Credit Agreement

 

Credit Agreement

Dated as of December 13, 2005

among

Synalloy Corporation,

together with

 

Each of the Designated Undersigned entities as Borrowers,

the Lenders from time to time parties hereto,

and

Carolina First bank,

as Agent

 

 

Table of Contents

Section Heading             Page

Section 1.          The Credit Facilities      

Section 1.1.       Term Loan Commitments          

Section 1.2.       Revolving Credit Commitments 1

Section 1.3.       Letters of Credit            2

Section 1.4.       Applicable Interest Rates          

Section 1.5.       Minimum Borrowing Amounts   

Section 1.6.       Manner of Borrowing Loans and Desinating Applicable Interest Period          4

Section 1.7.       Interest Periods             6

Section 1.8.       Maturity of Loans          7

Section 1.9.       Prepayments     

Section 1.10.     Default Rate     

Section 1.11.     The Notes         8

Section 1.12.     Funding Indemnity         9

Section 1.13.     Reserved           9

Section 1.14.     Swing Loans     

 

Section 2.          Fees     

Section 2.1.       Fees     

Section 3.          Place and Application of Payments        

Section 3.1.       Place and Application of Payments        

Section 4.          The Collateral   

Section 4.1.       Collateral          

Section 4.2.       Reserved          

Section 4.3.       Further Assurances       

Section 5.          Definitions; Interpretation          

Section 5.1.       Definitions        

Section 5.2.       Interpretation    

Section 5.3.       Change in Accounting Principles            

Section 6.          Representations and Warranties            

Section 6.1.       Organization and Qualification   

Section 6.2.       Subsidiaries      

Section 6.3.       Authority and Validity of Obligations     

Section 6.4.       Use of Proceeds; Margin Stock            

Section 6.5.       Financial Reports          

Section 6.6.       No Material Adverse Change   

Section 6.7.       Full Disclosure  

Section 6.8.       Trademarks, Franchises, and Licenses  

Section 6.9.       Governmental Authority and Licensing   

Section 6.10.     Good Title        

Section 6.11.     Litigation and Other Controversies        

Section 6.12.     Taxes   

Section 6.13.     Approvals        

Section 6.14.     Affiliate Transactions     

Section 6.15.     Investment Company; Public Utility Holding Company         

Section 6.16.     ERISA

Section 6.17.     Compliance with Laws  

Section 6.18.     Other Agreements        

Section 6.19.     Solvency          

Section 6.20.     No Default       

Section 6.21.     Trade Relations            

 

Section 7.          Conditions Precedent    

Section 7.1.       All Credit Events          

Section 7.2.       Initial Credit Event        

Section 7.3.       Project Reserve            

 

Section 8.          Covenants        

Section 8.1.       Maintenance of Business           

Section 8.2.       Maintenance of Properties        

Section 8.3.       Taxes and Assessments            

Section 8.4.       Insurance          

Section 8.5.       Financial Reports          

Section 8.6.       Inspection         

Section 8.7.       Borrowings and Guaranties       

Section 8.8.       Liens    

Section 8.9.       Investments, Acquisitions, Loans and Advances            

Section 8.10.     Mergers, Consolidations and Sales        

Section 8.11.     Maintenance of Subsidiaries      

Section 8.12.     Reserved          

Section 8.13.     ERISA

Section 8.14.     Compliance with Laws  

Section 8.15.     Burdensome Contracts With Affiliates   

Section 8.16.     No Changes in Fiscal Year       

Section 8.17.     Formation of Subsidiaries          

Section 8.18.     Change in the Nature of Business          

Section 8.19.     Use of Loan Proceeds  

Section 8.20.     No Restrictions

Section 8.21.     Capital Expenditures     

Section 8.22.     Consolidated Fixed Charge Coverage Ratio      

Section 8.23.     Consolidated Tangible Net Worth         

Section 8.24.     Consolidated Indebtedness to Tangible Net Worth Ratio    

Section 8.25.     Sale and Leaseback Transactions          

Section 8.26.     Speculative Hedging Transactions.        

Section 9.          Events of Default and Remedies            

Section 9.1.       Events of Default          

Section 9.2.       Non-Bankruptcy Defaults         

Section 9.3.       Bankruptcy Defaults     

Section 9.4.       Collateral for Undrawn Letters of Credit           

Section 9.5.       Notice of Default          

Section 9.6.       Expenses          

Section 10.        Change in Circumstances          

Section 10.1.     Change of Law

Section 10.2.     Reserved          

Section 10.3.     Increased Cost and Reduced Return     

Section 10.4.     Lending Offices            

Section 10.5.     Discretion of Lender as to Manner of Funding   

Section 11.        The Agent        

Section 11.1.     Appointment and Authorization of Agent           

Section 11.2.     Agent and its Affiliates  

Section 11.3.     Action by Agent           

Section 11.4.     Consultation with Experts          

Section 11.5.     Liability of Agent; Credit Decision         

Section 11.6.     Indemnity         

Section 11.7.     Resignation of Agent and Successor Agent        

Section 11.8.     L/C Issuer.       

Section 11.9.     Hedging Liability and Funds Transfer and Deposit Account Liability Arrangements

Section 11.10.   Designation of Additional Agents           

Section 11.11.   Authorization to Release Liens and Limit Amount of Certain Claims  

Section 12.        Reserved          

Section 13.        Miscellaneous   

Section 13.1.     Withholding Taxes        

Section 13.2.     No Waiver, Cumulative Remedies         

Section 13.3.     Non-Business Days      

Section 13.4.     Documentary Taxes      

Section 13.5.     Survival of Representations       

Section 13.6.     Survival of Indemnities  

Section 13.7.     Sharing of Set-Off        

Section 13.8.     Notices            

Section 13.9.     Counterparts    

Section 13.10.   Successors and Assigns            

Section 13.11. Participants       

Section 13.12.   Assignments     

Section 13.13.   Amendments    

Section 13.14.   Headings          

Section 13.15.   Costs and Expenses; Indemnification     

Section 13.16.   Set-off  

Section 13.17.   Entire Agreement          

Section 13.18.   Governing Law

Section 13.19.   Severability of Provisions          

Section 13.20.   Excess Interest

Section 13.21.   Construction     

Section 13.22.   Lender's Obligations Several     

Section 13.23    Confidentiality   

Section 13.24.   Synalloy as Administrative Borrower     

Section 13.25.   USA Patriot Act Notice            

Section 13.26.   Submission to Jurisdiction; Waiver of Jury Trial

 

 

Exhibit A           -            Notice of Payment Request

Exhibit B           -            Notice of Borrowing

Exhibit C           -            Notice of Continuation/Conversion

Exhibit D-1        -            Revolving Note

Exhibit D-2        -            Swing Note

Exhibit D-3        -            Term Note

Exhibit E            -            Authorized Representative Certificate

Exhibit F            -            Borrowing Base Certificate

Exhibit G           -            Eligible Chemical Inventory and Eligible Metal Inventory

Exhibit H           -            Security Agreement

Exhibit I             -            Compliance Certificate

Exhibit J            -            Assignment and Acceptance

Schedule 1        -            Commitments

Schedule 4.1     -            Collateral

Schedule 6.2     -            Subsidiaries

Schedule 6.21   -            Trade Relations

Schedule 8.7(b)             -            Permitted Debt

Schedule 8.8(f) -            Permitted Liens

Credit Agreement

This Credit Agreement is entered into effective as of December 13, 2005 by and among SYNALLOY CORPORATION, a Delaware corporation ("Synalloy"), EACH OF THE UNDERSIGNED ENTITIES (together with Synalloy, the "Borrowers" ), the several financial institutions from time to time party to this Agreement, as Lenders, and CAROLINA FIRST BANK, as Agent as provided herein, and the Lenders from time to time parties hereto. All capitalized terms used herein without definition shall have the same meanings herein as such terms are defined in Section 5.1 hereof.

Preliminary Statement

The Borrowers have requested, and the Lenders have agreed to extend, certain credit facilities on the terms and conditions of this Agreement.

Now, Therefore, in consideration of the mutual agreements contained herein, and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto hereby agree as follows:

Section 1.          The Credit Facilities.

            Section 1.1.      Term Loan Commitments . Subject to the terms and conditions hereof, each Lender, by its acceptance hereof, severally agrees to make a loan or loans (individually, a "Term Loan" and, collectively, for all the Lenders, the "Term Loans") in U.S. Dollars to the Borrowers from time to time in the amount of such Lender's Term Loan Commitment, on the Closing Date. Each Borrowing of Term Loans shall be made ratably by the Lenders in proportion to their respective Term Loan Percentages. All Term Loans shall bear interest at the Applicable Rate. No amount repaid or prepaid on any Term Loan may be borrowed again.

            Section 1.2.      Revolving Credit Commitments . Subject to the terms and conditions hereof, each Lender, by its acceptance hereof, severally agrees to make a loan or loans (individually a "Revolving Loan" and collectively the "Revolving Loans" ) in U.S. Dollars to the Borrowers from time to time on a revolving basis up to the amount of such Lender's Revolving Credit Commitment, subject to any reductions thereof pursuant to the terms hereof, before the Revolving Credit Termination Date. The sum of the aggregate principal amount of Revolving Loans, Swing Loans, and L/C Obligations at any time outstanding shall not exceed the lesser of (i) the aggregate Revolving Credit Commitments in effect at such time, and (ii) the Borrowing Base as determined based on the most recent Borrowing Base Certificate. Each Borrowing of Revolving Loans shall be made ratably by the Lenders in proportion to their respective Revolver Percentages. Each Borrowing of Revolving Loans bear interest at the Applicable Rate. Revolving Loans may be repaid and the principal amount thereof reborrowed before the Revolving Credit Termination Date, subject to the terms and conditions hereof.

If, at any time, the sum of (i) outstanding Revolving Loans plus (ii) Swing Loans plus (iii) L/C Obligations, exceeds the Borrowing Base, Borrowers shall promptly pay to Agent the amount of such excess.

            Section 1.3.      Letters of Credit . (a)  General Terms. Subject to the terms and conditions hereof, as part of the Revolving Credit, the L/C Issuer shall issue standby letters of credit (each a "Letter of Credit" ) for the Borrowers' account in an aggregate undrawn face amount up to the L/C Sublimit. Each Letter of Credit shall be issued by the L/C Issuer, but each Lender shall be obligated to reimburse the L/C Issuer for such Lender's Revolver Percentage of the amount of each drawing thereunder and, accordingly, each Letter of Credit shall constitute usage of the Revolving Credit Commitment of each Lender pro rata in an amount equal to its Revolver Percentage of the L/C Obligations then outstanding.

