AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT

 

 

 

                              AMENDED AND RESTATED

                     REVOLVING CREDIT AND SECURITY AGREEMENT

 

 

 

 

                         PNC BANK, NATIONAL ASSOCIATION

                            (AS LENDER AND AS AGENT)

 

 

 

 

                           THE LENDERS PARTY HERETO, AND

 

 

 

 

                              L. B. FOSTER COMPANY,

 

                                CXT INCORPORATED,

                                 NATMAYA, INC.,

                                       AND

                                   FOSMART, INC.

                                   (BORROWERS)

 

 

 

                                   May 5, 2005

 

 

 

 

 

 

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                                TABLE OF CONTENTS

 

 

 

 

 

1. DEFINITIONS...........................................................1

         1.1       Accounting Terms.......................................1

         1.2       General Terms..........................................1

         1.3       Uniform Commercial Code Terms.........................17

         1.4       Certain Matters of Construction.......................18

 

 

2. ADVANCES, PAYMENTS...................................................18

         2.1       Revolving Advances; Individual Revolving

                  Advances; Discretionary Rights........................18

         2.2       Procedure for Borrowing Advances......................19

         2.3       Disbursement of Advance Proceeds......................21

         2.4       Reserved..............................................21

         2.5       Maximum Advances......................................21

         2.6       Repayment of Advances.................................21

         2.7       Repayment of Excess Advances..........................22

         2.8       Statement of Account..................................22

         2.9       Letters of Credit and Acceptances.....................22

         2.10      Issuance of Letters of Credit; Creation of

                  Acceptances...........................................23

         2.11      Requirements For Issuance of Letters of

                  Credit and Acceptances................................24

         2.12      Disbursements, Reimbursement..........................24

         2.13      Repayment of Participation Advances...................26

         2.14      Documentation.........................................26

         2.15      Determination to Honor Drawing Request................26

         2.16      Nature of Participation and Reimbursement

                  Obligations...........................................27

         2.17      Indemnity.............................................28

         2.18      Liability for Acts and Omissions......................28

         2.19      Additional Payments...................................30

         2.20      Manner of Borrowing and Payment.......................30

         2.21      Use of Proceeds.......................................31

         2.22      Defaulting Lender.....................................32

 

 

3. INTEREST AND FEES....................................................32

         3.1       Interest..............................................32

         3.2       Letter of Credit and Acceptance Fees..................33

         3.3       Facility Fee..........................................34

         3.4       Reserved..............................................34

         3.5       Computation of Interest and Fees......................34

         3.6       Maximum Charges.......................................34

         3.7       Increased Costs.......................................34

         3.8       Basis For Determining Interest Rate

                  Inadequate or Unfair..................................35

         3.9       Capital Adequacy......................................36

 

 

4. COLLATERAL:   GENERAL TERMS...........................................36

         4.1       Security Interest in the Collateral...................36

         4.2       Perfection of Security Interest.......................37

         4.3       Disposition of Collateral.............................37

         4.4       Preservation of Collateral............................37

         4.5       Ownership of Collateral...............................38

         4.6       Defense of Agent's and Lenders'

                  Interests.............................................38

         4.7       Books and Records.....................................39

         4.8       Financial Disclosure..................................39

         4.9       Compliance with Laws..................................39

         4.10      Inspection of Premises................................40

         4.11      Insurance.............................................40

         4.12      Failure to Pay Insurance..............................41

         4.13      Payment of Taxes......................................42

         4.14      Payment of Leasehold Obligations......................42

         4.15      Receivables...........................................42

         4.16       Inventory.............................................45

         4.17      Maintenance of Equipment..............................45

         4.18      Exculpation of Liability..............................45

         4.19      Environmental Matters.................................46

         4.20      Financing Statements..................................48

 

 

5. REPRESENTATIONS AND WARRANTIES.......................................48

         5.1       Authority.............................................48

          5.2       Formation and Qualification...........................48

         5.3       Survival of Representations and

                  Warranties............................................49

         5.4       Tax Returns...........................................49

         5.5       Financial Statements..................................49

         5.6       Corporate Name........................................49

         5.7       O.S.H.A. and Environmental Compliance.................50

         5.8       Solvency; No Litigation, Violation,

                  Indebtedness or Default...............................50

         5.9       Patents, Trademarks, Copyrights

                  and Licenses..........................................51

         5.10      Licenses and Permits..................................52

         5.11      Default of Indebtedness...............................52

         5.12      No Default............................................52

         5.13      No Burdensome Restrictions............................52

         5.14      No Labor Disputes.....................................52

         5.15      Margin Regulations....................................52

         5.16      Investment Company Act................................53

         5.17      Disclosure............................................53

         5.18      Reserved..............................................53

         5.19      Swaps.................................................53

         5.20      Conflicting Agreements................................53

         5.21      Application of Certain Laws and

                  Regulations...........................................53

         5.22      Business and Property of Borrowers....................53

         5.23      Section 20 Subsidiaries...............................54

         5.24      Anti-Terrorism Laws...................................54

         5.25      Trading with the Enemy................................55

 

 

6. AFFIRMATIVE COVENANTS................................................55

         6.1       Payment of Fees.......................................55

         6.2       Conduct of Business and Maintenance

                  of Existence and Assets...............................55

         6.3        Violations............................................55

         6.4       Government Receivables................................55

         6.5       Net Worth.............................................56

         6.6       Fixed Charge Coverage Ratio...........................56

         6.7       Execution of Supplemental Instruments.................56

         6.8       Payment of Indebtedness...............................56

         6.9       Standards of Financial Statements.....................56

          6.10      Updates to Schedules..................................56

 

 

7. NEGATIVE COVENANTS...................................................57

         7.1       Merger, Consolidation, Acquisition

                  and Sale of Assets....................................57

         7.2       Creation of Liens and Agreements

                  Relating Thereto......................................58

         7.3       Guarantees............................................58

         7.4       Investments...........................................59

         7.5       Loans.................................................59

         7.6       Capital Expenditures..................................59

         7.7       Dividends.............................................59

         7.8       Indebtedness..........................................60

         7.9       Nature of Business....................................60

         7.10      Transactions with Affiliates..........................60

         7.11      Leases................................................60

         7.12      Subsidiaries..........................................61

         7.13      Fiscal Year and Accounting Changes....................61

         7.14      Pledge of Credit......................................61

         7.15      Amendment of Articles of

                  Incorporation, By-Laws................................61

         7.16      Compliance with ERISA.................................61

         7.17      Prepayment of Indebtedness............................62

         7.18      Anti-Terrorism Laws...................................62

         7.19      Trading with the Enemy Act............................62

 

 

8. CONDITIONS PRECEDENT.................................................62

         8.1       Conditions to Initial Advances........................62

         8.2       Conditions to Each Advance............................65

 

 

9. INFORMATION AS TO BORROWERS..........................................65

         9.1       Disclosure of Material Matters........................65

         9.2       Schedules.............................................65

         9.3       Environmental Reports.................................66

         9.4       Litigation............................................66

         9.5       Material Occurrences..................................66

         9.6       Government Receivables................................67

         9.7       Annual Financial Statements...........................67

          9.8       Quarterly Financial Statements........................67

         9.9       Monthly Financial Statements..........................67

         9.10      Other Reports.........................................68

         9.11      Additional Information................................68

         9.12      Projected Operating Budget............................68

         9.13      Variances from Operating Budget.......................69

         9.14      Notice of Suits, Adverse Events.......................69

         9.15      ERISA Notices and Requests............................69

         9.16      Additional Documents..................................70

 

 

10. EVENTS OF DEFAULT...................................................70

 

 

11. LENDERS' RIGHTS AND REMEDIES AFTER DEFAULT..........................72

         11.1      Rights and Remedies...................................72

         11.2      Agent's Discretion....................................73

         11.3      Setoff................................................73

         11.4      Rights and Remedies not Exclusive.....................74

         11.5      Allocation of Payments After

                  Event of Default......................................74

 

 

12. WAIVERS AND JUDICIAL PROCEEDINGS....................................75

         12.1      Waiver of Notice......................................75

         12.2      Delay.................................................75

         12.3      Jury Waiver...........................................75

 

 

13. EFFECTIVE DATE AND TERMINATION......................................75

         13.1      Term..................................................75

         13.2      Termination...........................................76

 

 

14. REGARDING AGENT.....................................................76

         14.1      Appointment...........................................76

         14.2      Nature of Duties......................................77

         14.3      Lack of Reliance on Agent and

                  Resignation...........................................77

         14.4      Certain Rights of Agent...............................78

         14.5      Reliance..............................................78

         14.6      Notice of Default.....................................78

         14.7      Indemnification.......................................78

         14.8      Agent in its Individual Capacity......................79

         14.9      Delivery of Documents.................................79

         14.10     Borrowers' Undertaking to Agent.......................79

         14.11     No Reliance on Agent's Customer

                  Identification Program................................79

 

 

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15. BORROWING AGENCY....................................................80

         15.1      Borrowing Agency Provisions...........................80

         15.2      Waiver of Subrogation.................................80

 

 

16. MISCELLANEOUS.......................................................81

         16.1      Governing Law.........................................81

         16.2      Entire Understanding..................................81

         16.3      Successors and Assigns;

                  Participations; New Lenders...........................83

         16.4      Application of Payments...............................85

         16.5      Indemnity.............................................85

         16.6      Notice................................................85

         16.7      Survival..............................................87

         16.8      Severability..........................................87

         16.9      Expenses..............................................87

         16.10     Injunctive Relief.....................................88

         16.11     Consequential Damages.................................88

         16.12     Captions..............................................88

         16.13     Counterparts; Telecopied Signatures...................88

         16.14     Construction..........................................88

         16.15     Confidentiality; Sharing Information..................88

         16.16     Publicity.............................................89

 

 

 

 

                          AMENDED AND RESTATED REVOLVING

                          CREDIT AND SECURITY AGREEMENT

 

         THIS AMENDED AND RESTATED REVOLVING CREDIT AND SECURITY AGREEMENT is

dated May 5, 2005, by and among L. B. FOSTER COMPANY, a corporation organized

under the laws of the State of Pennsylvania ("Foster"), CXT INCORPORATED, a

corporation organized under the laws of the State of Delaware ("CXT"), NATMAYA,

INC., a corporation organized under the laws of the State of Delaware

("Natmaya"), and FOSMART, INC., a corporation organized under the laws of the

State of Delaware ("Fosmart") (each a "Borrower" and collectively "Borrowers"),

the financial institutions which are now or which hereafter become a party

hereto (collectively, the "Lenders" and individually a "Lender") and PNC BANK,

NATIONAL ASSOCIATION ("PNC"), as agent for Lenders (PNC, in such capacity, the

"Agent").

 

         IN CONSIDERATION of the mutual covenants and undertakings herein

contained, Borrowers, Lenders and Agent hereby agree as follows:

 

1. DEFINITIONS

 

1.1       Accounting Terms.

 

         As used in this Agreement, the Revolving Credit Note or any

certificate, report or other document made or delivered pursuant to this

Agreement, accounting terms not defined in Section 1.2 or elsewhere in this

Agreement and accounting terms partly defined in Section 1.2 to the extent not

defined, shall have the respective meanings given to them under GAAP; provided,

however, whenever such accounting terms are used for the purposes of determining

compliance with financial covenants in this Agreement, such accounting terms

shall be defined in accordance with GAAP as applied in preparation of the

audited financial statements of Borrowers for the fiscal year ended December 31,

2004.

 

1.2       General Terms.

 

          For purposes of this Agreement the following terms shall have the

following meanings:

 

         "Acceptances" shall mean any existing and future drafts which involve

any Borrower or beneficiary under a Letter of Credit as drawer that are

processed and accepted for payment by Agent or other accepting bank in its

absolute discretion.

 

         "Accountants" shall have the meaning set forth in Section 9.7 hereof.

 

         "Advances" shall mean and include the Revolving Advances, Acceptances

and Letters of Credit.

 

         "Advance Rates" shall have the meaning set forth in Section 2.1(a)

hereof.

<PAGE>   2

         "Affiliate" of any Person shall mean (a) any Person which, directly or

indirectly, is in control of, is controlled by, or is under common control with

such Person, or (b) any Person who is a director or officer (i) of such Person,

(ii) of any Subsidiary of such Person or (iii) of any Person described in clause

(a) above. For purposes of this definition, control of a Person shall mean the

power, direct or indirect, (x) to vote 20% or more of the securities having

ordinary voting power for the election of directors of such Person, or (y) to

direct or cause the direction of the management and policies of such Person

whether by contract or otherwise. A Person shall not be deemed an Affiliate of

another Person solely because the Person has directors and/or officers in common

with such other Person.

