries

 

42

SECTION 8. COVENANTS OF THE COMPANY

 

43

8.01

 

Financial Statements Etc

 

43

8.02

 

Litigation

 

46

8.03

 

Existence, Etc

 

46

8.04

 

Insurance

 

47

8.05

 

Prohibition of Fundamental Changes

 

47

8.06

 

Limitation on Liens

 

47

8.07

 

Indebtedness

 

48

8.08

 

Investments

 

48

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

8.09  

 

Leverage Ratio

 

49

8.10  

 

Tangible Net Worth

 

49

8.11  

 

No Net Loss

 

49

8.12  

 

Lines of Business

 

49

8.13  

 

Dividend Payments

 

49

8.14  

 

Use of Proceeds

 

49

8.15  

 

Subordinated Debt

 

49

8.16  

 

Dormant Subsidiaries

 

50

8.17  

 

Additional Guarantors

 

50

SECTION 9. EVENTS OF DEFAULT

 

50

SECTION 10. THE AGENT

 

53

10.01

 

Appointment, Powers and Immunities

 

53

10.02

 

Reliance by Agent

 

53

10.03

 

Defaults

 

54

10.04

 

Rights as a Bank

 

54

10.05

 

Indemnification

 

54

10.06

 

Non-Reliance on Agent and Other Banks

 

54

10.07

 

Failure to Act

 

55

10.08

 

Resignation or Removal of Agent

 

55

10.09

 

Agency Fee

 

55

10.10

 

Consents under Other Basic Documents

 

55

SECTION 11. MISCELLANEOUS

 

56

11.01

 

Waiver

 

56

11.02

 

Notices

 

56

11.03

 

Expenses, etc

 

56

11.04

 

Amendments, Etc

 

57

11.05

 

Successors and Assigns

 

57

11.06

 

Assignments and Participations

 

58

11.07

 

Survival

 

59

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TABLE OF CONTENTS
(continued)

 

 

 

 

 

 

 

 

 

Page

 

 

 

 

 

11.08

 

Captions

 

59

11.09

 

Counterparts

 

59

11.10

 

Governing Law; Submission to Jurisdiction

 

59

11.11

 

Waiver of Jury Trial

 

60

11.12

 

Effect of Amendment and Restatement of the Existing Credit Agreement

 

60

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AMENDED AND RESTATED CREDIT AGREEMENT

                    AMENDED AND RESTATED CREDIT AGREEMENT dated as of June 13, 2006, among: EMPIRE RESOURCES, INC., a corporation duly organized and validly existing under the laws of the State of Delaware (the “Company”); each of the lenders that is a signatory hereto identified under the caption “Banks” on the signature pages hereto or that, pursuant to Section 2.01(b) or 11.06(b) hereof shall become a “Bank” hereunder (individually, a “Bank”, and collectively, the “Banks”); and JPMORGAN CHASE BANK, N.A. (formerly known as The Chase Manhattan Bank), as agent for the Banks (in such capacity, together with its successors in such capacity, the “Agent”).

                    The Company, the Banks and the Agent have heretofore entered into that certain Credit Agreement, dated as of December 21, 2000 (as amended prior to the date hereof, the “Existing Credit Agreement”), and the Company, the Banks and the Agent wish to increase the aggregate amount of the Commitments under the Existing Credit Agreement from $90,000,000 to $150,000,000, and to amend the Existing Credit Agreement in certain other respects. Accordingly, the Company, the Banks and the Agent agree that the Existing Credit Agreement is hereby amended and restated in its entirety to read as follows:

                    SECTION 1. Definitions and Accounting Matters.

                    1.01 Certain Defined Terms. As used herein, the following terms shall have the following meanings (all terms defined in this Section 1.01 or in other provisions of this Agreement in the singular to have the same meanings when used in the plural and vice versa):

                    “6900 Quad Avenue, LLC” shall mean 6900 Quad Avenue, LLC a Delaware limited liability company.

                    “Acceptance” shall mean a draft drawn by the Company on the Accepting Bank payable to the order of the Accepting Bank in Dollars, conforming to the requirements of Section 2.04 hereof and accepted by the Accepting Bank in accordance with Section 2.04(b) hereof.

                    “Acceptance Liability” shall mean, with respect to any Acceptance, the obligation of the Company to pay to the Agent at the Principal Office, for account of the Accepting Bank, the face amount thereof as required by Section 2.04(d) hereof.

                    “Accepting Bank” shall mean JPMorgan, as the Bank that creates and discounts Acceptances pursuant to Section 2.04 hereof together with its successors and assigns in such capacity.

                    “Affiliate” shall mean any Person that directly or indirectly controls, or is under common control with, or is controlled by, the Company and, if such Person is an individual, any member of the immediate family (including parents, spouse, children and siblings) of such individual and any trust whose principal beneficiary is such individual or one or more members of such immediate family and any Person who is controlled by any such member or trust. As


used in this definition, “control” (including, with its correlative meanings, “controlled by” and “under common control with”) shall mean possession, directly or indirectly, of power to direct or cause the direction of management or policies (whether through ownership of securities or partnership or other ownership interests, by contract or otherwise), provided that, in any event, any Person that owns directly or indirectly securities having 5% or more of the voting power for the election of directors or other governing body of a corporation or 5% or more of the partnership or other ownership interests of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person. Notwithstanding the foregoing, no individual shall be an Affiliate solely by reason of his or her being a director, officer or employee of the Company.

                    “Agreement” shall mean this Credit Agreement, as amended and restated on the Amendment Effective Date and as the same may be further amended, supplemented, amended and restated or otherwise modified in accordance with terms hereof and in effect from time to time.

                    “All-in Rate” shall mean, with respect to any Acceptance, a rate per annum specified by JPMorgan to the Company at the time of the creation of such Acceptance.

                    “Amendment Effective Date” means the date this Agreement becomes effective pursuant to Section 6.01.

                    “Applicable Lending Office” shall mean, for each Bank and for each Type of Loan, the “Lending Office” of such Bank (or of an affiliate of such Bank) designated for such Type of Loan on the signature pages hereof or such other office of such Bank (or of an affiliate of such Bank) as such Bank may from time to time specify to the Agent and the Company as the office by which its Loans of such Type are to be made and maintained.

                    “Applicable Margin” shall mean the applicable percentage per annum set forth below:

 

 

 

 

 

 

 

 

Leverage Ratio

 

Applicable
Margin for Base
Rate Loans

 

Applicable
Margin For
Eurodollar Loans

 


 


 


 

Greater than 5.00 to 1

 

0.50

%

 

1.55

%

 

Greater than or equal to 4.00 to 1 and less than or equal to 5.00 to 1

 

0.50

%

 

1.50

%

 

Less than 4.00 to 1

 

0.50

%

 

1.45

%

 

The Leverage Ratio used to compute the Applicable Margin shall be the Leverage Ratio set forth in the Compliance Certificate most recently delivered by the Company to each Bank pursuant to the last sentence of Section 8.01 hereof. Changes in the Applicable Margin resulting from a

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change in the Leverage Ratio shall become effective on the second day following delivery by the Company to the Banks of a new Compliance Certificate pursuant to the last sentence of Section 8.01 hereof. If the Company shall fail to deliver a Compliance Certificate within the time required pursuant to the last sentence of Section 8.01 hereof (without giving effect to any grace period), the Applicable Margin from and including the first day after the date on which such Compliance Certificate was required to be delivered to the date the Company delivers to the Banks the next Compliance Certificate shall conclusively equal the highest Applicable Margin set forth above.

                    “Australia” shall mean the Commonwealth of Australia.

                    “Australian Effective Date” shall mean the date on which each of the following conditions shall have been satisfied:

 

 

 

          (a) The Company shall have furnished to the Agent the following documents (which shall be in form and substance satisfactory to the Agent):


 

 

 

          (i) A Floating Charge, duly executed and delivered by the Company and the Agent;

 

 

 

          (ii) Evidence that the Floating Charge has been duly registered with the Australian Securities Commission, and

 

 

 

          (iii) evidence that all stamp duties, all fees, costs and expenses with respect to the filing of the Floating Charge have been paid in each of the states in Australia in which any of the Australian Receivables are owing on the date the charge is registered.


 

 

 

          (b) The Company shall be duly registered to do business in Australia, and the Company shall have furnished to the Agent evidence to such effect.

 

 

 

          (c) Australian counsel acceptable to the Banks, shall have furnished to the Banks its legal opinion with respect to the due creation, perfection and priority of the Lien over the Australian Receivables intended to be created by the Floating Charge.

                    “Australian Receivables” shall mean, as at any date, the aggregate amount of all Receivables at such date payable to the Company that would constitute Insured Eligible Receivables but for the fact that the principal place of business of the relevant account debtor is in Australia and/or such Receivables are payable in lawful money of Australia.

                    “Bankruptcy Code” shall mean the Federal Bankruptcy Code of 1978, as amended from time to time.

                    “Base Rate” shall mean, for any day, a rate per annum equal to the higher of (a) the Federal Funds Rate for such day plus ½ of 1% and (b) the Prime Rate for such day. Each change in any interest rate provided for herein based upon the Base Rate resulting from a change in the Base Rate shall take effect at the time of such change in the Base Rate.

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                    “Base Rate Loans” shall mean Loans that bear interest at rates based upon the Base Rate.

                    “Basic Documents” shall mean, collectively, this Agreement, the Notes, the Letter of Credit Documents and the Security Documents.

                    “Borrowing Base” shall mean, as at any date, the sum of the following:

 

 

 

          (a) 90% of the aggregate amount of Insured Eligible Receivables at said date, plus

 

 

 

          (b) 80% of the aggregate amount of Eligible Receivables (other than (i) Australian Receivables, Eligible Long Receivables and Insured Eligible Receivables and (ii) Uninsured Eligible Receivables from any one account debtor in excess of $2,500,000) at said date, plus

 

 

 

          (c) the lesser of (i) $1,000,000 and (ii) 80% of the aggregate amount of Eligible Long Receivables (other than Australian Receivables and Insured Eligible Receivables), plus

 

 

 

          (d) 70% of the aggregate amount of Australian Receivables at said date, provided that


 

 

 

          (i) Australian Receivables shall only be included in the Borrowing Base on and after the Australian Effective Date, and

 

 

 

          (ii) in no event shall the portion of the Borrowing Base attributable to Australian Receivables exceed 10% of the Borrowing Base, plus


 

 

 

          (e) 80% of the aggregate value of Eligible In-transit Inventory at said date, plus

 

 

 

          (f) 80% of the aggregate value of Eligible Inventory Ordered Under L/C at said date, plus

 

 

 

          (g) 75% of the aggregate value of Eligible Inventory at said date, provided, that in no event shall the portion of the Borrowing Base attributable to Eligible Inventory exceed 65% of the Borrowing Base, plus

 

 

 

          (h) without duplication of clauses (e) and (f) above, 60% of the aggregate amount of unsold aluminum billet (which, but for clause (e)(i) of the definition of “Eligible Inventory”, would constitute Eligible Inventory), provided that in no event shall the aggregate amount of such unsold aluminum billet exceed $2,000,000, plus

 

 

 

          (i) 80% of the aggregate amount of Pledged Securities, plus

 

 

 

          (j) 100% of the aggregate amount of Pledged Cash, less

-4-


 

 

 

          (k) an amount equal to any borrowing base reserve established by the Agent in its sole discretion.

The “value” of Eligible Inventory shall be determined at the lower of cost (as determined using a specific identification method) or market in accordance with GAAP.

                    “Borrowing Base Certificate” shall mean a certificate of the chief financial officer of the Company, substantially in the form of Exhibit B hereto and appropriately completed.

                    “Bridge Prom issory Note” shall mean the Third Amended and Restated Grid Promissory Note, dated as of May 26, 2006, pursuant to which the Company promises to pay to the order of Chase the aggregate principal amount of $10,000,000, as amended, supplemented, amended and restated or otherwise modified from time to time

                    “Business Day” shall mean (a) any day on which commercial banks are not authorized or required to close in New York City and (b) if such day relates to a borrowing of a payment or prepayment of principal of or interest on a Conversion of or into, or an Interest Period for, a Eurodollar Loan or a notice by the Company with respect to any such borrowing, payment, prepayment, Conversion or Interest Period, any day on which dealings in Dollar deposits are carried out in the London interbank market.

                    “Capital Lease Obligations” shall mean, for any Person, all obligations of such Person to pay rent or other amounts under a lease of (or other agreement conveying the right to use) Property to the extent such obligations are required to be classified and accounted for as a capital lease on a balance sheet of such Person under GAAP, and, for purposes of this Agreement, the amount of such obligations shall be the capitalized amount thereof, determined in accordance with GAAP.

                    “Closing Date” shall mean December 21, 2000.

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

                    “Collateral Account” shall mean a segregated collateral account maintained by the Agent on behalf of the Banks at JPMorgan, which shall be under the sole dominion and control of the Agent.

                    “Commitment” shall mean, as the context may require, the Revolving Loan Commitment or the Swing Line Commitment.

                    “Commitment Increase” shall have the meaning assigned to such term in Section 2.01(b) hereof.

                    “Compliance Certificate” shall have the meaning assigned to such term in the last sentence of Section 8.01 hereof.

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                    “Continue”, “Continuation” and “Continued” shall refer to the continuation pursuant to Section 2.10 hereof of a Eurodollar Loan from one Interest Period to the next Interest Period.

                    “Convert”, “Conversion” and “Converted” shall refer to a conversion pursuant to Section 2.10 hereof of one Type of Loans into another Type of Loans, which may be accompanied by the transfer by a Bank (at its sole discretion) of a Loan from one Applicable Lending Office to another.

                    “Default” shall mean an Event of Default or an event that with notice or lapse of time or both would become an Event of Default.

                    “Dividend Payment” shall mean dividends (in cash, Property or obligations) on, or other payments or distributions on account of, or the setting apart of money for a sinking or other analogous fund for, or the purchase, redemption, retirement or other acquisition of, any shares of any class of stock of the Company or of any warrants, options or other rights to acquire the same, but excluding dividends payable solely in shares of common stock of the Company.

                    “Dollars” and “$” shall mean lawful money of the United States of America.

                    “Effective Date” shall have the meaning assigned to such term in Section 2.01(b) hereof.

                    “Eligible In-transit Inventory” shall mean, as at any date, all Inventory:

 

 

 

          (a) that is owned by the Company as at such date, free and clear of all Liens, excepted for Liens permitted under clauses (a), (b) and (c) of Section 8.06 hereof,

 

 

 

          (b) that is (i) on a vessel bound for the United States of America or Canada, as evidenced by a bill of lading made out to the order of the Company and (ii) not located in a warehouse or other storage facility,

 

 

 

          (c) as to which appropriate Uniform Commercial Code financing statements have been filed naming the Company as “debtor” and the Agent as “secured party” and as to which the Agent has a first priority, perfected Lien thereon,

 

 

 

          (d) that meets all standards imposed by any governmental agency or department or division thereof having regulatory authority over such Inventory, its use or sale, and

 

 

 

          (e) that either (i) one or more customers of the Company has agreed to purchase or (ii) is the subject of a hedge arrangement acceptable to the Required Banks protecting the Company against fluctuations in the price of such Inventory.

 

 

 

          “Eligible Inventory” shall mean, as at any date, all Inventory

 

 

 

          (a) that is owned by the Company as at such date, free and clear of all Liens, excepted for Liens permitted under clauses (a), (b) and (c) of Section 8.06 hereof,

-6-



 

 

 

 

          (b) that is located in, or is in transit to or from, a warehouse or other storage facility in the United States,

 

 

 

 

          (c) as to which appropriate Uniform Commercial Code financing statements have been filed naming the Company as “debtor” and the Agent as “secured party” and as to which the Agent has a first priority, perfected Lien thereon,

 

 

 

 

          (d) that meets all standards imposed by any governmental agency or department or division thereof having regulatory authority over such Inventory, its use or sale, and

 

 

 

 

          (e) that either (i) one or more customers of the Company has agreed to purchase or (ii) is the subject of a hedge arrangement acceptable to the Required Banks protecting the Company against fluctuations in the price of such Inventory.

                    “Eligible Inventory Ordered Under L/C” shall mean, as at any date, the aggregate amount of Inventory (not otherwise included in the Borrowing Base) that the Company has contracted to purchase under a commercial letter of credit issued by one of the Banks, payable at sight, which Inventory is pending delivery on any date prior to the Revolving Credit Commitment Termination Date, so long as, upon receipt by the Borrower, such Inventory constitutes Eligible Inventory and the rights of the Company under the contract for the purchase of such Inventory are subject to a first priority perfected Lien of the Agent.

                    “Eligible Long Receivables” shall mean, as at any date, the aggregate amount of all Receivables at such date, each of which would constitute Eligible Receivables but for the fact that such Receivable is due and payable more than 90 days from the original invoice date; provided, that (a) no such Eligible Long Receivable shall be due and payable more than 180 days from the original invoice date therefor, and (b) the face amount of any one Eligible Long Receivable included in the Borrowing Base shall not exceed $1,000,000.

                    “Eligible Receivables” shall mean, as at any date, the aggregate amount of all Receivables at such date payable to the Company other than the following (determined without duplication):

 

 

 

          (a) any Receivable not payable in Dollars or in lawful money of Canada,

 

 

 

          (b) any Receivable due from an account debtor whose principal place of business is not located in the United States of America or Canada,

 

 

 

          (c) any Receivable owing from an Affiliate of the Company,

 

 

 

          (d) any Receivable owing from an account debtor that the Required Banks (through the Agent) have notified the Company does not have a satisfactory credit standing (as reasonably determined by the Required Banks),

 

 

 

          (e) any Receivable that remains unpaid for more than 60 days after the original due date thereof,

-7-


 

 

 

          (f) all Receivables of any account debtor if more than 50% of the aggregate amount of the Receivables owing from such account debtor shall at the time have remained unpaid for more than 60 days after the original due date thereof,

 

 

 

          (g) any Receivable as to which there is any unresolved dispute with the respective account debtor (but only to the extent of the amount thereof in dispute),

 

 

 

          (h) any Receivable evidenced by an Instrument (as defined in the Uniform Commercial Code as in effect in the State of New York) not in the possession of the Agent,

 

 

 

          (i) any Receivable representing an obligation for goods sold on consignment, approval or a sale-or-return basis or subject to any other repurchase or return arrangement,

 

 

 

          (j) any Receivable that is payable more than 90 days after the date of the original invoice therefor, and

 

 

 

          (k) any Receivable with respect to which the Agent does not have a first priority, perfected Lien on behalf of the Banks.

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

                    “ERISA Affiliate” shall mean any corporation or trade or business that is a member of any group of organizations (i) described in Section 414(b) or (c) of the Code of which the Company is a member and (ii) solely for purposes of potential liability under Section 302(c)(11) of ERISA and Section 412(c)(11) of the Code and the lien created under Section 302(f) of ERISA and Section 412(n) of the Code, described in Section 414(m) or (o) of the Code of which the Company is a member.

                    “Eurodollar Base Rate” shall mean, with respect to any Eurodollar Loan for any Interest Period therefor, the rate per annum (rounded upwards, if necessary, to the nearest 1/16 of 1%) quoted by the Agent at approximately 11:00 a.m. London time (or as soon thereafter as practicable) on the date three Business Days prior to the first day of such Interest Period for the offering by the Agent to leading banks in the London interbank market of Dollar deposits having a term comparable to such Interest Period and in an amount comparable to the principal amount of the Eurodollar Loan to be made by the Agent for such Interest Period.

                    “Eurodollar Loans” shall mean Loans that bear interest at rates based on rates referred to in the definition of “Eurodollar Base Rate” in this Section 1.01.

                    “Eurodollar Rate” shall mean, for any Eurodollar Loan for any Interest Period therefor, a rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by the Agent to be equal to the Eurodollar Base Rate for such Loan for such Interest Period divided by 1 minus the Reserve Requirement (if any) for such Loan for such Interest Period.

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                    “Event of Default” shall have the meaning assigned to such term in Section 9 hereof.

                    “Existing Credit Agreement” shall have the meaning assigned to such term in the second recital hereto.