            (b)         Applications. At any time before the Revolving Credit Termination Date, the L/C Issuer shall, at the request of the Borrowers, issue one or more Letters of Credit in U.S. Dollars, in a form satisfactory to the L/C Issuer, with expiration dates no later than the earlier of 12 months from the date of issuance (or which are cancelable not later than 12 months from the date of issuance and each renewal) or 30 days prior to the Revolving Credit Termination Date, in an aggregate face amount as set forth above, upon the receipt of an application duly executed by the Administrative Borrower for the relevant Letter of Credit in the form then customarily prescribed by the L/C Issuer for the Letter of Credit requested (each an "Application" ). Notwithstanding anything contained in any Application to the contrary: (i) the Borrowers shall pay fees in connection with each Letter of Credit as set forth in Section 2.1 hereof, (ii) before the occurrence of a Default or an Event of Default, the L/C Issuer will not call for the funding by the Borrowers of any amount under a Letter of Credit before being presented with a drawing thereunder, and (iii) if the L/C Issuer is not timely reimbursed for the amount of any drawing under a Letter of Credit on the date such drawing is paid, the Borrowers' obligation to reimburse the L/C Issuer for the amount of such drawing shall bear interest (which the Borrowers hereby promise to pay) from and after the date such drawing is paid at a rate per annum equal to the sum of 2% plus the Applicable Rate from time to time in effect (computed on the basis of a year of 360 days, and the actual number of days elapsed). If the L/C Issuer issues any Letter of Credit with an expiration date that is automatically extended unless the L/C Issuer gives notice that the expiration date will not so extend beyond its then scheduled expiration date, unless the Required Lenders instruct the L/C Issuer otherwise, the L/C Issuer will give such notice of non-renewal before the time necessary to prevent such automatic extension if before such required notice date: (i) the expiration date of such Letter of Credit if so extended would be after the Revolving Credit Termination Date, (ii) the Revolving Credit Commitments have been terminated, or (iii) a Default or an Event of Default exists and the Agent, at the request or with the consent of the Required Lenders, has given the L/C Issuer instructions not to so permit the extension of the expiration date of such Letter of Credit. The L/C Issuer agrees to issue amendments to the Letter(s) of Credit increasing the amount, or extending the expiration date, thereof at the request of the Borrowers subject to the conditions of Section 7 hereof and the other terms of this Section 1.3.

            (c)         The Reimbursement Obligations. Subject to Section 1.3(b) hereof, the obligation of the Borrowers to reimburse the L/C Issuer for all drawings under a Letter of Credit (a "Reimbursement Obligation" ) shall be governed by the Application related to such Letter of Credit, except that reimbursement shall be made by no later than 12:00 Noon (Greenville, South Carolina time) on the date when each drawing is to be paid if the Administrative Borrower has been informed of such drawing by the L/C Issuer on or before 9:00 a.m. (Greenville, South Carolina time) on the date when such drawing is to be paid or, if notice of such drawing is given to the Administrative Borrower after 9:00 a.m. (Greenville, South Carolina time) on the date when such drawing is to be paid, by the end of such day, in immediately available funds at the Agent's principal office in Greenville, South Carolina or such other office as the Agent may designate in writing to the Administrative Borrower (who shall thereafter cause to be distributed to the L/C Issuer such amount(s) in like funds). If the Borrowers do not make any such reimbursement payment on the date due and the Participating Lenders fund their participations therein in the manner set forth in Section 1.3(d) below, then all payments thereafter received by the Agent in discharge of any of the relevant Reimbursement Obligations shall be distributed in accordance with Section 1.3(d) below.

            (d)         The Participating Interests. Each Lender (other than the Lender acting as L/C Issuer in issuing the relevant Letter of Credit), by its acceptance hereof, severally agrees to purchase from the L/C Issuer, and the L/C Issuer hereby agrees to sell to each such Lender (a "Participating Lender" ), an undivided percentage participating interest (a "Participating Interest") , to the extent of its Revolver Percentage, in each Letter of Credit issued by, and each Reimbursement Obligation owed to, the L/C Issuer. Upon any failure by the Borrowers to pay any Reimbursement Obligation at the time required on the date the related drawing is to be paid, as set forth in Section 1.3(c) above, or if the L/C Issuer is required at any time to return to the Borrowers or to a trustee, receiver, liquidator, custodian or other Person any portion of any payment of any Reimbursement Obligation, each Participating Lender shall, not later than the Business Day it receives a certificate in the form of Exhibit A hereto from the L/C Issuer (with a copy to the Agent) to such effect, if such certificate is received before 1:00 p.m. (Greenville, South Carolina time), or not later than 1:00 p.m. (Greenville, South Carolina time) the following Business Day, if such certificate is received after such time, pay to the Agent for the account of the L/C Issuer an amount equal to such Participating Lender's Revolver Percentage of such unpaid or recaptured Reimbursement Obligation together with interest on such amount accrued from the date the related payment was made by the L/C Issuer to the date of such payment by such Participating Lender at a rate per annum equal to: (i) from the date the related payment was made by the L/C Issuer to the date 2 Business Days after payment by such Participating Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from the date 2 Business Days after the date such payment is due from such Participating Lender to the date such payment is made by such Participating Lender, the Applicable Rate in effect for each such day. Each such Participating Lender shall thereafter be entitled to receive its Revolver Percentage of each payment received in respect of the relevant Reimbursement Obligation and of interest paid thereon, with the L/C Issuer retaining its Revolver Percentage thereof as a Lender hereunder.

The several obligations of the Participating Lenders to the L/C Issuer under this Section 1.3 shall be absolute, irrevocable and unconditional under any and all circumstances whatsoever and shall not be subject to any set-off, counterclaim or defense to payment which any Participating Lender may have or have had against the Borrowers, the L/C Issuer, the Agent, any Lender or any other Person whatsoever. Without limiting the generality of the foregoing, such obligations shall not be affected by any Default or Event of Default or by any reduction or termination of any Commitment of any Lender, and each payment by a Participating Lender under this Section 1.3 shall be made without any offset, abatement, withholding or reduction whatsoever.

            (e)         Indemnification. The Participating Lenders shall, to the extent of their respective Revolver Percentages, indemnify the L/C Issuer (to the extent not reimbursed by the Borrowers) against any cost, expense (including reasonable counsel fees and disbursements), claim, demand, action, loss or liability (except such as result from the L/C Issuer's gross negligence or willful misconduct) that the L/C Issuer may suffer or incur in connection with any Letter of Credit issued by it. The obligations of the Participating Lenders under this Section 1.3(e) and all other parts of this Section 1.3 shall survive termination of this Agreement and of all Applications, Letters of Credit, and all drafts and other documents presented in connection with drawings thereunder.

            (f)          Manner of Requesting a Letter of Credit. The Administrative Borrower shall provide at least three (3) Business Days' advance written notice to the Agent of each request for the issuance of a Letter of Credit, such notice in each case to be accompanied by an Application for such Letter of Credit properly completed and executed by the Administrative Borrower and, in the case of an extension or an increase in the amount of a Letter of Credit, a written request therefor, in a form acceptable to the Agent and the L/C Issuer, in each case, together with the fees called for by this Agreement. The Agent shall promptly notify the L/C Issuer of the Agent's receipt of each such notice and the L/C Issuer shall promptly notify the Agent and the Lenders of the issuance of the Letter of Credit so requested.

            Section 1.4.      Applicable Interest Rates . (a)  Loans. Each Loan made or maintained by a Lender shall bear interest during each Interest Period it is outstanding (computed on the basis of a year of 360 days, and the actual days elapsed) on the unpaid principal amount thereof from the date such Loan is advanced, continued or converted until maturity (whether by acceleration or otherwise) at a rate per annum equal to the Applicable Rate from time to time in effect, payable (i) for any Borrowing having an Interest Period of 2, 3 or 6 months, on the last day of its Interest Period and at maturity (whether by acceleration or otherwise), or (ii) for any Borrowing having an Interest Period of 1 month, on the first (1 ^st ) day of each calendar month and at maturity (whether by acceleration or otherwise), except as such rate may be continued or converted pursuant to the terms hereof.

            (b)         Rate Determinations. The Agent shall determine each interest rate applicable to the Loans and the Reimbursement Obligations hereunder, and its determination thereof shall be conclusive and binding except in the case of manifest error.

            Section 1.5.      Minimum Borrowing Amounts . Unless the provisions of Section 1.14(f) are in effect, each Borrowing advanced, continued or converted under a Credit shall be in an amount equal to $100,000 or such greater amount which is an integral multiple of $100,000.

            Section 1.6.      Manner of Borrowing Loans and Designating Applicable Interest Period . (a)  Notice to the Agent. The Administrative Borrower shall give notice to the Agent by no later than 10:00 a.m. (Greenville, South Carolina time) on the date the Borrowers request the Lenders to advance a Borrowing. The Loans included in each Borrowing shall bear interest initially at the Applicable Rate for the Interest Period specified in such notice of a new Borrowing. Thereafter, the Administrative Borrower may from time to time elect to change or continue the Interest Period applicable to each Borrowing or, subject to Section 1.5's minimum amount requirement for each outstanding Borrowing, a portion thereof, as follows: on the last day of the Interest Period applicable thereto, the Administrative Borrower may continue part or all of such Borrowing for the same Interest Periods or convert part or all to one or more new Interest Periods. The Administrative Borrower shall give all such notices requesting the advance, continuation or conversion of a Borrowing to the Agent by telephone or telecopy (which notice shall be irrevocable once given and, if by telephone, shall be promptly confirmed in writing), substantially in the form attached hereto as Exhibit B (Notice of Borrowing) or Exhibit C (Notice of Continuation/Conversion), as applicable, or in such other form acceptable to the Agent. Notice of the continuation of a Borrowing for an additional Interest Period or of the conversion of part or all of the Loans to new Interest Periods must be given by no later than 10:00 a.m. (Greenville, South Carolina time) at least 2 Business Days before the date of the requested continuation or conversion. All such notices concerning the advance, continuation or conversion of a Borrowing shall specify the date of the requested advance, continuation or conversion of a Borrowing (which shall be a Business Day), the amount of the requested Borrowing to be advanced, continued or converted, and, the Interest Period applicable thereto. The Borrowers agree that the Agent may rely on any such telephonic or telecopy notice given by any person the Agent in good faith believes is an Authorized Representative without the necessity of independent investigation and, in the event any such notice by telephone conflicts with any written confirmation, such telephonic notice shall govern if the Agent has acted in reasonable reliance thereon.

            (b)         Notice to the Lenders . The Agent shall give prompt telephonic or telecopy notice to each Lender of any notice from the Administrative Borrower received pursuant to Section 1.6(a) above.

            (c)         Borrowers' Failure to Notify; Automatic Continuations and Conversions . Any outstanding Borrowing shall automatically be continued for a Interest Period of 1 month on the last day of its then current Interest Period unless the Administrative Borrower has notified the Agent within the period required by Section 1.6(a) that the Borrowers intend to continue or convert such Borrowing, subject to Section 7.1 hereof, or such Borrowing is prepaid in accordance with Section 1.9(a). In the event the Administrative Borrower fails to give notice pursuant to Section 1.6(a) above of a Borrowing equal to the amount of a Reimbursement Obligation and has not notified the Agent by 1:00 p.m. (Greenville, South Carolina time) on the day such Reimbursement Obligation becomes due that it intends to repay such Reimbursement Obligation through funds not borrowed under this Agreement, the Borrowers shall be deemed to have requested a Borrowing under the Revolving Credit (or, at the option of the Agent, under the Swing Line) on such day in the amount of the Reimbursement Obligation then due, which Borrowing shall be applied to pay the Reimbursement Obligation then due.

            (d)         Disbursement of Loans . Not later than 1:00 p.m. (Greenville, South Carolina time) on the date of any requested advance of a new Borrowing, subject to Section 7 hereof, each Lender shall make available its Loan comprising part of such Borrowing in funds immediately available at the principal office of the Agent in Greenville, South Carolina. The Agent shall make the proceeds of each new Borrowing available to the Borrowers at the Agent's principal office in Greenville, South Carolina.