 

         "Agent" shall have the meaning set forth in the preamble to this

Agreement and shall include its successors and assigns.

 

         "Agreement" shall mean this Amended and Restated Revolving Credit and

Security Agreement, as the same may be amended, restated, supplemented or

otherwise modified from time to time.

 

         "Alternate Base Rate" shall mean, for any day, a rate per annum equal

to the higher of (a) the Base Rate in effect on such day and (b) the Federal

Funds Open Rate in effect on such day plus 1/2 of 1%.

 

         "Anti-Terrorism Laws" shall mean any Applicable Laws relating to

terrorism or money laundering, including Executive Order No. 13224, the USA

Patriot Act, the Applicable Laws comprising or implementing the Bank Secrecy

Act, and the Applicable Laws administered by the United States Treasury

Department's Office of Foreign Asset Control (as any of the foregoing Applicable

Laws may from time to time be amended, renewed, extended, or replaced).

 

         "Applicable Margin" shall mean, as applicable:

 

                  (A) the percentage spread to be added to or subtracted from

the Alternate Base Rate at the indicated level of Fixed Charge Coverage Ratio in

the pricing grid on Schedule 1.2(A) below the heading "Alternate Base Rate

Spread," or

 

                  (B) the percentage spread to be added to the Eurodollar Rate

at the indicated level of Fixed Charge Coverage Ratio in the pricing grid on

Schedule 1.2(A) below the heading "Eurodollar Rate Spread."

 

                  The Applicable Margin shall be computed in accordance with the

parameters set forth on Schedule 1.2(A).

 

          "Authority" shall have the meaning set forth in Section 4.19(d).

 

         "Banker's Acceptance Rate" shall mean with respect to any Acceptance

hereunder, a discount charge (calculated with respect to the face amount of such

Acceptance on the basis of a 360-day year for the number of days from the date

such Acceptance is accepted by the accepting bank (the "Acceptance Date") to its

maturity date) at a rate per annum equal to the sum of (a) the discount rate in

the New York banker's acceptance market on the Acceptance Date as

<PAGE>   3

 

determined by the accepting bank in its sole discretion, plus (b) the Applicable

Margin (as set forth on Schedule 1.2(A)) for the Eurodollar Rate minus one-

fourth percent (.25%).

 

         "Base Rate" shall mean the base commercial lending rate of PNC as

publicly announced to be in effect from time to time, such rate to be adjusted

automatically, without notice, on the effective date of any change in such rate.

This rate of interest is determined from time to time by PNC as a means of

pricing some loans to its customers and is neither tied to any external rate of

interest or index nor does it necessarily reflect the lowest rate of interest

actually charged by PNC to any particular class or category of customers of PNC.

 

          "Blocked Accounts" shall have the meaning set forth in Section 4.15(h).

 

         "Blocked Person" shall have the meaning set forth in Section 5.24(b)

hereof.

 

         "Borrower" or "Borrowers" shall have the meaning set forth in the

preamble to this Agreement and shall extend to all permitted successors and

assigns of such Persons, but shall not include any Person which has dissolved or

otherwise ceased to have a separate legal existence in a manner permitted by the

Agreement.

 

         "Borrowing Base Certificate" shall mean a certificate duly executed by

an officer of Borrowing Agent appropriately completed and in substantially the

form of Exhibit A hereto.

 

         "Borrowers on a consolidated basis" shall mean the Foster, CXT, Natmaya

and Fosmart.

 

         "Borrowers' Account" shall have the meaning set forth in Section 2.8.

 

         "Borrowing Agent" shall mean Foster.

 

         "Business Day" shall mean any day other than Saturday or Sunday or a

legal holiday on which commercial banks are authorized or required by law to be

closed for business in East Brunswick, New Jersey and, if the applicable

Business Day relates to any Eurodollar Rate Loans, such day must also be a day

on which dealings are carried on in the London interbank market.

 

          "CERCLA" shall mean the Comprehensive Environmental Response,

Compensation and Liability Act of 1980, as amended, 42 U.S.C. ss.ss.9601 et seq.

 

         "Change of Control" shall mean (i) any person or group of persons

(within the meaning of Sections 13(d) or 14(a) of the Securities Exchange Act of

1934, as amended) shall have acquired beneficial ownership of (within the

meaning of Rule 13d-3 promulgated by the Securities and Exchange Commission

under said Act) 20% or more of the voting capital stock of Foster; or (ii)

within a period of twelve (12) consecutive calendar months, individuals who were

directors of Foster on the first day of such period shall cease to constitute a

majority of the board of directors of Foster, provided however, that persons who

replace directors of Foster who cease to be directors as a result of death,

disability or personal reasons unrelated to the business of Foster shall be

deemed to have been directors of Foster at all times during the relevant twelve

(12) month period.

<PAGE>   4

 

         "Change of Ownership" shall mean, except as otherwise permitted under

Section 7.1, (a) Foster shall cease to own, directly or indirectly, 100% of the

capital stock of the other Borrowers, or (b) any merger, consolidation or sale

of substantially all of the property or assets of any Borrower.

 

         "Charges" shall mean all taxes, charges, fees, imposts, levies or other

assessments, including, without limitation, all net income, gross income, gross

receipts, sales, use, ad valorem, value added, transfer, franchise, profits,

inventory, capital stock, license, withholding, payroll, employment, social

security, unemployment, excise, severance, stamp, occupation and property taxes,

custom duties, fees, assessments, liens, claims and charges of any kind

whatsoever, together with any interest and any penalties, additions to tax or

additional amounts, imposed by any taxing or other authority, domestic or

foreign (including, without limitation, the Pension Benefit Guaranty Corporation

or any environmental agency or superfund), upon the Collateral, any Borrower or

any of its Affiliates.

 

         "Closing Date" shall mean May 5, 2005 or such other date as may be

agreed to by the parties hereto.

 

         "Code" shall mean the Internal Revenue Code of 1986, as amended from

time to time, and the regulations promulgated thereunder.

 

         "Collateral" shall mean and include:

 

         (a) all Receivables;

 

         (b) all General Intangibles;

 

         (c) all Inventory;

 

         (d) all of each Borrower's right, title and interest in and to (i) all

merchandise returned or rejected by Customers, relating to or securing any of

the Receivables; (ii) all of each Borrower's rights as a consignor, a consignee,

an unpaid vendor, mechanic, artisan, or other lienor, including stoppage in

transit, setoff, detinue, replevin, reclamation and repurchase; (iii) all

additional amounts due to any Borrower from any Customer relating to the

Receivables; (iv) warranty claims relating to any goods securing this Agreement;

(v) all of each Borrower's contract rights, rights of payment which have been

earned under a contract right, instruments (including promissory notes),

documents, chattel paper (including electronic chattel paper), warehouse

receipts, deposit accounts, letters of credit, and money; (vi) all commercial

tort claims (whether now existing or hereafter arising); (vii) if and when

obtained by any Borrower, all real and personal property of third parties in

which such Borrower has been granted a lien or security interest as security for

the payment or enforcement of Receivables; and (viii) any other personal

property or real property now owned or hereafter acquired in which any Borrower

has expressly granted a security interest or may in the future grant a security

interest to Agent hereunder, or in any amendment or supplement hereto or

thereto, or under any other agreement between Agent and any Borrower;

 

         (e) all of each Borrower's ledger sheets, ledger cards, files,

correspondence, records, books of account, business papers, computers, computer

software (owned by any Borrower or in

<PAGE>   5

 

which it has an interest), computer programs, tapes, disks and documents

relating to (a), (b), (c) or (d) of this Paragraph; and

 

         (f) all proceeds and products of (a), (b), (c), (d) and (e) in whatever

form, including, but not limited to: cash, deposit accounts (whether or not

comprised solely of proceeds), certificates of deposit, insurance proceeds

(including hazard, flood and credit insurance), negotiable instruments and other

instruments for the payment of money, chattel paper, security agreements,

documents, eminent domain proceeds, condemnation proceeds and tort claim

proceeds.

 

         Notwithstanding the foregoing, the Collateral expressly excludes

Equipment, Investment Property and Real Property.

 

         "Commitment Percentage" of any Lender shall mean the percentage set

forth below such Lender's name on the signature page hereof as same may be

adjusted upon any assignment by a Lender pursuant to Section 16.3(b) hereof.

 

         "Commitment Transfer Supplement" shall mean a document in the form of

Exhibit 16.3 hereto, properly completed and otherwise in form and substance

satisfactory to Agent by which the Purchasing Lender purchases and assumes a

portion of the obligation of Lenders to make Advances under this Agreement.

 

         "Consents" shall mean all filings and all licenses, permits, consents,

approvals, authorizations, qualifications and orders of governmental authorities

and other third parties, domestic or foreign, necessary to carry on any

Borrower's business, including, without limitation, any Consents required under

all applicable federal, state or other applicable law.

 

         "Controlled Group" shall mean all members of a controlled group of

corporations and all trades or businesses (whether or not incorporated) under

common control which, together with any Borrower, are treated as a single

employer under Section 414 of the Code.

 

         "Customer" shall mean and include the account debtor with respect to

any Receivable and/or the prospective purchaser of goods, services or both with

respect to any contract or contract right, and/or any party who enters into or

proposes to enter into any contract or other arrangement with any Borrower,

pursuant to which such Borrower is to deliver any personal property or perform

any services.

 

         "CXT" shall mean CXT Incorporated, a corporation organized under the

laws of the State of Delaware

 

         "Default" shall mean an event which, with the giving of notice or

passage of time or both, would constitute an Event of Default.

 

         "Default Rate" shall have the meaning set forth in Section 3.1 hereof.

 

         "Defaulting Lender" shall have the meaning set forth in Section 2.22(a)

hereof.

 

         "Depository Accounts" shall have the meaning set forth in Section

4.15(h) hereof.

<PAGE>   6

 

         "DM&E" shall mean Dakota, Minnesota & Eastern Railroad Corporation, a

corporation incorporated under the laws of the state of Delaware.

 

          "Documents" shall have the meaning set forth in Section 8.1(c) hereof.

 

         "Dollar" and the sign "$" shall mean lawful money of the United States

of America.

 

         "Domestic Rate Loan" shall mean any Advance that bears interest based

upon the Alternate Base Rate.

 

         "Earnings Before Interest and Taxes" shall mean for any period the sum

of (a) net income (or loss) of Borrowers on a consolidated basis for such

period, plus non-operating and non-recurring items such as, but not limited to

extraordinary items and cumulative changes in accounting principles, plus (b)

all interest expense of Borrowers on a consolidated basis for such period, plus

(c) all charges against income of Borrowers on a consolidated basis for such

period for federal, state and local taxes, plus (d) non-cash expenses in

connection with Borrowers' employee stock option plan.

 

         "EBITDA" shall mean for any period the sum of (a) Earnings Before

Interest and Taxes for such period, plus (b) depreciation expenses for such

period, plus (c) amortization expenses for such period.

 

         "Eligible Inventory" shall mean and include Inventory (work in process

may be deemed not to be Eligible Inventory at the discretion of the Agent) with

respect to each Borrower valued at the lower of cost or market value, determined

on a first-in-first-out basis, which is not, in Agent's opinion, obsolete, slow

moving or unmerchantable and which Agent, in its reasonable discretion, shall

not deem ineligible Inventory, based on such considerations as Agent may from

time to time deem appropriate including, without limitation, whether the

Inventory is subject to a perfected, first priority security interest in favor

of Agent and whether the Inventory conforms to all standards imposed by any

governmental agency, division or department thereof which has regulatory

authority over such goods or the use or sale thereof.