                    “Federal Funds Rate” shall mean, for any day, the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers on such day, as published by the Federal Reserve Bank of New York on the Business Day next succeeding such day, provided that (a) if the day for which such rate is to be determined is not a Business Day, the Federal Funds Rate for such day shall be such rate on such transactions on the next preceding Business Day as so published on the next succeeding Business Day and (b) if such rate is not so published for any Business Day, the Federal Funds Rate for such Business Day shall be the average rate charged to JPMorgan on such Business Day on such transactions as determined by the Agent.

                    “Floating Charge” shall mean a Floating Charge Agreement, in form and substance satisfactory to the Banks, that creates a charge under Australian law with respect to all Receivables.

                    “GAAP” shall mean generally accepted accounting principles applied on a basis consistent with those that, in accordance with the last sentence of Section 1.02(a) hereof, are to be used in making the calculations for purposes of determining compliance with this Agreement.

                    “Guarantee” shall mean a guarantee, an endorsement, a contingent agreement to purchase or to furnish funds for the payment or maintenance of, or otherwise to be or become contingently liable under or with respect to, the Indebtedness, other obligations, net worth, working capital or earnings of any Person, or a guarantee of the payment of dividends or other distributions upon the stock or equity interests of any Person, or an agreement to purchase, sell or lease (as lessee or lessor) Property, products, materials, supplies or services primarily for the purpose of enabling a debtor to make payment of such debtor’s obligations or an agreement to assure a creditor against loss, and including, without limitation, causing a bank or other financial institution to issue a letter of credit or other similar instrument for the benefit of another Person, but excluding endorsements for collection or deposit in the ordinary course of business. The terms “Guarantee” and “Guaranteed” used as a verb shall have a correlative meaning.

                    “Guarantors” shall mean each Subsidiary of the Company that executes and delivers a Subsidiary Guarantee.

                    “Indebtedness” shall mean, for any Person: (a) obligations created, issued or incurred by such Person for borrowed money (whether by loan, the issuance and sale of debt securities or the sale of Property to another Person subject to an understanding or agreement, contingent or otherwise, to repurchase such Property from such Person); (b) obligations of such Person to pay the deferred purchase or acquisition price of Property or services, other than trade accounts payable (other than for borrowed money) arising, and accrued expenses incurred, in the ordinary course of business so long as such trade accounts payable are payable within 90 days of

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the date the respective goods are delivered or the respective services are rendered; (c) Indebtedness of others secured by a Lien on the Property of such Person, whether or not the respective indebtedness so secured has been assumed by such Person; (d) obligations of such Person in respect of letters of credit or similar instruments issued or accepted by banks and other financial institutions for account of such Person; (e) Capital Lease Obligations of such Person; and (f) Indebtedness of others Guaranteed by such Person.

                    “Insured Eligible Receivables” shall mean, on any date, all Eligible Receivables that are the subject of credit insurance that (w) is provided by insurers reasonably acceptable to the Required Banks, (x) is duly documented by one or more written policies, (y) is effective in accordance with the policy or policies evidencing the same, and (z) provides that the Agent is named as an additional insured.

                    “Interest Period” shall mean,

 

 

 

          (a) with respect to any Eurodollar Loan, each period commencing on the date such Eurodollar Loan is made or Converted from a Base Rate Loan or the last day of the next preceding Interest Period for such Loan and ending on the numerically corresponding day in the first, second or third calendar month thereafter, as the Company may select as provided in Section 4.05 hereof, except that each Interest Period that commences on the last Business Day of a calendar month (or on any day for which there is no numerically corresponding day in the appropriate subsequent calendar month) shall end on the last Business Day of the appropriate subsequent calendar month; and

 

 

 

          (b) with respect to any Money Market Loan, each period of seven, 30, 60 or 90 days as the Company may select as provided in Section 4.05 hereof; provided that, in the case of Swing Line Loans that are Money Market Loans, “Interest Period” with respect to such Swing Line Loans may include periods of overnight to seven days.

Notwithstanding the foregoing, each Interest Period that would otherwise end on a day that is not a Business Day shall end on the next succeeding Business Day (or, if such next succeeding Business Day falls in the next succeeding calendar month, on the next preceding Business Day).

                    “Interest Rate Protection Agreement” shall mean, for any Person, an interest rate swap, cap or collar agreement or similar arrangement between such Person and one or more financial institutions providing for the transfer or mitigation of interest risks either generally or under specific contingencies.

                    “Inventory” shall mean aluminum, steel semi-fabricated products and aluminum billets.

                    “Investment” shall mean, for any Person: (a) the acquisition (whether for cash, Property, services or securities or otherwise) of capital stock, bonds, notes, debentures, partnership or other ownership interests or other securities of any other Person or any agreement to make any such acquisition (including, without limitation, any “short sale” or any sale of any securities at a time when such securities are not owned by the Person entering into such sale); (b) the making of any deposit with, or advance, loan or other extension of credit to, any other

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Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person), but excluding any such advance, loan or extension of credit having a term not exceeding 90 days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business); (c) the entering into of any Guarantee of, or other contingent obligation with respect to, Indebtedness or other liability of any other Person and (without duplication) any amount committed to be advanced, lent or extended to such Person; or (d) the entering into of any Interest Rate Protection Agreement.

                    “Issuing Bank” shall mean one or more of the Banks (as selected by the Company), as the issuer of Letters of Credit under Section 2.03 hereof, together with its successors and assigns in such capacity.

                    “JPMorgan” shall mean JPMorgan Chase Bank, N.A.

                    “Letter of Credit” shall have the meaning assigned to such term in Section 2.03 hereof.

                    “Letter of Credit Documents” shall mean, with respect to any Letter of Credit, collectively, any application therefor and any other agreements, instruments, guarantees or other documents (whether general in application or applicable only to such Letter of Credit) governing or providing for (a) the rights and obligations of the parties concerned or at risk with respect to such Letter of Credit or (b) any collateral security for any of such obligations, each as the same may be modified and supplemented and in effect from time to time.

                    “Letter of Credit Interest” shall mean for each Bank, such Bank’s participation interest (or, in the case of the Issuing Bank, the Issuing Bank’s retained interest) in the Issuing Bank’s liability under Letters of Credit and such Bank’s rights and interests in Reimbursement Obligations and fees, interest and other amounts payable in connection with Letters of Credit and Reimbursement Obligations.

                    “Letter of Credit Liability” shall mean, without duplication, at any time and in respect of any Letter of Credit, the sum of (a) the undrawn face amount of such Letter of Credit plus (b) the aggregate unpaid principal amount of all Reimbursement Obligations of the Company at such time due and payable in respect of all drawings made under such Letter of Credit.

                    “Leverage Ratio” shall mean, at any time, the ratio of (a) Total Liabilities at such time minus the amount of Subordinated Debt at such time to (b) Tangible Net Worth of the Company at such time.

                    “Lien” shall mean, with respect to any Property, any mortgage, lien, pledge, charge, security interest or encumbrance of any kind in respect of such Property. For purposes of this Agreement and the other Basic Documents, a Person shall be deemed to own subject to a Lien any Property that it has acquired or holds subject to the interest of a vendor or lessor under any conditional sale agreement, capital lease or other title retention agreement (other than an operating lease) relating to such Property.

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                    “Loans” shall mean, as the context may require, a Revolving Loan or a Swing Line Loan of any Type.

                    “Margin Stock” shall mean “margin stock” within the meaning of Regulations T, U and X.

                    “Material Adverse Effect” shall mean a material adverse effect on (a) the Property, business, operations, financial condition, prospects, liabilities or capitalization of the Company and its Non-Dormant Subsidiaries (on a consolidated basis), (b) the ability of the Company or any of its Non-Dormant Subsidiaries to perform its obligations under any of the Basic Documents to which it is a party, (c) the validity or enforceability of any of the Basic Documents, (d) the rights and remedies of the Banks and the Agent under any of the Basic Documents or (e) the timely payment of the principal of or interest on the Loans or the Reimbursement Obligations or other amounts payable in connection therewith.

                    “Maturity Date” shall mean, with respect to any Acceptance, the maturity date of the draft whose acceptance hereunder by the Accepting Bank created such Acceptance.

                    “Money Market Loans” shall mean loans that bear interest at a rate based on the Money Market Rate.

                    “Money Market Rate” shall mean, with respect to any Money Market Loan for any Interest Period therefor, the highest interest rate per annum quoted by any Bank to the Agent for such Loan for such Interest Period as the applicable rate therefor.

                    “New Bank” shall have the meaning assigned to such term in Section 2.01(b) hereof.

                    “Non-Dormant Subsidiary” shall mean any Subsidiary of the Company that is not listed on Schedule III hereto.

                    “Notes” shall mean the promissory notes provided for by Section 2.09 hereof and all promissory notes delivered in substitution or exchange therefor, in each case as the same shall be modified and supplemented and in effect from time to time.

                    “Obligors” shall mean, collectively, the Company and the Guarantors.

                    “PBGC” shall mean the Pension Benefit Guaranty Corporation or any entity succeeding to any or all of its functions under ERISA.

                    “Permitted Investments” shall mean: (a) direct obligations of the United States of America, or of any agency thereof, or obligations guaranteed as to principal and interest by the United States of America, or of any agency thereof, in either case maturing not more than 90 days from the date of acquisition thereof; (b) certificates of deposit issued by any bank or trust company organized under the laws of the United States of America or any state thereof and having capital, surplus and undivided profits of at least $500,000,000, maturing not more than 90 days from the date of acquisition thereof; (c) commercial paper rated A-1 or better or P-1 by

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Standard & Poor’s Corporation or Moody’s Investors Services, Inc., respectively, maturing not more than 90 days from the date of acquisition thereof; and (d) municipal bonds with a credit rating acceptable to the Required Banks.

                    “Person” shall mean any individual, corporation, company, voluntary association, partnership, joint venture, trust, unincorporated organization or government (or any agency, instrumentality or political subdivision thereof).

                    “Plan” shall mean an employee benefit or other plan established or maintained by the Company or any ERISA Affiliate and that is covered by Title IV of ERISA, other than a Multiemployer Plan.

                    “Pledged Cash” shall mean time and deposit accounts maintained at JPMorgan that are the subject of a perfected security interest in favor of the Agent, securing the obligations of the Company hereunder and under the Notes.

                    “Pledged Securities” shall mean Permitted Investments that are pledged to, and under the dominion and control of, the Agent pursuant to documents satisfactory to the Required Banks creating a perfected security interest in favor of the Agent, securing the obligations of the Company hereunder and under the Notes.

                    “Post-Default Rate” shall mean a rate per annum equal to 2% plus the Base Rate as in effect from time to time plus the Applicable Margin for Base Rate Loans (provided that, (x) if the amount with respect to which interest at the Post-Default Rate is payable is principal of a Eurodollar Loan and the due date thereof is a day other than the last day of the Interest Period therefor, the “Post-Default Rate” for such principal shall be, for the period from and including such due date to but excluding the last day of such Interest Period, 2% plus the interest rate for such Loan as provided in Section 3.02(a)(ii) hereof and, thereafter, the rate provided for above in this definition, (y) if the amount so in default is the face amount of any Acceptance, 2% plus the All-in Rate for such Acceptance, and (z) if the amount with respect to which interest at the Post-Default Rate is payable is principal of a Money Market Loan and the due date thereof is a day other than the last day of the Interest Period therefor, the “Post-Default Rate” for such principal shall be, for the period from and including such due date to but excluding the last day of such Interest Period, 2% plus the interest rate for such Loan as provided in Section 3.02(a)(iii) or Section 3.02(b)(ii) hereof, as applicable, and, thereafter, the rate provided for above in this definition).

                    “Prime Rate” shall mean the rate of interest from time to time announced by JPMorgan at the Principal Office as its prime commercial lending rate.

                    “Principal Office” shall mean the principal office of JPMorgan, located on the date hereof at 270 Park Avenue, New York, New York 10017.

                    “Principal Shareholders” shall mean Nathan S. Kahn and Sandra R. Kahn.

                    “Property” shall mean any right or interest in or to property of any kind whatsoever, whether real, personal or mixed and whether tangible or intangible.

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                    “Quad Avenue Loan Agreement” shall mean the Loan Agreement dated as of December 27, 2004 between 6900 Quad Avenue, LLC and JPMorgan Chase Bank, N.A., as the same shall be modified and supplemented and in effect from time to time.

                    “Quad Avenue Subsidiary” shall mean 6900 Quad Avenue, LLC, unless such Person owns any property (real or otherwise) other than the approximately 122,000 square foot warehouse located at 6900 Quad Avenue, Baltimore, Maryland.

                    “Quarterly Dates” shall mean the last Business Day of each March, June, September and December, the first of which shall be the first such day after the date of this Agreement.

                    “Receivables” shall mean, as at any date, the unpaid portion of the obligation, as stated on the respective invoice, of a customer of the Company in respect of Inventory sold and shipped to such customer, net of any credits, rebates or offsets owed to such customer and also net of any commissions payable to third parties (and for purposes hereof, a credit or rebate paid by check or draft of the Company shall be deemed to be outstanding until such check or draft shall have been debited to the account of the Company) and net of any applicable taxes.

                    “Regulations A, D, T, U and X” shall mean, respectively, Regulations A, D, T, U and X of the Board of Governors of the Federal Reserve System (or any successor), as the same may be modified and supplemented and in effect from time to time.

                    “Regulatory Change” shall mean, with respect to any Bank, any change after the date of this Agreement in Federal, state or foreign law or regulations (including, without limitation, Regulation D) or the adoption or making after such date of any interpretation, directive or request applying to a class of banks including such Bank of or under any Federal, state or foreign law or regulations (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) by any court or governmental or monetary authority charged with the interpretation or administration thereof.

                    “Reimbursement Obligations” shall mean, at any time, the obligations of the Company then outstanding, or that may thereafter arise in respect of all Letters of Credit then outstanding, to reimburse amounts paid by the Issuing Bank in respect of any drawings under a Letter of Credit.

                    “Required Banks” shall mean Banks having 51% of the aggregate amount of the Revolving Loan Commitments or, if the Revolving Loan Commitments shall have terminated, Banks holding at least 51% of the aggregate principal amount of the sum of outstanding Loans, Letter of Credit Liabilities and Acceptance Liabilities.

                    “Reserve Requirement” shall mean, for any Interest Period for any Eurodollar Loan, the average maximum rate at which reserves (including, without limitation, any marginal, supplemental or emergency reserves) are required to be maintained during such Interest Period under Regulation D by member banks of the Federal Reserve System in New York City with deposits exceeding one billion Dollars against “Eurocurrency liabilities” (as such term is used in Regulation D). Without limiting the effect of the foregoing, the Reserve Requirement shall

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include any other reserves required to be maintained by such member banks by reason of any Regulatory Change with respect to (i) any category of liabilities that includes deposits by reference to which the Eurodollar Base Rate is to be determined as provided in the definition of “Eurodollar Base Rate” in this Section 1.01 or (ii) any category of extensions of credit or other assets that includes Eurodollar Loans.

                    “Revolving Credit Commitment Termination Date” shall mean June 30, 2011.

                    “Revolving Loan Commitment” shall mean, as to each Bank, the obligation of such Bank to make Loans and to acquire a participation in Letters of Credit and Acceptances in an aggregate principal or face amount at any one time outstanding up to but not exceeding the amount set opposite such Bank’s name under the caption “Commitment” on the signature page for such Bank attached hereto (as the same may be reduced from time to time pursuant to Section 2.05 hereof and increased pursuant to Section 2.01(b) hereof). The aggregate amount of the Revolving Loan Commitments on the date hereof is $150,000,000.

                    “Revolving Loan Commitment Percentage” shall mean, with respect to any Bank, the ratio of (a) the amount of the Revolving Loan Commitment of such Bank to (b) the aggregate amount of the Revolving Loan Commitments of all of the Banks.

                    “Revolving Loans” shall mean the loans provided for in Section 2.01 hereof, which may be Base Rate Loans and/or Eurodollar Loans and/or Money Market Loans.

                    “Security Agreement” shall mean the Amended and Restated Security Agreement among the Company, the Guarantors and the Agent, substantially in the form of Exhibit C hereto, as the same shall be modified and supplemented and in effect from time to time.

                    “Security Documents” shall mean, collectively, the Security Agreement, the Subsidiary Guarantees, the Floating Charge (but only after the Australian Effective Date), the Patent Security Agreement and all Uniform Commercial Code financing statements required by this Agreement and the Security Agreement to be filed with respect to the security interests in personal Property and fixtures created pursuant to the Security Agreement.

                    “Subordinated Debt” shall mean unsecured and unguaranteed Indebtedness of the Company held by the Principal Shareholders, that is subordinated to the Indebtedness of the Company to the Banks on terms, and with such other terms, as shall be acceptable to the Required Banks in their sole discretion.

                    “Subsidiary” shall mean, with respect to any Person, any corporation, partnership or other entity of which at least a majority of the securities or other ownership interests having by the terms thereof ordinary voting power to elect a majority of the board of directors or other persons performing similar functions of such corporation, partnership or other entity (irrespective of whether or not at the time securities or other ownership interests of any other class or classes of such corporation, partnership or other entity shall have or might have voting power by reason of the happening of any contingency) is at the time directly or indirectly owned or controlled by such Person or one or more Subsidiaries of such Person or by such Person and one or more Subsidiaries of such Person.

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                    “Subsidiary Guarantee” shall have the meaning assigned to such term in Section 8.17 hereof.

                    “Swing Line Bank” shall mean, subject to the terms of this Agreement, JPMorgan.

                    “Swing Line Commitment” shall have the meaning assigned to such term in Section 2.01(c) hereof.

                    “Swing Line Loan” shall have the meaning assigned to such term in Section 2.01(c) hereof.

                    “Tangible Net Worth” shall mean, as at any date for any Person, the sum for such Person (determined without duplication in accordance with GAAP), of the following:

 

 

 

          (a) the amount of common stock; plus

 

 

 

          (b) the amount of surplus and retained earnings (or, in the case of a surplus or retained earnings deficit, minus the amount of such deficit); plus

 

 

 

          (c) the amount of any Subordinated Debt; minus

 

 

 

          (d) the sum of the following: (i) the aggregate amount of Investments other than Permitted Investments plus (ii) the cost of treasury shares and the book value of all assets that should be classified as intangibles (without duplication of deductions in respect of items already deducted in arriving at surplus and retained earnings) but in any event including goodwill, minority interests, research and development costs, trademarks, trade names, copyrights, patents and franchises, unamortized debt discount and expense, all reserves and any write-up in the book value of assets resulting from a revaluation thereof subsequent to December 31, 2005.

                    “Total Liabilities” shall mean, as at any date, the sum, for the Company (determined without duplication in accordance with GAAP), of the following: (a) all Indebtedness and (b) all other liabilities that should be classified as liabilities on a balance sheet, including, without limitation, all reserves (other than general contingency reserves), but excluding all deferred taxes and other deferred items.

                    “Type” shall have the meaning assigned to such term in Section 1.03 hereof.

                    “Uninsured Eligible Receivables” shall mean, on any date, all Eligible Receivables that are either not covered by, or in excess of the insured limits set by, receivables or credit insurance.

                    1.02 Accounting Terms and Determinations.

                    (a) Except as otherwise expressly provided herein, all accounting terms used herein shall be interpreted, and all financial statements and certificates and reports as to financial

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matters required to be delivered to the Banks hereunder shall (unless otherwise disclosed to the Banks in writing at the time of delivery thereof in the manner described in subsection (b) below) be prepared, in accordance with generally accepted accounting principles applied on a basis consistent with those used in the preparation of the latest financial statements furnished to the Banks hereunder. All calculations made for the purposes of determining compliance with this Agreement shall (except as otherwise expressly provided herein) be made by application of generally accepted accounting principles applied on a basis consistent with those used in the preparation of the latest annual or quarterly financial statements furnished to the Banks pursuant to Section 8.01 hereof.

                    (b) To enable the ready and consistent determination of compliance with the covenants set forth in Section 8 hereof, the Company will not change the last day of its fiscal year from December 31 of each year, or the last days of the first three fiscal quarters in each of its fiscal years from March 31, June 30 and September 30 of each year, respectively.