            (e)         Agent Reliance on Lender Funding. Unless the Agent shall have been notified by a Lender prior to the date on which such Lender is scheduled to make payment to the Agent of the proceeds of a Loan (which notice shall be effective upon receipt) that such Lender does not intend to make such payment, the Agent may assume that such Lender has made such payment when due and the Agent may in reliance upon such assumption (but shall not be required to) make available to the Borrowers the proceeds of the Loan to be made by such Lender and, if any Lender has not in fact made such payment to the Agent, such Lender shall, on demand, pay to the Agent the amount made available to the Borrowers attributable to such Lender together with interest thereon in respect of each day during the period commencing on the date such amount was made available to the Borrowers and ending on (but excluding) the date such Lender pays such amount to the Agent at a rate per annum equal to: (i) from the date the related advance was made by the Agent to the date 2 Business Days after payment by such Lender is due hereunder, the Federal Funds Rate for each such day and (ii) from the date 2 Business Days after the date such payment is due from such Lender to the date such payment is made by such Lender, the Applicable Rate in effect for each such day, as the same may be adjusted from time to time.

            Section 1.7.      Interest Periods . As provided in Section 1.6(a) and 1.14 hereof, at the time of each request to advance, continue or convert a Borrowing, the Administrative Borrower shall select an Interest Period applicable to such Loans from among the available options. The term "Interest Period" means the period commencing on the date a Borrowing of Loans is advanced, continued or converted and ending 1, 2, 3 or 6 months thereafter; provided, however, that:

            (a)         any Interest Period for a Borrowing of Loans that otherwise would end after the Revolving Credit Termination Date shall end on the Revolving Credit Termination Date;

            (b)         no Interest Period with respect to any portion of the Loans shall extend beyond the Revolving Credit Termination Date;

            (c)         whenever the last day of any Interest Period would otherwise be a day that is not a Business Day, the last day of such Interest Period shall be extended to the next succeeding Business Day, provided that, if such extension would cause the last day of an Interest Period for a Borrowing to occur in the following calendar month, the last day of such Interest Period shall be the immediately preceding Business Day; and

            (d)         for purposes of determining an Interest Period for a Borrowing; a month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month; provided, however, that if there is no numerically corresponding day in the month in which such an Interest Period is to end or if such an Interest Period begins on the last Business Day of a calendar month, then such Interest Period shall end on the last Business Day of the calendar month in which such Interest Period is to end.

Provided however , that the Interest Period for Swing Loans shall be a period of 1 month.

            Section 1.8.      Maturity of Loans. (a) Scheduled Payments of Term Loans . The Borrowers shall make principal payments on the Term Loans in installments on the last day of each December, March, June and September in each year, commencing with the fiscal quarter ending December 31, 2005, with the amount of each such principal installment to be equal to the amount set forth in column B below as shown opposite the relevant due date as set forth in column A below:

Column A Payment Date	Column B Scheduled Principal Payment on Term Loans
12/31/05	$116,666.75
3/31/06	$116,666.75
6/30/06	$116,666.75
9/30/06	$116,666.75
12/31/06	$116,666.75
3/31/07	$116,666.75
6/30/07	$116,666.75
9/30/07	$116,666.75
12/31/07	$116,666.75
3/31/08	$116,666.75
6/30/08	$116,666.75
9/30/08	$116,666.75
12/31/08	$116,666.75
3/31/09	$116,666.75
6/30/09	$116,666.75
9/30/09	$116,666.75
12/31/09	$116,667.00
3/31/10	$116,667.00
6/30/10	$116,667.00
9/30/10	$116,667.00

It being agreed that the final payment of all principal and interest not sooner paid on the Term Loans shall be due and payable on December 31, 2010, the final maturity thereof. Each such principal payment shall be applied to the Lenders holding the Term Loans pro rata based upon their Term Loan Percentages.

            (b)         Revolving Loans and Swing Loans. Each Revolving Loan and Swing Loan, both for principal and interest, shall mature and become due and payable by the Borrowers on the Revolving Credit Termination Date.

            Section 1.9. Prepayments. (a) The Borrowers shall have the privilege of prepaying the Loans without premium or penalty (except as set forth in Section 1.12 below) and in whole or in part.

(b)         The Agent will promptly advise each Lender of any notice of prepayment it receives from the Borrowers. Any amount of Revolving Loans and Swing Loans paid or prepaid before the Revolving Credit Termination Date may, subject to the terms and conditions of this Agreement, be borrowed, repaid and borrowed again. No amount of the Term Loans paid or prepaid may be reborrowed, and, in the case of any partial prepayment, such prepayment shall be applied to the remaining amortization payments on the Term Loans in the inverse order of maturities, on a pro rata basis.

            Section 1.10.    Default Rate . Notwithstanding anything to the contrary contained in Section 1.3 hereof, while any Event of Default exists or after acceleration, the Borrowers shall pay interest (after as well as before entry of judgment thereon to the extent permitted by law) on the principal amount of all Loans owing by it at a rate per annum equal to the sum of 2.0% plus the Applicable Rate from time to time in effect; provided, however, that in the absence of acceleration, any adjustments pursuant to this Section shall be made at the election of the Agent, acting at the request or with the consent of the Required Lenders, with written notice to the Borrowers. While any Event of Default exists or after acceleration, interest shall be paid on demand of the Agent at the request or with the consent of the Required Lenders.

            Section 1.11.    The Notes . (a) The Revolving Loans made to the Borrowers by a Lender shall be evidenced by a single promissory note of the Borrowers issued to such Lender in the form of Exhibit D-1 hereto. Each such promissory note is hereinafter referred to as a "Revolving Note" and collectively such promissory notes are referred to as the "Revolving Notes."

            (b)         The Swing Loans made to the Borrowers by the Agent shall be evidenced by a single promissory note of the Borrowers issued to the Agent in the form of Exhibit D-2 hereto. Such promissory note is hereinafter referred to as the "Swing Note."

            (c)         The Term Loan made to the Borrowers by Lender shall be evidenced by a single promissory note of the Borrowers issued to such Lender in the form of Exhibit D-3 hereto. Each such promissory note is hereinafter referred to as a " Term Note " and collectively such promissory notes are referred to as the " Term Notes ".

            (d)         Each Lender shall record on its books and records or on a schedule to its appropriate Note the amount of each Loan advanced, continued or converted by it, all payments of principal and interest and the principal balance from time to time outstanding thereon, the Interest Period and the interest rate applicable thereto. The record thereof, whether shown on such books and records of a Lender or on a schedule to the relevant Note, shall be prima facie evidence as to all such matters; provided, however , that the failure of any Lender to record any of the foregoing or any error in any such record shall not limit or otherwise affect the obligation of the Borrowers to repay all Loans made to it hereunder together with accrued interest thereon. At the request of any Lender and upon such Lender tendering to the Borrowers the appropriate Note to be replaced, the Borrowers shall furnish a new Note to such Lender to replace any outstanding Note, and at such time the first notation appearing on a schedule on the reverse side of, or attached to, such Note shall set forth the aggregate unpaid principal amount of all Loans, if any, then outstanding thereon.

            Section 1.12.    Funding Indemnity . For any Loans for which the Applicable Rate is based upon an Interest Period exceeding 1 month, if any Lender shall incur any loss, cost or expense (including, without limitation, any loss of profit, and any loss, cost or expense incurred by reason of the liquidation or re-employment of deposits or other funds acquired by such Lender to fund or maintain any Loan or the relending or reinvesting of such deposits or amounts paid or prepaid to such Lender) as a result of:

            (a)         any payment, prepayment or conversion of a Loan or on a date other than the last day of its Interest Period,

            (b)         any failure by the Borrowers to make any payment of principal on any Loan when due (whether by acceleration or otherwise), or

            (c)         any acceleration of the maturity of the Loans as a result of the occurrence of any Event of Default hereunder,

then, upon the demand of such Lender, the Borrowers shall pay to such Lender such amount as will reimburse such Lender for such loss, cost or expense. If any Lender makes such a claim for compensation, it shall provide to the Borrowers, with a copy to the Agent, a certificate setting forth the amount of such loss, cost or expense in reasonable detail and the amounts shown on such certificate shall be deemed prime facie correct.

            Section 1.13.    [Reserved.]

            Section 1.14.    Swing Loans . (a)   Generally. Subject to the terms and conditions hereof, as part of the Revolving Credit, the Agent agrees to make loans to the Borrowers under the Swing Line (individually a "Swing Loan" and collectively the "Swing Loans" ) which shall not in the aggregate at any time outstanding exceed the Swing Line Sublimit. The Swing Loans may be availed of by the Borrowers from time to time and borrowings thereunder may be repaid and used again during the period ending on the Revolving Credit Termination Date.

            (b)         Interest on Swing Loans ;. Each Swing Loan shall bear interest until maturity (whether by acceleration or otherwise) at a rate per annum equal to the Applicable Rate from time to time in effect (computed on the basis of a year of 360 days, for the actual number of days elapsed). Interest on each Swing Loan shall be due and payable prior to such maturity on the last day of each Interest Period applicable thereto, and, unless each Lender funds its participation in a Swing Loan pursuant to Section 1.14(e), interest shall be payable solely for the account of Agent.

            (c)         Requests for Swing Loans ;. The Administrative Borrower shall give the Agent prior notice (which may be written or oral) no later than 12:00 Noon (Greenville, South Carolina time) on the date upon which Borrowers request that any Swing Loan be made, of the amount and date of such Swing Loan, and the Interest Period requested therefor. Such Swing Loan shall bear interest at the then Applicable Rate for Loans under the Revolving Credit as from time to time in effect. Subject to the terms and conditions hereof, the proceeds of such Swing Loan shall be made available to the Borrowers on the date so requested at the offices of the Agent in Greenville, South Carolina. Anything contained in the foregoing to the contrary notwithstanding (i) the obligation of the Agent to make Swing Loans shall be subject to all of the terms and conditions of this Agreement, and (ii) the Agent shall not be obligated to make more than one Swing Loan during any one day.

            (d)         Refunding Loans ;. In its sole and absolute discretion, the Agent may at any time, on behalf of the Borrowers (which hereby irrevocably authorizes the Agent to act on its behalf for such purpose) and with notice to the Borrowers, request each Lender to make a Revolving Loan in an amount equal to such Lender's Revolver Percentage of the amount of the Swing Loans outstanding on the date such notice is given. Unless an Event of Default described in Section 9.1(k) or 9.1(l) exists with respect to the Borrowers, regardless of the existence of any other Event of Default, each Lender shall make the proceeds of its requested Revolving Loan available to the Agent, in immediately available funds, at the Agent's principal office in Greenville, South Carolina, before 12:00 Noon (Greenville, South Carolina time) on the Business Day following the day such notice is given. The proceeds of such Borrowing of Revolving Loans shall be immediately applied to repay the outstanding Swing Loans.