 

         "Eligible Receivables" shall mean and include with respect to each

Borrower, each Receivable of such Borrower arising in the ordinary course of

such Borrower's business, which is not, in Agent's reasonable credit judgment,

ineligible, based on such considerations as Agent may from time to time deem

appropriate. A Receivable shall not be deemed eligible unless such Receivable is

subject to Agent's first priority perfected security interest and no other Lien

(other than Permitted Encumbrances), and is evidenced by an invoice or other

documentary evidence satisfactory to Agent. In addition, no Receivable shall be

an Eligible Receivable if:

 

(a) it arises out of a sale made by any Borrower to an Affiliate of any Borrower

or to a Person controlled by an Affiliate of any Borrower;

 

(b) it is due or unpaid more than sixty (60) after the original due date or more

than one hundred twenty (120) days after the original invoice date;

 

(c)       fifty percent (50%) or more of the Receivables from such Customer are

not deemed Eligible Receivables hereunder;

<PAGE>   7

 

(d) any covenant, representation or warranty contained in this Agreement with

respect to such Receivable has been breached;

 

(e) the Customer shall (i) apply for, suffer, or consent to the appointment of,

or the taking of possession by, a receiver, custodian, trustee or liquidator of

itself or of all or a substantial part of its property or call a meeting of its

creditors, (ii) admit in writing its inability, or be generally unable, to pay

its debts as they become due or cease operations of its present business, (iii)

make a general assignment for the benefit of creditors, (iv) commence a

voluntary case under any state or federal bankruptcy laws (as now or hereafter

in effect), (v) be adjudicated a bankrupt or insolvent, (vi) file a petition

seeking to take advantage of any other law providing for the relief of debtors,

(vii) acquiesce to, or fail to have dismissed, any petition which is filed

against it in any involuntary case under such bankruptcy laws, or (viii) take

any action for the purpose of effecting any of the foregoing; provided however,

if all other criteria for Eligible Receivables other than this item (e) are

satisfied, then at the discretion of the Agent, Receivables arising from sales

to Customers after the filing of a bankruptcy petition under Chapter 11 of Title

11 of the United Stated Code by such Customer may be included in Eligible

Receivables;

 

(f) the sale is to a Customer outside the continental United States of America

or Canada, unless the sale is on letter of credit, guaranty or acceptance terms,

in each case acceptable to Agent in its reasonable discretion;

 

(g) the sale to the Customer is on a bill-and-hold, guaranteed sale,

sale-and-return, sale on approval, consignment or any other repurchase or return

basis; provided however, at the Agent's discretion based upon review of the

contract terms, Receivables based upon production of Inventory specific to a

Customer which has not yet been shipped to the Customer shall not be excluded

from Eligible Receivables;

 

(h) the Receivable is evidenced by chattel paper which has not been delivered to

the Agent, other than Receivables arising from rental arrangements for piling

and related products leased by a Borrower to the Customer;

 

(i) Agent believes, in its sole judgment, that collection of such Receivable is

insecure or that such Receivable may not be paid by reason of the Customer's

financial inability to pay;

 

(j) the Customer is the United States of America, any state or any department,

agency or instrumentality of any of them, unless the applicable Borrower assigns

its right to payment of such Receivable to Agent pursuant to the Assignment of

Claims Act of 1940, as amended (31 U.S.C. Sub-Section 3727 et seq. and 41 U.S.C.

Sub-Section 15 et seq.) or has otherwise complied with other applicable statutes

or ordinances;

 

(k) the goods giving rise to such Receivable have not been shipped to the

Customer (other than as permitted under item (g) above) or the services giving

rise to such Receivable have not been performed by the applicable Borrower or

the Receivable otherwise does not represent a final sale;

 

(l) the Receivables of the Customer exceed a credit limit determined by Agent,

in its reasonable discretion, to the extent such Receivable exceeds such limit;

<PAGE>   8

 

(m) the Receivable is subject to any offset, deduction, defense, dispute, or

counterclaim, provided however, that portion of the Receivable which is not

subject to offset or deduction at the discretion of the Agent and meets the

other criteria for Eligible Receivables may be included in Eligible Receivables;

 

(n) the Receivable is contingent in any respect or for any reason;

 

(o) the applicable Borrower has made any agreement with any Customer for any

deduction therefrom, except for discounts or allowances made in the ordinary

course of business for prompt payment, all of which discounts or allowances are

reflected in the calculation of the face value of each respective invoice

related thereto;

 

(p) any return, rejection or repossession of the merchandise has occurred or the

rendition of services has been disputed;

 

(q) such Receivable is not payable to a Borrower; or

 

(r) such Receivable is not otherwise satisfactory to Agent as determined in good

faith by Agent in the exercise of its discretion in a reasonable manner.

 

         "Environmental Complaint" shall have the meaning set forth in Section

4.19(d) hereof.

 

         "Environmental Laws" shall mean all federal, state and local

environmental, land use, zoning, health, chemical use, safety and sanitation

laws, statutes, ordinances and codes relating to the protection of the

environment and/or governing the use, storage, treatment, generation,

transportation, processing, handling, production or disposal of Hazardous

Substances and the rules, regulations, policies, guidelines, interpretations,

decisions, orders and directives of federal, state and local governmental

agencies and authorities with respect thereto.

 

         "Equipment" shall mean and include as to each Borrower all of such

Borrower's goods (other than Inventory) which are owned by the Borrower or are

leased to the Borrower as lessee, whether now owned or hereafter acquired and

wherever located including, without limitation, all equipment, machinery,

apparatus, motor vehicles, fittings, furniture, furnishings, fixtures, parts,

accessories and all replacements and substitutions therefor or accessions

thereto.

 

         "ERISA" shall mean the Employee Retirement Income Security Act of 1974,

as amended from time to time and the rules and regulations promulgated

thereunder.

 

         "Eurodollar Rate" shall mean for any Eurodollar Rate Loan for the then

current Interest Period relating thereto the interest rate per annum determined

by Agent by dividing (the resulting quotient rounded upwards, if necessary, to

the nearest 1/100th of 1% per annum) (i) the rate of interest determined by

Agent in accordance with its usual procedures (which determination shall be

conclusive absent manifest error) to be the average of the London interbank

offered rates for U.S. Dollars quoted by the British Bankers' Association as set

forth on Moneyline Telerate (or appropriate successor or, if British Banker's

Association or its successor ceases to provide such quotes, a comparable

replacement determined by Agent) display page 3750 (or such other display page

on the Moneyline Telerate system as may replace display page 3750) two (2)

Business Days prior to the first day of such Interest Period for an amount

comparable to such

<PAGE>   9

 

Eurodollar Rate Loan and having a borrowing date and a maturity comparable to

such Interest Period by (ii) a number equal to 1.00 minus the Reserve

Percentage. The Eurodollar Rate may also be expressed by the following formula:

 

       Average of London interbank offered rates quoted by BBA as shown on

   Eurodollar Rate = Moneyline Telerate Service display page 3750 or appropriate

        successor 1.00 - Reserve Percentage.

 

         "Eurodollar Rate Loan" shall mean an Advance at any time that bears

interest based on the Eurodollar Rate.

 

         "Event of Default" shall mean the occurrence of any of the events set

forth in Article 10 hereof.

 

         "Executive Order No. 13224" shall mean the Executive Order No. 13224 on

Terrorist Financing, effective September 24, 2001, as the same has been, or

shall hereafter be, renewed, extended, amended or replaced.

 

         "Existing Credit Facility" shall mean that certain Revolving Credit and

Security Agreement dated as of September 26, 2002, as amended, among the

Borrowers, the Agent and the Lenders.

 

         "Facility Fee" shall mean the percentage rate per annum at the

indicated level of Fixed Charge Coverage Ratio in the pricing grid on Schedule

1.2(A) below the heading "Facility Fee." The Facility Fee shall be computed in

accordance with the parameters set forth on Schedule 1.2(A).

 

         "Federal Funds Effective Rate" for any day shall mean the rate per

annum (based on a year of 360 days and actual days elapsed and rounded upward to

the nearest 1/100 of 1%) announced by the Federal Reserve Bank of New York (or

any successor) on such day as being the weighted average of the rates on

overnight federal funds transactions arranged by federal funds brokers on the

previous trading day, as computed and announced by such Federal Reserve Bank (or

any successor) in substantially the same manner as such Federal Reserve Bank

computes and announces the weighted average it refers to as the "Federal Funds

Effective Rate" as of the date of this Agreement; provided, if such Federal

Reserve Bank (or its successor) does not announce such rate on any day, the

"Federal Funds Effective Rate" for such day shall be the Federal Funds Effective

Rate for the last day on which such rate was announced.

 

         "Federal Funds Open Rate" shall mean the rate per annum determined by

the Agent in accordance with its usual procedures (which determination shall be

conclusive absent manifest error) to be the "open" rate for federal funds

transactions as of the opening of business for federal funds transactions among

members of the Federal Reserve System arranged by federal funds brokers on such

day, as quoted by Garvin Guybutler Corporation, any successor entity thereto, or

any other broker selected by the Agent, as set forth on the applicable Telerate

display page; provided, however; that if such day is not a Business Day, the

Federal Funds Open Rate for such day shall be the "open" rate on the immediately

preceding Business Day, or if no such rate shall be quoted by a Federal funds

broker at such time, such other rate as determined by the Agent in accordance

with its usual procedures.

<PAGE> 10

 

         "Fee Letter" shall mean the fee letter dated May 5, 2005 among

Borrowers and PNC.

 

         "Fixed Charges" shall mean for any period the sum of Borrowers'

consolidated cash interest expense, principal payments (excluding Advances) with

respect to Indebtedness for borrowed money and capital leases and dividends,

distributions and redemptions permitted under Section 7.7, all the foregoing of

Borrowers as determined and consolidated in accordance with GAAP.

 

         "Fixed Charge Coverage Ratio" shall mean and include, with respect to

any period, the ratio of (a) EBITDA plus non-cash charges, minus noncash income,

minus Net Capital Expenditures, minus Permitted Acquisition Financing minus

taxes actually paid by Borrowers on a consolidated basis to (b) Fixed Charges,

in the case of each of the foregoing during such period.

 

         "Formula Amount" shall have the meaning set forth in Section 2.1.

 

         "Fosmart" shall mean Fosmart, Inc., a corporation organized under the

laws of the State of Delaware.

         

         "Foster" shall mean L. B. Foster Company, a corporation organized under

  the laws of the Commonwealth of Pennsylvania.

         

         "GAAP" shall mean generally accepted accounting principles in the

United States of America in effect from time to time.

 

         "General Intangibles" shall mean and include as to each Borrower all of

such Borrower's general intangibles, whether now owned or hereafter acquired

including, without limitation, all payment intangibles, choses in action, causes

of action, corporate or other business records, customer lists, computer

programs, all claims under guaranties, security interests or other security held

by or granted to such Borrower to secure payment of any of the Receivables by a

Customer (other than to the extent covered by Receivables) all rights of

indemnification relating to Receivables and all other intangible property of

every kind and nature relating to Receivables (other than Receivables). General

Intangibles shall include inventions, designs, patents, patent applications,

equipment formulations, manufacturing procedures, quality control procedures,

trademarks, service marks, trade secrets, goodwill, copyrights, design rights,

software, computer information, source codes, codes, records and dates,

registrations, licenses, and franchises which are necessary or useful to the

sale or other disposition of Inventory or to the collection or disposition of

Receivables.

 

         "Governmental Body" shall mean any nation or government, any state or

other political subdivision thereof or any entity exercising the legislative,

judicial, regulatory or administrative functions of or pertaining to a

government.

 

         "Hazardous Discharge" shall have the meaning set forth in Section

4.19(d) hereof.

 

         "Hazardous Substance" shall mean, without limitation, any flammable

explosives, radon, radioactive materials, asbestos, urea formaldehyde foam

insulation, polychlorinated biphenyls, petroleum and petroleum products,

methane, hazardous materials, Hazardous Wastes, hazardous

<PAGE> 11

 

or Toxic Substances or related materials as defined in CERCLA, the Hazardous

Materials Transportation Act, as amended (49 U.S.C. Sections 1801, et. seq.),

RCRA, or any other applicable Environmental Law and in the regulations adopted

pursuant thereto.

 

         "Hazardous Wastes" shall mean all waste materials subject to regulation

under CERCLA, RCRA or applicable state law, and any other applicable Federal and

state laws now in force or hereafter enacted relating to hazardous waste

disposal.

         "Indebtedness" of a Person at a particular date shall mean all

obligations of such Person which in accordance with GAAP would be classified

upon a balance sheet as liabilities (except capital stock and surplus earned or

otherwise) and in any event, without limitation by reason of enumeration, shall

include all indebtedness, debt and other similar monetary obligations of such

Person whether direct or guaranteed, and all premiums, if any, due at the

required prepayment dates of such indebtedness, and all indebtedness secured by

a Lien on assets owned by such Person, whether or not such indebtedness actually

shall have been created, assumed or incurred by such Person. Any indebtedness of

such Person resulting from the acquisition by such Person of any assets subject

to any Lien shall be deemed, for the purposes hereof, to be the equivalent of

the creation, assumption and incurring of the indebtedness secured thereby,

whether or not actually so created, assumed or incurred.