                    (c) Any and all financial information delivered pursuant to Section 8.01(a) and (b) shall be prepared on a consolidated basis for the Company and its Subsidiaries. Any and all calculations made hereunder for purposes of determining compliance with the financial covenants set forth in Sections 8.09 through 8.11 shall be on a consolidated basis for the Company and its Subsidiaries.

                    1.03 Types of Loans. Loans hereunder are distinguished by “Type”. The “Type” of a Loan refers to whether such Loan is a Base Rate Loan or a Eurodollar Loan or a Money Market Loan, each of which constitutes a Type.

                    SECTION 2. Commitments, Loans, Notes and Prepayments.

                    2.01 Loans.

                    (a) Each Bank severally agrees, on the terms and conditions of this Agreement, to make loans to the Company in Dollars during the period from and including the Amendment Effective Date to but not including the Revolving Credit Commitment Termination Date in an aggregate principal amount at any one time outstanding up to but not exceeding the amount of such Bank’s Revolving Loan Commitment Percentage as in effect from time to time of the aggregate amount of the Revolving Loan Commitments as in effect from time to time; provided that the aggregate amount of all Revolving Loans, Swing Line Loans, Acceptance Liabilities and Letter of Credit Liabilities at any one time outstanding shall not exceed the lesser of (x) the Revolving Loan Commitments as in effect from time to time and (y) the Borrowing Base. Subject to the terms and conditions of this Agreement, during such period the Company may borrow, repay and reborrow the amount of the Revolving Loan Commitments by means of Base Rate Loans, Eurodollar Loans and Money Market Loans and may Convert one Type into Loans of another Type (as provided in Section 2.10 hereof) or Continue Loans of one Type as Loans of the same Type (as provided in Section 2.10 hereof), provided that (a) no more than ten separate Interest Periods in respect of Eurodollar Loans from each Bank may be outstanding at

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any one time and (b) no more than ten separate Interest Periods in respect of Money Market Loans from each Bank may be outstanding at any one time.

                    (b) On a single occasion after the date hereof, the Company may, by written notice to the Agent (but without the consent of the Agent) and with the consent of the Issuing Bank (such consent not to be unreasonably withheld), request that a Bank and/or a financial institution not already a Bank hereunder and acceptable to the Agent (each a “New Bank”) increase the amount of the Revolving Loan Commitments in an aggregate amount not to exceed $25,000,000 (the “Commitment Increase”) in one or more increments of at least $10,000,000 on the date specified in such notice (the “Effective Date”); provided that each Bank shall have the right of first refusal with respect to any such Commitment Increase and no Bank shall be required to participate in such Commitment Increase. Each New Bank (if any) shall become a Bank hereunder for all purposes of this Agreement and the other Basic Documents on the Effective Date. The Commitment Increase shall be subject to the satisfaction of the following conditions on or prior to the Effective Date:

 

 

 

          (i) each New Bank shall have executed and delivered to the Agent and to the Company a joinder agreement, in form and substance satisfactory to the Agent, pursuant to which the New Bank shall agree to be a Lender hereunder with a Revolving Loan Commitment equal to at least $10,000,000;

 

 

 

          (ii) the New Bank shall have purchased from each other Bank, effective as of the Effective Date, an assignment of such other Bank’s outstanding Loans on the Effective Date (for a purchase price equal to the principal amount thereof) in the respective amounts such that, after giving effect thereto, the outstanding Loans and unused Commitments shall be held ratably among the Banks;

 

 

 

          (iii) the Company shall have paid any amounts payable under Section 5.04 hereof as if the Loans being assigned pursuant to the foregoing clause (ii) were being prepaid; and

 

 

 

          (iv) no Default shall be continuing on the Effective Date.

                    (c) Subject to the terms and conditions of this Agreement, the Revolving Loan Commitments may be utilized, upon the request of the Company to the Swing Line Bank, in addition to the Revolving Loans provided for by clause (a) hereof, to make swing line loans (the “Swing Line Loans”) to the Company in Dollars during the period from and including the Amendment Effective Date to but not including the Revolving Credit Commitment Termination Date in an aggregate principal amount at any one time outstanding up to but not exceeding $10,000,000 (the “Swing Line Commitment”). Subject to the terms and conditions of this Agreement, during such period the Company may borrow, repay and reborrow Swing Line Loans. At the option of the Borrower, Swing Line Loans may be Base Rate Loans or Money Market Loans. On the date a Swing Line Loan is made by the Swing Line Bank, the Swing Line Bank shall be deemed to have sold and transferred to each other Bank and each such other Bank shall be deemed irrevocably and unconditionally to have purchased and received from the Swing Line Bank, without recourse or warranty, an undivided interest and participation, to the extent of

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such other Bank’s Revolving Loan Commitment Percentage of the Swing Line Loan so made. The Swing Line Bank shall not be permitted or required to make Swing Line Loans if, after giving effect thereto, (i) the aggregate outstanding principal amount of all Swing Line Loans would exceed the then existing Swing Line Commitment or (ii) unless otherwise agreed to by the Swing Line Bank, in its sole discretion, the sum of all Revolving Loans made by the Swing Line Bank plus the Swing Line Bank’s Revolving Loan Commitment Percentage of the aggregate amount of all Swing Line Loans and Letter of Credit Liabilities would exceed the Swing Line Bank’s Revolving Loan Commitment Percentage of the then existing Revolving Loan Commitment; provided that the aggregate amount of all Revolving Loans, Swing Line Loans, Acceptance Liabilities and Letter of Credit Liabilities at any one time outstanding shall not exceed the lesser of (x) the Revolving Loan Commitments as in effect from time to time and (y) the Borrowing Base.

          If (i) any Swing Line Loan shall be outstanding for more than five consecutive Business Days, (ii) any Swing Line Loan is or will be outstanding on a date when the Company requests that a Revolving Loan be made, or (iii) any Default shall occur and be continuing, then each Bank (other than the Swing Line Bank) irrevocably agrees that it will, at the request of the Swing Line Bank in its sole and absolute discretion, make a Revolving Loan (which shall initially be funded as a Base Rate Loan) in an amount equal to such Bank’s Revolving Loan Commitment Percentage of the aggregate principal amount of all such Swing Line Loans then outstanding (such outstanding Swing Line Loans hereinafter referred to as the “Refunded Swing Line Loans”). On or before 2:00 p.m. New York time on the first Business Day following receipt by each Bank (other than the Swing Line Bank) of a request to make Revolving Loans as provided in the preceding sentence, each Bank (other than the Swing Line Bank) shall deposit in an account specified by the Swing Line Bank the amount so requested in same day funds and such funds shall be applied by the Swing Line Bank to repay the Refunded Swing Line Loans. In connection with the Refunded Swing Line Loans, the Swing Line Bank shall be deemed to have made Revolving Loans in an amount equal to the Swing Line Bank’s Revolving Loan Commitment Percentage of the aggregate principal amount of the Refunded Swing Line Loans. Upon the making (or deemed making, in the case of the Swing Line Bank) of any Revolving Loans pursuant to this paragraph, the amount so funded shall become an outstanding Revolving Loan and shall no longer be owed as a Swing Line Loan. All interest payable with respect to any Revolving Loans made (or deemed made, in the case of the Swing Line Bank) pursuant to this paragraph shall be appropriately adjusted to reflect the period of time during which the Swing Line Bank had outstanding Swing Line Loans in respect of which such Revolving Loans were made. Each Bank’s (other than the Swing Line Bank’s) obligation to make the Revolving Loans referred to in this paragraph shall be absolute and unconditional and shall not be affected by any circumstance, including (i) any set-off, counterclaim, recoupment, defense or other right which such Bank may have against the Swing Line Bank, any Obligor or any Person for any reason whatsoever; (ii) the occurrence or continuation of any Default; (iii) any adverse change in the condition (financial or otherwise) of any Obligor; (iv) the acceleration or maturity of the Loans or the termination of any Commitment after the making of any Swing Line Loan; (v) any breach of any Basic Document by any Person; or (vi) any other circumstance, happening or event whatsoever, whether or not similar to any of the foregoing (and if, as a result of the occurrence of any Event of Default described in clauses (f) or (g) of Section 9 with respect to the Company, any Bank shall be prohibited or stayed from making any such Revolving Loan referred to in this

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paragraph, each such Bank shall pay to the Swing Line Bank an amount equal to each Revolving Loan otherwise required to be made by it pursuant to this Section in payment for the participation in the related Swing Line Loan purchased by such Bank pursuant to the foregoing clause (c)).

                    2.02 Borrowings. The Company shall give the Agent notice of each borrowing hereunder as provided in Section 4.05 hereof. On the date specified for each borrowing hereunder, each Bank shall, subject to the terms and conditions of this Agreement, make available the amount of such borrowing to the Agent by depositing the same, in immediately available funds, at an account maintained by the Agent with JPMorgan at the Principal Office. The amount so received by the Agent shall, subject to the terms and conditions of this Agreement, be made available to the Company, by depositing the same, in immediately available funds, in an account of the Company maintained with JPMorgan at the Principal Office designated by the Company.

                    2.03 Letters of Credit. Subject to the terms and conditions of this Agreement, the Revolving Loan Commitments may be utilized, upon the request of the Company, in addition to the Revolving Loans provided for by Section 2.01 hereof, by the issuance by the Issuing Bank of letters of credit and letters of indemnity (collectively, “Letters of Credit”) for account of the Company, provided that in no event shall (i) the aggregate amount of all Letter of Credit Liabilities, together with the aggregate outstanding amount of the Loans and the aggregate amount of Acceptance Liabilities, exceed the lesser of (x) the Borrowing Base reflected on the most recent Borrowing Base Certificate delivered pursuant to Section 8.01(d) hereof, and (y) the aggregate amount of the Revolving Loan Commitments as in effect from time to time, (ii) the outstanding aggregate amount of all Letter of Credit Liabilities arising out of standby Letters of Credit exceed $4,000,000 and (iii) the expiration date of any Letter of Credit extend beyond the Revolving Credit Commitment Termination Date.

                    (a) The Company shall give the Agent at least three Business Days’ irrevocable prior notice (effective upon receipt) specifying the Business Day (which shall be no later than 30 days preceding the Revolving Credit Commitment Termination Date) each Letter of Credit is to be issued, the name of the Issuing Bank, and the account party or parties therefor and describing in reasonable detail the proposed terms of such Letter of Credit (including the beneficiary thereof) and the nature of the transactions or obligations proposed to be supported thereby (including whether such Letter of Credit is to be a commercial letter of credit or a standby letter of credit).

                    (b) Upon receipt from the beneficiary of any Letter of Credit of any demand for payment under such Letter of Credit, the Issuing Bank shall promptly notify the Company (through the Agent) of the amount to be paid by the Issuing Bank as a result of such demand and the date on which payment is to be made by the Issuing Bank to such beneficiary in respect of such demand. Notwithstanding the identity of the account party of any Letter of Credit, the Company hereby unconditionally agrees to pay and reimburse the Agent for the account of the Issuing Bank for the amount of each demand for payment under such Letter of Credit made in accordance with the terms thereof at or prior to the date on which payment is to be made by the

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Issuing Bank to the beneficiary thereunder in accordance with the terms thereof, without presentment, demand, protest or other formalities of any kind.

                    (c) Forthwith upon its receipt of a notice referred to in clause (b) of this Section 2.03, the Company shall advise the Agent whether or not the Company intends to borrow hereunder to finance its obligation to reimburse the Issuing Bank for the amount of the related demand for payment and, if it does, submit a notice of such borrowing as provided in Section 4.05 hereof. In the event that the Company fails to reimburse the Issuing Bank for a payment under a Letter of Credit by the date of such payment, the Agent shall give each Bank prompt notice of the amount of the demand for payment, specifying such Bank’s Revolving Commitment Percentage of the amount of the related demand for payment.

                    (d) Each Bank (other than the Issuing Bank) shall pay to the Agent for account of the Issuing Bank at the Principal Office in Dollars and in immediately available funds, the amount of such Bank’s Revolving Commitment Percentage of any payment under a Letter of Credit upon notice by the Issuing Bank (through the Agent) to such Bank requesting such payment and specifying such amount. Each such Bank’s obligation to make such payment to the Agent for account of the Issuing Bank under this clause (d), and the Issuing Bank’s right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the failure of any other Bank to make its payment under this clause (d), the financial condition of the Company (or any other account party), the existence of any Default or the termination of the Commitment. Each such payment to the Issuing Bank shall be made without any offset, abatement, withholding or reduction whatsoever. If any Bank shall default in its obligation to make any such payment to the Agent for account of the Issuing Bank, for so long as such default shall continue the Agent may at the request of the Issuing Bank withhold from any payments received by the Agent under this Agreement or any Note for account of such Bank the amount so in default and, to the extent so withheld, pay the same to the Issuing Bank in satisfaction of such defaulted obligation.

               (e) Upon the making of each payment by a Bank to the Issuing Bank pursuant to clause (d) above in respect of any Letter of Credit, such Bank shall, automatically and without any further action on the part of the Agent, the Issuing Bank or such Bank, acquire (i) a participation in an amount equal to such payment in the Reimbursement Obligation owing to the Issuing Bank by the Company hereunder and under the Letter of Credit Documents relating to such Letter of Credit and (ii) a participation in a percentage equal to such Bank’s Revolving Commitment Percentage in any interest or other amounts payable by the Company hereunder and under such Letter of Credit Documents in respect of such Reimbursement Obligation (other than the commissions, charges, costs and expenses payable to the Issuing Bank pursuant to clause (f) of this Section 2.03). Upon receipt by the Issuing Bank from or for account of the Company of any payment in respect of any Reimbursement Obligation or any such interest or other amount (including by way of setoff or application of proceeds of any collateral security) the Issuing Bank shall promptly pay to the Agent for account of each Bank entitled thereto, such Bank’s Revolving Commitment Percentage of such payment, each such payment by the Issuing Bank to be made in the same money and funds in which received by the Issuing Bank. In the event any payment received by the Issuing Bank and so paid to the Banks hereunder is rescinded or must otherwise be returned by the Issuing Bank, each Bank shall, upon the request of the

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Issuing Bank (through the Agent), repay to the Issuing Bank (through the Agent) the amount of such payment paid to such Bank, with interest at the rate specified in clause (i) of this Section 2.03.

                    (f) The Company shall pay to the Agent the following fees:

 

 

 

          (x) in respect of each commercial Letter of Credit, a payment commission in an amount equal to 25/100 of 1% of each amount drawn under such Letter of Credit, payable upon such drawing (of such fee, 15/100 of 1% shall be for the account of each Bank, ratably in accordance with their respective Revolving Commitment Percentages and 10/100 of 1% shall be for the account of the Issuing Bank), and

 

 

 

           (y) in respect of each standby Letter of Credit, a letter of credit fee for the account of each Bank in an amount equal to 1.55% per annum of undrawn face amount of such Letter of Credit, to be paid ratably in accordance with their respective Revolving Commitment Percentages, in advance on the date such Letter of Credit shall be issued and on each Quarterly Date thereafter, and such fee to be calculated assuming that there will be no drawings under, and no termination or cancellation of, such Letter of Credit prior to the next succeeding Quarterly Date.

In addition, the Company shall pay to the Agent for account of the Issuing Bank all commissions, charges, costs and expenses in the amounts customarily charged by the Issuing Bank from time to time in like circumstances with respect to the issuance of each Letter of Credit and drawings and other transactions relating thereto.

                    (g) At the request of any Bank, the Issuing Bank shall deliver (through the Agent) to such Bank a notice describing the aggregate amount of all Letters of Credit outstanding at the end of any month. Upon the request of any Bank from time to time, the Issuing Bank shall deliver any other information reasonably requested by such Bank with respect to each Letter of Credit then outstanding.

                    (h) The issuance by the Issuing Bank of each Letter of Credit shall, in addition to the conditions precedent set forth in Section 6 hereof, be subject to the conditions precedent that (i) such Letter of Credit shall be in such form, contain such terms and support such transactions as shall be satisfactory to the Issuing Bank consistent with its then current practices and procedures with respect to letters of credit of the same type, (ii) all documents of title covering goods financed with a Letter of Credit shall either be issued (A) in the name of the Issuing Bank or (B) to the order of the shipper and endorsed in blank and delivered to the Issuing Bank and (iii) the Company shall have executed and delivered such applications, agreements and other instruments relating to such Letter of Credit as the Issuing Bank shall have reasonably requested consistent with its then current practices and procedures with respect to letters of credit of the same type, provided that in the event of any conflict between any such application, agreement or other instrument and the provisions of this Agreement or any Security Document, the provisions of this Agreement and the Security Documents shall control.

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                    (i) To the extent that any Bank shall fail to pay any amount required to be paid pursuant to clause (d) or (e) of this Section 2.03 on the due date therefor, such Bank shall pay interest to the Issuing Bank (through the Agent) on such amount from and including such due date to but excluding the date such payment is made at the Federal Funds Rate.

                    (j) The issuance by the Issuing Bank of any modification or supplement to any Letter of Credit hereunder shall be subject to the same conditions applicable under this Section 2.03 to the issuance of new Letters of Credit, and no such modification or supplement shall be issued hereunder unless either (i) the respective Letter of Credit affected thereby would have complied with such conditions had it originally been issued hereunder in such modified or supplemented form or (ii) each Bank shall have consented thereto.

The Company hereby indemnifies and holds harmless each Bank and the Agent from and against any and all claims and damages, losses, liabilities, costs or expenses that such Bank or the Agent may incur (or that may be claimed against such Bank or the Agent by any Person whatsoever) by reason of or in connection with the execution and delivery or transfer of or payment or refusal to pay by the Issuing Bank under any Letter of Credit; provided that the Company shall not be required to indemnify the Issuing Bank or the Agent for any claims, damages, losses, liabilities, costs or expenses to the extent, but only to the extent, caused by (x) the willful misconduct or gross negligence of the Issuing Bank in determining whether a request presented under any Letter of Credit complied with the terms of such Letter of Credit or (y) the Issuing Bank’s failure to pay under any Letter of Credit after the presentation to it of a request strictly complying with the terms and conditions of such Letter of Credit or (z) the requirement of any Bank to pay interest pursuant to Section 2.03(i) hereof. Nothing in this Section 2.03 is intended to limit the other obligations of the Company, any Bank or the Agent under this Agreement.

                    2.04 Acceptances. Subject to the terms and conditions of this Agreement, the Revolving Loan Commitment may be utilized, upon the request of the Company, for the creation and discount by the Accepting Bank of Acceptances, provided that in no event shall (i) the aggregate amount of all Acceptance Liabilities, together with the aggregate outstanding amount of Loans and the aggregate amount of all Letter of Credit Liabilities, exceed the lesser of (x) the Borrowing Base reflected on the most recent Borrowing Base Certificate delivered pursuant to Section 8.01(d) hereof, and (y) the aggregate amount of the Revolving Loan Commitments at such time and (ii) the Maturity Date of any Acceptance extend beyond the Revolving Credit Termination Date. The following additional provisions shall apply to Acceptances:

                    (a) When the Company wishes to request that the Accepting Bank create and discount Acceptances for account of the Company, the Company shall give the Accepting Bank notice of such request so as to be received by the Accepting Bank no later than 11:00 a.m. New York time on the Business Day next preceding the date proposed therein for the creation and discount of such Acceptances, specifying:

 

 

 

          (i) the aggregate face amount of such Acceptances;

 

 

 

          (ii) the tenor of such Acceptances (which in any event shall not exceed six months);

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          (iii) the type and C.I.F. (or other applicable) value of the goods out of whose shipment such Acceptance will arise;

 

 

 

          (iv) the date of shipment of such goods (which in any event may not be more than 30 days prior to the date proposed in the notice requesting the creation and discount of such Acceptances);

 

 

 

          (v) the city and country of origin of shipment of such goods; and

 

 

 

          (vi) the city and state of destination of shipment of such goods.