            (e)         Participations . If any Lender refuses or otherwise fails to make a Revolving Loan when requested by the Agent pursuant to Section 1.13(d) above (because an Event of Default described in Section 9.1(k) or 9.1(l) exists with respect to the Borrowers or otherwise), such Lender will, by the time and in the manner such Revolving Loan was to have been funded to the Agent, purchase from the Agent an undivided participating interest in the outstanding Swing Loans in an amount equal to its Revolver Percentage of the aggregate principal amount of Swing Loans that were to have been repaid with such Revolving Loans. Each Lender that so purchases a participation in a Swing Loan shall thereafter be entitled to receive its Revolver Percentage of each payment of principal received on the Swing Loan and of interest received thereon accruing from the date such Lender funded to the Agent its participation in such Loan. The several obligations of the Lenders under this Section shall be absolute, irrevocable and unconditional under any and all circumstances whatsoever and shall not be subject to any set-off, counterclaim or defense to payment which any Lender may have or have had against the Borrowers, any other Lender or any other Person whatever. Without limiting the generality of the foregoing, such obligations shall not be affected by any Default or Event of Default or by any reduction or termination of the Revolving Credit Commitments of any Lender, and each payment made by a Lender under this Section shall be made without any offset, abatement, withholding or reduction whatsoever.

            (f)          Zero Balance Program and Account. During such time as Carolina First Bank is serving as Agent hereunder, until Carolina First Bank notifies Borrowers to the contrary (Carolina First Bank hereby agreeing to implement its Zero Balance Program for Borrowers, so long as no Default or Event of Default exists hereunder and Carolina First Bank continues generally to maintain such program, to a comparable extent as implemented for its similarly situated customers) the Swing Loans shall be administered through Carolina First Bank's Zero Balance Program in accordance with the Agreement for Transaction Clearing Services between Carolina First Bank and Borrowers. In order to facilitate the borrowing of Swing Loans, Borrowers and Agent, acting in its capacity as a Lender of Swing Loans may, and are hereby authorized to, enter into the Agreement for Transaction Clearing Services providing for the automatic advance (and repayment to) the Agent acting in such capacity of Swing Loans under the conditions set forth in such Agreement for Transaction Clearing Services and without the necessity for any notice by the Borrowers otherwise required by Sections 1.6(a) and 1.14(c) hereof. In the event that, for any Business Day, presentments are made under the Zero Balance Program which exceed the Swing Line Sublimit, then Borrowers shall be deemed to have requested a Revolving Loan (at the Applicable Rate for Swing Loans) in the amount of such excess The provisions of Sections 1.6(b), (c), (d) and (e) above shall continue to apply in all respects during any participation by the Borrowers in the Zero Balance Program pursuant to this Section 1.14(f) and the Agreement for Transaction Clearing Services, but this Section 1.14(f) shall, during any participation, operate in lieu of those set forth in Sections 1.6(b) and 1.14(c).

Section 2.          Fees.

            Section 2.1.      Fees . (a)  Revolving Credit Commitment Fee . The Borrowers shall pay to the Agent for the ratable account of the Lenders in accordance with their Revolver Percentages a commitment fee at the rate per annum equal to the Applicable Unused Fee (computed on the basis of a year of 360 days, and the actual number of days elapsed) on the average daily Unused Revolving Credit Commitments. Such commitment fee shall be payable quarterly in arrears on the last day of each March, June, September, and December in each year (commencing on the first such date occurring after the date hereof) and on the Revolving Credit Termination Date.

            (b)         Letter of Credit Fees. On the date of issuance (and if applicable, on each anniversary date thereof) or extension, or increase in the amount, of any Letter of Credit pursuant to Section 1.3 hereof, the Borrowers shall pay (i) to the L/C Issuer for its own account an issuance fee equal to 10 basis points times the face amount for each such Letter of Credit, and (ii) to the Agent, for the ratable benefit of the Lenders in accordance with their Revolver Percentages, a letter of credit fee at a rate per annum equal to 90 basis points (computed on the basis of a year of 360 days, and the actual number of days elapsed) times the face amount of Letters of Credit so issued. In addition, the Borrowers shall pay to the L/C Issuer for its own account the L/C Issuer's standard drawing, negotiation, amendment, and other administrative fees for each Letter of Credit. Such standard fees referred to in the preceding sentence may be established by the L/C Issuer from time to time in accordance with its customary business practice.

            (c)         Agent Fees . The Borrowers shall pay to the Agent, for its own use and benefit, an arrangement fee in the amount of $45,000, due and payable at Closing.

            (d)         Audit Fees. The Borrowers shall pay to the Agent for its own use and benefit charges for audits of the Collateral performed by the Agent or its agents or representatives in such amounts as the Agent may from time to time request (the Agent acknowledging and agreeing that such charges shall be computed in the same manner as it at the time customarily uses for the assessment of charges for similar collateral audits); provided, however, that in the absence of any Default and Event of Default, the Borrowers shall not be required to pay the Agent for more than one such audit per calendar year in an amount not to exceed $7,500.

            (e)         Commitment Fee . The Borrowers shall pay (or shall have paid) to the Agent for the ratable account of the Lenders a commitment fee in the amount of $67,500.

Section 3.          Place and Application of Payments.

            Section 3.1.      Place and Application of Payments . Subject to the provisions of Section 1.14(f), all payments of principal of and interest on the Loans and the Reimbursement Obligations, and of all other Obligations payable by the Borrowers under this Agreement and the other Loan Documents, shall be made by the Borrowers to the Agent by no later than 12:00 Noon (Greenville, South Carolina time) on the due date thereof at the office of the Agent in Greenville, South Carolina (or such other location as the Agent may designate to the Borrowers) for the benefit of the Lender or Lenders entitled thereto. Any payments received after such time shall be deemed to have been received by the Agent on the next Business Day. All such payments shall be made in U.S. Dollars, in immediately available funds at the place of payment, in each case without set-off or counterclaim. The Agent will promptly thereafter cause to be distributed like funds relating to the payment of principal or interest on Loans and on Reimbursement Obligations in which the Lenders have purchased Participating Interests ratably to the Lenders and like funds relating to the payment of any other amount payable to any Lender to such Lender, in each case to be applied in accordance with the terms of this Agreement.

Anything contained herein to the contrary notwithstanding, all payments and collections received in respect of the Obligations and all proceeds of the Collateral received, in each instance, by the Agent or any of the Lenders after the occurrence and during the continuation of an Event of Default shall be remitted to the Agent and distributed as follows:

            (a)         first, to the payment of any outstanding costs and expenses incurred by the Agent, and any security trustee therefor, in monitoring, verifying, protecting, preserving or enforcing the Liens on the Collateral, in protecting, preserving or enforcing rights under the Loan Documents, and in any event all costs and expenses of a character which the Borrowers have agreed to pay the Agent under Section 13.15 hereof (such funds to be retained by the Agent for its own account unless it has previously been reimbursed for such costs and expenses by the Lenders, in which event such amounts shall be remitted to the Lenders to reimburse them for payments theretofore made to the Agent);

            (b)         second, to the payment of principal and interest on the Swing Note until paid in full;

            (c)         third, to the payment of any outstanding interest and fees due under the Loan Documents to be allocated pro rata in accordance with the aggregate unpaid amounts owing to each holder thereof;

            (d)         fourth, to the payment of principal on the Notes, unpaid Reimbursement Obligations, together with amounts to be held by the Agent as collateral security for any outstanding L/C Obligations pursuant to Section 9.4 hereof (until the Agent is holding an amount of cash equal to the then outstanding amount of all such L/C Obligations), and Hedging Liability, the aggregate amount paid to, or held as collateral security for, the Lenders and, in the case of Hedging Liability, their Affiliates to be allocated pro rata in accordance with the aggregate unpaid amounts owing to each holder thereof;

            (e)         fifth, to the payment of all other unpaid Obligations and all other indebtedness, obligations, and liabilities of the Borrowers secured by the Collateral Documents (including, without limitation, Funds Transfer and Deposit Account Liability) to be allocated pro rata in accordance with the aggregate unpaid amounts owing to each holder thereof; and

            (f)          sixth, to the Borrowers or whoever else may be lawfully entitled thereto.

Section 4.          The Collateral.

            Section 4.1.      Collateral . The Obligations, Hedging Liability, and Funds Transfer and Deposit Account Liability shall be secured by (a) the property pledged by the Mortgage, and (b) the following property of each Borrower, wherever located and whether now owned by such Borrower or hereafter acquired: (i) all Accounts, Inventory, Goods (including, without limitation, Equipment and Fixtures), Investment Property, Instruments, Chattel Paper, Letter of Credit Rights, Deposit Accounts, General Intangibles, Documents and Supporting Obligations; (ii) all money deposits and all funds held on deposit or otherwise under control of the Agent, its agents or any correspondence of the Agent; (iii) an assignment of life insurance as set forth on Schedule 4.1, on forms satisfactory to the Agent, and (iv) all parts, accessions to, replacements, substitutions, profits, products and cash and non-cash proceeds of any of the foregoing (including insurance proceeds payable by reason of loss or damage thereto) in any form and wherever located, and shall also include all written or electronically recorded books and records related to any such collateral and other rights related thereto. (All of the foregoing, collectively, the " Collateral "). With respect to any real estate collateral pledged by the Mortgage, the Borrowers shall pay all taxes, costs and expenses incurred by the Agent in recording such Mortgage, and shall supply the Agent, at the Borrowers' cost and expense, such hazard insurance and a mortgagee's policy of title insurance from a title insurer acceptable to Agent, as Agent shall reasonably request, together with such other instruments, documents, certificates and opinions reasonably required by the Agent in connection therewith. The Borrowers acknowledge and agree that the Liens on the Collateral shall be granted to the Agent for the benefit of the holders of the Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account Liability and shall be valid and perfected first priority Liens subject, however, to the liens permitted pursuant to Section 8.8, in each case pursuant to one or more Collateral Documents from such Persons, each in form and substance reasonably satisfactory to the Agent.

            Section 4.2.      [Reserved.] .

            Section 4.3.      Further Assurances . Each Borrower agrees that it shall, from time to time, at the request of the Agent or the Required Lenders, execute and deliver such documents and do such acts and things as the Agent or the Required Lenders may reasonably request in order to provide for or perfect or protect such Liens on the Collateral. In the event any Borrower forms or acquires a Subsidiary after the date hereof, such Borrower shall promptly upon such formation or acquisition cause such newly formed or acquired Subsidiary to execute a Guaranty and such Collateral Documents as the Agent may then require, and such Borrower shall also deliver to the Agent, or cause such Subsidiary to deliver to the Agent, at the Borrowers' cost and expense, such other instruments, documents, certificates, and opinions reasonably required by the Agent in connection therewith.

Section 5.          Definitions; Interpretation.

            Section 5.1.      Definitions . The following terms when used herein shall have the following meanings:

"Accounts" means all Accounts of the Borrowers as defined in the UCC.

            "Account Debtor" means any Person who is or who may become obligated to any Borrower under or on account of an Account.

"Acquired Business" means the entity or assets acquired by Borrower in an Acquisition after the date hereof.

"Acquisition" means any transaction or series of related transactions for the purpose of or resulting, directly or indirectly, in (a) the acquisition of all or substantially all of the assets of a Person, or of any business or division of a Person, (b) the acquisition of in excess of 50% of the capital stock, partnership interests, membership interests or equity of any Person (other than a Person that is a Subsidiary), or otherwise causing any Person to become a Subsidiary, or (c) a merger or consolidation or any other combination with another Person (other than a Person that is a Subsidiary) provided that the Borrower is the surviving entity.

"Administrative Borrower" shall mean Synalloy Corporation.