 

         "Ineligible Security" shall mean any security which may not be

underwritten or dealt in by member banks of the Federal Reserve System under

Section 16 of the Banking Act of 1933 (12 U.S.C. Section 24, Seventh), as

amended.

 

         "Interest Period" shall mean the period provided for any Eurodollar

Rate Loan pursuant to Section 2.2(b).

 

         "Inventory" shall mean and include as to each Borrower all of such

Borrower's now owned or hereafter acquired goods (other than Equipment),

merchandise and other personal property, wherever located, to be furnished under

any consignment arrangement, contract of service or held for sale or lease, all

raw materials, work in process, finished goods and materials and supplies of any

kind, nature or description which are or might be used or consumed in such

Borrower's business or used in selling or furnishing such goods, merchandise and

other personal property, and all documents of title or other documents

representing them.

 

         "Inventory Advance Rate" shall have the meaning set forth in Section

2.1(a)(y)(ii) hereof.

 

         "Investment Property" shall mean and include as to each Borrower, all

of such Borrower's now owned or hereafter acquired securities (whether

certificated or uncertificated), securities entitlements, securities accounts,

commodities contracts and commodities accounts.

 

         "Issuer" shall mean any Person who issues a Letter of Credit and/or

accepts a draft pursuant to the terms hereof.

 

         "Lender" and "Lenders" shall have the meaning ascribed to such term in

the preamble to this Agreement and shall include each Person which becomes a

transferee, successor or assign of any Lender.

<PAGE> 12

 

         "Letter of Credit and Acceptance Fees" shall have the meaning set forth

in Section 3.2.

 

         "Letters of Credit" shall have the meaning set forth in Section 2.9.

 

         "Lien" shall mean any mortgage, deed of trust, pledge, hypothecation,

assignment, security interest, lien (whether statutory or otherwise), Charge,

claim or encumbrance, or preference, priority or other security agreement or

preferential arrangement held or asserted in respect of any asset of any kind or

nature whatsoever including, without limitation, any conditional sale or other

title retention agreement, any lease having substantially the same economic

effect as any of the foregoing, and the filing of, or agreement to give, any

financing statement under the Uniform Commercial Code or comparable law of any

jurisdiction.

 

         "Material Adverse Effect" shall mean a material adverse effect (a) the

condition, operations, assets, business or prospects of the Borrowers taken as a

whole, (b) the Borrowers' ability to pay the Obligations in accordance with the

terms thereof, (c) the value of the Collateral, or Agent's Liens on the

Collateral or the priority of any such Lien or (d) the practical realization of

the benefits of Agent's and each Lender's rights and remedies under this

Agreement and the Other Documents.

 

         "Maximum Face Amount" shall mean with respect to any Letter of Credit,

the face amount of such Letter of Credit including all automatic increases

provided for in such letter of Credit, whether or not any such automatic

increase has become effective.

 

         "Maximum Revolving Advance Amount" shall mean $60,000,000.

 

         "Maximum Undrawn Amount" shall mean with respect to any outstanding

Letter of Credit, the amount of such Letter of Credit that is or may become

available to be drawn, including all automatic increases provided for in such

Letter of Credit, whether or not any such automatic increase has become

effective.

 

         "Minimum Availability Threshold" at a particular date shall mean that

(i) prior to such date, Undrawn Availability has not been less than Five Million

Dollars ($5,000,000) for five (5) consecutive days or more, or (ii) in the event

that Undrawn Availability has been less than Five Million Dollars ($5,000,000)

for five (5) consecutive days or more, then subsequent to such period the

Borrowers have maintained the Restoration Threshold.

 

          "Monthly Advances" shall have the meaning set forth in Section 3.1

hereof.

 

         "Multiemployer Plan" shall mean a "multiemployer plan" as defined in

Sections 3(37) and 4001(a)(3) of ERISA.

 

         "Natmaya" shall mean Natmaya, Inc., a corporation organized under the

laws of the State of Delaware.

 

         "Net Capital Expenditures" shall mean for any period the difference

between capital expenditures of the Borrowers (excluding capital expenditures

which are funded from credit extended by Persons other than the Lenders and

capital expenditures related to the Union Pacific Project which are funded with

Revolving Advances not in excess of $3,000,000) minus net cash

<PAGE> 13

 

proceeds received by the Borrowers from the sale of capital assets of the

Borrowers; provided however, if Net Capital Expenditures is an amount less than

zero (0), then Net Capital Expenditures shall be deemed to be zero (0).

 

         "Net Proceeds of Significant Asset Sales" shall mean with respect to

all sales of assets by the Borrowers outside the ordinary course of business

which are effected after the Closing Date and for which the consideration for

such sale exceeds Two Million Dollars ($2,000,000), (i) the cash and cash

equivalents received by the Borrowers from such sale, minus (ii) the sum of the

Borrowers' reasonable expenses of such sale and the Borrowers' book value of any

Receivables and Inventory sold in connection with such sale

 

         "Net Worth" at a particular date, shall mean all amounts which would be

included under shareholders' equity on a balance sheet of the Borrowers on a

consolidated basis determined in accordance with GAAP as at such date.

 

         "Obligations" shall mean and include any and all loans, advances,

debts, liabilities, obligations, covenants and duties owing by Borrowers to

Lenders or Agent or to any other direct or indirect subsidiary or affiliate of

Agent or any Lender of any kind or nature, present or future (including, without

limitation, any interest accruing thereon after maturity, or after the filing of

any petition in bankruptcy, or the commencement of any insolvency,

reorganization or like proceeding relating to any Borrower, whether or not a

claim for post-filing or post-petition interest is allowed in such proceeding),

whether or not evidenced by any note, guaranty or other instrument, whether

arising under any agreement, instrument or document, (including, without

limitation, this Agreement and the Other Documents) whether or not for the

payment of money, whether arising by reason of an extension of credit, opening

of a letter of credit, loan, equipment lease or guarantee, under any interest or

currency swap, future, option or other similar agreement (whether with one or

more of the Borrowers as a counterparty), or in any other manner, whether

arising out of overdrafts or deposit or other accounts or electronic funds

transfers (whether through automated clearing houses or otherwise) or out of the

Agent's or any Lenders non-receipt of or inability to collect funds or otherwise

not being made whole in connection with depository transfer check or other

similar arrangements, whether direct or indirect (including those acquired by

assignment or participation), absolute or contingent, joint or several, due or

to become due, now existing or hereafter arising, contractual or tortious,

liquidated or unliquidated, regardless of how such indebtedness or liabilities

arise or by what agreement or instrument they may be evidenced or whether

evidenced by any agreement or instrument, including, but not limited to, any and

all of any Borrower's Indebtedness and/or liabilities under this Agreement, the

Other Documents or under any other agreement between Agent or Lenders and any

Borrower and any amendments, extensions, renewals or increases and all costs and

expenses of Agent and any Lender incurred in the documentation, negotiation,

modification, enforcement, collection or otherwise in connection with any of the

foregoing, including but not limited to reasonable attorneys' fees and expenses

and all obligations of any Borrower to Agent or Lenders to perform acts or

refrain from taking any action.

 

         "Other Documents" shall mean the Revolving Credit Note and any and all

other agreements, instruments and documents, including, without limitation,

guaranties, pledges, powers of attorney, consents, and all other writings

heretofore, now or hereafter executed by any

<PAGE> 14

 

Borrower and/or delivered to Agent or any Lender in respect of the transactions

contemplated by this Agreement.

 

          "Parent" of any Person shall mean a corporation or other entity owning,

directly or indirectly at least 50% of the shares of stock or other ownership

interests having ordinary voting power to elect a majority of the directors of

the Person, or other Persons performing similar functions for any such Person.

 

         "Participant" shall mean each Person who shall be granted the right by

any Lender to participate in any of the Advances and who shall have entered into

a participation agreement in form and substance satisfactory to such Lender.

 

         "Payment Office" shall mean initially Two Tower Center Boulevard, East

Brunswick, New Jersey 08816; thereafter, such other office of Agent, if any,

which it may designate by notice to Borrowing Agent and to each Lender to be the

Payment Office.

 

         "PBGC" shall mean the Pension Benefit Guaranty Corporation.

 

         "Permitted Acquisition" shall have the meaning set forth in Section 7.1

hereof.

 

         "Permitted Acquisition Financing" shall mean acquisition financing for

acquisitions permitted under Section 7.1 made with the proceeds of Revolving

Advances.

 

         "Permitted Encumbrances" shall mean (a) Liens in favor of Agent for the

benefit of Agent and Lenders; (b) Liens for taxes, assessments or other

governmental charges not delinquent or being contested in good faith and by

appropriate proceedings and with respect to which proper reserves have been

taken by Borrowers; provided, that, the Lien shall have no effect on the

priority of the Liens in favor of Agent or the value of the assets in which

Agent has such a Lien and a stay of enforcement of any such Lien shall be in

effect; (c) deposits or pledges to secure obligations under worker's

compensation, social security or similar laws, or under unemployment insurance;

(d) deposits, security interests or pledges to secure bids, tenders, contracts

(other than contracts for the payment of money), leases, statutory obligations,

surety and appeal bonds and other obligations of like nature arising in the

ordinary course of any Borrower's business; (e) judgment Liens that have been

stayed or bonded and mechanics', workers', materialmen's or other like Liens

arising in the ordinary course of any Borrower's business with respect to

obligations which are not due or which are being contested in good faith by the

applicable Borrower; (f) Liens placed upon fixed assets, proceeds from

disposition thereof and other property directly related thereto, hereafter

acquired to secure a portion of the purchase price thereof (or refinance fixed

assets acquired with proceeds of Revolving Advances, so long as the proceeds of

such refinancing are applied to the outstanding balance of Revolving Advances)

or Liens of lessors on fixed assets subject to capital leases, provided that (x)

any such lien shall not encumber any other property of Borrowers (other than

related obligations owed to such lender or lessor) and (y) the aggregate amount

of Indebtedness secured by such Liens incurred as a result of such purchases

during any fiscal year shall not exceed the amount provided for in Section 7.6;

(g) other Liens incidental to the conduct of Borrowers' business or the

ownership of its property and assets which were not incurred in connection with

the borrowing of money or the obtaining of advances or credit, and which do not

in the aggregate

<PAGE> 15

 

materially detract from Agent's or Lenders' rights in and to the Collateral or

the value of Borrowers' property or assets or which do not materially impair the

use thereof in the operation of Borrowers' business; (h) Liens on assets of the

Borrowers other than Collateral which secure Indebtedness not exceeding

$6,000,000 in the aggregate at any one time outstanding and which

is permitted under Section 7.8; and (i) Liens disclosed on Schedule 1.2(B).

 

         "Person" shall mean any individual, sole proprietorship, partnership,

corporation, business trust, joint stock company, trust, unincorporated

organization, association, limited liability company, institution, public

benefit corporation, joint venture, entity or government (whether Federal,

state, county, city, municipal or otherwise, including any instrumentality,

division, agency, body or department thereof).

 

         "Plan" shall mean any employee benefit plan within the meaning of

Section 3(3) of ERISA, maintained for employees of Borrowers or any member of

the Controlled Group or any such Plan to which any Borrower or any member of the

Controlled Group is required to contribute on behalf of any of its employees.

 

         "Projections" shall have the meaning set forth in Section 5.5(b)

hereof.

 

         "Purchasing Lender" shall have the meaning set forth in Section 16.3

hereof.

 

         "RCRA" shall mean the Resource Conservation and Recovery Act, 42 U.S.C.

ss.ss. 6901 et seq., as same may be amended from time to

time.

 

         "Real Property" shall mean all of each Borrower's right, title and

interest in and to the owned and leased premises identified on Schedule 4.19

hereto and other owned or leased property acquired by the Borrower as permitted

under this Agreement.

 

         "Receivables" shall mean and include, as to each Borrower, all of such

Borrower's accounts, contract rights, instruments (including those evidencing

indebtedness owed to Borrowers by their Affiliates), documents, chattel paper

(including electronic chattel paper), general intangibles relating to accounts,

drafts and acceptances, credit card receivables, and all other forms of

obligations owing to such Borrower arising out of or in connection with the sale

or lease of Inventory or the rendition of services, all supporting obligations,

guarantees and other security therefor, whether secured or unsecured, now

existing or hereafter created, and whether or not specifically sold or assigned

to Agent hereunder.