                    (b) The Accepting Bank shall, not later than 1:00 p.m. New York time on the date specified for the creation and discount of such Acceptances:

 

 

 

          (i) create such Acceptances in such aggregate amount by the acceptance at the Principal Office of a draft or drafts in the form customarily employed by the Accepting Bank in creating bankers’ acceptances (the denomination of each such Acceptance to be selected by the Accepting Bank in its sole discretion);

 

 

 

          (ii) discount such Acceptances at the All-In Rate and shall notify each Bank of such rate; and

 

 

 

          (iii) promptly make available to the Company the proceeds of such discount by depositing the same, in immediately available funds, in an account of the Company maintained with the Accepting Bank at the Principal Office designated by the Company.

                    (c) On each day during the period commencing with the creation and discount by the Accepting Bank of any Acceptance and until the related Acceptance Liability shall have been paid in full, the Revolving Loan Commitment of each Bank shall be deemed to be utilized for all purposes of this Agreement in an amount equal to such Bank’s Revolving Commitment Percentage of the face amount of such Acceptance. Each Bank (other than the Accepting Bank) agrees that, upon the creation and discount of any Acceptance hereunder, it shall automatically and without any further action on the part of the Agent, the Accepting Bank or such Bank acquire a participation in the Accepting Bank’s liability under such Acceptance in an amount equal to such Bank’s Revolving Commitment Percentage of such liability, and each Bank (other than the Accepting Bank) thereby shall absolutely, unconditionally and irrevocably assume, as primary obligor and not as surety, and shall be unconditionally obligated to the Accepting Bank to pay and discharge when due, and to pay and reimburse the Accepting Bank in accordance with clause (f) below, its Revolving Commitment Percentage of the Accepting Bank’s liability under such Acceptance.

                    (d) With respect to any Acceptance created and discounted hereunder, the Company unconditionally agrees to pay to the Agent for the account of the Accepting Bank, on the Maturity Date of such Acceptance, or such earlier date as may be required pursuant to the terms of this Agreement, the face amount of such Acceptance.

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                    (e) The Company shall advise the Agent whether or not the Company intends to borrow hereunder to finance its obligation to reimburse the Accepting Bank in the face amount of any Acceptance and, if it does, submit a notice of such borrowing as provided in Section 4.05 hereof. In the event that the Company fails to reimburse the Accepting Bank for the face amount of an Acceptance on the Maturity Date therefor, the Agent shall give each Bank prompt notice of such face amount, specifying such Bank’s Revolving Commitment Percentage of such face amount.

                    (f) Upon demand of the Accepting Bank made through the Agent at any time from and including the Maturity Date of any Acceptance until the Company shall have reimbursed the Accepting Bank in the face amount of such Acceptance under clause (e) hereof, each Bank (other than the Accepting Bank) shall pay to the Agent for account of the Accepting Bank at the Principal Office in Dollars and in immediately available funds, the amount of such Bank’s Revolving Commitment Percentage of the face amount of such Acceptance. Each such Bank’s obligation to make such payment to the Agent for account of the Accepting Bank under this clause (f), and the Accepting Bank’s right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the failure of any other Bank to make its payment under this clause (f), the financial condition of the Company (or any other account party), the existence of any Default or the termination of the Commitment. Each such payment to the Accepting Bank shall be made without any offset, abatement, withholding or reduction whatsoever. If any Bank shall default in its obligation to make any such payment to the Agent for account of the Accepting Bank, for so long as such default shall continue the Agent may at the request of the Accepting Bank withhold from any payments received by the Agent under this Agreement or any Note for account of such Bank the amount so in default and, to the extent so withheld, pay the same to the Accepting Bank in satisfaction of such defaulted obligation.

                    (g) Upon the making of each payment by a Bank to the Accepting Bank pursuant to clause (f) above in respect of any Acceptance, such Bank shall, automatically and without any further action on the part of the Agent, the Accepting Bank or such Bank, acquire (i) a participation in an amount equal to such payment in the Acceptance Liability owing to the Accepting Bank by the Company hereunder and under the Acceptance Documents relating to such Acceptance and (ii) a participation in a percentage equal to such Bank’s Revolving Commitment Percentage in any interest or other amounts payable by the Company hereunder and under such Acceptance Documents in respect of such Acceptance Liability. Upon receipt by the Accepting Bank from or for account of the Company of any payment in respect of any Acceptance Liability or any such interest or other amount (including by way of setoff or application of proceeds of any collateral security) the Accepting Bank shall promptly pay to the Agent for account of each Bank entitled thereto, such Bank’s Revolving Commitment Percentage of such payment, each such payment by the Accepting Bank to be made in the same money and funds in which received by the Accepting Bank. In the event any payment received by the Accepting Bank and so paid to the Banks hereunder is rescinded or must otherwise be returned by the Accepting Bank, each Bank shall, upon the request of the Accepting Bank (through the Agent), repay to the Accepting Bank (through the Agent) the amount of such payment paid to such Bank, with interest at the rate specified in clause (j) of this Section 2.04.

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                    (h) In the event the Accepting Bank is unable to rediscount any Acceptance in the secondary bankers’ acceptance market for any reason whatsoever (or in the event the Accepting Bank repurchases any Acceptance theretofore rediscounted in such market because such Acceptance is not eligible for discount and purchase by a Federal Reserve Bank), each Bank (other than the Accepting Bank) shall, upon notice from the Accepting Bank, purchase from the Accepting Bank a participation in the Accepting Bank’s right, title and interest in and to such Acceptance equal to its Revolving Commitment Percentage of such Acceptance by paying to the Agent for account of the Accepting Bank an amount equal to its Revolving Commitment Percentage of the proceeds of the discount of such Acceptance paid by the Accepting Bank. Each such Bank’s obligation to make such payments to the Agent for account of the Accepting Bank under this clause (h), and the Accepting Bank’s right to receive the same, shall be absolute and unconditional and shall not be affected by any circumstance whatsoever, including, without limitation, the failure of any other Bank to make its payment under this clause (h), the financial condition of the Company or any of its Subsidiaries, the existence of any Default or the termination of the Commitments. Each such payment to the Agent for account of the Accepting Bank shall be made without any offset, abatement, withholding or reduction whatsoever. Upon the making of any payment by a Bank to the Agent for account of the Accepting Bank pursuant to the first sentence of this clause (h) in respect of any Acceptance, such Bank shall, automatically and without any further action on the part of the Agent, the Accepting Bank or such Bank, acquire a participation in its Revolving Commitment Percentage of any proceeds received by the Accepting Bank from the subsequent rediscount of such Acceptance in the secondary banker’s acceptance market. To the extent a Bank makes a payment under this clause (h), such Bank shall not be required to make a payment with respect to such Acceptance pursuant to clause (f) of this Section 2.04.

                    (i) To the extent that any Bank shall fail to pay any amount required to be paid pursuant to clause (f) or (g) of this Section 2.04 on the due date therefor, such Bank shall pay interest to the Accepting Bank (through the Agent) on such amount from and including such due date to but excluding the date such payment is made at the Federal Funds Rate.

                    (j) The Company hereby appoints the Accepting Bank to be, and the Accepting Bank hereby accepts such appointment to be, the Company’s true and lawful attorney-in-fact for and on behalf of the Company to sign in the name of the Company, as drawer, drafts naming the Accepting Bank as drawee and payee and otherwise in the form customarily employed by the Accepting Bank in creating bankers’ acceptances, and to complete such drafts as to amount, date and maturity (in such numbers and denominations as the Accepting Bank is hereby authorized to determine) in accordance with any request for the creation and discount of Acceptances under Section 2.04(a) hereof.

                    2.05 Changes of the Commitment.

                    (a) The Commitment shall be automatically reduced to zero on the Revolving Credit Commitment Termination Date.

                    (b) The Company shall have the right at any time or from time to time (i) so long as no Loans or Letter of Credit Liabilities or Acceptance Liabilities are outstanding, to terminate the Revolving Loan Commitment and (ii) to reduce the unused amount of the

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Revolving Loan Commitment (for which purpose use of the Commitment shall be deemed to include the aggregate amount of Letter of Credit Liabilities, Acceptance Liabilities and Swing Line Loans); provided that (x) the Company shall give notice of each such termination or reduction as provided in Section 4.05 hereof, (y) each partial reduction shall be in an amount at least equal to $10,000,000 and (z) each such partial reduction shall be applied pro rata to reduce the Revolving Loan Commitment of each Bank.

                    (c) The Revolving Loan Commitment once terminated or reduced may not be reinstated.

                    2.06 Commitment Fee. The Company shall pay to the Agent for account of each Bank a commitment fee on the daily average unused amount of the Revolving Loan Commitment (for which purpose (a) the aggregate amount of any Letter of Credit Liabilities (other than the face amount of any letters of indemnity) and any Acceptance Liabilities shall be deemed to be a use of the Revolving Loan Commitment and (b) in the case of each Bank, other than the Swing Line Bank, the aggregate amount of any Swing Line Loans then outstanding shall not be deemed to be a use of the Revolving Loan Commitment), for the period from and including the date of this Agreement to but not including the earlier of the date the Revolving Loan Commitment is terminated and the Revolving Credit Commitment Termination Date, at a rate per annum equal to 25/100 of 1%. Accrued commitment fees shall be payable on each Quarterly Date and on the earlier of the date the Revolving Loan Commitment is terminated and the Revolving Credit Commitment Termination Date. For the avoidance of doubt, the aggregate amount of the Commitments on the date hereof with respect to which a commitment fee would be payable under this Section 2.06 is $150,000,000 (which amount is subject to increase as provided as in Section 2.01(b) hereof).

                    2.07 Lending Offices. The Loans of each Type made by each Bank shall be made and maintained at such Bank’s Applicable Lending Office for Loans of such Type.

                    2.08 Several Obligations; Remedies Independent. The failure of any Bank to make any Loan or other extension of credit to be made by it on the date specified therefor shall not relieve any other Bank of its obligation to make its Loan on such date and no Bank shall have any obligation to the Agent or any other Bank for the failure by any such other Bank to make any Loan or other extension of credit required to be made by such other Bank. The amounts payable by the Company at any time hereunder and under the Notes to each Bank shall be a separate and independent debt and each Bank shall be entitled to protect and enforce its rights arising out of this Agreement and the Notes, and it shall not be necessary for any other Bank or the Agent to consent to, or be joined as an additional party in, any proceedings for such purposes.

                    2.09 Notes.

                    (a) The Revolving Loans made by each Bank shall be evidenced by a single promissory note of the Company substantially in the form of Exhibit A hereto, dated the date hereof, payable to such Bank in a principal amount equal to the amount of the Revolving Loan Commitment as originally in effect and otherwise duly completed.

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                    (b) The Swing Line Loans made by the Swing Line Bank shall be evidenced by one or more promissory notes of the Company substantially in the form of Exhibit A hereto, payable to the Swing Line Bank in a principal amount equal to the amount of the Swing Line Commitment.

                    (c) The date, amount, Type, interest rate and duration of Interest Period (if applicable) of each Loan made by each Bank to the Company, and each payment made on account of the principal thereof, shall be recorded by each Bank on its books and, prior to any transfer of the Note, endorsed by each Bank on the schedule attached to the Note or any continuation thereof; provided that the failure of such Bank to make any such recordation or endorsement shall not affect the obligations of the Company to make a payment when due of any amount owing hereunder or under the Note.

                    (d) No Bank shall be entitled to have the Notes subdivided, by exchange for promissory notes of lesser denominations or otherwise, except in connection with a permitted assignment of all or any portion of the relevant Commitment, Loans and Notes pursuant to Section 11.06(b) hereof.

                    2.10 Optional Prepayments and Conversions or Continuations of Loans. Subject to Section 4.04 hereof, the Company shall have the right to prepay Loans, or to Convert Loans of one Type into Loans of another Type or Continue Loans of one Type as Loans of the same Type, at any time or from time to time, in whole or in part, without premium or penalty, except as may be required by Section 5 hereof, provided that: (a) the Company shall give the Agent notice of each such prepayment, Conversion or Continuation as provided in Section 4.05 hereof (and, upon the date specified in any such notice of prepayment, the amount to be prepaid shall become due and payable hereunder); and (b) a Eurodollar Loan and a Money Market Loan may be prepaid or Converted only on the last day of an Interest Period for such Loan. Notwithstanding the foregoing, and without limiting the rights and remedies of the Banks under Section 9 hereof, in the event that any Event of Default shall have occurred and be continuing, the Agent may (and at the request of the Required Banks shall) suspend the right of the Company to Convert any Loan into a Eurodollar Loan or a Money Market Loan, or to Continue any Loan as a Eurodollar Loan or a Money Market Loan, in which event all Eurodollar Loans and Money Market Loans shall be Converted (on the last day(s) of the respective Interest Periods therefor) or Continued, as the case may be, as Base Rate Loans.

                    2.11 Mandatory Prepayments.

                    (a) Borrowing Base. Until the Revolving Credit Commitment Termination Date, the Company shall from time to time prepay the Loans (and/or provide cover for Letter of Credit Liabilities and Acceptance Liabilities as specified in clause (b) below) in such amounts as shall be necessary so that at all times the aggregate outstanding amount of the Loans together with the outstanding Letter of Credit Liabilities and Acceptance Liabilities shall not exceed the lesser of the Borrowing Base and the aggregate amount of the Revolving Loan Commitments, such amount to be applied, first, to Revolving Loans outstanding, second, to Swing Line Loans outstanding, and, third, as cover for Letter of Credit Liabilities and Acceptance Liabilities outstanding.

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                    (b) Cover for Letter of Credit Liabilities and Acceptance Liabilities. In the event that the Company shall be required pursuant to this Section 2.11 to provide cover for Letter of Credit Liabilities or Acceptance Liabilities, the Company shall effect the same by paying to the Agent immediately available funds in an amount equal to the required cover amount, which funds shall be retained by the Agent in the Collateral Account (as collateral security in the first instance for the Letter of Credit Liabilities and Acceptance Liabilities) until such time as the relevant Letters of Credit shall have been terminated and all of the Letter of Credit Liabilities and Acceptance Liabilities thereunder paid in full or such time as such funds are no longer required pursuant to Section 2.11(a) hereof.

                    SECTION 3. Payments of Principal and Interest.

                    3.01 Repayment of Loans. The Company hereby promises to pay to the Agent for account of each Bank the entire outstanding principal amount of the Loans, and each Loan shall mature and be due and payable, on the Revolving Credit Commitment Termination Date.

                    3.02 Interest.

                    (a) The Company hereby promises to pay to the Agent for account of each Bank interest on the unpaid principal amount of each Revolving Loan made by such Bank for the period from and including the date of such Revolving Loan to but excluding the date such Revolving Loan shall be paid in full, at the following rates per annum:

 

 

 

          (i) during such periods as such Revolving Loan is a Base Rate Loan, the Base Rate (as in effect from time to time) plus the Applicable Margin;

 

 

 

          (ii) during such periods as such Revolving Loan is a Eurodollar Loan, for each Interest Period relating thereto, the Eurodollar Rate for such Revolving Loan for such Interest Period plus the Applicable Margin;

 

 

 

          (iii) during such periods as such Revolving Loan is a Money Market Loan, the Money Market Rate for such Revolving Loan for such period.

                    (b) The Company hereby promises to pay to the Agent for account of the Swing Line Bank interest on the unpaid principal amount of each Swing Line Loan made by the Swing Line Bank for the period from and including the date of such Swing Line Loan to but excluding the date such Swing Line Loan shall be paid in full, at the following rates per annum:

 

 

 

          (i) during such periods as such Swing Line Loan is a Base Rate Loan, the Base Rate (as in effect from time to time) plus the Applicable Margin; and

 

 

 

          (ii) during such periods as such Swing Line Loan is a Money Market Loan, the Money Market Rate for such Swing Line Loan for such period.

Notwithstanding the foregoing, the Company hereby promises to pay to the Agent for account of each Bank interest at the applicable Post-Default Rate on any principal of any Loan, on any

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Reimbursement Obligation on any Acceptance Liabilities and on any other amount payable by the Company hereunder or under the Notes that shall not be paid in full when due (whether at stated maturity, by acceleration, by mandatory prepayment or otherwise), for the period from and including the due date thereof to but excluding the date the same is paid in full. Accrued interest on each Loan shall be payable (i) in the case of a Base Rate Loan, monthly on the last Business Day of each month, (ii) in the case of a Eurodollar Loan or a Money Market Loan, on the last day of each Interest Period therefor, and (iii) in the case of any Loan, upon the payment or prepayment thereof or the Conversion of such Loan to a Loan of another Type (but only on the principal amount so paid, prepaid or Converted), except that interest payable at the Post-Default Rate shall be payable from time to time on demand. Promptly after the determination of any interest rate provided for herein or any change therein, the Agent shall give notice thereof to the Banks to which such interest is payable and to the Company.

                    SECTION 4. Payments; Computations; Etc.

                    4.01 Payments.

                    (a) Except to the extent otherwise provided herein, all payments of principal, interest, Reimbursement Obligations, Acceptance Liabilities and other amounts to be made by the Company under this Agreement and the Notes, and, except to the extent otherwise provided therein, all payments to be made by the Obligors under any other Basic Document, shall be made in Dollars, in immediately available funds, without deduction, set-off or counterclaim, to the Agent at the Principal Office, not later than 1:00 p.m. New York time on the date on which such payment shall become due (each such payment made after such time on such due date to be deemed to have been made on the next succeeding Business Day).

                    (b) Any Bank for whose account such payment is to be made may (but shall not be obligated to) debit the amount of any such payment that is not made by such time to any ordinary deposit account of the Company with such Bank (with notice to the Company and the Agent).

                    (c) The Company shall, at the time of making each payment under this Agreement or any Note, for account of any Bank specify to the Agent (which shall so notify the intended recipient(s) thereof) the Loans, Acceptance Liabilities, Reimbursement Obligations or other amounts payable by the Company hereunder to which such payment is to be applied (and in the event that the Company fails to so specify, or if an Event of Default has occurred and is continuing, the Agent may distribute such payment to the Banks for application in such manner as it, subject to Section 4.03 hereof, may determine to be appropriate).

                    (d) Except to the extent otherwise provided in the last sentence of Section 2.03(d) and Section 2.04(f) hereof, each payment received by the Agent under this Agreement or any Note for account of any Bank shall be paid by the Agent promptly to such Bank, in immediately available funds, for account of such Bank’s Applicable Lending Office for the Loan or other obligation in respect of which such payment is made.

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                    (e) If the due date of any payment under this Agreement or any Note would otherwise fall on a day that is not a Business Day, such date shall be extended to the next succeeding Business Day, and interest shall be payable for any principal so extended for the period of such extension.

                    4.02 Computations. Interest on Loans, Reimbursement Obligations, Acceptance Liabilities and commitment fee shall be computed on the basis of a year of 360 days and actual days elapsed (including the first day but excluding the last day) occurring in the period for which payable.

                    4.03 Pro Rata Treatment. Except to the extent otherwise provided herein: (a) each borrowing of Loans from and participation interests in Swing Line Loans, Letters of Credit and Acceptances purchased by the Banks under Section 2.01 hereof shall be made from the Banks, each payment of commitment fee under Section 2.06 hereof in respect of Revolving Loan Commitments shall be made for account of the Banks, each payment of letter of credit fee under Section 2.03 hereof, and each termination or reduction of the amount of the Revolving Loan Commitments under Section 2.05 hereof shall be applied to the Revolving Loan Commitments of the Banks, pro rata according to the amounts of their respective Revolving Loan Commitments; (b) each payment or prepayment of principal of loans by the Company shall be made for account of the Banks pro rata in accordance with the respective unpaid principal amounts of the Loans held by them; and (c) each payment of interest on Loans by the Company shall be made for account of the Banks pro rata in accordance with the amounts of interest on such Loans then due and payable to the Banks.