"Affiliate" means any Person directly or indirectly controlling or controlled by, or under direct or indirect common control with, another Person. A Person shall be deemed to control another Person for the purposes of this definition if such Person possesses, directly or indirectly, the power to direct, or cause the direction of, the management and policies of the other Person, whether through the ownership of voting securities, common directors, trustees or officers, by contract or otherwise; provided that , in any event for purposes of this definition, any Person that owns, directly or indirectly, 15% or more of the securities having the ordinary voting power for the election of directors or governing body of a corporation or 15% or more of the partnership or other ownership interest of any other Person (other than as a limited partner of such other Person) will be deemed to control such corporation or other Person.

"Agent" means Carolina First Bank and any successor pursuant to Section 11.7 hereof.

"Agreement" means this Credit Agreement, as the same may be amended, modified, restated or supplemented from time to time pursuant to the terms hereof.

"Applicable Margin" means that percent per annum set forth below, which shall be based upon the Consolidated Leverage Ratio for the four-quarter period most recently ended as specified below:

The Applicable Margin shall be established on each Determination Date. Any change in the Applicable Margin following each Determination Date shall be determined based upon the computations set forth in the certificate furnished to the Agent pursuant to Section 8.5(m) , subject to review and approval of such computations by the Agent, and shall be effective commencing on the fifth Business Day following the date such certificate is received until the fifth Business Day following the date on which a new certificate is delivered or is required to be delivered, whichever shall first occur; provided however , if the Borrowers shall fail to deliver any such certificate within the time period required by Section 8.5(m) , then the Applicable Margin shall be Tier V until the appropriate certificate is so delivered.

"Applicable Rate" means, as of any date, (i) for Swing Loans, the 1 month LIBOR Rate plus the Applicable Margin, as the same may be adjusted from time to time pursuant to the terms hereof, and (ii) for all other Loans, the LIBOR Rate for the Interest Period as selected by the Borrowers or otherwise determined pursuant to the terms hereof plus the Applicable Margin, as the same may be adjusted from time to time pursuant to the terms hereof.

"Applicable Unused Fee" means that percent per annum set forth below, which shall be based upon the Consolidated Leverage Ratio for the four-quarter period most recently ended as specified below:

The Applicable Unused Fee shall be established on each Determination Date. Any change in the Applicable Unused Fee following each Determination Date shall be determined based upon the computations set forth in the certificate furnished to the Agent pursuant to Section 8.5(m), subject to review and approval of such computations by the Agent, and shall be effective commencing on the fifth Business Day following the date such certificate is received until the fifth Business Day following the date on which a new certificate; is delivered or is required to be delivered, whichever shall first occur; provided however, if the Borrowers shall fail to deliver any such certificate within the time period required by Section 8.5(m), then the Applicable Unused Fee shall be Tier V until the appropriate certificate is so delivered.

"Application" is defined in Section 1.3(b) hereof.

"Authorized Representative" means the President, the Chief Executive Officer, any Vice President of Synalloy Corporation, the Chief Financial Officer or Treasurer of Synalloy Corporation or any other person expressly designated by the Board of Directors (or the appropriate committee thereof) of the Administrative Borrower as an Authorized Representative of all Borrowers, as set forth from time to time in a certificate in the form attached hereto as Exhibit E .

"Borrowers" is defined in the introductory paragraph of this Agreement, and " Borrower " means any of them.

"Borrowing" means the total of Loans of a single type advanced, continued for or converts to an additional Interest Period, by the Lenders under a Credit on a single date. Borrowings of Loans are made and maintained ratably from each of the Lenders under a Credit according to their Percentages of such Credit. A Borrowing is "advanced" on the day Lenders advance funds comprising such Borrowing to the Borrowers, is "continued" on the date a new Interest Period commences for such Borrowing, and is "converted" when such Borrowing is changed from one Interest Period to another, all as requested by the Borrowers pursuant to [Section 1.5(a)] hereof. Borrowings of Swing Loans are made by the Agent in accordance with the procedures set forth in Section 1.13 hereof.

"Borrowing Base" means the sum of (i) 85% of Eligible Accounts plus (ii) 50% of Eligible Chemicals Inventory plus (iii) 60% of Eligible Metals Inventory, plus (iv) 30% of Eligible Work In Process Metals Inventory, not to exceed $2,000,000, plus (v) 90% of Cash Surrender Value of Life Insurance, provided however that the value of assets from subclauses (ii), (iii) and (iv) shall not exceed $7,500,000.00 plus one-half (1/2) of the amount of the Project Reserve then-drawn and outstanding pursuant to Section 7.3 hereof.

"Borrowing Base Certificate" means a certificate in the form of Exhibit F hereto.

"Business Day" means any day (other than a Saturday or Sunday) on which banks are not authorized or required to close in Greenville, South Carolina.

"Capital Expenditures" means, with respect to any Person for any period, the aggregate amount of all expenditures (whether paid in cash or accrued as a liability) by such Person during that period for the acquisition or leasing (pursuant to a Capital Lease) of fixed or capital assets or additions to property, plant, or equipment (including replacements, capitalized repairs, and improvements) which should be capitalized on the balance sheet of such Person in accordance with GAAP.

"Capital Lease " means any lease of Property which in accordance with GAAP is required to be capitalized on the balance sheet of the lessee.

"Capitalized Lease Obligation" means, for any Person, the amount of the liability shown on the balance sheet of such Person in respect of a Capital Lease determined in accordance with GAAP.

"Cash Surrender Value of Life Insurance" means the dollar amount, on any date, for which a life insurance company, acceptable to Agent, is obligated to pay to a Borrower a sum certain in consideration of such Borrower's surrender to the issuer of a life insurance policy owned by such Borrower, as evidenced in writing by the insurer. Such life insurance policy shall have been duly assigned to the Agent.

"Chattel Paper" shall have the meaning assigned thereto in the UCC.

"CERCLA" means the Comprehensive Environmental Response, Compensation and Liability Act of 1980, as amended by the Superfund Amendments and Reauthorization Act of 1986, 42 U.S.C. paragraph 9601 et seq., and any future amendments.

"Closing Date" means the date of this Agreement or such later Business Day upon which each condition described in Section 7.2 shall be satisfied or waived in a manner acceptable to the Agent in its discretion.

"Code" means the Internal Revenue Code of 1986, as amended, and any successor statute thereto.

"Collateral" means all properties, rights, interests, and privileges (as described in Section 4.1) from time to time subject to the Liens granted to the Agent, or any security trustee therefor, by the Collateral Documents.

"Collateral Account" is defined in Section 9.4 hereof.

"Collateral Documents" means the Security Agreement, the Mortgage, and all other mortgages, deeds of trust, security agreements, assignment of life insurance, pledge agreements, assignments, financing statements and other documents as shall from time to time secure or relate to the Obligations, the Hedging Liability, and the Funds Transfer and Deposit Account Liability or any part thereof.

"Consistent Basis" in reference to the application of GAAP means the accounting principles observed in the period referred to are comparable in all material respects to those applied in the preparation of the audited consolidated financial statements of the Borrowers referred to in Section 7.6(a) hereof.

"Consolidated EBITDA" means, with respect to the Borrowers for any period of computation thereof, the sum of, without duplication, (i) Consolidated Net Income during such period, plus (ii) Consolidated Interest Expense accrued during such period, plus (iii) taxes on income accrued during such period, plus (iv) amortization during such period, plus (v) Depreciation during such period, but excluding non-cash expenses such as environmental accruals and expensing of stock options, adding back cash disbursements to satisfy environmental accruals, all determined on a consolidated basis in accordance with GAAP applied on a Consistent Basis.

"Consolidated Fixed Charges" means, with respect to the Borrowers for the period of computation thereof, the sum of, without duplication, (i) Consolidated Interest Expense during such period, plus (ii) current maturities of Consolidated Indebtedness for Money Borrowed actually paid during such period, all determined in accordance with GAAP applied on a Consistent Basis.

"Consolidated Fixed Charge Ratio" means, with respect to the Borrowers for the period of computation thereof, the ratio of (i) Consolidated EBITDA for such period less shareholder/member dividends and distributions, to (ii) Consolidated Fixed Charges for such period.

"Consolidated Indebtedness" means, as of any date on which the amount thereof is to be determined, all Debt of the Borrowers as determined on a consolidated basis.

"Consolidated Indebtedness for Money Borrowed" means, as of any date on which the amount thereof is to be determined, all Indebtedness for Money Borrowed of the Borrowers, excluding for purposes of Section 9.1 the undrawn amount of letters of credit, as determined on a consolidated basis.

"Consolidated Indebtedness to Tangible Net Worth Ratio" means, with respect to the Borrowers for the period of computation thereof, the ratio of (i) Consolidated Indebtedness for such period to (ii) Consolidated Tangible Net Worth.

"Consolidated Interest Expense" means, for any period of computation thereof, the gross interest expense of the Borrowers, including without limitation (i) the current amortized portion of debt discounts to the extent included in gross interest expense, (ii) the current amortized portion of all fees (including, without limitation, fees payable in respect of a Swap Agreement) payable in connection with the incurrence of Consolidated Indebtedness to the extent included in gross interest expense, and (iii) the portion of any payments made in connection with Capital Leases allocable to interest expense, all determined on a consolidated basis in accordance with GAAP applied on a Consistent Basis.

"Consolidated Leverage Ratio" means, as of the last day of any fiscal quarter of the Borrowers, the ratio of the aggregate outstanding principal amount of all Debt of the Borrowers to EBITDA of the Borrowers for the period of four consecutive fiscal quarters then-ended, on a consolidated basis.

"Consolidated Net Income" means, for any period of computation thereof, the consolidated net income of the Borrowers determined in accordance with GAAP applied on a Consistent Basis.

"Consolidated Shareholders' Equity" means, as of any date on which the amount thereof is to be determined, the sum of the following in respect of the Borrowers: (i) the amount of issued and outstanding share capital, plus (ii) the amount of additional paid-in capital and retained earnings (or, in the case of a deficit, minus the amount of such deficit), plus (iii) the amount of any foreign currency translation adjustment (if positive, or, if negative, minus the amount of such translation adjustment), minus (iv) the amount of any treasury stock, all determined on a consolidated basis in accordance with GAAP applied on a Consistent Basis.

"Consolidated Tangible Net Worth" means, with respect to the Borrowers as of any date on which the amount thereof is to be determined, Consolidated Shareholders' Equity minus the net book value of all assets of the Borrowers which would be treated as intangible assets determined on a consolidated basis in accordance with GAAP applied on a Consistent Basis.

"Contingent Obligation" of any Person means all contingent liabilities required (or which, upon the creation or incurring thereof, would be required) to be included in the financial statements (including footnotes) of such Person in accordance with GAAP applied on a Consistent Basis, and any obligation of such Person guaranteeing or in effect guaranteeing any Indebtedness, dividend or other obligation of any other Person (the "primary obligor") in any manner, whether directly or indirectly, including obligations of such Person however incurred:

(1)         to purchase such Indebtedness or other obligation or any property or assets constituting security therefor;

(2)         to advance or supply funds in any manner (i) for the purchase or payment of such Indebtedness or other obligation, or (ii) to maintain a minimum working capital, net worth or other balance sheet condition or any income statement condition of the primary obligor;

(3)         to grant or convey any lien, security interest, pledge, charge or other encumbrance on any property or assets of such Person to secure payment of such Indebtedness or other obligation;

(4)         to lease property or to purchase securities or other property or services primarily for the purpose of assuring the owner or holder of such Indebtedness or obligation of the ability of the primary obligor to make payment of such Indebtedness or other obligation; or

(5)         otherwise to assure the owner of the Indebtedness or such obligation of the primary obligor against loss in respect thereof;

"Controlled Group" means all members of a controlled group of corporations and all trades or businesses (whether or not incorporated) under common control which, together with the Borrowers, are treated as a single employer under Section 414 of the Code.