 

          "Receivables Advance Rate" shall have the meaning set forth in Section

2.1(a)(y)(i) hereof.

 

         "Release" shall have the meaning set forth in Section 5.7(c)(i) hereof.

 

         "Reportable Event" shall mean a reportable event described in Section

4043(b) of ERISA or the regulations promulgated thereunder.

 

         "Required Lenders" shall mean Lenders holding at least sixty-six and

two-thirds percent (66-2/3%) of the Advances and, if no Advances are

outstanding, shall mean Lenders holding sixty-six and two-thirds percent

(66-2/3%) of the Commitment Percentages.

<PAGE> 16

 

         "Reserve Percentage" shall mean the maximum effective percentage in

effect on any day as prescribed by the Board of Governors of the Federal Reserve

System (or any successor) for determining the reserve requirements (including,

without limitation, supplemental, marginal and emergency reserve requirements)

with respect to eurocurrency funding.

 

         "Restoration Threshold" shall mean that subsequent to the Borrowers'

failure to maintain the Minimum Availability Threshold, the Borrowers maintain

an average Undrawn Availability equal to or greater than Eight Million Dollars

($8,000,000) for a period of at least thirty (30) consecutive days and no

Default or Event of Default has occurred or exists during such 30 day period.

 

         "Revolving Advances" shall mean Advances made other than Letters of

Credit and Acceptances.

 

         "Revolving Credit Note" shall mean, collectively, the promissory notes

referred to in Section 2.1(a) hereof.

 

         "Revolving Interest Rate" shall mean an interest rate per annum equal

to (a) the sum of the Alternate Base Rate plus the Applicable Margin with

respect to Domestic Rate Loans and (b) the sum of the Eurodollar Rate plus the

Applicable Margin with respect to Eurodollar Rate Loans.

 

         "Section 20 Subsidiary" shall mean the Subsidiary of the bank holding

company controlling PNC, which Subsidiary has been granted authority by the

Federal Reserve Board to underwrite and deal in certain Ineligible Securities.

 

         "Settlement Date" shall mean the Closing Date and thereafter Wednesday

of each week unless such day is not a Business Day in which case it shall be the

next succeeding Business Day.

 

         "Subsidiary" shall mean a corporation or other entity of whose shares

of stock or other ownership interests having ordinary voting power (other than

stock or other ownership interests having such power only by reason of the

happening of a contingency) to elect a majority of the directors of such

corporation, or other Persons performing similar functions for such entity, are

owned, directly or indirectly, by such Person.

 

         "Term" shall have the meaning set forth in Section 13.1 hereof.

 

         "Termination Event" shall mean (a) a Reportable Event with respect to

any Plan or Multiemployer Plan; (b) the withdrawal of any Borrower or any member

of the Controlled Group from a Plan or Multiemployer Plan during a plan year in

which such entity was a "substantial employer" as defined in Section 4001(a)(2)

of ERISA; (c) the providing of notice of intent to terminate a Plan in a

distress termination described in Section 4041(c) of ERISA; (d) the institution

by the PBGC of proceedings to terminate a Plan or Multiemployer Plan; (e) any

event or condition (i) which might constitute grounds under Section 4042 of

ERISA for the termination of, or the appointment of a trustee to administer, any

Plan or Multiemployer Plan, or (ii) that may result in termination of a

Multiemployer Plan pursuant to Section 4041A of ERISA; or (f) the

<PAGE> 17

 

partial or complete withdrawal within the meaning of Sections 4203 and 4205 of

ERISA, of any Borrower or any member of the Controlled Group from a

Multiemployer Plan.

 

         "Toxic Substance" shall mean and include any material present on the

Real Property which has been shown to have significant adverse effect on human

health or which is subject to regulation under the Toxic Substances Control Act

(TSCA), 15 U.S.C. ss.ss. 2601 et seq., applicable state law, or any other

applicable Federal or state laws now in force or hereafter enacted relating to

toxic substances. "Toxic Substance" includes but is not limited to asbestos,

polychlorinated biphenyls (PCBs) and lead-based paints.

 

         "Trading with the Enemy Act" shall mean the foreign assets control

regulations of the United States Treasury Department (31 CFR, Subtitle B,

Chapter V, as amended) and any enabling legislation or executive order relating

thereto.

 

         "Transferee" shall have the meaning set forth in Section 16.3(b)

hereof.

 

         "Undrawn Availability" at a particular date shall mean an amount equal

to (a) the lesser of (i) the Formula Amount plus the aggregate amount of

outstanding Letters of Credit and Acceptances, or (ii) the Maximum Revolving

Advance Amount, minus (b) the sum of (i) the outstanding amount of Advances plus

(ii) all amounts due and owing to Borrowers' trade creditors which are

outstanding sixty (60) days or more beyond the due date, plus (iii) fees and

expenses which are due and for which Borrowers are liable to Agent or Lenders

but which have not been paid or charged to Borrowers' Account.

 

         "Union Pacific Contract" shall mean that certain agreement dated

January 21, 2005, between Union Pacific Railroad and CXT which provides, among

other matters, for the purchase by Union Pacific Railroad from CXT of concrete

railroad ties manufactured at facilities located in Grand Island, Nebraska and

Tucson, Arizona.

 

         "Union Pacific Project" shall mean the renovation and/or construction

of the concrete railroad tie manufacturing facilities in Grand Island, Nebraska

and Tucson, Arizona.

 

         "USA Patriot Act" shall mean the Uniting and Strengthening America by

Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of

2001, Public Law 107-56, as the same has been, or shall hereafter be, renewed,

extended, amended or replaced.

 

         "Week" shall mean the time period commencing with the opening of

business on a Wednesday and ending on the end of business the following Tuesday.

 

1.3       Uniform Commercial Code Terms.

 

         All terms used herein and defined in the Uniform Commercial Code as

adopted in the Commonwealth of Pennsylvania from time to time shall have the

meaning given therein unless otherwise defined herein. To the extent the

definition of any category or type of Collateral is expanded by any amendment,

modification or revision to the Uniform Commercial Code, such expanded

definition will apply automatically as of the date of such amendment,

modification or revision.

<PAGE> 18

 

1.4       Certain Matters of Construction.

 

         The terms "herein", "hereof" and "hereunder" and other words of similar

import refer to this Agreement as a whole and not to any particular section,

paragraph or subdivision. Any pronoun used shall be deemed to cover all genders.

Wherever appropriate in the context, terms used herein in the singular also

include the plural and vice versa. All references to statutes and related

regulations shall include any amendments of same and any successor statutes and

regulations. Unless otherwise provided, all references to any instruments or

agreements to which Agent is a party, including, without limitation, references

to any of the Other Documents, shall include any and all modifications or

amendments thereto and any and all extensions or renewals thereof.

 

2. ADVANCES, PAYMENTS

 

2.1      Revolving Advances; Individual Revolving Advances; Discretionary Rights.

 

(a)       Revolving Advances. Subject to the terms and conditions set forth in

         this Agreement including, without limitation, Section 16.2, each

         Lender, severally and not jointly, will make Revolving Advances to

         Borrowers in aggregate amounts outstanding at any time equal to such

         Lender's Commitment Percentage of the lesser of (x) the Maximum

         Revolving Advance Amount less the aggregate amount of outstanding

         Letters of Credit and Acceptances or (y) an amount equal to the sum of:

 

(i)       up to 85%, subject to the provisions of Section 2.1(c) hereof

         ("Receivables Advance Rate"), of Eligible Receivables, plus

 

(ii)      up to the lesser of (A) 60%, subject to the provisions of Section

         2.1(c) hereof ("Inventory Advance Rate"), of the value of the Eligible

         Inventory (the Receivables Advance Rate and the Inventory Advance Rate

         shall be referred to collectively, as the "Advance Rates") or (B)

         $35,000,000 in the aggregate at any one time, minus

 

(iii)     the aggregate amount of outstanding Letters of Credit and Acceptances,

         minus

 

(iv)      such reserves as Agent may reasonably deem proper and necessary from

         time to time.

 

         The amount derived from the sum of (a) Sections 2.1(a)(y)(i) and (ii)

minus (b) Section 2.1 (a)(y)(iii) and (iv) at any time and from time to time

shall be referred to as the "Formula Amount". The Revolving Advances shall be

evidenced by one or more secured promissory notes (collectively, the "Revolving

Credit Note") substantially in the form attached hereto as Exhibit 2.1(a).

 

(b) Formula Amount Calculation. Subject to the Agent's discretion as set forth

in this Section 2.1 and in the definitions of Eligible Inventory and Eligible

Receivables, as well as Agent's review of the accuracy and sufficiency of the

Borrowing Base Certificates in accordance

<PAGE> 19

 

with Section 9.2, the Formula Amount shall be determined based upon the

Borrowing Base Certificates delivered by the Borrowers pursuant to Section 9.2.

 

(c) Discretionary Rights. Subject to Section 16.2(b)(vii), the Advance Rates may

be increased or decreased by Agent at any time and from time to time in the

exercise of its reasonable discretion. Each Borrower consents to any such

increases or decreases and acknowledges that decreasing the Advance Rates or

increasing the reserves may limit or restrict Advances requested by Borrowing

Agent. Notwithstanding the foregoing, Agent cannot reduce the Advance Rates in

any one year which would cause the amount available to be borrowed to decrease

by more than 5%. Agent shall give Borrowing Agent ten (10) Business Days prior

written notice of its intention to decrease the Advance Rates.

 

2.2       Procedure for Borrowing Advances.

 

(a) Borrowing Agent on behalf of any Borrower may notify Agent prior to 12:00

noon on a Business Day of a Borrower's request to incur, on that day, a

Revolving Advance hereunder. Should any amount required to be paid as interest

hereunder, or as fees or other charges under this Agreement or any other

agreement with Agent or Lenders, or with respect to any other Obligation, become

due, same shall be deemed a request for a Revolving Advance as of the date such

payment is due, in the amount required to pay in full such interest, fee, charge

or Obligation under this Agreement or any other agreement with Agent or Lenders,

and such request shall be irrevocable.

 

(b) Notwithstanding the provisions of (a) above, in the event any Borrower

desires to obtain a Eurodollar Rate Loan, Borrowing Agent shall give Agent prior

to 12:00 noon at least two (2) Business Days' prior written notice, specifying

(i) the date of the proposed borrowing (which shall be a Business Day), (ii) the

type of borrowing and the amount on the date of such Advance to be borrowed,

which amount shall be in a minimum amount of $1,000,000 and in integral

multiples of $250,000 thereafter, and (iii) the duration of the first Interest

Period therefor. Interest Periods for Eurodollar Rate Loans shall be for seven

days or one, two, three, or six months; provided, if an Interest Period would

end on a day that is not a Business Day, it shall end on the next succeeding

Business Day unless such day falls in the next succeeding calendar month in

which case the Interest Period shall end on the next preceding Business Day. No

Eurodollar Rate Loan shall be made available to Borrower during the continuance

of a Default or an Event of Default.

 

(c) Each Interest Period of a Eurodollar Rate Loan shall commence on the date

such Eurodollar Rate Loan is made and shall end on such date as Borrowing Agent

may elect as set forth in subsection (b)(iii) above provided that the exact

length of each Interest Period shall be determined in accordance with the

practice of the interbank market for offshore Dollar deposits and no Interest

Period shall end after the last day of the Term.

 

                  Borrowing Agent shall elect the initial Interest Period

applicable to a Eurodollar Rate Loan by its notice of borrowing given to Agent

pursuant to Section 2.2(b) or by its notice of conversion given to Agent

pursuant to Section 2.2(d), as the case may be. Borrowing Agent shall elect the

duration of each succeeding Interest Period by giving irrevocable written notice

to Agent prior to 12:00 noon of such duration not less than two (2) Business

Days prior to the last

<PAGE> 20

 

day of the then current Interest Period applicable to such Eurodollar Rate Loan.

If Agent does not receive timely notice of the Interest Period elected by

Borrowing Agent, Borrowers shall be deemed to have elected to convert to a

Domestic Rate Loan subject to Section 2.2(d) hereinbelow.