                    4.04 Minimum Amounts. Except for mandatory prepayments made pursuant to Section 2.11 hereof:

                    (a) each borrowing, Conversion and partial prepayment of principal of Revolving Loans shall be in an amount at least equal to the following:

 

 

 

          (i) $5,000,000 or multiples of $1,000,000 in excess thereof in the case of Eurodollar Loans,

 

 

 

          (ii) $250,000 or multiples of $50,000 in excess thereof in the case of Base Rate Loans, and

 

 

 

          (iii) $1,250,000 or multiples of $50,000 in excess thereof in the case of Money Market Loans; and

                    (b) each borrowing, Conversion and partial prepayment of principal of Swing Line Loans shall be in an amount at least equal to $500,000 or multiples of $25,000 in excess thereof

(borrowings, Conversions or prepayments of or into Loans of different Types or, in the case of Eurodollar Loans, having different Interest Periods at the same time hereunder to be deemed separate borrowings, Conversions and prepayments for purposes of the foregoing, one for each Type or Interest Period).

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                    4.05 Certain Notices. Notices by the Company to the Agent of terminations or reductions of any Commitment, of borrowings, Conversions, Continuations and optional prepayments of Loans, of Types of Loans and of the duration of Interest Periods shall be irrevocable and shall be effective only if received by the Agent not later than 2:00 p.m. New York time (12:00 noon New York time in the case of Money Market Loans or Base Rate Loans) on the number of Business Days prior to the date of the relevant termination, reduction, borrowing, Conversion, Continuation or prepayment or the first day of such Interest Period specified below:

 

 

 

 

 

Notice

 

Number of
Business
Days Prior

 


 


 

 

 

 

 

Termination or reduction

 

 

 

of the Commitment

 

Five

 

 

 

 

 

Borrowing or prepayment of,

 

 

 

or Conversions into,

 

 

 

Base Rate Loans

 

Same day

 

 

 

 

 

Borrowing or prepayment of,

 

 

 

Conversions into, Continuations

 

 

 

as, or duration of Interest

 

 

 

Period for, Eurodollar Loans

 

Three

 

 

 

 

 

Borrowing or prepayment of,

 

 

 

Conversions into, Continuations

 

 

 

as, or duration of Interest

 

 

 

Period for, Money Market Loans

 

Same day

Each such notice of termination or reduction shall specify the amount of the Commitment to be terminated or reduced. Each such notice of borrowing, Conversion, Continuation or optional prepayment shall specify the amount (subject to Section 4.04 hereof) and Type of each Loan to be borrowed, Converted, Continued or prepaid and the date of borrowing, Conversion, Continuation or optional prepayment (which shall be a Business Day). Each such notice of the duration of an Interest Period shall specify the Loans to which such Interest Period is to relate. In the event that the Company fails to select the Type of Loan, or the duration of any Interest Period for any Eurodollar Loan or Money Market Loan, within the time period and otherwise as provided in this Section 4.05, such Loan (if outstanding as a Eurodollar Loan or a Money Market Loan) will be automatically Converted into a Base Rate Loan on the last day of the then current Interest Period for such Loan or (if outstanding as a Base Rate Loan) will remain as, or (if not then outstanding) will be made as, a Base Rate Loan.

                    4.06 Non-Receipt of Funds by the Agent. Unless the Agent shall have been notified by a Bank or the Company (the “Payor”) prior to the date on which the Payor is to make payment to the Agent of (in the case of a Bank) the proceeds of a Loan to be made by such Bank hereunder or (in the case of the Company) a payment to the Agent for account of one or more of

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the Banks hereunder (such payment being herein called the “Required Payment”), which notice shall be effective upon receipt, that the Payor does not intend to make the Required Payment to the Agent, the Agent may assume that the Required Payment has been made and may, in reliance upon such assumption (but shall not be required to), make the amount thereof available to the intended recipient(s) on such date; and, if the Payor has not in fact made the Required Payment to the Agent, the recipient(s) of such payment shall, on demand, repay to the Agent the amount so made available together with interest thereon in respect of each day during the period commencing on the date (the “Advance Date”) such amount was so made available by the Agent until the date the Agent recovers such amount at a rate per annum equal to the Federal Funds Rate for such day and, if such recipient(s) shall fail promptly to make such payment, the Agent shall be entitled to recover such amount, on demand, from the Payor, together with interest as aforesaid, provided that if neither the recipient(s) nor the Payor shall return the Required Payment to the Agent within three Business Days of the Advance Date, then, retroactively to the Advance Date, the Payor and the recipient(s) shall each be obligated to pay interest on the Required Payment as follows:

 

 

 

          (i) if the Required Payment shall represent a payment to be made by the Company to the Banks, (x) the Company shall be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Post-Default Rate and (y) the recipient(s) shall be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Federal Funds Rate (and, in case the recipient(s) shall return the Required Payment to the Agent, without limiting the obligation of the Company under Section 3.02 hereof to pay interest to such recipient(s) at the Post-Default Rate in respect of the Required Payment) and

 

 

 

          (ii) if the Required Payment shall represent proceeds of a Loan to be made by the Banks to the Company, (x) the Payor shall be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the Federal Funds Rate and (y) the Company shall be obligated retroactively to the Advance Date to pay interest in respect of the Required Payment at the rate of interest provided for such Required Payment pursuant to Section 3.02 hereof (and, in case the Company shall return the Required Payment to the Agent, without limiting any claim the Company may have against the Payor in respect of the Required Payment).

                    4.07 Sharing of Payments, etc.

                    (a) The Company agrees that, in addition to (and without limitation of) any right of set-off, banker’s lien or counterclaim a Bank may otherwise have, each Bank shall be entitled, at its option, to offset balances held by it for account of the Company at any of its offices, in Dollars or in any other currency, against any principal of or interest on any of such Bank’s Loans, Reimbursement Obligations, Acceptance Liabilities or any other amount payable to such Bank hereunder, that is not paid when due (regardless of whether such balances are then due to the Company), in which case it shall promptly notify the Company and the Agent thereof, provided that such Bank’s failure to give such notice shall not affect the validity thereof.

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                    (b) If any Bank shall obtain from any Obligor payment of any principal of or interest on any Loan, Acceptance Liabilities or Letter of Credit Liability owing to it or payment of any other amount under this Agreement or any other Basic Document through the exercise of any right of set-off, banker’s lien or counterclaim or similar right or otherwise (other than from the Agent as provided herein), and, as a result of such payment, such Bank shall have received a greater percentage of the principal of or interest on the Loans or Letter of Credit Liabilities, Acceptance Liabilities or such other amounts then due hereunder or thereunder by such Obligor to such Bank than the percentage received by any other Bank of the principal of or interest on the Loans or Letter of Credit Liabilities, Acceptance Liabilities or such other amounts then due hereunder or thereunder by such Obligor to such other Bank, it shall promptly purchase from such other Banks participations in (or, if and to the extent specified by such Bank, direct interests in) the Loans or Letter of Credit Liabilities, Acceptance Liabilities or such other amounts, respectively, owing to such other Banks (or in interest due thereon, as the case may be) in such amounts, and make such other adjustments from time to time as shall be equitable, to the end that all the Banks shall share the benefit of such excess payment (net of any expenses that may be incurred by such Bank in obtaining or preserving such excess payment) pro rata in accordance with the unpaid principal of and/or interest on the Loans, Acceptance Liabilities, Letter of Credit Liabilities and such other amounts, respectively, owing to each of the Banks. To such end all the Banks shall make appropriate adjustments among themselves (by the resale of participations sold or otherwise) if such payment is rescinded or must otherwise be restored.

                    (c) The Company agrees that any Bank so purchasing such a participation (or direct interest) may exercise all rights of set-off, banker’s lien, counterclaim or similar rights with respect to such participation as fully as if such Bank were a direct holder of Loans or other amounts (as the case may be) owing to such Bank in the amount of such participation.

                    (d) Nothing contained herein shall require any Bank to exercise any such right or shall affect the right of any Bank to exercise, and retain the benefits of exercising, any such right with respect to any other indebtedness or obligation of any Obligor. If, under any applicable bankruptcy, insolvency or other similar law, any Bank receives a secured claim in lieu of a set-off to which this Section 4.07 applies, such Bank shall, to the extent practicable, exercise its rights in respect of such secured claim in a manner consistent with the rights of the Banks entitled under this Section 4.07 to share in the benefits of any recovery on such secured claim.

                    SECTION 5. Yield Protection, Etc.

                    5.01 Additional Costs.

                    (a) The Company shall pay directly to each Bank from time to time such amounts as such Bank may determine to be necessary to compensate such Bank for any costs that such Bank determines are attributable to its making or maintaining of any Eurodollar Loans or its obligation to make any Eurodollar Loans hereunder, or any reduction in any amount receivable by such Bank hereunder in respect of any of such Loans or such obligation (such increases in costs and reductions in amounts receivable being herein called “Additional Costs”), resulting from any Regulatory Change that:

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          (i) subjects any Bank (or its Applicable Lending Office for any of such Loans) to any tax, duty or other charge in respect of such Loans or its Notes or changes the basis of taxation of any amounts payable to such Bank under this Agreement or its Notes in respect of any of such Loans (excluding changes in the rate of tax on the overall net income of such Bank or of such Applicable Lending Office by any jurisdiction in which such Bank or Applicable Lending Office or the Principal Office is located); or

 

 

 

          (ii) imposes or modifies any reserve, special deposit or similar requirements (other than the Reserve Requirement utilized in the determination of the Eurodollar Rate for such Loan) relating to any extensions of credit or other assets of, or any deposits with or other liabilities of, such Bank (including, without limitation, any of such Loans or any deposits referred to in the definition of “Eurodollar Base Rate” in Section 1.01 hereof), or any commitment of such Bank (including, without limitation, the Revolving Loan Commitment of such Bank hereunder); or

 

 

 

          (iii) imposes any other condition affecting this Agreement or the Note (or any of such extensions of credit or liabilities) or the Revolving Loan Commitment.

If any Bank requests compensation from the Company under this Section 5.01(a), the Company may, by notice to such Bank (with a copy to the Agent), suspend the obligation of such Bank thereafter to make or Continue Eurodollar Loans, or to Convert Base Rate Loans into Eurodollar Loans, until the Regulatory Change giving rise to such request ceases to be in effect), provided that such suspension shall not affect the right of such Bank to receive the compensation so requested.

                    (b) Without limiting the effect of the provisions of paragraph (a) of this Section 5.01, in the event that, by reason of any Regulatory Change, any Bank either (i) incurs Additional Costs based on or measured by the excess above a specified level of the amount of a category of deposits or other liabilities of such Bank that includes deposits by reference to which the interest rate on Eurodollar Loans is determined as provided in this Agreement or a category of extensions of credit or other assets of such Bank that includes Eurodollar Loans or (ii) becomes subject to restrictions on the amount of such a category of liabilities or assets that it may hold, then, if such Bank so elects by notice to the Company, the obligation of such Bank to make or Continue, or to Convert Base Rate Loans into, Eurodollar Loans hereunder shall be suspended until such Regulatory Change ceases to be in effect and the Company shall, upon the request of such Bank, at the option of the Company, prepay any of such Loans then outstanding hereunder together with accrued interest thereon or Convert such Loans into Base Rate Loans.

                    (c) Without limiting the effect of the foregoing provisions of this Section 5.01 (but without duplication), the Company shall pay directly to each Bank from time to time on request such amounts as such Bank may determine to be necessary to compensate such Bank (or, without duplication, the bank holding company of which such Bank is a subsidiary) for any costs that it determines are attributable to the maintenance by such Bank (or any Applicable Lending Office or such bank holding company), pursuant to any law or regulation or any interpretation,

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directive or request (whether or not having the force of law and whether or not failure to comply therewith would be unlawful) of any court or governmental or monetary authority (i) following any Regulatory Change or (ii) implementing any risk-based capital guideline or other requirement (whether or not having the force of law and whether or not the failure to comply therewith would be unlawful) heretofore or hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord (including, without limitation, the Final Risk-Based Capital Guidelines of the Board of Governors of the Federal Reserve System (12 C.F.R. Part 208, Appendix A; 12 C.F.R. Part 225, Appendix A) and the Final Risk-Based Capital Guidelines of the Office of the Comptroller of the Currency (12 C.F.R. Part 3, Appendix A)), of capital in respect of its Commitments or Loans or participations in Letters of Credit or Acceptances (such compensation to include, without limitation, an amount equal to any reduction of the rate of return on assets or equity of such Bank (or any Applicable Lending Office or such bank holding company) to a level below that which such Bank (or any Applicable Lending Office or such bank holding company) could have achieved but for such law, regulation, interpretation, directive or request). For purposes of this Section 5.01(c) and Section 5.05 hereof, “Basle Accord” shall mean the proposals for risk-based capital framework described by the Basle Committee on Banking Regulations and Supervisory Practices in its paper entitled “International Convergence of Capital Measurement and Capital Standards” dated July 1988, as amended, modified and supplemented and in effect from time to time or any replacement thereof.

                    (d) Each Bank shall notify the Company of any event occurring after the date of this Agreement entitling such Bank to compensation under paragraph (a) or (c) of this Section 5.01 as promptly as practicable, but in any event within 45 days, after such Bank obtains actual knowledge thereof; provided that (i) if any Bank fails to give such notice within 45 days after it obtains actual knowledge of such an event, such Bank shall, with respect to compensation payable pursuant to this Section 5.01 in respect of any costs resulting from such event, only be entitled to payment under this Section 5.01 for costs incurred from and after the date 45 days prior to the date that such Bank does give such notice and (ii) each Bank will designate a different Applicable Lending Office for the Loans affected by such event if such designation will avoid the need for, or reduce the amount of, such compensation and will not, in the sole opinion of such Bank, be disadvantageous to such Bank, except that such Bank shall have no obligation to designate an Applicable Lending Office located in the United States of America. Each Bank will furnish to the Company a certificate setting forth the basis and amount of each request by such Bank for compensation under paragraph (a) or (c) of this Section 5.01. Determinations and allocations by any Bank for purposes of this Section 5.01 of the effect of any Regulatory Change pursuant to paragraph (a) or (b) of this Section 5.01, or of the effect of capital maintained pursuant to paragraph (c) of this Section 5.01, on its costs or rate of return of maintaining Loans or participations in Acceptances or its obligation to make Loans or participate in Acceptances, or on amounts receivable by it in respect of Loans or Acceptances, and of the amounts required to compensate such Bank under this Section 5.01, shall be conclusive, provided that such determinations and allocations are made on a reasonable basis.

                    5.02 Limitation on Types of Loans. Anything herein to the contrary notwithstanding, if, on or prior to the determination of any Eurodollar Base Rate for any Interest Period, the Agent determines (which determination shall be conclusive) that:

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                    (a) quotations of interest rates for the relevant deposits referred to in the definition of “Eurodollar Base Rate” in Section 1.01 hereof are not being provided in the relevant amounts or for the relevant maturities for purposes of determining rates of interest for Eurodollar Loans as provided herein; or

                    (b) the relevant rates of interest referred to in the definition of “Eurodollar Base Rate” in Section 1.01 hereof upon the basis of which the rate of interest for Eurodollar Loans for such Interest Period is to be determined are not likely adequately to cover the cost to the Bank of making or maintaining Eurodollar Loans for such Interest Period;

then the Agent shall give the Company and each Bank prompt notice thereof and, so long as such condition remains in effect, the Banks (or such quoting Bank) shall be under no obligation to make additional Eurodollar Loans, to Continue Eurodollar Loans or to Convert Base Rate Loans into Eurodollar Loans, and the Company shall, on the last day(s) of the then current Interest Period(s) for the outstanding Eurodollar Loans, either prepay such Loans or Convert such Loans into Base Rate Loans in accordance with Section 2.10 hereof.

                    5.03 Illegality. Notwithstanding any other provision of this Agreement, in the event that it becomes unlawful for any Bank or its Applicable Lending Office to honor its obligation to make or maintain Eurodollar Loans hereunder, then such Bank shall promptly notify the Company (with a copy to the Agent) thereof and such Bank’s obligation to make or Continue, or to Convert Loans of any other Type into, Eurodollar Loans shall be suspended until such time as the Bank may again make and maintain Eurodollar Loans and the Company shall, upon the request of such Bank, at the option of the Company, prepay any of such Loans then outstanding hereunder together with accrued interest thereon or Convert such Loans into Base Rate Loans.

                    5.04 Compensation. The Company shall pay to the Agent for account of each Bank, upon the request of such Bank (through the Agent), such amount or amounts as shall be sufficient (in the reasonable opinion of such Bank) to compensate it for any loss, cost or expense that such Bank determines is attributable to:

                    (a) any payment, mandatory or optional prepayment or Conversion of a Eurodollar Loan, a Money Market Loan or an Acceptance for any reason (including, without limitation, the acceleration of the Loans and the Acceptances pursuant to Section 9 hereof) on a date other than the last day of the Interest Period for such Loan or the Maturity Date of such Acceptance; or

                    (b) any failure by the Company for any reason (including, without limitation, the failure of any of the conditions precedent specified in Section 6 hereof to be satisfied) to borrow a Eurodollar Loan or a Money Market Loan on the date for such borrowing specified in the relevant notice of borrowing given pursuant to Section 2.02 hereof or draw any Acceptance requested pursuant to Section 2.04 hereof or to Convert or prepay a Eurodollar Loan or Money Market Loan after notice thereof has been delivered to the Agent.

Without limiting the effect of the preceding sentence, such compensation shall include, with respect to Eurodollar Loans, an amount equal to the excess, if any, of (i) the amount of interest

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that otherwise would have accrued on the principal amount so paid, prepaid, Converted or not borrowed, prepaid or Converted for the period from the date of such payment, prepayment, Conversion or failure to borrow, prepay or Convert to the last day of the then current Interest Period for such Loan (or, in the case of a failure to borrow, prepay or Convert, the Interest Period for such Loan that would have commenced on the date specified for such borrowing) at the applicable rate of interest for such Loan provided for herein over (ii) the amount of interest that otherwise would have accrued on such principal amount at a rate per annum equal to the interest component of the amount such Bank would have bid in the London interbank market for Dollar deposits of leading banks in amounts comparable to such principal amount and with maturities comparable to such period (as reasonably determined by such Bank).

                    5.05 Additional Costs in Respect of Letters of Credit. Without limiting the obligations of the Company under Section 5.01 hereof (but without duplication), if as a result of any Regulatory Change or any risk-based capital guideline or other requirement heretofore or hereafter issued by any government or governmental or supervisory authority implementing at the national level the Basle Accord there shall be imposed, modified or deemed applicable any tax, reserve, special deposit, capital adequacy or similar requirement against or with respect to or measured by reference to Letters of Credit issued or to be issued hereunder and the result shall be to increase the cost to any Bank or Banks of issuing (or purchasing participations in) or maintaining its obligation hereunder to issue any Letter of Credit hereunder or reduce any amount receivable by any Bank hereunder in respect of any Letter of Credit (which increases in cost, or reductions in amount receivable, shall be the result of such Bank’s or Banks’ reasonable allocation of the aggregate of such increases or reductions resulting from such event), then, upon demand by such Bank or Banks (through the Agent), the Company shall pay immediately to the Agent for account of such Bank or Banks, from time to time as specified by such Bank or Banks (through the Agent), such additional amounts as shall be sufficient to compensate such Bank or Banks (through the Agent) for such increased costs or reductions in amount. A statement as to such increased costs or reductions in amount incurred by any such Bank or Banks, submitted by such Bank or Banks to the Company shall be conclusive in the absence of manifest error as to the amount thereof.

                    SECTION 6. Conditions Precedent.

                    6.01 Effectiveness of Agreement. The obligation of any Bank to make any extension of credit hereunder (whether by making a Loan, creating and discounting an Acceptance or issuing a Letter of Credit) and the effectiveness of this Agreement are subject to the conditions precedent that the Agent shall have received the following documents, each of which shall be satisfactory to the Agent (and to the extent specified below to each Bank) in form and substance on or before the Amendment Effective Date:

                    (a) Corporate Documents. Certified copies of the charter and by-laws (or equivalent documents) of the Company, or a certificate of a senior officer of the Company certifying that such documents have not been changed or modified since the Closing Date, and of all corporate authority for the Company (including, without limitation, board of director resolutions and evidence of the incumbency of officers) with respect to the execution, delivery

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and performance of the Basic Documents and each other document to be delivered by the Company from time to time in connection herewith and the extensions of credit hereunder (and the Agent and each Bank may conclusively rely on such certificate until it receives notice in writing from the Company to the contrary).