"Credit" means any of the Revolving Credit, the Term Credit or the Swing Line.

"Credit Event" means the advancing of any Loan, the continuation or conversion of a Loan, or the issuance of, or extension of the expiration date or increase in the amount of, any Letter of Credit.

"Debt" means, at any time the same is to be determined, the aggregate of all indebtedness of each Borrower on a consolidated basis (without duplication) at such time with respect to (a) borrowed money; (b) the aggregate amount of Capitalized Lease Obligations; (c) all indebtedness secured by any Lien on any Property of each Borrower; (d) all indebtedness representing the deferred purchase price of Property or services, excluding trade payables in the ordinary course of business, (e) letters of credit, and (f) direct guaranties and indemnities in respect of, and to purchase or otherwise acquire, or otherwise to assure a creditor against loss in respect of, or to assure an obligee against failure to make payment in respect of, liabilities, obligations or indebtedness of others of the kinds referred to in clauses (a) through (e) above.

"Default" means any event or condition the occurrence of which would, with the passage of time or the giving of notice, or both, constitute an Event of Default.

"Deposit Accounts" shall have the meaning assigned thereto in the UCC.

"Depreciation" means, with respect to the Borrowers for any period of computation thereof, the aggregate amount of depreciation accrued during such period as determined on a consolidated basis in accordance with GAAP applied on a Consistent Basis.

"Determination Date" means the last Business Day of each fiscal quarter of the Borrowers.

"Eligible Accounts" means those Accounts of each Borrower arising from the sale of goods or services, which goods or services have actually been delivered to the payee therefor, less those Accounts which: (i) remain unpaid more than ninety (90) days after the issue date thereof, unless otherwise agreed to by Agent on a case by case basis; (ii) are disputed or otherwise subject to any setoff, credit allowance or adjustment by the Account Debtor; (iii) arise as a result of an Intercompany Transaction; (iv) are Accounts owing by an Account Debtor which is not Solvent; (v) are Accounts owed by an Account Debtor located outside of the continental United States of America which are not fully secured by a letter of credit or credit insurance acceptable to Agent; (vi) are Accounts owed by the United States of America or any other governmental or quasi-governmental unit, agency or subdivision unless the respective Borrower shall have complied with all applicable federal and state assignment of claims laws, and such Borrower has provided Agent with written evidence satisfactory to Agent of such compliance; or (vii) are otherwise unacceptable to Agent, in its reasonable discretion, all of the foregoing being subject to a valid first priority perfected security interest in favor of Agent subject to Permitted Liens.

"Eligible Chemicals Inventory" means raw materials and finished goods Inventory in Borrowers' chemical divisions that is held for sale in the ordinary course of Borrowers' business, located at one of the locations of Borrowers set forth on Exhibit G , complies with each of the representations and warranties respecting Inventory made by Borrowers in the Loan Documents, and that is not excluded by virtue of the following criteria. An item of Inventory shall not be included in Inventory if (i) a Borrower does not have good, valid and marketable title thereto, (ii) is not located at one of the locations in the United States set forth on Exhibit G or in transit from one such location to another such location; (iii) is not subject to a valid and perfected first priority security interest in the Agent other than a Permitted Lien; (iv) consists of labor or overhead attributable to raw materials or finished goods of inventory owned by third parties, including without limitation "toll" inventory, or (v) consists of goods in possession of third parties on a consignment basis.

"Eligible Line of Business" means any business engaged in as of the date of this Agreement by any Borrower.

"Eligible Metals Inventory" means raw materials and finished goods Inventory in Borrowers' metal divisions that is held for sale in the ordinary course of Borrowers' business, located at one of the locations of Borrowers set forth on Exhibit G , complies with each of the representations and warranties respecting Inventory made by Borrowers in the Loan Documents, and that is not excluded by virtue of the following criteria. An item of Inventory shall not be included in Inventory if (i) a Borrower does not have good, valid and marketable title thereto, (ii) is not located at one of the locations in the United States set forth on Exhibit G or in transit from one such location to another such location; (iii) is not subject to a valid and perfected first priority security interest in the Agent other than a Permitted Lien; (iv) consists of labor or overhead attributable to raw materials or finished goods of inventory owned by third parties, including without limitation "toll" inventory, or (v) consists of goods in possession of third parties on a consignment basis.

"Eligible Work In Process Metals Inventory" means work in process Inventory in Borrowers' metals division.

"Environmental Claim" means any investigation, notice, violation, demand, allegation, action, suit, injunction, judgment, order, consent decree, penalty, fine, lien, proceeding or claim (whether administrative, judicial or private in nature) arising (a) pursuant to, or in connection with an actual or alleged violation of, any Environmental Law, (b) in connection with any Hazardous Material, (c) from any abatement, removal, remedial, corrective or response action in connection with a Hazardous Material, Environmental Law or order of a governmental authority or (d) from any actual or alleged damage, injury, threat or harm to health, safety, natural resources or the environment.

"Environmental Law" means any current or future Legal Requirement pertaining to (a) the protection of health, safety and the indoor or outdoor environment, (b) the conservation, management or use of natural resources and wildlife, (c) the protection or use of surface water or groundwater, (d) the management, manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation or handling of, or exposure to, any Hazardous Material or (e) pollution (including any Release to air, land, surface water or groundwater), and any amendment, rule, regulation, order or directive issued thereunder.

"Equipment" shall have the meaning assigned thereto in the UCC.

"ERISA" means the Employee Retirement Income Security Act of 1974, as amended, or any successor statute thereto.

"Event of Default" means any event or condition identified as such in Section 9.1 hereof.

"Federal Funds Rate" means the fluctuating interest rate per annum quoted rate determined by the Agent to be the average (rounded upward, if necessary, to the next higher 1/100 of 1%) of the rates per annum to the Agent at approximately 10:00 a.m. (Greenville, South Carolina time or as soon thereafter as is practicable) on such day (or, if such day is not a Business Day, on the immediately preceding Business Day) by two or more Federal funds brokers selected by the Agent for sale to the Agent at face value of Federal funds in the secondary market in an amount comparable to the principal amount owed to the Agent for which such rate is being determined.

"Fixtures" shall have the meaning assigned thereto in the UCC.

"Funds Transfer and Deposit Account Liability" means the liability of any Borrower owing to any of the Lenders, or any Affiliates of such Lenders, arising out of (a) the execution or processing of electronic transfers of funds by automatic clearing house transfer, wire transfer or otherwise to or from the deposit accounts of such Borrower now or hereafter maintained with any of the Lenders or their Affiliates, (b) the acceptance for deposit or the honoring for payment of any check, draft or other item with respect to any such deposit accounts, and (c) any other deposit, disbursement, and cash management services afforded to a Borrower by any of such Lenders or their Affiliates.

"GAAP" means generally accepted accounting principles set forth from time to time in the opinions and pronouncements of the Accounting Principles Board and the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board (or agencies with similar functions of comparable stature and authority within the U.S. accounting profession) and Public Company Accounting Oversight Board (United States) which are applicable to the circumstances as of the date of determination.

"General Intangibles" shall have the meaning assigned thereto in the UCC.

"Goods" shall have the meaning assigned thereto in the UCC.

"Hazardous Material" means any substance, chemical, compound, product, solid, gas, liquid, waste, byproduct, pollutant, contaminant or material which is hazardous or toxic, and includes, without limitation, (a) asbestos, polychlorinated biphenyls and petroleum (including crude oil or any fraction thereof) and (b) any material classified or regulated as "hazardous" or "toxic" or words of like import pursuant to an Environmental Law.

"Hazardous Material Activity" means any activity, event or occurrence involving a Hazardous Material, including, without limitation, the manufacture, possession, presence, use, generation, transportation, treatment, storage, disposal, Release, threatened Release, abatement, removal, remediation, handling of or corrective or response action to any Hazardous Material.

"Hedging Liability" means the liability of any Borrower to any of the Lenders, or any Affiliates of such Lenders, in respect of any interest rate swap agreements, interest rate cap agreements, interest rate collar agreements, interest rate floor agreements, interest rate exchange agreements, commodity option, commodity forward contract, commodity swap, cap, collar or floor, foreign currency contracts, currency swap contracts, or other similar interest rate, commodity or currency hedging arrangements as any Borrower may from time to time enter into with any one or more of the Lenders party to this Agreement or their Affiliates.

"Intercompany Transaction" means any Account, Chattel Paper, General Intangible, Instrument, Document or other Debt or obligation arising from business done with or for, or Indebtedness owed between or among any Borrower and any other Borrower or Subsidiary or Affiliate thereof.

"Interest Expense" means, with reference to any period, the sum of all interest charges (including imputed interest charges with respect to Capitalized Lease Obligations and all amortization of debt discount and expense) of any Borrower for such period determined on a consolidated basis in accordance with GAAP.

"Interest Period" is defined in Section 1.7 hereof.

"Internal Control Event" means a material weakness in, or fraud that involves management or other employees who have a significant role in, the Borrowers' internal controls over financial reporting, in each case as described in the Securities Laws.

"Instruments" shall have the meaning assigned thereto in the UCC.

"Inventory" shall have the meaning assigned thereto in the UCC.

"Investment Property" shall have the meaning assigned thereto in the UCC.

"L/C Issuer" means Carolina First Bank.

"L/C Obligations" means the aggregate undrawn face amounts of all outstanding Letters of Credit and all unpaid Reimbursement Obligations.

"L/C Sublimit" means $2,000,000, as reduced pursuant to the terms hereof.

"Legal Requirement" means any treaty, convention, statute, law, regulation, ordinance, license, permit, governmental approval, injunction, judgment, order, consent decree or other requirement of any governmental authority, whether federal, state, or local.

"Lenders" means and includes Carolina First Bank and Regions Bank, and the other financial institutions from time to time party to this Agreement, including each assignee Lender pursuant to Section 13.12 hereof.

"Lending Office" is defined in Section 10.4 hereof.

"Letter of Credit" is defined in Section 1.3(a) hereof.

"Letter of Credit Rights" shall have the meaning assigned thereto in the UCC.

"LIBOR Rate" means, (i) for any Interest Period of 2, 3 or 6 months, the rate per annum (rounded upwards, if necessary, to the next higher 1/100 of a percentage point) for deposits in U.S. dollars for a period equal to such Interest Period, which appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time) on the day two (2) Business Days before the commencement of such Interest Period, and (ii) for any 1 month Interest Period, the rate per annum, (rounded upwards, if necessary, to the next higher 1/100 ^th of a percentage point) for deposits in U.S. Dollars for a 1 month period which appears on the Telerate Page 3750 as of 11:00 a.m. (London, England time, on the first (1 ^st ) day of the month in which a Borrowing having a 1 month Interest Period is made, and ending on the last day of such month, and adjusted based upon the LIBOR Rate as of the first day of the next succeeding month. If the LIBOR Rate is unavailable for any reason whatsoever, the Agent may, in its reasonable discretion, substitute the Federal Funds Rate plus 20 bp.

"Lien" means any mortgage, lien, security interest, pledge, charge or encumbrance of any kind in respect of any Property, including the interests of a vendor or lessor under any conditional sale, Capital Lease or other title retention arrangement.

"Loan" means any Revolving Loan, Term Loan or Swing Loan, each of which is a "type" of Loan hereunder.