 

(d) Provided that no Event of Default shall have occurred and be continuing, any

Borrower may, on the last Business Day of the then current Interest Period

applicable to any outstanding Eurodollar Rate Loan, or on any Business Day with

respect to Domestic Rate Loans, convert any such loan into a loan of another

type in the same aggregate principal amount provided that any conversion of a

Eurodollar Rate Loan shall be made only on the last Business Day of the then

current Interest Period applicable to such Eurodollar Rate Loan. If a Borrower

desires to convert a loan, Borrowing Agent shall give Agent prior to 12:00 noon

not less than two (2) Business Days prior written notice to convert from a

Domestic Rate Loan to a Eurodollar Rate Loan or two (2) Business Days prior

written notice to convert from a Eurodollar Rate Loan to a Domestic Rate Loan,

specifying the date of such conversion, the loans to be converted and if the

conversion is from a Domestic Rate Loan to any other type of loan, the duration

of the first Interest Period therefor. After giving effect to each such

conversion, there shall not be outstanding more than five (5) Eurodollar Rate

Loans, in the aggregate.

 

(e) At its option and upon three (3) Business Days' prior written notice, any

Borrower may prepay the Eurodollar Rate Loans in whole at any time or in part

from time to time, without premium or penalty, but with accrued interest on the

principal being prepaid to the date of such repayment. Such Borrower shall

specify the date of prepayment of Advances which are Eurodollar Rate Loans and

the amount of such prepayment. In the event that any prepayment of a Eurodollar

Rate Loan is required or permitted on a date other than the last Business Day of

the then current Interest Period with respect thereto, such Borrower shall

indemnify Agent and Lenders therefor in accordance with Section 2.2(f) hereof.

 

(f) Each Borrower shall indemnify Agent and Lenders and hold Agent and Lenders

harmless from and against any and all losses or expenses that Agent and Lenders

may sustain or incur as a consequence of any prepayment, conversion of or any

default by any Borrower in the payment of the principal of or interest on any

Eurodollar Rate Loan or failure by any Borrower to complete a borrowing of, a

prepayment of or conversion of or to a Eurodollar Rate Loan after notice thereof

has been given, including, but not limited to, any interest payable by Agent or

Lenders to lenders of funds obtained by it in order to make or maintain its

Eurodollar Rate Loans hereunder. A certificate as to any additional amounts

payable pursuant to the foregoing sentence submitted by Agent or any Lender to

Borrowing Agent shall be conclusive absent manifest error.

 

(g) Notwithstanding any other provision hereof, if any applicable law, treaty,

regulation or directive, or any change therein or in the interpretation or

application thereof, shall make it unlawful for any Lender (for purposes of this

subsection (g), the term "Lender" shall include any Lender and the office or

branch where any Lender or any corporation or bank controlling such Lender makes

or maintains any Eurodollar Rate Loans) to make or maintain its Eurodollar Rate

Loans, the obligation of Lenders to make Eurodollar Rate Loans hereunder shall

forthwith be cancelled and Borrowers shall, if any affected Eurodollar Rate

Loans are then outstanding, promptly upon request from Agent, either pay all

such affected Eurodollar Rate Loans or convert such affected Eurodollar Rate

Loans into loans of another type. If any such

<PAGE> 21

 

payment or conversion of any Eurodollar Rate Loan is made on a day that is not

the last day of the Interest Period applicable to such Eurodollar Rate Loan,

Borrowers shall pay Agent, upon Agent's request, such amount or amounts as may

be necessary to compensate Lenders for any loss or expense sustained or incurred

by Lenders in respect of such Eurodollar Rate Loan as a result of such payment

or conversion, including (but not limited to) any interest or other amounts

payable by Lenders to lenders of funds obtained by Lenders in order to make

or maintain such Eurodollar Rate Loan. A certificate as to any additional

amounts payable pursuant to the foregoing sentence submitted by Lenders to

Borrowing Agent shall be conclusive absent manifest error.

 

2.3       Disbursement of Advance Proceeds.

 

         All Advances shall be disbursed from whichever office or other place

Agent may designate from time to time and, together with any and all other

Obligations of Borrowers to Agent or Lenders, shall be charged to Borrowers'

Account on Agent's books. During the Term, Borrowers may use the Revolving

Advances by borrowing, prepaying and reborrowing, all in accordance with the

terms and conditions hereof. The proceeds of each Revolving Advance requested by

Borrowers or deemed to have been requested by Borrowers under Section 2.2(a)

hereof shall, with respect to requested Revolving Advances to the extent Lenders

make such Revolving Advances, be made available to the applicable Borrower on

the day so requested by way of credit to such Borrower's operating account at

PNC, or such other bank as Borrowing Agent may designate following notification

to Agent, in immediately available federal funds or other immediately available

funds or, with respect to Revolving Advances deemed to have been requested by

any Borrower, be disbursed to Agent to be applied to the outstanding Obligations

giving rise to such deemed request.

 

2.4       Reserved.

 

2.5       Maximum Advances.

 

         The aggregate balance of Advances outstanding at any time shall not

exceed the lesser of (a) Maximum Revolving Advance Amount or (b) the Formula

Amount.

 

2.6       Repayment of Advances.

 

(a) The Revolving Advances shall be due and payable in full on the last day of

the Term subject to earlier prepayment as herein provided.

 

(b) Agent is not required to credit Borrowers' Account for the amount of any

item of payment which is unsatisfactory to Agent and Agent may charge Borrowers'

Account for the amount of any item of payment which is returned to Agent unpaid.

 

(c) All payments of principal, interest and other amounts payable hereunder, or

under any of the Other Documents shall be made to Agent at the Payment Office

not later than 2:00 P.M. (New York Time) on the due date therefor in lawful

money of the United States of America in federal funds or other funds

immediately available to Agent. Agent shall have the right to effectuate payment

on any and all Obligations due and owing hereunder if not paid promptly by the

Borrowers (or following a Default or Event of Default or Borrowers' failure to

meet the

<PAGE> 22

 

Minimum Availability Threshold) by charging Borrowers' Account or by

making Advances as provided in Section 2.2 hereof.

 

(d) Borrowers shall pay principal, interest, and all other amounts payable

hereunder, or under any related agreement, without any deduction whatsoever,

including, but not limited to, any deduction for any setoff or counterclaim.

 

2.7       Repayment of Excess Advances.

 

         The aggregate balance of Advances outstanding at any time in excess of

the maximum amount of Advances permitted hereunder shall be immediately due and

payable without the necessity of any demand, at the Payment Office, whether or

not a Default or Event of Default has occurred.

 

2.8       Statement of Account.

 

         Agent shall maintain, in accordance with its customary procedures, a

loan account ("Borrowers' Account") in the name of Borrowers in which shall be

recorded the date and amount of each Advance made by Agent and the date and

amount of each payment in respect thereof; provided, however, the failure by

Agent to record the date and amount of any Advance shall not adversely affect

Agent or any Lender. Each month, Agent shall send to Borrowing Agent a statement

showing the accounting for the Advances made, payments made or credited in

respect thereof, and other transactions between Agent and Borrowers, during such

month. The monthly statements shall be deemed correct and binding upon Borrowers

in the absence of manifest error and shall constitute an account stated between

Lenders and Borrowers unless Agent receives a written statement of Borrowers'

specific exceptions thereto within thirty (30) days after such statement is

received by Borrowing Agent. The records of Agent with respect to the loan

account shall be conclusive evidence absent manifest error of the amounts of

Advances and other charges thereto and of payments applicable thereto.

 

2.9       Letters of Credit and Acceptances.

 

         Subject to the terms and conditions hereof, Agent shall (a) issue or

cause the issuance of standby and trade Letters of Credit ("Letters of Credit")

on behalf of any Borrower, or (b) accept, or cause to be accepted Acceptances;

provided, however, that Agent will not be required to issue or cause to be

issued any Letters of Credit or accept or cause to be accepted any Acceptances

to the extent that the issuance of such Letters of Credit or acceptance of such

Acceptances would then cause the sum of (i) the outstanding Revolving Advances

plus (ii) the Maximum Undrawn Amount of outstanding Letters of Credit plus (iii)

outstanding Acceptances to exceed the lesser of (x) the Maximum Revolving

Advance Amount or (y) the Formula Amount. The Maximum Undrawn Amount of

outstanding Letters of Credit and Acceptances shall not exceed $15,000,000 in

the aggregate at any time. The maximum amount of outstanding Acceptances shall

not exceed $15,000,000 in the aggregate at any time. All disbursements or

payments related to Letters of Credit and Acceptances shall be deemed to be

Domestic Rate Loans consisting of Revolving Advances and shall bear interest at

the Revolving Interest Rate for Domestic Rate Loans; Letters of Credit that have

not been drawn upon shall not bear interest. All letters of credit issued and

outstanding under the Existing Credit Facility, as further described

<PAGE> 23

 

on Schedule 2.9, shall from and after the Closing Date be deemed to be Letters

of Credit issued and outstanding pursuant to this Agreement, including without

limitation, Sections 2.9 through 2.18.

 

2.10      Issuance of Letters of Credit; Creation of Acceptances.

 

(a) Borrowing Agent, on behalf of Borrowers, may request Agent, upon five (5)

days' prior written notice submitted on or before 10:00 a.m. New York time, to

issue or cause the issuance of a Letter of Credit by delivering to Agent at the

Payment Office, Agent's form of Letter of Credit Application (the "Letter of

Credit Application") completed to the satisfaction of Agent; and, such other

certificates, documents and other papers and information as Agent may reasonably

request. Borrowing Agent, on behalf of Borrowers, also has the right to give

instructions and make agreements with respect to any application, any applicable

letter of credit and security agreement, any applicable letter of credit

reimbursement agreement and/or any other applicable agreement, any letter of

credit and the disposition of documents, disposition of any unutilized funds,

and to agree with Agent upon any amendment, extension or renewal of any Letter

of Credit.

 

(b) Each Letter of Credit shall, among other things, (i) provide for the payment

of sight drafts, other written demands for payment, or acceptances of usance

drafts when presented for honor thereunder in accordance with the terms thereof

and when accompanied by the documents described therein and (ii) have an expiry

date not later than twelve (12) months after such Letter of Credit's date of

issuance and in no event later than the last day of the Term. Each standby

Letter of Credit shall be subject either to the Uniform Customs and Practice for

Documentary Credits (1993 Revision), International Chamber of Commerce

Publication No. 500, and any amendments or revisions thereof adhered to by the

Issuer ("UCP 500") or the International Standby Practices (ISP98-International

Chamber of Commerce Publication Number 590), and any amendments or revisions

thereof adhered to by the Issuer (the "ISP98 Rules"), as determined by Agent,

and each trade Letter of Credit shall be subject to UCP 500.

 

(c) Agent shall notify Lenders of the request by Borrowing Agent for a Letter of

Credit or an Acceptance hereunder.

 

(d) Agent shall have absolute discretion whether to accept any draft. Without in

any way limiting Agent's absolute discretion whether to accept any draft,

Borrowers will not present for acceptance any draft, and Agent will generally

not accept any drafts (i) that arise out of transactions involving the sale of

goods by any Borrower not in the ordinary course of business, (ii) that involve

a sale to an Affiliate of any Borrower, (iii) that involve any purchase for

which Agent has not received all related documents, instruments and forms

requested by Agent, (iv) for which Agent is unable to locate a purchaser in the

ordinary course of business on standard terms, or (v) that is not eligible for

discounting with Federal Reserve Banks pursuant to paragraph 7 of Section 13 of

the Federal Reserve Act, as amended.

 

(e) Subject to terms set by Agent from time to time in its discretion with

respect to the acceptance of drafts generally, Borrowing Agent may request

Acceptances on any Business Day, by delivering to Agent a request for an

Acceptance in substantially the form of Exhibit 2.10 and, upon demand, copies of

all invoices, delivery receipts and related documents relating to that

<PAGE> 24

 

request that Agent might require. Provided that the request for Acceptance is

received prior to 10:30 a.m. and approved by Agent, Agent shall make the net

proceeds of the Acceptance available to a Borrower by crediting the net amount

of the Acceptance in lawful money of the United States and in immediately

available funds to such Borrower's Account. The net amount of the Acceptance

shall be calculated by discounting the Acceptance at the Banker's Acceptance

Rate for the applicable maturity period upon the creation by Agent of an

Acceptance.

 

(f) Borrowers shall pay to Agent the amount of any Acceptance on or before its

maturity date. In addition, Agent is hereby irrevocably authorized, in its sole

discretion, to make Revolving Advances from time to time, or to charge any

account of Borrowers, to pay any Acceptance for which payment is due, or at any

time after the occurrence of an Event of Default to fund cash collateral for any

outstanding Acceptance.