                    (b) Officer’s Certificate. A certificate of a senior officer of the Company, dated the Amendment Effective Date, to the effect set forth in clauses (a), (b) and (c) of Section 6.02 hereof and certifying that the certificates of insurance delivered by the Company to the Agent on the Closing Date pursuant to Section 8.04 hereof remain in full force and effect as of the date hereof and that such certificates have not been rescinded or modified in any way since the Closing Date.

                    (c) Borrowing Base Certificate. A Borrowing Base Certificate as of April 30, 2006.

                    (d) Opinion of Counsel to the Company. An opinion, dated the Amendment Effective Date, of Weil, Gotshal & Manges LLP, counsel to the Company, substantially in the form of Exhibit E hereto (and the Company hereby instructs such counsel to deliver such opinion to the Banks and the Agent).

                    (e) Notes. The Notes, duly completed and executed.

                    (f) Security Agreement. The Security Agreement, duly executed and delivered by the Company and the Agent. In addition, the Company shall have taken such other action (including, without limitation, delivering to the Agent, for filing, appropriately completed and duly executed copies of Uniform Commercial Code financing statements) as the Agent shall have requested in order to perfect the security interests created pursuant to the Security Agreement.

                    (g) Other Documents. Such other documents as the Agent or any Bank or special New York counsel to JPMorgan may reasonably request.

                    (h) Bridge Promissory Note. The Company shall have repaid the Bridge Promissory Note, together with all interest accrued thereon (if any) and fees incurred in connection therewith (if any) with the proceeds of Loans made to the Company hereunder on the Amendment Effective Date.

The obligation of any Bank to make its initial extension of credit hereunder is also subject to the payment or delivery by the Company of such fees as the Company shall have agreed to pay to any Bank or the Agent in connection herewith, including, without limitation, the reasonable fees and expenses of Mayer, Brown, Rowe & Maw LLP, special New York counsel to JPMorgan in connection with the negotiation, preparation, execution and delivery of this Agreement and the Notes and the other Basic Documents and the extensions of credit hereunder (to the extent that statements for such fees and expenses have been delivered to the Company).

                    6.02 Initial and Subsequent Extensions of Credit. The effectiveness of this Agreement and the obligation of any Bank to make any Loan or otherwise extend any credit to

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the Company upon the occasion of each borrowing or other extension of credit hereunder (including the initial borrowing or other extension of credit) is subject to the further conditions precedent that, both immediately prior to the making of such Loan or other extension of credit and also after giving effect thereto and to the intended use thereof: (a) no Default shall have occurred and be continuing; (b) the representations and warranties made by the Company in Section 7 hereof, and by the Company in each of the other Basic Documents to which it is a party, shall be true and complete on and as of the date of the making of such Loan or other extension of credit with the same force and effect as if made on and as of such date (or, if any such representation or warranty is expressly stated to have been made as of a specific date, as of such specific date); and (c) the aggregate outstanding principal amount of the Loans together with the aggregate amount of all Letter of Credit Liabilities and Acceptance Liabilities shall not exceed the lesser of (x) the Borrowing Base reflected on the most recent Borrowing Base Certificate delivered pursuant to Section 8.01(d) hereof and (y) the Revolving Loan Commitment. Each notice of borrowing or request for the issuance of a Letter of Credit or for the creation and discount of Acceptances by the Company hereunder shall constitute a certification by the Company to the effect set forth in the preceding sentence (both as of the date of such notice or request and, unless the Company otherwise notifies the Agent prior to the date of such borrowing, issuance or creation and discount, as of the date of such borrowing, issuance or creation and discount).

                    SECTION 7. Representations and Warranties. The Company represents and warrants to the Agent and the Banks that:

                    7.01 Corporate Existence. The Company: (a) is a corporation, partnership or other entity duly organized, validly existing and in good standing under the laws of the jurisdiction of its organization; (b) has all requisite corporate or other power, and has all material governmental licenses, authorizations, consents and approvals necessary to own its assets and carry on its business as now being or as proposed to be conducted; and (c) is qualified to do business and is in good standing in all jurisdictions in which the nature of the business conducted by it makes such qualification necessary and where failure so to qualify could (either individually or in the aggregate) have a Material Adverse Effect.

                    7.02 Financial Condition. The Company has heretofore furnished to each of the Banks the balance sheet of the Company as at December 31, 2005 and the related statements of income and retained earnings of the Company for the fiscal year ended on said date, with the opinion thereon of Eisner LLP, and the unaudited balance sheet of the Company as at March 31, 2006 and the related statements of income and retained earnings of the Company for the 3-month period ended on such date (subject, in the case of such financial statements as at March 31, 2006, to normal year-end audit adjustments). All such financial statements fairly present the financial condition of the Company as at said dates and the results of its operations for the fiscal year and nine-month period ended on said dates, all in accordance with generally accepted accounting principles applied on a consistent basis. The Company does not have on the date hereof any material contingent liabilities, liabilities for taxes, unusual forward or long-term commitments or unrealized or anticipated losses from any unfavorable commitments, except as referred to or reflected or provided for in said balance sheets as at said dates. Since December 31, 2005, there

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has been no material adverse change in the financial condition, operations, business or prospects of the Company from that set forth in said financial statements as at said date.

                    7.03 Litigation. There are no legal or arbitral proceedings, or any proceedings by or before any governmental or regulatory authority or agency, now pending or (to the knowledge of the Company) threatened against the Company that, if adversely determined could (either individually or in the aggregate) have a Material Adverse Effect.

                    7.04 No Breach. None of the execution and delivery of this Agreement and the Notes and the other Basic Documents, the consummation of the transactions herein and therein contemplated or compliance with the terms and provisions hereof and thereof will conflict with or result in a breach of, or require any consent under, the charter or by-laws of the Company, or any applicable law or regulation, or any order, writ, injunction or decree of any court or governmental authority or agency, or any agreement or instrument to which the Company is a party or by which any of them or any of their Property is bound or to which any of them is subject, or constitute a default under any such agreement or instrument, or (except for the Liens created pursuant to the Security Documents) result in the creation or imposition of any Lien upon any Property of the Company pursuant to the terms of any such agreement or instrument.

                    7.05 Action. The Company has all necessary corporate power, authority and legal right to execute, deliver and perform its obligations under each of the Basic Documents to which it is a party; the execution, delivery and performance by the Company of each of the Basic Documents to which it is a party have been duly authorized by all necessary corporate action on its part (including, without limitation, any required shareholder approvals); and this Agreement has been duly and validly executed and delivered by the Company and constitutes, and each of the Notes and the other Basic Documents to which it is a party when executed and delivered by the Company (in the case of the Notes, for value) will constitute, its legal, valid and binding obligation, enforceable against the Company in accordance with its terms.

                    7.06 Approvals. No authorizations, approvals or consents of, and no filings or registrations with, any governmental or regulatory authority or agency, or any securities exchange, are necessary for the execution, delivery or performance by the Company of the Basic Documents to which it is a party or for the legality, validity or enforceability hereof or thereof, except for filings and recordings in respect of the Liens created pursuant to the Security Documents.

                    7.07 Use of Credit. The Company is not engaged principally, or as one of its important activities, in the business of extending credit for the purpose, whether immediate, incidental or ultimate, of buying or carrying Margin Stock, and no part of the proceeds of any extension of credit hereunder will be used to buy or carry any Margin Stock.

                    7.08 ERISA. Each Plan, and, to the knowledge of the Company, each Multiemployer Plan, is in compliance in all material respects with, and has been administered in all material respects in compliance with, the applicable provisions of ERISA, the Code and any other Federal or State law, and no event or condition has occurred and is continuing as to which the Company would be under an obligation to furnish a report to the Banks under Section 8.01(c) hereof.

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                    7.09 Taxes. The Company has filed, or has valid extensions for the filing of, all Federal income tax returns and all other material tax returns that are required to be filed by it and have paid all taxes due pursuant to such returns or pursuant to any assessment received by the Company. The charges, accruals and reserves on the books of the Company in respect of taxes and other governmental charges are, in the opinion of the Company, adequate. The Company has not given or been requested to give a waiver of the statute of limitations relating to the payment of Federal, state, local and foreign taxes or other impositions.

                    7.10 Indebtedness and Investments.

                    (a) Schedule I hereto is a complete and correct list, as of the date of this Agreement, of each credit agreement, loan agreement, indenture, purchase agreement, guarantee, letter of credit or other arrangement providing for or otherwise relating to any Indebtedness or any extension of credit (or commitment for any extension of credit) to, or guarantee by, the Company, and the aggregate principal or face amount outstanding or that may be outstanding under each such arrangement is correctly described in said Schedule I.

                    (b) Schedule II hereto is a complete and correct list, as of the date of this Agreement, of all Investments held by the Company in any Person and, for each such Investment, the nature of such Investment.

                    7.11 True and Complete Disclosure. The information, reports, financial statements, exhibits and schedules furnished in writing by or on behalf of the Company to the Agent or any Bank in connection with the negotiation, preparation or delivery of this Agreement and the other Basic Documents or included herein or therein or delivered pursuant hereto or thereto, when taken as a whole do not contain any untrue statement of material fact or omit to state any material fact necessary to make the statements herein or therein, in light of the circumstances under which they were made, not misleading. All written information furnished after the date hereof by the Company to the Agent and the Banks in connection with this Agreement and the other Basic Documents and the transactions contemplated hereby and thereby will be true, complete and accurate in every material respect, or (in the case of projections) based on reasonable estimates, on the date as of which such information is stated or certified. There is no fact known to the Company that could have a Material Adverse Effect that has not been disclosed herein, in the other Basic Documents or in a report, financial statement, exhibit, schedule, disclosure letter or other writing furnished to the Banks for use in connection with the transactions contemplated hereby or thereby.

                    7.12 Subsidiaries. The Subsidiaries listed on Schedule III hereto have no Property and no liabilities.

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                    SECTION 8. Covenants of the Company. The Company covenants and agrees with the Banks and the Agent that, so long as any Commitment, Loan, Letter of Credit Liability or Acceptance Liability is outstanding and until payment in full of all amounts payable by the Company hereunder:

                    8.01 Financial Statements Etc. The Company shall deliver to each of the Banks:

                    (a) as soon as available and in any event within 45 days after the end of each quarterly fiscal period of each fiscal year of the Company, either (x) the Company’s report on Form 10-Q for such fiscal quarter as filed with the Securities and Exchange Commission, or (y) a statement of income and retained earnings of the Company for such period and for the period from the beginning of the respective fiscal year to the end of such period, and the related balance sheet of the Company as at the end of such period, accompanied by a certificate of a senior financial officer of the Company, which certificate shall state that said financial statements fairly present the financial condition and results of operations of the Company, in each case in accordance with generally accepted accounting principles, consistently applied, as at the end of, and for, such period (subject to normal year-end audit adjustments);

                    (b) as soon as available and in any event within 90 days after the end of each fiscal year of the Company, either (x) the Company’s report on Form 10-K for such fiscal year as filed with the Securities and Exchange Commission, or (y) a statement of income, retained earnings and cash flow of the Company for such fiscal year and the related balance sheet as at the end of such fiscal year, and accompanied by an unqualified opinion thereon of independent certified public accountants acceptable to the Banks, which opinion shall state that said audited financial statements fairly present the financial condition and results of operations of the Company as at the end of, and for, such fiscal year in accordance with generally accepted accounting principles;

                    (c) as soon as possible, and in any event within ten days after the Company knows or has reason to believe that any of the events or conditions specified below with respect to any Plan or Multiemployer Plan has occurred or exists, a statement signed by a senior financial officer of the Company setting forth details respecting such event or condition and the action, if any, that the Company or its ERISA Affiliate proposes to take with respect thereto (and a copy of any report or notice required to be filed with or given to PBGC by the Company or an ERISA Affiliate with respect to such event or condition):

 

 

 

          (i) any reportable event, as defined in Section 4043(b) of ERISA and the regulations issued thereunder, with respect to a Plan, as to which PBGC has not by regulation waived the requirement of Section 4043(a) of ERISA that it be notified within 30 days of the occurrence of such event (provided that a failure to meet the minimum funding standard of Section 412 of the Code or Section 302 of ERISA, including, without limitation, the failure to make on or before its due date a required installment under Section 412(m) of the Code or Section 302(e) of ERISA, shall be a reportable event regardless of the issuance of any waivers in accordance with Section 412(d) of the Code); and any request for a waiver under Section 412(d) of the Code for any Plan;

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          (ii) the distribution under Section 4041 of ERISA of a notice of intent to terminate any Plan or any action taken by the Company or an ERISA Affiliate to terminate any Plan;

 

 

 

          (iii) the institution by PBGC of proceedings under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan, or the receipt by the Company or any ERISA Affiliate of a notice from a Multiemployer Plan that such action has been taken by PBGC with respect to such Multiemployer Plan;

 

 

 

          (iv) the complete or partial withdrawal from a Multiemployer Plan by the Company or any ERISA Affiliate that results in liability under Section 4201 or 4204 of ERISA (including the obligation to satisfy secondary liability as a result of a purchaser default) or the receipt by the Company or any ERISA Affiliate of notice from a Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA or that it intends to terminate or has terminated under Section 4041A of ERISA;

 

 

 

          (v) the institution of a proceeding by a fiduciary of any Multiemployer Plan against the Company or any ERISA Affiliate to enforce Section 515 of ERISA, which proceeding is not dismissed within 30 days; and

 

 

 

          (vi) the adoption of an amendment to any Plan that, pursuant to Section 401(a)(29) of the Code or Section 307 of ERISA, would result in the loss of tax-exempt status of the trust of which such Plan is a part if the Company or an ERISA Affiliate fails to timely provide security to the Plan in accordance with the provisions of said Sections;

 

 

 

(d) as soon as available and in any event within 14 Business Days after:

 

 

 

          (i) the end of each bi-weekly accounting period (ending each Friday of each other calendar week) of the Company if the Borrowing Base at the end of such bi-weekly accounting period is an amount that is less than the aggregate outstanding amount of Loans, Acceptance Liabilities and Letter of Credit Liabilities plus $1,000,000,

 

 

 

          (ii) the end of each monthly accounting period (ending on the last day of the second complete week occurring in such month), if the Borrowing Base at the end of such monthly accounting period is an amount that is equal to or greater than the aggregate outstanding amount of Loans, Acceptance Liabilities and Letter of Credit Liabilities plus $1,000,000, and

 

 

 

          (iii) any other accounting period for which any Bank requests a Borrowing Base Certificate,

each of the following:

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          (x) a Borrowing Base Certificate as at the last day of such accounting period, and

 

 

 

          (y) a report, as of the last day of such accounting period, setting forth (A) the aging of the Receivables, specifying both the names of the respective account debtors and the period of time each such account has been past due and (B) a list of the Eligible Receivables and, on and after the Australian Effective Date, Australian Receivables;

                    (e) from time to time at the request of the Agent (but, so long as no Default is continuing, no more than once in any fiscal year), a report as of the end of any fiscal quarter, in form and substance satisfactory to the Required Banks, of an independent collateral auditor satisfactory to the Required Banks (which may be, or be affiliated with, one of the Banks):

 

 

 

          (i) with respect to the Receivables and Inventory components included in the Borrowing Base as at the end of such fiscal quarter which report shall indicate that, based upon a review by such auditors of the Receivables (including, without limitation, verification with respect to the amount, aging, identity and credit of the respective account debtors and the billing practices of the Company) and Inventory (including, without limitation, verification as to the value, location and respective types), the information set forth in the Borrowing Base Certificate delivered by the Company as at the end of such fiscal quarter is accurate and complete in all material respects,

 

 

 

          (ii) with respect to the insurance policy or policies covering any of the Receivables, and

 

 

 

          (iii) with respect to the agreements entered into by the Company with its customers and its suppliers;

                    (f) promptly upon the mailing thereof to the shareholders of the Company generally, copies of all financial statements, reports and proxy statements so mailed;

                    (g) promptly after the Company knows or has reason to believe that any Default has occurred, a notice of such Default describing the same in reasonable detail and, together with such notice or as soon thereafter as possible, a description of the action that the Company has taken or proposes to take with respect thereto; and

                    (h) from time to time such other information regarding the financial condition, operations, business or prospects of the Company (including, without limitation, any Plan or Multiemployer Plan and any reports or other information required to be filed under ERISA) as any Bank or the Agent may reasonably request.

The Company will furnish to each Bank, at the time it furnishes each set of financial statements pursuant to paragraph (a) or (b) above, a certificate of a senior financial officer of the Company (the “Compliance Certificate”) (i) to the effect that no Default has occurred and is continuing (or, if any Default has occurred and is continuing, describing the same in reasonable detail and

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describing the action that the Company has taken or proposes to take with respect thereto) and (ii) setting forth in reasonable detail the computations necessary to determine whether the Company is in compliance with Sections 8.07, 8.08(d), 8.09, 8.10 and 8.11 hereof as of the end of the respective quarterly fiscal period or fiscal year.

                    8.02 Litigation. The Company will promptly (and in any event no later than five Business Days after the Company has notice of the same) give to each Bank notice of all legal or arbitral proceedings, and of all proceedings by or before any governmental or regulatory authority or agency, and any material development in respect of such legal or other proceedings, affecting the Company or any of its Subsidiaries, except proceedings that, if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect. Without limiting the generality of the foregoing, the Company will give to each Bank notice of the assertion of any environmental matter by any Person against, or with respect to the activities of, the Company or any of its Subsidiaries and notice of any alleged violation of or non-compliance with any Environmental Laws or any permits, licenses or authorizations, other than any environmental matter or alleged violation that, if adversely determined, would not (either individually or in the aggregate) have a Material Adverse Effect.

                    8.03 Existence, Etc. The Company will:

                    (a) preserve and maintain its legal existence and all of its material rights, privileges, licenses and franchises;

                    (b) comply with the requirements of all applicable laws, rules, regulations and orders of governmental or regulatory authorities if failure to comply with such requirements could (either individually or in the aggregate) have a Material Adverse Effect;

                    (c) pay and discharge all taxes, assessments and governmental charges or levies imposed on it or on its income or profits or on any of its Property prior to the date on which penalties attach thereto, except for any such tax, assessment, charge or levy the payment of which is being contested in good faith and by proper proceedings and against which adequate reserves are being maintained;

                    (d) maintain all of its Properties used or useful in its business in good working order and condition, ordinary wear and tear excepted;

                    (e) keep adequate records and books of account, in which complete entries will be made in accordance with generally accepted accounting principles consistently applied; and

                    (f) permit representatives of any Bank or the Agent, during normal business hours and upon reasonable prior notice (which such notice shall not be required at any time an Event of Default has occurred and is continuing), to examine, copy and make extracts from its books and records, to inspect any of its Properties, and to discuss its business and affairs with its officers, all to the extent reasonably requested by such Bank or the Agent (which notice shall specify the reasons (determined by such Bank or the Agent in its sole discretion) for such examination, inspections or discussions).

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                    8.04 Insurance. The Company will, and will cause its Non-Dormant Subsidiaries to, maintain insurance with financially sound and reputable insurance companies, and with respect to Property and risks of a character usually maintained by corporations engaged in the same or similar business similarly situated, against loss, damage and liability of the kinds and in the amounts customarily maintained by such corporations, including, in any event, marine and credit insurance policies covering the Company’s or its Non-Dormant Subsidiaries’, as the case may be, inventory and accounts receivable, respectively, in amounts, pursuant to policies, and issued by insurers, acceptable to the Required Banks. The Company shall maintain key-man insurance on the life of Nathan Kahn in an amount not less than $2,000,000. The Company shall (a) no later than two Business Days of the Closing Date, cause all such insurance (other than workers’ compensation) to name the Agent as loss payee (to the extent covering risk of loss or damage to tangible property) and as an additional named insured as its interests may appear (to the extent covering any other risk), and furnish the Agent evidence of the same, and (b) at least annually, furnish to the Agent certificates of insurance evidencing the existence of all insurance required to be maintained pursuant to this Section 8.04 and the designation of the Agent as the loss payee or additional named insured, as the case may be, thereunder to the extent required by this Section 8.04. With respect to the key-man insurance, (x) no later than two Business Days after the Closing Date, such insurance shall be assigned to the Agent (for the benefit of the Banks), (y) no later than two Business Days after the Closing Date, the Company shall furnish to the Banks evidence of notice to the insurer of such assignment and acknowledgement of receipt by such insurer, and (z) the Agent and the Banks agree to release their security interest in such insurance upon the termination or expiration of the Commitments, the expiry or termination of all Letters of Credit and Acceptances and the payment in full of all amounts payable by the Company hereunder and under the other Basic Documents, and to remit any proceeds received by the Agent or any Bank thereafter (or after the payment in full of all such amounts) to the beneficiary or beneficiaries of such insurance.