"Loan Documents" means this Agreement, the Notes, the Applications, the Collateral Documents, and each other instrument or document to be delivered hereunder or thereunder or otherwise in connection therewith.

"Material Adverse Effect" means (a) a material adverse change in, or material adverse effect upon, the operations, business, Property, or a condition (financial or otherwise) of any Borrower or of any Borrower taken as a whole, (b) a material impairment of the ability of any Borrower to perform its material obligations under any Loan Document or (c) a material adverse effect upon (i) the legality, validity, binding effect or enforceability against any Borrower of any Loan Document or the rights and remedies of the Agent and the Lenders thereunder or (ii) the perfection or priority of any Lien granted under any Collateral Document.

"Moody's" means Moody's Investors Service, Inc.

"Mortgage" means those certain mortgages and deeds of trust dated as of the Closing Date and given to the Agent for the benefit of the Lenders, pledging the real property pledged at as Collateral for the Obligations, together with all improvements situated thereon and all rights, easements and appurtenances associated therewith.

"Notes" means and includes the Revolving Notes, the Term Notes and the Swing Note.

"Obligations" means all obligations of the Borrowers to pay principal and interest on the Loans, all Reimbursement Obligations owing under the Applications, all fees and charges payable hereunder, and all other payment obligations of the Borrowers arising under or in relation to any Loan Document, in each case whether now existing or hereafter arising, due or to become due, direct or indirect, absolute or contingent, and howsoever evidenced, held or acquired.

"Participating Interest" is defined in Section 1.3(d) hereof.

"Participating Lender" is defined in Section 1.3(d) hereof.

"PBGC" means the Pension Benefit Guaranty Corporation or any Person succeeding to any or all of its functions under ERISA.

"Percentage" means for any Lender its Revolver Percentage, or Term Loan Percentage, as applicable; and where the term "Percentage" is applied on an aggregate basis (including, without limitation, Section 11.6) such aggregate Percentage shall be calculated by aggregating the separate components of the Revolver Percentage and the Term Loan Percentage, and expressing such components on a single percentage basis.

"Permitted Acquisition" means any Acquisition with respect to which all of the following conditions shall have been satisfied:

            (a)         the Acquired Business is in an Eligible Line of Business and has its primary operations within the United States of America;

            (b)         the Borrowers shall have provided to the Agent such financial statements for the Acquired Businesses as the Borrower is required to obtain under applicable Securities Laws;

            (c)         the Total Consideration for the Acquired Business, when taken together with the Total Consideration for all Acquired Businesses acquired during the immediately preceding 12-month period, does not exceed $2,000,000 in the aggregate;

            (d)         if the Total Consideration for the Acquired Business exceeds $1,000,000, then the Borrowers shall have notified the Agent and Lenders not less than 30 days prior to any such Acquisition and furnished to the Agent and Lenders at such time reasonable details as to such Acquisition (including sources and uses of funds therefor), and a certificate signed the chief financial officer of the Borrowers showing in reasonable detail compliance on a pro forma basis with the requirements of Sections 8.22, 8.23 and 8.24 hereof for the immediately preceding twelve month period of the Borrowers immediately preceding the date of such Acquisition and the four consecutive fiscal quarters of the Borrowers immediately following the date of such Acquisition;

            (e)         if the Acquisition involves the merger of any Borrower and another Person, the Borrower shall be the surviving entity or the surviving entity shall become a Borrower hereunder;

            (f)          if a new Subsidiary is formed or acquired as a result of or in connection with the Acquisition, the Borrower shall have complied with the requirements of Section 4 hereof in connection therewith; and

            (g)         after giving effect to the Acquisition, no Default or Event of Default shall exist, including with respect to the covenants contained in Sections 8.22, 8.23 and 8.24 on a pro forma basis.

"Person" means an individual, partnership, corporation, limited liability company, association, trust, unincorporated organization or any other entity or organization, including a government or agency or political subdivision thereof.

"Plan" means any employee pension benefit plan covered by Title IV of ERISA or subject to the minimum funding standards under Section 412 of the Code that either (a) is maintained by a member of the Controlled Group for employees of a member of the Controlled Group or (b) is maintained pursuant to a collective bargaining agreement or any other arrangement under which more than one employer makes contributions and to which a member of the Controlled Group is then making or accruing an obligation to make contributions or has within the preceding five plan years made contributions.

"Premises" means the real property owned or leased by any Borrower.

"Project Reserve" means a sublimit under the Revolving Credit in the amount of $5,000,000, which may be drawn by the Borrowers only subject to the conditions and terms set forth in Section 7.3 hereof.

"Property" means, as to any Person, all types of real, personal, tangible, intangible or mixed property owned by such Person whether or not included in the most recent balance sheet of such Person and its subsidiaries under GAAP.

"RCRA" means the Solid Waste Disposal Act, as amended by the Resource Conservation and Recovery Act of 1976 and Hazardous and Solid Waste Amendments of 1984, 42 U.S.C. paragraph 6901 et seq. , and any future amendments.

"Reimbursement Obligation" is defined in Section 1.3(c) hereof.

"Release" means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, migration, dumping, or disposing into the indoor or outdoor environment, including, without limitation, the abandonment or discarding of barrels, drums, containers, tanks or other receptacles containing or previously containing any Hazardous Material.

"Required Lenders" means, as of the date of determination thereof, Lenders whose outstanding interest in Revolving Loans, interests in Term Loans, interests in Swing Line Loans and interests in Letters of Credit and Unused Revolving Credit Commitments constitute more than 60% of the sum of the total outstanding interests in Revolving Loans, interests in Term Loans, interests in Swing Line Loans, interests in Letters of Credit, and Unused Revolving Credit Commitments of the Lenders (provided that, for purposes of the foregoing, Unused Revolving Credit Commitments shall include the Project Revenue)..

"Responsible Officers" shall mean the Chief Executive Officer, the Chief Financial Officer or such officers as are designated by such Administrative Borrower in writing from time to time who are reasonably satisfactory to the Agent.

"Revolver Percentage" means, for each Lender, the percentage of the Revolving Credit Commitments represented by such Lender's Revolving Credit Commitment or, if the Revolving Credit Commitments have been terminated, the percentage held by such Lender (including through participation interests in Reimbursement Obligations) of the aggregate principal amount of all Revolving Loans and L/C Obligations then outstanding.

"Revolving Credit" means the credit facility for making Revolving Loans and issuing Letters of Credit described in Sections 1.2 and 1.3 hereof.

"Revolving Credit Commitment" means, as to any Lender, the obligation of such Lender to make Revolving Loans and to participate in Letters of Credit issued for the account of the Borrowers hereunder in an aggregate principal or face amount at any one time outstanding not to exceed the amount set forth opposite such Lender's name on Schedule 1 attached hereto and made a part hereof, as the same may be reduced or modified at any time or from time to time pursuant to the terms hereof. The Borrowers and the Lenders acknowledge and agree that the Revolving Credit Commitments of the Lenders aggregate $20,000,000 on the date hereof, subject further, to the Project Reserve conditions set forth in Section 7.3 hereof.

"Revolving Credit Termination Date" means December 31, 2010 or such earlier date on which the Revolving Credit Commitments are terminated in whole pursuant to Section 9.2 or 9.3 hereof.

"Revolving Loan" is defined in Section 1.2 hereof.

"Revolving Note" is defined in Section 1.11 hereof.

"S&P" means Standard & Poor's Ratings Services Group, a division of The McGraw-Hill Companies, Inc.

"Sarbanes-Oxley" means the Sarbanes-Oxley Act of 2002.

"SEC" means the Securities and Exchange Commission, or any governmental authority succeeding to any of its principal functions.

"Securities Laws" means the Securities Act of 1933, the Securities Exchange Act of 1934, Sarbanes-Oxley and the applicable accounting and auditing principles, rules, standards and practices promulgated, approved or incorporated by the SEC or the Public Company Accounting Oversight Board, as each of the foregoing may be amended and in effect on any applicable date hereunder.

"Security Agreement " means that certain Security Agreement dated as of the date hereof between the Borrowers and the Agent for the benefit of the Lenders and substantially in the form of Exhibit H hereto, as hereafter amended, supplemented or replaced from time to time.

"Subsidiary" means, as to any particular parent corporation or organization, any other corporation or organization more than 50% of the outstanding Voting Stock of which is at the time directly or indirectly owned by such parent corporation or organization or by any one or more other entities which are themselves subsidiaries of such parent corporation or organization. Unless otherwise expressly noted herein, the term "Subsidiary" means a Subsidiary of any Borrower or of any of its direct or indirect Subsidiaries.

"Supporting Obligations" shall have the meaning assigned thereto in the UCC.

"Swing Line"  means the credit facility for making one or more Swing Loans described in Section 1.14 hereof.

"Swing Line Sublimit" means $3,000,000.

"Swing Loan" and "Swing Loans" each is defined in Section 1.14 hereof.

"Swing Note" is defined in Section 1.11 hereof.

"Term Credit" means the credit facility for Term Loans described in Section 1.1(a) hereof.

"Term Credit Termination Date" means December 31, 2010.

"Term Loan" is defined in Section 1.1(a) hereof.

"Term Loan Commitment" means, as to any Lender, the obligation of such Lender to make its Term Loan on the Closing Date, in the aggregate principal amount not to exceed the amount set forth such Lender's name on Schedule 1 attached hereto and made a part hereof. The Borrowers and the Lenders acknowledge and agree that the Term Loan Commitments of the Lenders aggregate $7,000,000 on the date hereof.

"Term Loan Percentage" means, for each Lender, the percentage of the Term Loan Commitments represented by such Lender's Term Loan Commitment.

"Term Note" is defined in Section 1.11 hereof.

"Total Consideration" means the total amount (but without duplication) of (a) cash paid in connection with any Acquisition, but excluding any cash proceeds of the issuance and sale of equity securities of a Borrower issued for the purpose of financing such Acquisition, plus (b) indebtedness payable to the seller in connection with such Acquisition, plus (c) the present value (based on a commercially-reasonable discount rate in effect at the time of calculation) of covenants not to compete entered into in connection with such Acquisition or other future payments which are required to be made over a period of time and are not contingent upon a Borrower or its Subsidiary meeting financial performance objectives (exclusive of salaries paid in the ordinary course of business) (discounted at commercially-reasonable rate), but only to the extent not included in clause (a), (b) or (c) above, plus (d) the amount of indebtedness assumed in connection with such Acquisition.

"Total Shareholders' Equity" means, at any time the same is to be determined, the total shareholder's equity of a Borrower and its Subsidiaries which would appear on the balance sheet of such Borrower prepared on a consolidated basis in accordance with GAAP.

"UCC" means the Uniform Commercial Code in effect under the laws of the State of South Carolina, as amended from time to time.

"Unfunded Vested Liabilities" means, for any Plan at any time, the amount (if any) by which the present value of all vested nonforfeitable accrued benefits under such Plan exceeds the fair market value of all Plan assets allocable to such benefits, all determined as of the then most recent valuation date for such Plan, but only to the extent that such excess represents a potential liability of a member of the Controlled Group to the PBGC or the Plan under Title IV of ERISA.