 

(g) Each Acceptance shall be payable in Dollars and shall be in the face amount

of at least $500,000. The maturity of each Acceptance shall be in any 30 day

increment equal to or greater than 30 and less than or equal to 180 days or, if

such day is not a Business Day, on the next succeeding Business Day and, in any

event, no later than the day preceding the expiration of the Term. This Section

2.10(g) will not apply to Acceptances created under Letters of Credit.

 

2.11      Requirements For Issuance of Letters of Credit and Acceptances.

 

(a) Borrowing Agent shall authorize and direct any Issuer to name the applicable

Borrower as the "Applicant" or "Account Party" of each Letter of Credit. If

Agent is not the Issuer of any Letter of Credit, Borrowing Agent shall authorize

and direct the Issuer to deliver to Agent all instruments, documents, and other

writings and property received by the Issuer pursuant to the Letter of Credit of

any Acceptance related thereto and to accept and rely upon Agent's instructions

and agreements with respect to all matters arising in connection with the Letter

of Credit or the application therefore or any Acceptance therefor.

 

(b) In connection with all Letters of Credit issued or caused to be issued by

Agent under this Agreement, each Borrower hereby appoints Agent, or its

designee, as its attorney, with full power and authority if an Event of Default

shall have occurred, (i) to sign and/or endorse such Borrower's name upon any

warehouse or other receipts, letter of credit applications and acceptances; (ii)

to sign such Borrower's name on bills of lading; (iii) to clear Inventory

through the United States of America Customs Department ("Customs") in the name

of such Borrower or Agent or Agent's designee, and to sign and deliver to

Customs officials powers of attorney in the name of such Borrower for such

purpose; and (iv) to complete in such Borrower's name or Agent's, or in the name

of Agent's designee, any order, sale or transaction, obtain the necessary

documents in connection therewith, and collect the proceeds thereof. Neither

Agent nor its attorneys will be liable for any acts or omissions nor for any

error of judgment or mistakes of fact or law, except for Agent's or its

attorney's willful misconduct. This power, being coupled with an interest, is

irrevocable as long as any Letters of Credit remain outstanding.

 

2.12      Disbursements, Reimbursement.

 

(a) Immediately upon the issuance of each Letter of Credit, each Lender shall be

deemed to, and hereby irrevocably and unconditionally agrees to, purchase from

Agent a

<PAGE> 25

 

participation in such Letter of Credit and each drawing thereunder in an

amount equal to such Lender's Commitment Percentages of the Maximum Face Amount

of such Letter of Credit and the amount of such drawing, respectively.

 

(b) In the event of any request for a drawing under a Letter of Credit by the

beneficiary or transferee thereof, Agent will promptly notify the applicable

Borrower. Provided that it shall have received such notice, such Borrower shall

reimburse (such obligation to reimburse Agent shall sometimes be referred to as

a "Reimbursement Obligation") Agent prior to 4:30 p.m., New York time on each

date that an amount is paid by Agent under any Letter of Credit (each such date,

a "Drawing Date") in an amount equal to the amount so paid by Agent. In the

event such Borrower fails to reimburse Agent for the full amount of any drawing

under any Letter of Credit by 4:30 p.m., New York time, on the Drawing Date,

Agent will promptly notify each Lender thereof, and Borrowers shall be deemed to

have requested that a Domestic Rate Loan be made by the Lenders to be disbursed

on the Drawing Date under such Letter of Credit in the amount of such

unreimbursed drawing, subject to the amount of the unutilized portion of the

lesser of Maximum Revolving Advance Amount or the Formula Amount and subject to

Section 8.2. Any notice given by Agent pursuant to this Section 2.12(b) may be

oral if immediately confirmed in writing; provided that the lack of such an

immediate confirmation shall not affect the conclusiveness or binding effect of

such notice.

 

(c) Each Lender shall upon any notice pursuant to Section 2.12(b) make available

to Agent an amount in immediately available funds equal to its Commitment

Percentage of the amount of the drawing, whereupon the participating Lenders

shall (subject to Section 2.12(d)) each be deemed to have made a Domestic Rate

Loan to Borrowers in that amount. If any Lender so notified fails to make

available to Agent the amount of such Lender's Commitment Percentage of such

amount by no later than 2:00 p.m., New York time on the Drawing Date, then

interest shall accrue on such Lender's obligation to make such payment, from the

Drawing Date to the date on which such Lender makes such payment (i) at a rate

per annum equal to the Federal Funds Open Rate during the first three days

following the Drawing Date and (ii) at a rate per annum equal to the rate

applicable to Domestic Rate Loans on and after the fourth day following the

Drawing Date. Agent will promptly give notice of the occurrence of the Drawing

Date, but failure of Agent to give any such notice on the Drawing Date or in

sufficient time to enable any Lender to effect such payment on such date shall

not relieve such Lender from its obligation under this Section 2.12(c), provided

that such Lender shall not be obligated to pay interest as provided in Section

2.12(c) (i) and (ii) until and commencing from the date of receipt of notice

from Agent of a drawing (it being understood that any such notice given by Agent

after 12:00 noon New York time on any Business Day shall be deemed to have been

received on the following Business Day). Each Lender's participation commitment

shall continue until the last to occur of any of the following events: (A) Agent

ceases to be obligated to issue or cause to be issued Letters of Credit or

Acceptances hereunder; (B) no Letter of Credit issued or created hereunder

remains outstanding and uncancelled and no Acceptance remains outstanding and

unmatured, or (C) all Persons (other than the applicable Borrower) have been

fully reimbursed for all payments made under or relating to Letters of Credit

and/or Acceptances.

 

(d) With respect to any unreimbursed drawing that is not converted into a

Domestic Rate Loan to Borrower in whole or in part as contemplated by Section

2.12(b), because of Borrower's failure to satisfy the conditions set forth in

Section 8.2 (other than any notice

<PAGE> 26

 

requirements) or for any other reason, Borrower shall be deemed to have incurred

from Agent a borrowing (each a "Letter of Credit Borrowing") in the amount of

such drawing. Such Letter of Credit Borrowing shall be due and payable on demand

(together with interest) and shall bear interest at the rate per annum

applicable to a Domestic Rate Loan. Each Lender's payment to Agent pursuant to

Section 2.12(c) shall be deemed to be a payment in respect of its participation

in such Letter of Credit Borrowing and shall constitute a "Participation

Advance" from such Lender in satisfaction of its participation obligation under

this Section 2.12.

 

2.13      Repayment of Participation Advances.

 

(a) Upon (and only upon) receipt by Agent for its account of immediately

available funds from Borrowers (i) in reimbursement of any payment made by the

Agent under the Letter of Credit with respect to which any Lender has made a

Participation Advance to Agent, or (ii) in payment of interest on such a payment

made by Agent under such a Letter of Credit, Agent will pay to each Lender, in

the same funds as those received by Agent, the amount of such Lender's

Commitment Percentage of such funds, except Agent shall retain the amount of the

Commitment Percentage of such funds of any Lender that did not make a

Participation Advance in respect of such payment by Agent.

 

(b) If Agent is required at any time to return to any Borrower, or to a trustee,

receiver, liquidator, custodian, or any official in any insolvency proceeding,

any portion of the payments made by Borrowers to Agent pursuant to Section

2.13(a) in reimbursement of a payment made under the Letter of Credit or

interest or fee thereon, each Lender shall, on demand of Agent, forthwith return

to Agent the amount of its Commitment Percentage of any amounts so returned by

Agent plus interest at the Federal Funds Open Rate.

 

2.14      Documentation.

 

         Each Borrower agrees to be bound by the terms of the Letter of Credit

Application and by Agent's interpretations of any Letter of Credit issued for

any Borrower and by Agent's written regulations and customary practices relating

to letters of credit, though Agent's interpretation of such regulations and

practices may be different from Borrower's own. In the event of a conflict

between the Letter of Credit Application and this Agreement, this Agreement

shall govern. It is understood and agreed that, except in the case of gross

negligence or willful misconduct, Agent shall not be liable for any error,

negligence and/or mistakes, whether of omission or commission, in following any

Borrower's instructions or those contained in the Letters of Credit or any

modifications, amendments or supplements thereto.

 

2.15      Determination to Honor Drawing Request.

 

         In determining whether to honor any request for drawing under any

Letter of Credit by the beneficiary thereof, the Issuer shall be responsible

only to determine that the documents and certificates required to be delivered

under such Letter of Credit have been delivered and that they comply on their

face with the requirements of such Letter of Credit and that any other drawing

condition appearing on the face of such Letter of Credit has been satisfied in

the manner so set forth.

<PAGE> 27

 

2.16      Nature of Participation and Reimbursement Obligations.

 

                  Each Lender's obligation in accordance with this Agreement to

make the Revolving Advances or Participation Advances as a result of a drawing

under a Letter of Credit, and the obligations of Borrowers to reimburse Agent

upon a draw under a Letter of Credit, shall be absolute, unconditional and

irrevocable, and shall be performed strictly in accordance with the terms of

this Section 2.16 under all circumstances, including the following

circumstances:

 

(i)       any set-off, counterclaim, recoupment, defense or other right which

          such Lender may have against Agent, any Borrower or any other Person

         for any reason whatsoever;

 

(ii)      the failure of any Borrower or any other Person to comply, in

         connection with a Letter of Credit Borrowing, with the conditions set

         forth in this Agreement for the making of a Revolving Advance, it being

         acknowledged that such conditions are not required for the making of a

         Letter of Credit Borrowing and the obligation of the Lenders to make

         Participation Advances under Section 2.12;

 

(iii)     any lack of validity or enforceability of any Letter of Credit;

 

(iv)      any claim of breach of warranty that might be made by any Borrower or

         any Lender against the beneficiary of a Letter of Credit, or the

         existence of any claim, set-off, defense or other right which any

         Borrower or any Lender may have at any time against a beneficiary, any

         successor beneficiary or any transferee of any Letter of Credit or the

          proceeds thereof (or any Persons for whom any such transferee may be

         acting), Agent or any Lender or any other Person, whether in connection

         with this Agreement, the transactions contemplated herein or any

         unrelated transaction (including any underlying transaction between any

         Borrower or any Subsidiaries of any Borrower and the beneficiary for

         which any Letter of Credit was procured);

 

(v)       the lack of power or authority of any signer of, or lack of validity,

         sufficiency, accuracy, enforceability or genuineness of, any draft,

         demand, instrument, certificate or other document presented under any

         Letter of Credit, or any such draft, demand, instrument, certificate or

         other document proving to be forged, fraudulent, invalid, defective or

         insufficient in any respect or any statement therein being untrue or

         inaccurate in any respect, even if Agent has been notified thereof;

 

(vi)      payment by Agent under any Letter of Credit against presentation of a

         demand, draft or certificate or other document which does not comply

         with the terms of such Letter of Credit other than as a result of the

         gross negligence or willful misconduct of Agent;

 

(vii)     the solvency of, or any acts or omissions by, any beneficiary of any

         Letter of Credit, or any other Person having a role in any transaction

         or obligation relating to a Letter of Credit, or the existence, nature,

         qualify, quantity, condition, value or other characteristic of any

         property or services relating to a Letter of Credit;

<PAGE> 28

 

(viii)    any failure by Agent or any of Agent's Affiliates to issue any Letter

         of Credit in the form requested by a Borrower, unless Agent has

         received written notice from such Borrower of such failure within three

         Business Days after Agent shall have furnished such Borrower a copy of

         such Letter of Credit and such error is material and no drawing has

         been made thereon prior to receipt of such notice:

 

(ix)      any Material Adverse Effect;

 

(x)       any breach of this Agreement or any Other Document by any party

         thereto;

 

(xi)      the occurrence or continuance of an insolvency proceeding with respect

         to any Borrower;

 

(xii)     the fact that a Default or Event of Default shall have occurred and be

         continuing;

 

(xiii)    the fact that the Term shall have expired or this Agreement or the

         Obligations hereunder shall have been terminated; and

 

(xiv)     any other circumstance or happening whatsoever, whether or not similar

         to any of the foregoing.

 

2.17      Indemnity.

 

         In addition to amounts payable as provided in Section 16.5 hereof,

Borrowers hereby agree to protect, indemnify, pay and save harmless Agent and

any of Agent's Affiliates that have issued a Letter of Credit or an Acceptance

from and against any and all claims, demands, liabilities, damages, taxes,

penalties, interest, judgments, losses, costs, charges and expenses (including

reasonable fees, expenses and disbursements of counsel and allocated costs of

internal counsel) which Agent or any of Agent's Affiliates may incur or be

subject to as a consequence, direct or indirect, of the issuance of any Letter

of Credit or Acceptance, other than as a result of (a) the gross negligence or

willful misconduct of Agent as determined by a final judgment of a court of

competent jurisdiction or (b) the wrongful dishonor by Agent or any of Agent's

Affiliates of a proper demand for payment made under any Letter of Credit as

determined by a final judgment of a court of competent jurisdiction, except if

such dishonor resulted from any act or omission, whether rightful or wrongful,

of any present or future de jure or de facto Governmental Body (all such acts or

omissions herein called "Governmental Acts").