                    8.05 Prohibition of Fundamental Changes. The Company will not enter into any transaction of merger or consolidation or amalgamation, or liquidate, wind up or dissolve itself (or suffer any liquidation or dissolution). The Company will not acquire any business or Property from, or capital stock of, or be a party to any acquisition of, any Person except for purchases of inventory and other Property to be sold or used in the ordinary course of business. The Company will not convey, sell, lease, transfer or otherwise dispose of, in one transaction or a series of transactions, any part of its business or Property, whether now owned or hereafter acquired (including, without limitation, receivables and leasehold interests, but excluding any inventory or other Property sold or disposed of in the ordinary course of business and on ordinary business terms).

                    8.06 Limitation on Liens. The Company will not create, incur, assume or suffer to exist any Lien upon any of its Property and will not allow any of its Subsidiaries to create, incur, assume or suffer to exist any Lien upon any of their respective Property, whether now owned or hereafter acquired, except:

                    (a) Liens created pursuant to the Security Documents;

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                    (b) Liens imposed by any governmental authority for taxes, assessments or charges not yet due or that are being contested in good faith and by appropriate proceedings if adequate reserves with respect thereto are maintained on the books of the Company in accordance with GAAP;

                    (c) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other like Liens arising in the ordinary course of business that are not overdue for a period of more than 30 days or that are being contested in good faith and by appropriate proceedings and Liens securing judgments but only to the extent for an amount and for a period not resulting in an Event of Default under Section 9(h) hereof;

                    (d) pledges or deposits under worker’s compensation, unemployment insurance and other social security legislation;

                    (e) Liens on the warehouse facility in Baltimore, Maryland securing the Indebtedness permitted under Section 8.07(c) hereof;

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

                    (g) Liens securing Indebtedness permitted pursuant to Section 8.07(e) hereof.

                    8.07 Indebtedness. The Company will not, and will not allow any of its Subsidiaries to, create, incur or suffer to exist any Indebtedness except:

                    (a) Indebtedness to the Banks hereunder;

                    (b) Indebtedness outstanding on the date hereof and listed in Schedule I hereto (excluding, however, following the making of the initial Loans hereunder, the Indebtedness to be repaid with the proceeds of such Loans, as indicated on said Schedule I);

                    (c) Indebtedness of 6900 Quad Avenue, LLC under the Quad Avenue Loan Agreement in an aggregate amount not to exceed $2,535,000, the proceeds of which shall have been used to finance the acquisition of the warehouse facility in Baltimore, Maryland, and any Guarantee by the Company of such Indebtedness;

                    (d) Subordinated Debt;

                    (e) purchase money Indebtedness for capital equipment and/or capital leases in an aggregate outstanding principal amount not to exceed at any time $1,000,000; and

                    (f) other unsecured Indebtedness in an aggregate outstanding principal amount not to exceed at any time $250,000.

                    8.08 Investments. If a Default shall have occurred and be continuing, the Company will not, nor will it permit any of its Subsidiaries to, make or permit to remain outstanding any Investments except:

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                    (a) Investments outstanding on the date hereof and identified in Schedule II hereto;

                    (b) deposit accounts with banks;

                    (c) Interest Rate Protection Agreements and commodities hedge agreements entered into in the ordinary course of business and not for speculative purposes; and

                    (d) other Investments in an aggregate outstanding principal amount not to exceed at any time $500,000.

                    8.09 Leverage Ratio. The Company will not permit the Leverage Ratio to exceed (a) at any time during the period commencing on the Closing Date and ending on June 30, 2007, 6.00 to 1 and (b) at any time thereafter, 5.50 to 1.

                    8.10 Tangible Net Worth. The Company will not permit its Tangible Net Worth to be less than $20,000,000.

                    8.11 No Net Loss. The Company will not permit its net earnings (calculated before taxes in accordance with GAAP) to be a negative number for two or more consecutive quarters.

                    8.12 Lines of Business. The Company will not engage to any substantial extent in any line or lines of business activity other than the business of acquiring, selling, trading, extruding and otherwise dealing in aluminum semi-finished products (or other similar metal products).

                    8.13 Dividend Payments. The Company will not, nor will it permit any of its Subsidiaries to, declare or make any Dividend Payment at any time if (a) a Default shall have occurred and be continuing or (b) immediately after giving effect to making such Dividend Payment any Default would be continuing.

                    8.14 Use of Proceeds. The Company will use the proceeds of the extensions of credit hereunder for working capital and for its other general corporate purposes (in compliance with all applicable legal and regulatory requirements, including, without limitation, Regulations T, U and X and the Securities Act of 1933 and the Securities Act of 1934 and the regulations thereunder); provided that neither the Agent nor any Bank shall have any responsibility as to the use of any of such proceeds.

                    8.15 Subordinated Debt. The Company will not purchase, redeem, retire or otherwise acquire for value, or set apart any money for any sinking, defeasance or other analogous fund for, the purchase, redemption, retirement or other acquisition of, or make any payment or prepayment of the principal of or interest on, or any other amount owing in respect of, any Subordinated Debt, except for regularly scheduled payments of principal and interest in respect thereof required pursuant to the instruments evidencing such Subordinated Debt.

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                    8.16 Dormant Subsidiaries. The Company will not (i) transfer any Property to, or make any Investments, in any of the Subsidiaries listed on Schedule III hereto, and (ii) permit any of said Subsidiaries to acquire any Property or incur any liabilities.

                    8.17 Additional Guarantors. The Company will take such action, and will cause each of its domestic Subsidiaries (other than the Quad Avenue Subsidiary) to take such action, from time to time as shall be necessary to ensure that all domestic Subsidiaries (other than the Quad Avenue Subsidiary) of the Company duly execute and deliver a Guarantee in favor of the Agent substantially in the form of Exhibit D hereto (a “Subsidiary Guarantee”). Without limiting the generality of the foregoing, in the event it or any of its Subsidiaries shall form or acquire any new domestic Subsidiary (other than the Quad Avenue Subsidiary), the Company or the respective Subsidiary will cause such new domestic Subsidiary (other than the Quad Avenue Subsidiary) to become a “Guarantor” hereunder pursuant to a written instrument in form and substance satisfactory to each Bank and the Agent, and to deliver such proof of corporate action, incumbency of officers, opinions of counsel and other documents as is consistent with those delivered by the Company pursuant to Section 6.01 hereof upon the Closing Date or as any Bank or the Agent shall have requested.

                    SECTION 9. Events of Default. If one or more of the following events (herein called “Events of Default”) shall occur and be continuing:

                    (a) The Company shall default in the payment when due (whether at stated maturity or upon mandatory or optional prepayment) of (i) any principal of any Loan or any Acceptance or any Reimbursement Obligation, any fee or any other amount payable by it hereunder (other than interest) or under any other Basic Document or (ii) any interest on any Loan or any Acceptance or any Reimbursement Obligation and, if the Company has sufficient funds in its accounts maintained at the Agent and the Agent has not debited such accounts to make such payment of interest, such default shall continue unremedied for two Business Days after notice thereof to the Company by the Agent; or

                    (b) The Company shall default in the payment when due of any principal of or interest on any of its other material indebtedness or any of its Subsidiaries shall default in the payment when due of any principal of or interest on any of its material indebtedness; or any event specified in any note, agreement, indenture or other document evidencing or relating to any such indebtedness shall occur if the effect of such event is to cause, or (with the giving of any notice or the lapse of time or both) to permit the holder or holders of such indebtedness (or a trustee or agent on behalf of such holder or holders) to cause, such indebtedness to become due, or to be prepaid in full (whether by redemption, purchase, offer to purchase or otherwise), prior to its stated maturity; or

                    (c) Any representation, warranty or certification made or deemed made herein or in any other Basic Document (or in any modification or supplement hereto or thereto) by the Company or any of its Subsidiaries, or any certificate furnished to any Bank or the Agent pursuant to the provisions hereof or thereof, shall prove to have been false or misleading as of the time made or furnished in any material respect; or

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                    (d) The Company shall default in the performance of any of its obligations under any of Sections 8.01(g), 8.05, 8.06, 8.07, 8.08, 8.09, 8.10, 8.11, 8.13 or 8.15 hereof or any Obligor shall default in the performance of any of its obligations under the Security Agreement or (after the Australian Effective Date) the Floating Charge; the Company shall default in the performance of its obligations under Section 8.01(d) hereof and such default shall continue unremedied for a period of three Business Days after notice thereof to the Company by the Agent or any Bank (through the Agent); or the Company shall default in the performance of any of its other obligations in this Agreement or any other Basic Document and such default shall continue unremedied for a period of thirty or more days after notice thereof to the Company by the Agent or any Bank (through the Agent); or

                    (e) The Company or any of its Subsidiaries shall admit in writing its inability to, or be generally unable to, pay its debts as such debts become due; or

                    (f) The Company or any of its Subsidiaries shall (i) apply for or consent to the appointment of, or the taking of possession by, a receiver, custodian, trustee, examiner or liquidator of itself or of all or a substantial part of its Property, (ii) make a general assignment for the benefit of its creditors, (iii) commence a voluntary case under the Bankruptcy Code, (iv) file a petition seeking to take advantage of any other law relating to bankruptcy, insolvency, reorganization, liquidation, dissolution, arrangement or winding-up, or composition or readjustment of debts, (v) fail to controvert in a timely and appropriate manner, or acquiesce in writing to, any petition filed against it in an involuntary case under the Bankruptcy Code or (vi) take any corporate action for the purpose of effecting any of the foregoing; or

                    (g) A proceeding or case shall be commenced, without the application or consent of the Company or any of its Subsidiaries, in any court of competent jurisdiction, seeking (i) its reorganization, liquidation, dissolution, arrangement or winding-up, or the composition or readjustment of its debts, (ii) the appointment of a receiver, custodian, trustee, examiner, liquidator or the like of the Company or any of its Subsidiaries or of all or any substantial part of its Property, or (iii) similar relief in respect of the Company or any of its Subsidiaries under any law relating to bankruptcy, insolvency, reorganization, winding-up, or composition or adjustment of debts, and such proceeding or case shall continue undismissed, or an order, judgment or decree approving or ordering any of the foregoing shall be entered and continue unstayed and in effect, for a period of 60 or more days; or an order for relief against the Company or any of its Subsidiaries shall be entered in an involuntary case under the Bankruptcy Code; or

                    (h) A final judgment or judgments for the payment of money in excess of $500,000 (exclusive of judgment amounts fully covered by insurance where the insurer has admitted liability in respect of such judgment) shall be rendered by one or more courts, administrative tribunals or other bodies having jurisdiction against the Company or any of its Subsidiaries and the same shall not be discharged (or provision shall not be made for such discharge), or a stay of execution thereof shall not be procured, within 30 days from the date of entry thereof and the Company or any of its Subsidiaries shall not, within said period of 30 days, or such longer period during which execution of the same shall have been stayed, appeal therefrom and cause the execution thereof to be stayed during such appeal; or

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                    (i) An event or condition specified in Section 8.01(c) hereof shall occur or exist with respect to any Plan or Multiemployer Plan and, as a result of such event or condition, together with all other such events or conditions, the Company or any ERISA Affiliate shall incur or in the opinion of the Required Banks shall be reasonably likely to incur a liability to a Plan, a Multiemployer Plan or PBGC (or any combination of the foregoing) that, in the determination of the Required Banks, would (either individually or in the aggregate) have a Material Adverse Effect; or

                    (j) (i) The Principal Shareholders shall cease to own beneficially and of record at least 33% of the issued and outstanding capital stock having voting power to elect members of the Board of Directors of the Company or (ii) Nathan Kahn shall cease to be President of the Company;

                    (k) The Liens created by the Security Documents shall at any time not constitute a valid and perfected Lien on the collateral intended to be covered thereby (to the extent perfection by filing, registration, recordation or possession is required herein or therein) in favor of the Banks, free and clear of all other Liens (other than Liens permitted under Section 8.06 hereof or under the respective Security Documents), or, except for expiration in accordance with its terms, any of the Security Documents shall for whatever reason be terminated or cease to be in full force and effect, or the enforceability thereof shall be contested by the Company; or

                    (l) 6900 Quad Avenue, LLC shall default in the performance of its obligations under Section 4(a) of the Quad Avenue Loan Agreement;

THEREUPON: (1) in the case of an Event of Default other than one referred to in clause (f) or (g) of this Section 9, the Agent may with the consent of the Required Banks, and, upon request of the Required Banks shall by notice to the Company, terminate the Commitments and/or declare the principal amount then outstanding of, and the accrued interest on, the Loans, the Acceptances, the Reimbursement Obligations and all other amounts payable by the Company hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.04 or 5.05 hereof) to be forthwith due and payable, whereupon such amounts shall be immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company; and (2) in the case of the occurrence of an Event of Default referred to in clause (f) or (g) of this Section 9, the Commitments shall automatically be terminated and the principal amount then outstanding of, and the accrued interest on, the Loans, the Acceptances, the Reimbursement Obligations and all other amounts payable by the Company hereunder and under the Notes (including, without limitation, any amounts payable under Section 5.04 or 5.05 hereof) shall automatically become immediately due and payable without presentment, demand, protest or other formalities of any kind, all of which are hereby expressly waived by the Company.

                    In addition, upon the occurrence and during the continuance of any Event of Default (if the Agent has declared the principal amount then outstanding of, and accrued interest on, the Loans and all other amounts payable by the Company hereunder and under the Notes to be due and payable), the Company agrees that it shall, if requested by the Agent or the Required Banks through the Agent (and, in the case of any Event of Default referred to in clause (f) or (g) of this Section 9, forthwith, without any demand or the taking of any other action by the Agent or

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such Banks) provide cover for the Letter of Credit Liabilities by paying to the Agent immediately available funds in an amount equal to the then aggregate undrawn face amount of all Letters of Credit, which funds shall be held by the Agent in the Collateral Account as collateral security in the first instance for the Letter of Credit Liabilities and be subject to withdrawal only as therein provided.

                    SECTION 10. The Agent.

                    10.01 Appointment, Powers and Immunities. Each Bank hereby irrevocably appoints and authorizes the Agent to act as its agent hereunder and under the other Basic Documents with such powers as are specifically delegated to the Agent by the terms of this Agreement and of the other Basic Documents, together with such other powers as are reasonably incidental thereto. The Agent (which term as used in this sentence and in Section 10.05 and the first sentence of Section 10.06 hereof shall include reference to its affiliates and its own and its affiliates’ officers, directors, employees and agents): (a) shall have no duties or responsibilities except those expressly set forth in this Agreement and in the other Basic Documents, and shall not by reason of this Agreement or any other Basic Document be a trustee for any Bank; (b) shall not be responsible to the Banks for any recitals, statements, representations or warranties contained in this Agreement or in any other Basic Document, or in any certificate or other document referred to or provided for in, or received by any of them under, this Agreement or any other Basic Document, or for the value, validity, effectiveness, genuineness, enforceability or sufficiency of this Agreement, any Note or any other Basic Document or any other document referred to or provided for herein or therein or for any failure by the Company or any other Person to perform any of its obligations hereunder or thereunder; (c) shall not be required to initiate or conduct any litigation or collection proceedings hereunder or under any other Basic Document, unless so directed by the Required Lenders; (d) shall not be required to act as collateral agent hereunder or otherwise be responsible for any collateral security granted in connection herewith except with respect to any collateral that cannot be perfected by filing Uniform Commercial Code financing statements; and (e) shall not be responsible for any action taken or omitted to be taken by it hereunder or under any other Basic Document or under any other document or instrument referred to or provided for herein or therein or in connection herewith or therewith, except for its own gross negligence or willful misconduct. The Agent may employ agents and attorneys-in-fact and shall not be responsible for the negligence or misconduct of any such agents or attorneys-in-fact selected by it in good faith. The Agent may deem and treat the payee of any Note as the holder thereof for all purposes hereof unless and until a notice of the assignment or transfer thereof shall have been filed with the Agent.

                    10.02 Reliance by Agent. The Agent shall be entitled to rely upon any certification, notice or other communication (including, without limitation, any thereof by telephone, telecopy, telex, telegram or cable) believed by it to be genuine and correct and to have been signed or sent by or on behalf of the proper Person or Persons, and upon advice and statements of legal counsel, independent accountants and other experts selected by the Agent. As to any matters not expressly provided for by this Agreement or any other Basic Document, the Agent shall in all cases be fully protected in acting, or in refraining from acting, hereunder or thereunder in accordance with instructions given by the Required Banks and such instructions of

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such Banks and any action taken or failure to act pursuant thereto shall be binding on all of the Banks.

                    10.03 Defaults. The Agent shall not be deemed to have knowledge or notice of the occurrence of a Default (other than payment Defaults) unless the Agent has received notice from a Bank or the Company specifying such Default and stating that such notice is a “Notice of Default”. In the event that the Agent receives such a notice of the occurrence of a Default or becomes aware of a payment Default, the Agent shall give prompt notice thereof to the Banks. The Agent shall (subject to Section 10.07 hereof) take such action with respect to such Default as shall be directed by the Required Banks, provided that, unless and until the Agent shall have received such directions, the Agent may (but shall not be obligated to) take such action, or refrain from taking such action, with respect to such Default as it shall deem advisable in the best interest of the Banks except to the extent that this Agreement expressly requires that such action be taken, or not be taken, only with the consent or upon the authorization of the Required Banks.

                    10.04 Rights as a Bank. With respect to its Commitments and the Loans made by it, JPMorgan (and any successor acting as Agent) in its capacity as a Bank hereunder shall have the same rights and powers hereunder as any other Bank and may exercise the same as though it were not acting as the Agent, and the term “Bank” or “Banks” shall, unless the context otherwise indicates, include the Agent in its individual capacity. JPMorgan (and any successor acting as Agent) and its affiliates may (without having to account therefor to any Bank) accept deposits from, lend money to, make investments in and generally engage in any kind of banking, trust or other business with the Company (and any of its Subsidiaries or Affiliates) as if it were not acting as the Agent, and JPMorgan and its affiliates may accept fees and other consideration from the Company for services in connection with this Agreement or otherwise without having to account for the same to the Banks.

                    10.05 Indemnification. The Banks agree to indemnify the Agent (to the extent not reimbursed under Section 11.03 hereof, but without limiting the obligations of the Company under said Section 11.03, ratably in accordance with their respective Revolving Loan Commitments, for any and all liabilities, obligations, losses, damages, penalties, actions, judgments, suits, costs, expenses or disbursements of any kind and nature whatsoever that may be imposed on, incurred by or asserted against the Agent (including by any Bank) arising out of or by reason of any investigation in or in any way relating to or arising out of this Agreement or any other Basic Document or any other documents contemplated by or referred to herein or therein or the transactions contemplated hereby or thereby (including, without limitation, the costs and expenses that the Company is obligated to pay under Section 11.03 hereof but excluding, unless a Default has occurred and is continuing, normal administrative costs and expenses incident to the performance of its agency duties hereunder) or the enforcement of any of the terms hereof or thereof or of any such other documents, provided that no Bank shall be liable for any of the foregoing to the extent they arise from the gross negligence or willful misconduct of the party to be indemnified.