"Unused Revolving Credit Commitments" means, at any time, the difference between the Revolving Credit Commitments then in effect and the aggregate outstanding principal amount of Revolving Loans and L/C Obligations, provided that (i) Swing Loans outstanding from time to time shall be deemed to reduce the Unused Revolving Credit Commitment of the Agent for purposes of computing the commitment fee under Section 2.1(a) hereof, and (ii) the Unused Revolving Credit Commitment shall at all times be reduced by the amount of the Project Reserve.

"U.S. Dollars" and "$" each means the lawful currency of the United States of America.

"Voting Stock" of any Person means capital stock or other equity interests of any class or classes (however designated) having ordinary power for the election of directors or other similar governing body of such Person, other than stock or other equity interests having such power only by reason of the happening of a contingency.

"Welfare Plan" means a "welfare plan" as defined in Section 3(1) of ERISA.

"Wholly-owned Subsidiary" means a Subsidiary of which all of the issued and outstanding shares of capital stock (other than directors' qualifying shares as required by law) or other equity interests are owned by a Borrower and/or one or more Wholly-owned Subsidiaries within the meaning of this definition.

            Section 5.2.      Interpretation . The foregoing definitions are equally applicable to both the singular and plural forms of the terms defined. The words "hereof" , "herein" , and "hereunder" and words of like import when used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement. All references to time of day herein are references to Greenville, South Carolina, time unless otherwise specifically provided. Where the character or amount of any asset or liability or item of income or expense is required to be determined or any consolidation or other accounting computation is required to be made for the purposes of this Agreement, it shall be done in accordance with GAAP except where such principles are inconsistent with the specific provisions of this Agreement.

            Section 5.3.      Change in Accounting Principles . If, after the date of this Agreement, there shall occur any change in GAAP from those used in the preparation of the financial statements referred to in Section 6.5 hereof and such change shall result in a change in the method of calculation of any financial covenant, standard or term found in this Agreement, either the Borrowers or the Required Lenders may by notice to the Lenders and the Borrowers, respectively, require that the Lenders and the Borrowers negotiate in good faith to amend such covenants, standards, and term so as equitably to reflect such change in accounting principles, with the desired result being that the criteria for evaluating the financial condition of the Borrowers shall be the same as if such change had not been made. No delay by the Borrowers or the Required Lenders in requiring such negotiation shall limit their right to so require such a negotiation at any time after such a change in accounting principles. Until any such covenant, standard, or term is amended in accordance with this Section 5.3, financial covenants shall be computed and determined in accordance with GAAP in effect prior to such change in accounting principles. Without limiting the generality of the foregoing, the Borrowers shall neither be deemed to be in compliance with any financial covenant hereunder nor out of compliance with any financial covenant hereunder if such state of compliance or noncompliance, as the case may be, would not exist but for the occurrence of a change in accounting principles after the date hereof.

Section 6.          Representations and Warranties.

The Borrowers represent and warrant to the Agent and the Lenders as follows:

            Section 6.1.      Organization and Qualification . Each Borrower is duly organized, validly existing and in good standing under the laws of its respective State of incorporation or organization, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualifying, except where the failure to do so would not have a Material Adverse Effect.

            Section 6.2.      Subsidiaries . Each Subsidiary is duly organized, validly existing and in good standing under the laws of the jurisdiction in which it is incorporated or organized, as the case may be, has full and adequate power to own its Property and conduct its business as now conducted, and is duly licensed or qualified and in good standing in each jurisdiction in which the nature of the business conducted by it or the nature of the Property owned or leased by it requires such licensing or qualifying, except where the failure to do so would not have a Material Adverse Effect. Schedule 6.2 hereto identifies each Subsidiary, the jurisdiction of its incorporation or organization, as the case may be, the percentage of issued and outstanding shares of each class of its capital stock or other equity interests owned by a Borrower and the other Subsidiaries and, if such percentage is not 100% (excluding directors' qualifying shares as required by law), a description of each class of its authorized capital stock and other equity interests and the number of shares of each class issued and outstanding. All of the outstanding shares of capital stock and other equity interests of each Subsidiary are validly issued and outstanding and fully paid and nonassessable and all such shares and other equity interests indicated on Schedule 6.2 as owned by any Borrower or another Subsidiary are owned, beneficially and of record, by the Borrower or such Subsidiary free and clear of all Liens other than the Liens granted in favor of the Agent pursuant to the Collateral Documents. There are no outstanding commitments or other obligations of any Subsidiary to issue, and no options, warrants or other rights of any Person to acquire, any shares of any class of capital stock or other equity interests of any Subsidiary.

            Section 6.3.      Authority and Validity of Obligations . Each Borrower has full right and authority to enter into this Agreement and the other Loan Documents executed by it, to make the borrowings herein provided for, to issue its Notes in evidence thereof, to grant to the Agent the Liens described in the Collateral Documents executed by the Borrowers, and to perform all of its obligations hereunder and under the other Loan Documents executed by it. The Loan Documents delivered by the Borrowers have been duly authorized, executed, and delivered by such Person and constitute valid and binding obligations of such Person enforceable against it in accordance with their terms, except as enforceability may be limited by bankruptcy, insolvency, fraudulent conveyance or similar laws affecting creditors' rights generally and general principles of equity (regardless of whether the application of such principles is considered in a proceeding in equity or at law); and this Agreement and the other Loan Documents do not, nor does the performance or observance by any Borrower of any of the matters and things herein or therein provided for, (a) contravene or constitute a default under any provision of law or any judgment, injunction, order or decree binding upon any Borrower or any provision of the organizational documents (e.g., charter, articles of incorporation or by-laws, articles of association or operating agreement, partnership agreement or other similar document) of any Borrower, (b) contravene or constitute a default under any covenant, indenture or agreement of or affecting any Borrower or any of its Property, in each case where such contravention or default, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect or (c) result in the creation or imposition of any Lien on any Property of any Borrower other than the Liens granted in favor of the Agent pursuant to the Collateral Documents.

            Section 6.4.      Use of Proceeds; Margin Stock . The Borrowers shall use the proceeds of (a) the Revolving Credit to refinance existing debt, for general working capital purposes and for such other legal and proper purposes as are consistent with all applicable laws, and (b) the Term Loans to refinance existing indebtedness of the Borrowers. None of the Borrowers is engaged in the business of extending credit for the purpose of purchasing or carrying margin stock (within the meaning of Regulation U of the Board of Governors of the Federal Reserve System), and no part of the proceeds of any Loan or any other extension of credit made hereunder will be used to purchase or carry any such margin stock or to extend credit to others for the purpose of purchasing or carrying any such margin stock. Margin stock (as hereinabove defined) constitutes less than 25% of the assets of any Borrower and its Subsidiaries which are subject to any limitation on sale, pledge or other restriction hereunder.

            Section 6.5.      Financial Reports .  The consolidated balance sheet of the Borrowers and their Subsidiaries furnished to the Lenders in applying for the Loans fairly present the consolidated financial condition of the Borrowers and their Subsidiaries as at said dates and the consolidated results of their operations and cash flows for the periods then ended in conformity with GAAP applied on a consistent basis. Neither any Borrower nor any Subsidiary has contingent liabilities which are material to it other than as indicated on such financial statements or, with respect to future periods, on the financial statements furnished pursuant to Section 8.5 hereof.

            Section 6.6.      No Material Adverse Change. Since September 30, 2005, there has been no change in the condition (financial or otherwise) or with respect to the assets of any Borrower and its Subsidiaries taken as a whole, except those occurring in the ordinary course of business, none of which individually or in the aggregate have been materially adverse, nor has any Internal Control Event occurred since the time such information was furnished.

            Section 6.7.      Full Disclosure . The written statements and information furnished to the Agent and the Lenders in connection with the negotiation of this Agreement and the other Loan Documents and the commitments by the Lenders to provide all or part of the financing contemplated hereby, taken as a whole, do not contain any untrue statements of a material fact or, to the best of each Borrower's knowledge, omit a material fact necessary to make the material statements contained herein or therein not misleading, the Agent and the Lenders acknowledging that as to any projections furnished to the Agent and the Lenders, each Borrower only represents that the same were prepared on the basis of information and estimates such Borrower believed to be reasonable.

            Section 6.8.      Trademarks, Franchises, and Licenses . To the best of its knowledge, the Borrowers own, possess, or have the right to use all necessary patents, licenses, franchises, trademarks, trade names, trade styles, copyrights, trade secrets, know how, and confidential commercial and proprietary information to conduct their businesses as now conducted, without known conflict with any patent, license, franchise, trademark, trade name, trade style, copyright or other proprietary right of any other Person.

            Section 6.9.      Governmental Authority and Licensing . The Borrowers have received all licenses, permits, and approvals of all federal, state, and local governmental authorities, if any, necessary to conduct their businesses, in each case where the failure to obtain or maintain the same could reasonably be expected to have a Material Adverse Effect. No investigation or proceeding which, if adversely determined, could reasonably be expected to result in revocation or denial of any material license, permit or approval is pending or, to the knowledge of the Borrower, threatened.

            Section 6.10.    Good Title . The Borrowers have good and defensible title (or valid leasehold interests) to their assets as reflected on the most recent consolidated balance sheet of the Borrowers furnished to the Agent and the Lenders (except for sales of assets in the ordinary course of business), subject to no Liens other than such thereof as are permitted by Section 8.8 hereof.

            Section 6.11.    Litigation and Other Controversies. There is no litigation or governmental proceeding or labor controversy pending, nor to the knowledge of any Borrower threatened, against any Borrower or any Subsidiary which if adversely determined, individually or in the aggregate, could reasonably be expected to have a Material Adverse Effect which is not fully covered by insurance (subject to a deductible of not more than $250,000) for which the insurer has accepted coverage.

            Section 6.12.    Taxes . All tax returns required to be filed by the Borrowers in any jurisdiction have, in fact, been filed, and all taxes, assessments, fees, and other governmental charges upon the Borrowers or upon any of their Property, income or franchises, which are shown to be due and payable in such returns, have been paid, except such taxes, assessments, fees and governmental charges, if any, as are being contested in good faith and by appropriate proceedings which prevent enforcement of the matter under contest and as to which adequate reserves established in accordance with GAAP have been provided. No Borrower knows of any proposed additional tax assessment against it or its Subsidiaries for which adequate provisions in accordance with GAAP have not been made on their accounts. Adequate provisions in accordance with GAAP for taxes on the books of each Borrower and each Subsidiary have been made for all open years, and for its current fiscal period.

            Section 6.13.    Approval s. No authorization, consent, license or exemption from, or filing or registration with, any court or governmental department, agency or instrumentality, nor any approval or consent of any other Person, is or will be necessary to the valid execution, delivery or performance by any Borrower of any Loan Document, except for such approvals which have been obtained prior to the date of this Agreement and remain in full force and effect, except in each case where the failure to obtain such authorization, consent, license or exemption or to make such filing or to obtain such approval or consent would not be reasonably expected to have a Material Adverse Effect.

            Section 6.14.    Affiliate Transactions. No Borrower is a party to any contracts or agreements with any of its Affiliates or Subsidiaries (other than with Wholly-owned Subsidiaries) on terms and conditions which are less favorable to such Borrower than would be usual and customary in similar contracts or agreements between Persons not affiliated with each other.

            Section 6.15.    Investment Company; Public Utility Holding Company. No Borrower is an "investment company" or a company "controlled" by an "investment company" within the meaning of the Investment Company Act of 1940, as amended, or a "public utility holding company" within the meaning of the Public Utility Holding Company Act of 1935, as amended.

            Section 6.16.    ERISA . Each