                    10.06 Non-Reliance on Agent and Other Banks. Each Bank agrees that it has, independently and without reliance on the Agent or any other Bank, and based on such documents and information as it has deemed appropriate, made its own credit analysis of the

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Company and decision to enter into this Agreement and that it will, independently and without reliance upon the Agent or any other Bank, and based on such documents and information as it shall deem appropriate at the time, continue to make its own analysis and decisions in taking or not taking action under this Agreement or under any other Basic Document. The Agent shall not be required to keep itself informed as to the performance or observance by any Obligor of this Agreement or any of the other Basic Documents or any other document referred to or provided for herein or therein or to inspect the Properties or books of the Company. Except for notices, reports and other documents and information expressly required to be furnished to the Banks by the Agent hereunder or under the Security Documents, the Agent shall not have any duty or responsibility to provide any Bank with any credit or other information concerning the affairs, financial condition or business of the Company (or any of its affiliates) that may come into the possession of the Agent or any of its affiliates.

                    10.07 Failure to Act. Except for action expressly required of the Agent hereunder and under the other Basic Documents, the Agent shall in all cases be fully justified in failing or refusing to act hereunder and thereunder unless it shall receive further assurances to its satisfaction from the Banks of their indemnification obligations under Section 10.05 hereof against any and all liability and expense that may be incurred by it by reason of taking or continuing to take any such action.

                    10.08 Resignation or Removal of Agent. Subject to the appointment and acceptance of a successor Agent as provided below, the Agent may resign at any time by giving notice thereof to the Banks and the Company, and the Agent may be removed at any time with or without cause by the Required Banks. Upon any such resignation or removal, the Required Banks shall have the right to appoint a successor Agent, subject (in the case of any successor Agent that is not a Bank at such time) to the Company’s approval of such successor Agent. If no successor Agent shall have been so appointed by the Required Banks (or if the Company shall fail to approve such a successor Agent) and shall have accepted such appointment within 30 days after the retiring Agent’s giving of notice of resignation or the Required Banks’ removal of the retiring Agent, then the retiring Agent may, on behalf of the Banks, subject to the Company’s approval, appoint a successor Agent, that shall be a bank that has an office in New York, New York. Upon the acceptance of any appointment as Agent hereunder by a successor Agent, such successor Agent shall thereupon succeed to and become vested with all the rights, powers, privileges and duties of the retiring Agent, and the retiring Agent shall be discharged from its duties and obligations hereunder. After any retiring Agent’s resignation or removal hereunder as Agent, the provisions of this Section 10 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 the Agent.

                    10.09 Agency Fee. So long as the Commitments are in effect and until payment in full of the principal of and interest on the Loans and all other amounts payable by the Company hereunder, the Company will pay to the Agent an agency fee as mutually agreed upon.

                    10.10 Consents under Other Basic Documents. Except as otherwise provided in Section 11.04 hereof with respect to this Agreement, the Agent may, with the prior consent of the Required Banks (but not otherwise), consent to any modification, supplement or waiver under any of the Basic Documents, provided that, without the prior consent of each Bank, the

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Agent shall not (except as provided herein or in the Security Documents) release any collateral or otherwise terminate any Lien under any Basic Document providing for collateral security, or agree to additional obligations being secured by such collateral security (unless the Lien for such additional obligations shall be junior to the Lien in favor of the other obligations secured by such Basic Document).

                    SECTION 11. Miscellaneous.

                    11.01 Waiver. No failure on the part of the Agent or any Bank to exercise and no delay in exercising, and no course of dealing with respect to, any right, power or privilege under this Agreement or the Note shall operate as a waiver thereof, nor shall any single or partial exercise of any right, power or privilege under this Agreement or any Note preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The remedies provided herein are cumulative and not exclusive of any remedies provided by law.

                    11.02 Notices. All notices, requests and other communications provided for herein and under the Security Documents (including, without limitation, any modifications of, or waivers, requests or consents under, this Agreement) shall be given or made in writing (including, without limitation, by facsimile) delivered to the intended recipient at the “Address for Notices” specified below its name on the signature pages hereof; or, as to any party, at such other address as shall be designated by such party in a notice to each other party. Except as otherwise provided in this Agreement, all such communications shall be deemed to have been duly given (a) if transmitted by facsimile, when the confirmation of transmission thereof is received by the transmitter, (b) when personally delivered or (c) in the case of a mailed notice, upon receipt, in each case given or addressed as aforesaid. The parties hereto agree that delivery of an executed counterpart of a signature page to this Agreement and each other Basic Document by facsimile (or electronic transmission) shall be effective as delivery of an original executed counterpart of this Agreement or such other Basic Document.

                    11.03 Expenses, etc. The Company agrees to pay or reimburse each of the Banks and the Agent for: (a) all reasonable out-of-pocket costs and expenses of each Bank and the Agent (including, without limitation, the reasonable fees and expenses of Mayer, Brown, Rowe & Maw LLP, special New York counsel to the Banks) in connection with (i) the negotiation, preparation, execution and delivery of this Agreement and the other Basic Documents and the extension of credit hereunder and (ii) the negotiation or preparation of any modification, supplement or waiver of any of the terms of this Agreement or any of the other Basic Documents (whether or not consummated); (b) all reasonable out-of-pocket costs and expenses of each Bank and the Agent (including, without limitation, the reasonable fees and expenses of legal counsel) in connection with (i) any Default and any enforcement or collection proceedings resulting therefrom, including, without limitation, all manner of participation in or other involvement with (x) bankruptcy, insolvency, receivership, foreclosure, winding up or liquidation proceedings, (y) judicial or regulatory proceedings and (z) workout, restructuring or other negotiations or proceedings (whether or not the workout, restructuring or transaction contemplated thereby is consummated) and (ii) the enforcement of this Section 11.03; and (c) all transfer, stamp, documentary or other similar taxes, assessments or charges levied by any

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governmental or revenue authority in respect of this Agreement or any of the other Basic Documents or any other document referred to herein or therein and all costs, expenses, taxes, assessments and other charges incurred in connection with any filing, registration, recording or perfection of any security interest contemplated by any Basic Document or any other document referred to therein.

                    The Company hereby agrees to indemnify the Agent and each Bank and their respective directors, officers, employees, attorneys and agents from, and hold each of them harmless against, any and all losses, liabilities, claims, damages or expenses incurred by any of them arising out of or by reason of any investigation or litigation or other proceedings (including, without limitation, any and all losses, liabilities, claims, damages or expenses incurred by the Agent to any Bank, whether or not the Agent or any Bank is a party thereto) relating to the extensions of credit hereunder or any actual or proposed use by the Company of the proceeds of any of the extensions of credit hereunder, including, without limitation, the reasonable fees and disbursements of counsel incurred in connection with any such investigation or litigation or other proceedings (but excluding any such losses, liabilities, claims, damages or expenses incurred by reason of the gross negligence or willful misconduct of the Person to be indemnified).

                    11.04 Amendments, Etc. Except as otherwise expressly provided in this Agreement, any provision of this Agreement may be modified or supplemented only by an instrument in writing signed by the Company, the Agent and the Required Banks, or by the Company and the Agent acting with the consent of the Required Banks, and any provision of this Agreement may be waived by the Required Banks or by the Agent acting with the consent of the Required Banks; provided that: (a) no modification, supplement or waiver shall, unless by an instrument signed by all of the Banks affected thereby or by the Agent acting with the consent of all of the Banks affected thereby: (i) increase, or extend the term of any of the Commitments of such Banks, or extend the time or waive any requirement for the reduction or termination of any of the Commitments of such Banks, (ii) extend the date fixed for the payment of principal of or interest on any Loan, the Reimbursement Obligations, the Acceptances or any fee hereunder, (iii) reduce the amount of any such payment of principal on Loans, Reimbursement Obligations or Acceptances, (iv) reduce the amount of or rate at which interest is payable thereon or any fee is payable hereunder, (v) alter the rights or obligations of the Company to prepay Loans, (vi) alter the terms of this Section 11.04, (vii) modify the definition of the term “Required Banks”, or modify in any other manner the number or percentage of the Banks required to make any determinations or waive any rights hereunder or to modify any provision hereof, (viii) modify the definition of “Borrowing Base” or any of the defined terms used therein, (ix) waive any of the conditions precedent set forth in Section 6.01 hereof, (x) amend or waive Section 4.03 of this agreement or (xi) release any Guarantor; and (b) any modification or supplement of Section 10 hereof shall require the consent of the Agent.

                    11.05 Successors and Assigns. This Agreement shall be binding upon and inure to the benefit of the parties hereto and their respective successors and permitted assigns.

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                    11.06 Assignments and Participations.

                    (a) The Company may not assign any of its rights or obligations hereunder, under the Acceptances or under the Notes without the prior consent of all the Banks and the Agent.

                    (b) Each Bank may assign any of its Loans, its Acceptances, its Note, and its Revolving Loan Commitment (but only with the consent of, in the case of the outstanding Revolving Loan Commitment, the Company (but the consent of the Company shall be required only so long as no Default shall be continuing) and the Agent and, in the case of the Revolving Loan Commitment or a Letter of Credit Interest, the Issuing Bank and, in the case of an Acceptance, the Accepting Bank, each such required consent not to be unreasonably withheld or delayed); provided that (i) no such consent by the Company or the Agent shall be required in the case of any assignment to another Bank; (ii) any such partial assignment shall be in an amount at least equal to $5,000,000; and (iii) each such assignment by a Bank of its Loans, Note, Revolving Loan Commitment, Letter of Credit Interest or Acceptances shall be made in such manner so that the same portion of its Loans, Note, Revolving Loan Commitment, Letter of Credit Interest and Acceptances is assigned to the respective assignee. Upon execution and delivery by the assignee to the Company, the Agent and the Issuing Bank of an instrument in writing pursuant to which such assignee agrees to become a “Bank” hereunder (if not already a Bank) having the Revolving Loan Commitment(s), Loans, Acceptances and, if applicable, Letter of Credit Interest specified in such instrument, and upon consent thereto by the Company, the Agent and the Issuing Bank, to the extent required above, the assignee shall have, to the extent of such assignment (unless otherwise provided in such assignment with the consent of the Company, the Agent and the Issuing Bank), the obligations, rights and benefits of a Bank hereunder holding the Revolving Loan Commitment(s), Loans, Acceptances and, if applicable, Letter of Credit Interest (or portions thereof) assigned to it (in addition to the Revolving Loan Commitment(s), Loans, Acceptances and Letter of Credit Interest, if any, theretofore held by such assignee) and the assigning Bank shall, to the extent of such assignment, be released from the Revolving Loan Commitment(s) (or portion(s) thereof) so assigned. Upon each such assignment the assigning Bank shall pay the Agent an assignment fee of $3,500.

                    (c) A Bank may (without obtaining the consent of the Company) sell or agree to sell to one or more other Persons a participation in all or any part of any Loans, Acceptances or Letter of Credit Interest, or in the Revolving Loan Commitment, in which event each purchaser of a participation (a “Participant”) shall be entitled to the rights and benefits of the provisions of Section 8.01(g) hereof with respect to its participation in such Loans, Acceptances, Letter of Credit Interest and Revolving Loan Commitment as if (and the Company shall be directly obligated to such Participant under such provisions as if) such Participant were a “Bank” for purposes of said Section, but shall not have any other rights or benefits under this Agreement or any Note or any other Basic Document (the Participant’s rights against such Bank in respect of such participation to be those set forth in the agreements executed by such Bank in favor of the Participant).

                    (d) In addition to the assignments and participations permitted under the foregoing provisions of this Section 11.06, any Bank may (without notice to the Company, the

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Agent or any other Bank and without payment of any fee) (i) assign and pledge all or any portion of the Loans, the Acceptances and the Note to any Federal Reserve Bank as collateral security pursuant to Regulation A and any Operating Circular issued by such Federal Reserve Bank and (ii) assign all or any portion of its rights under this Agreement and the Loans, the Acceptances and the Note to an affiliate. No such assignment shall release the assigning Bank from its obligations hereunder.

                    (e) A Bank may furnish any information concerning the Company in the possession of such Bank from time to time to assignees and participants (including prospective assignees and participants).

                    (f) Anything in this Section 11.06 to the contrary notwithstanding, no Bank may assign or participate any interest in any Loan, Acceptance or Reimbursement Obligation held by it hereunder to the Company or any of its Affiliates or Subsidiaries without the prior consent of each Bank.

                    11.07 Survival. The obligations of the Company under Sections 5.01, 5.04, 5.05 and 11.03 and the obligations of the Banks under Section 10.05 hereof shall survive the repayment of the Loans, the Acceptances and the Reimbursement Obligations and the termination of the Revolving Loan Commitment. In addition, each representation and warranty made, or deemed to be made by a notice of any extension of credit (whether by means of a Loan, an Acceptance or a Letter of Credit), herein or pursuant hereto shall survive the making of such representation and warranty, and no Bank shall be deemed to have waived, by reason of making any extension of credit hereunder (whether by means of a Loan, an Acceptance or a Letter of Credit), any Default that may arise by reason of such representation or warranty proving to have been false or misleading, notwithstanding that such Bank or the Agent may have had notice or knowledge or reason to believe that such representation or warranty was false or misleading at the time such extension of credit was made.

                    11.08 Captions. The table of contents and captions and section headings appearing herein are included solely for convenience of reference and are not intended to affect the interpretation of any provision of this Agreement.

                    11.09 Counterparts. This Agreement may be executed in any number of counterparts, all of which taken together shall constitute one and the same instrument and any of the parties hereto may execute this Agreement by signing any such counterpart.

                    11.10 Governing Law; Submission to Jurisdiction. This Agreement and the Notes shall be governed by, and construed in accordance with, the law of the State of New York. The Company hereby submits to the nonexclusive jurisdiction of the United States District Court for the Southern District of New York and of any New York state court sitting in New York City for the purposes of all legal proceedings arising out of or relating to this Agreement or the transactions contemplated hereby. The Company irrevocably waives, to the fullest extent permitted by applicable law, any objection that it may now or hereafter have to the laying of the venue of any such proceeding brought in such a court and any claim that any such proceeding brought in such a court has been brought in an inconvenient forum. The Company hereby further irrevocably consents to the service of process in any such legal proceedings in said courts

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by the mailing thereof by the Agent or any Bank by registered or certified mail, postage prepaid, at its address set forth beneath its signature hereto.

                    11.11 Waiver of Jury Trial. EACH OF THE COMPANY, THE AGENT AND THE BANKS HEREBY IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

                    11.12 Effect of Amendment and Restatement of the Existing Credit Agreement. On the Amendment Effective Date, the Existing Credit Agreement shall be amended and restated in its entirety. The parties hereto acknowledge and agree that (a) this Agreement and the other Basic Documents, whether executed and delivered in connection herewith or otherwise, do not constitute a novation or termination of the “Loans”, “Acceptances” or “Letters of Credit” (as defined in the Existing Credit Agreement) under the Existing Credit Agreement as in effect prior to the Amendment Effective Date and which remain outstanding, (b) the “Loans”, “Acceptances” or “Letters of Credit” are in all respects continuing (as amended and restated hereby and which are hereinafter subject to the terms herein) and (c) the Liens and security interests as granted under the applicable Basic Documents securing payment of such “Loans”, “Acceptances” and “Letters of Credit” are in all respects continuing and in full force and effect.

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                    IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed and delivered as of the day and year first above written.

 

 

 

 

EMPIRE RESOURCES, INC.

 

 

 

 

 

By:

 /s/ Sandra R. Kahn

 

 

 


 

 

 

Title: Vice President

 

 

 

Address for Notices:

 

 

Empire Resources, Inc.

 

 

One Parker Plaza

 

 

Fort Lee, New Jersey 07024

 

 

 

Attention: Ms. Sandra R. Kahn

 

 

 

Facsimile No.: (201) 944-2226

 

 

 

Telephone No.: (201) 944-2200

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BANKS

Commitment

 

JPMORGAN CHASE BANK, N.A.


 

 

$50,000,000

 

 

 

 

 

 

 

 

By:

 /s/ Thomas S. Drake

 

 


 

 

Thomas S. Drake

 

 

Vice President

 

 

 

Lending Office for all Loans:

 

 

JPMorgan Chase Bank, N.A.

 

 

270 Park Avenue

 

 

New York, New York 10017

 

 

 

Address for Notices:

 

 

JPMorgan Chase Bank, N.A.

 

 

1166 Avenue of the Americas, 21st Floor

 

 

New York, New York 10036

 

 

 

Attention: Mr. Thomas S. Drake

 

 

 

Facsimile No.: (212) 899-2911

 

 

 

Telephone No.: (212) 899-1379

 

 

 

Email: thomas.s.drake@chase.com

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BANKS

 

Commitment

 

BROWN BROTHERS HARRIMAN & CO.

 


 

 

 

$15,000,000

 

 

 

 

 

 

 

 

By:

 /s/ Michael L. Vellucci

 

 

 


 

 

 

Name: Michael L. Vellucci

 

 

 

Title: Vice President

 

 

 

 

 

Lending Office for all Loans:

 

 

140 Broadway

 

 

New York, NY 10005

 

 

 

 

 

Address for Notices:

 

 

140 Broadway

 

 

New York, NY 10005

 

 

 

 

 

Attention: Michael Vellucci

 

 

 

 

 

Facsimile No.: 212-493-8998

 

 

 

 

 

Telephone No.: 212-493-8538

 

 

 

 

 

Email: michael.vellucci@bbh.com

 

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BANKS

 

 

Commitment

CITICORP USA, INC.


 

 

$35,000,000

 

 

 

 

 

 

By:

/s/ Pamela M. Frederick

 

 


 

 

Name: Pamela M. Frederick

 

 

Title: Vice President

 

 

 

Lending Office for all Loans:
153 E. 53rd Street, 18th Floor
New York, NY 10022

Address for Notices:
153 E. 53rd Street, 18th Floor
New York, NY 10022

Attention: Pamela M. Frederick

Facsimile No.: 212-793-4813

Telephone No.: 212-559-2372

Email: pamela.frederick@citigroup.com

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BANKS

 

 

Commitment


$35,000,000

COOPERATIEVE CENTRALE RAIFFEISEN BOERENLEENBANK B.A., “RABOBANK INTERNATIONAL”, NEW YORK BRANCH

 

 

 

 

By:

/s/ Eva Rushkevich

 

 


 

 

Name: Eva Rushkevich

 

 

Title: Executive Director

 

 

 

 

By:

/s/ Rebecca O. Morrow

 

 


 

 

Name: Rebecca O. Morrow

 

 

Title: Executive Director

 

 

 

Lending Office for all Loans:
245 Park Avenue
New York, NY 10167

Address for Notices:
245 Park Avenue
New York, NY 10167

Attention: Eva Rushkevich

Facsimile No.: 212-916-3731

Telephone No.: 212-916-3711

Email: eva.rushkevich@rabobank.com

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BANKS

 

 

 

Commitment

FORTIS CAPITAL CORP.


 

 

$15,000,000

 

 

 

 

 

 

By: 

/s/ Kimberly Oates

 

 


 

 

Name: Kimberly Oates

 

 

Title: Vice President

 

 

 

 

By:

/s/ Ted Aldrich

 

 


 

 

Name: Ted Aldrich

 

 

Title: Director

 

 

 

 

Lending Office for all Loans:

 

520 Madison Avenue

 

New York, NY 10022

 

 

 

 

Address for Notices:

 

520 Madison Avenue

 

New York, NY 10022

 

 

 

 

Attention: Kimberly Oates

 

 

 

 

Facsimile No.: 212-340-5340

 

 

 

 

Telephone No.: 212-340-5349

 

 

 

 

Email: kimberly.oates@us.fortis.com

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JPMORGAN CHASE BANK, N.A., as Agent and
as the Swing Line Bank

 

 

 

 

By: 

/s/ Thomas S. Drake

 

 


 

 

Thomas S. Drake

 

 

Vice President

 

 

 

 

Address for Notices:

 

 

JPMorgan Chase Bank, N.A.

 

 

1166 Avenue of the Americas, 21st Floor

 

 

New York, New York 10036

 

 

 

 

Attention: Mr. Thomas S. Drake

 

 

 

 

Facsimile No.: (212) 899-2911

 

 

 

 

Telephone No.: (212) 899-1379

 

 

 

 

Email: thomas.s.drake@chase.com

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