 

2.18      Liability for Acts and Omissions.

 

         As between Borrowers and Agent and Lenders, Borrowers assume all risks

of the acts and omissions of, or misuse of the Letters of Credit by, the

respective beneficiaries of such Letters of Credit. In furtherance and not in

limitation of the respective foregoing, Agent shall not be responsible for: (i)

the form, validity, sufficiency, accuracy, genuineness or legal effect of any

document submitted by any party in connection with the application for an

issuance of any such Letter of Credit, even if it should in fact prove to be in

any or all respects invalid, insufficient, inaccurate, fraudulent or forged

(even if Agent shall have been notified thereof); (ii) the validity

<PAGE> 29

 

or sufficiency of any instrument transferring or assigning or purporting to

transfer or assign any such Letter of Credit or the rights or benefits

thereunder or proceeds thereof, in whole or in part, which may prove to be

invalid or ineffective for any reason; (iii) the failure of the beneficiary of

any such Letter of Credit, or any other party to which such Letter of Credit may

be transferred, to comply fully with any conditions required in order to draw

upon such Letter of Credit or any other claim of any Borrower against any

beneficiary of such Letter of Credit, or any such transferee, or any dispute

between or among any Borrower and any beneficiary of any Letter of Credit or any

such transferee; (iv) errors, omissions, interruptions or delays in transmission

or delivery of any messages, by mail, cable, telegraph, telex or otherwise,

whether or not they be in cipher; (v) errors in interpretation of technical

terms; (vi) any loss or delay in the transmission or otherwise of any document

required in order to make a drawing under any such Letter of Credit or of the

proceeds thereof; (vii) the misapplication by the beneficiary of any such Letter

of Credit of the proceeds of any drawing under such Letter of Credit; or (viii)

any consequences arising from causes beyond the control of Agent, including any

governmental acts, and none of the above shall affect or impair, or prevent the

vesting of, any of Agent's rights or powers hereunder. Nothing in the preceding

sentence shall relieve Agent from liability for Agent's gross negligence or

willful misconduct in connection with actions or omissions described in such

clauses (i) through (viii) of such sentence, in the event such gross negligence

or willful misconduct is determined by a final judgment of a court of competent

jurisdiction. In no event shall Agent or Agent's Affiliates be liable to

Borrower for any indirect, consequential, incidental, punitive, exemplary or

special damages or expenses (including without limitation attorneys' fees), or

for any damages resulting from any change in the value of any property relating

to a Letter of Credit or an Acceptance.

 

         Without limiting the generality of the foregoing, Agent and each of its

Affiliates (i) may rely on any oral or other communication believed in good

faith by Agent or such Affiliate to have been authorized or given by or on

behalf of the applicant for a Letter of Credit; (ii) may honor any presentation

if the documents presented appear on their face substantially to comply with the

terms and conditions of the relevant Letter of Credit; (iii) may honor a

previously dishonored presentation under a Letter of Credit, whether such

dishonor was pursuant to a court order, to settle or compromise any claim of

wrongful dishonor, or otherwise, and shall be entitled to reimbursement to the

same extent as if such presentation had initially been honored, together with

any interest paid by Agent or its Affiliates; (iv) may honor any drawing that is

payable upon presentation of a statement advising negotiation or payment, upon

receipt of such statement (even if such statement indicates that a draft or

other document is being delivered separately), and shall not be liable for any

failure of any such draft or other document to arrive, or to conform in any way

with the relevant Letter of Credit; (v) may pay any paying or negotiating bank

claiming that it rightfully honored under the laws or practices of the place

where such bank is located; and (vi) may settle or adjust any claim or demand

made on Agent or its Affiliate in any way related to any order issued at the

applicant's request to an air carrier, a letter of guarantee or of indemnity

issued to a carrier or any similar document (each an "Order") and honor any

drawing in connection with any Letter of Credit that is the subject of such

Order, notwithstanding that any drafts or other documents presented in

connection with such Letter of Credit fail to conform in any way with such

Letter of Credit.

 

         In furtherance and extension and not in limitation of the specific

provisions set forth above, any action taken or omitted by Agent under or in

connection with the Letters of Credit

<PAGE> 30

 

issued by it or any documents and certificates delivered thereunder, if taken or

omitted in good faith and without gross negligence, shall not put Agent under

any resulting liability to any Borrower or any Lender.

 

2.19      Additional Payments.

 

         Any sums expended by Agent or any Lender due to any Borrower's failure

to perform or comply with its obligations under this Agreement or any Other

Document including, without limitation, any Borrower's obligations under

Sections 4.2, 4.4, 4.12, 4.13, 4.14 and 6.1 hereof, may be charged to Borrowers'

Account as a Revolving Advance and added to the Obligations.

 

2.20      Manner of Borrowing and Payment.

 

(a) Each borrowing of Revolving Advances shall be advanced according to the

applicable Commitment Percentages of Lenders.

 

(b) Each payment (including each prepayment) by Borrowers on account of the

principal of and interest on the Revolving Advances, shall be applied to the

Revolving Advances pro rata according to the applicable Commitment Percentages

of Lenders. Except as expressly provided herein, all payments (including

prepayments) to be made by any Borrower on account of principal, interest and

fees shall be made without set off or counterclaim and shall be made to Agent on

behalf of Lenders to the Payment Office, in each case on or prior to 1:00 P.M.,

New York time, in Dollars and in immediately available funds.

 

(c) (i) Notwithstanding anything to the contrary contained in Sections 2.20(a)

and (b) hereof, commencing with the first Business Day following the Closing

Date, each borrowing of Revolving Advances shall be advanced by Agent and each

payment by any Borrower on account of Revolving Advances shall be applied first

to those Revolving Advances advanced by Agent. On or before 1:00 P.M., New York

time, on each Settlement Date commencing with the first Settlement Date

following the Closing Date, Agent and Lenders shall make certain payments as

follows: (A) if the aggregate amount of new Revolving Advances made by Agent

during the preceding Week (if any) exceeds the aggregate amount of repayments

applied to outstanding Revolving Advances during such preceding Week, then each

Lender shall provide Agent with funds in an amount equal to its applicable

Commitment Percentage of the difference between (w) such Revolving Advances and

(x) such repayments and (B) if the aggregate amount of repayments applied to

outstanding Revolving Advances during such Week exceeds the aggregate amount of

new Revolving Advances made during such Week, then Agent shall provide each

Lender with funds in an amount equal to its applicable Commitment Percentage of

the difference between (y) such repayments and (z) such Revolving Advances.

 

               (ii) Each Lender shall be entitled to earn interest at the

applicable Revolving Interest Rate on outstanding Advances which it has funded.

 

              (iii) Promptly following each Settlement Date, Agent shall submit

to each Lender a certificate with respect to payments received and Advances made

during the Week immediately

<PAGE> 31

 

preceding such Settlement Date. Such certificate of Agent shall be conclusive in

the absence of manifest error.

 

(d) If any Lender or Participant (a "benefitted Lender") shall at any time

receive any payment of all or part of its Advances, or interest thereon, or

receive any Collateral in respect thereof (whether voluntarily or involuntarily

or by set-off) in a greater proportion than any such payment to and Collateral

received by any other Lender, if any, in respect of such other Lender's

Advances, or interest thereon, and such greater proportionate payment or receipt

of Collateral is not expressly permitted hereunder, such benefitted Lender shall

purchase for cash from the other Lenders a participation in such portion of each

such other Lender's Advances, or shall provide such other Lender with the

benefits of any such Collateral, or the proceeds thereof, as shall be necessary

to cause such benefitted Lender to share the excess payment or benefits of such

Collateral or proceeds ratably with each of the other Lenders; provided,

however, that if all or any portion of such excess payment or benefits is

thereafter recovered from such benefitted Lender, such purchase shall be

rescinded, and the purchase price and benefits returned, to the extent of such

recovery, but without interest. Each Lender so purchasing a portion of another

Lender's Advances may exercise all rights of payment (including, without

limitation, rights of set-off) with respect to such portion as fully as if such

Lender were the direct holder of such portion.

 

(e) Unless Agent shall have been notified by telephone, confirmed in writing, by

any Lender that such Lender will not make the amount which would constitute its

applicable Commitment Percentage of the Advances available to Agent, Agent may

(but shall not be obligated to) assume that such Lender shall make such amount

available to Agent on the next Settlement Date and, in reliance upon such

assumption, make available to Borrowers a corresponding amount. Agent will

promptly notify Borrowers of its receipt of any such notice from a Lender. If

such amount is made available to Agent on a date after such next Settlement

Date, such Lender shall pay to Agent on demand an amount equal to the product of

(i) the daily average Federal Funds Effective Rate (computed on the basis of a

year of 360 days) during such period as quoted by Agent, times (ii) such amount,

times (iii) the number of days from and including such Settlement Date to the

date on which such amount becomes immediately available to Agent. A certificate

of Agent submitted to any Lender with respect to any amounts owing under this

paragraph (e) shall be conclusive, in the absence of manifest error. If such

amount is not in fact made available to Agent by such Lender within three (3)

Business Days after such Settlement Date, Agent shall be entitled to recover

such an amount, with interest thereon at the rate per annum then applicable to

such Revolving Advances hereunder, on demand from Borrowers; provided, however,

that Agent's right to such recovery shall not prejudice or otherwise adversely

affect Borrowers' rights (if any) against such Lender.

 

2.21      Use of Proceeds.

 

         Borrowers shall apply the proceeds of Advances to (a) refinance

indebtedness owed under the Existing Credit Facility, (b) pay fees and expenses

relating to this transaction, and (c) to provide for their working capital and

other general corporate purposes. From and after the Closing Date, the Existing

Credit Facility is amended and restated and evidenced with this Agreement and

the Other Documents.

<PAGE> 32

 

2.22      Defaulting Lender.

 

(a) Notwithstanding anything to the contrary contained herein, in the event any

Lender (x) has refused (which refusal constitutes a breach by such Lender of its

obligations under this Agreement) to make available its portion of any Advance

or (y) notifies either Agent or Borrowing Agent that it does not intend to make

available its portion of any Advance (if the actual refusal would constitute a

breach by such Lender of its obligations under this Agreement) (each, a "Lender

Default"), all rights and obligations hereunder of such Lender (a "Defaulting

Lender") as to which a Lender Default is in effect and of the other parties

hereto shall be modified to the extent of the express provisions of this Section

2.22 while such Lender Default remains in effect.

 

(b) Advances shall be incurred pro rata from Lenders (the "Non-Defaulting

Lenders") which are not Defaulting Lenders based on their respective Commitment

Percentages, and no Commitment Percentage of any Lender or any pro rata share of

any Advances required to be advanced by any Lender shall be increased as a

result of such Lender Default. Amounts received in respect of principal of any

type of Advances shall be applied to reduce the applicable Advances of each

Lender pro rata based on the aggregate of the outstanding Advances of that type

of all Lenders at the time of such application; provided, that, such amount

shall not be applied to any Advances of a Defaulting Lender at any time when,

and to the extent that, the aggregate amount of Advances of any Non-Defaulting

Lender exceeds such Non-Defaulting Lender's Commitment Percentage of all

Advances then outstanding.

 

(c) A Defaulting Lender shall not be entitled to give instructions to Agent or

to approve, disapprove, consent to or vote on any matters relating to this

Agreement and the Other Documents. All amendments, waivers and other

modifications of this Agreement and the Other Documents may be made without

regard to a Defaulting Lender and, for purposes of the definition of "Required

Lenders", a Defaulting Lender shall be deemed not to be a Lender and not to have

Advances outstanding.

 

(d) Other than as expressly set forth in this Section 2.22, the rights and

obligations of a Defaulting Lender (including the obligation to indemnify Agent)

and the other parties hereto shall remain unchanged. Nothing in this Section

2.22 shall be deemed to release any Defaulting Lender from its obligations under

this Agreement and the Other Documents, shall alter such obligations, shall

operate as a waiver of any default by such Defaulting Lender hereunder, or shall

prejudice any rights which any Borrower, Agent or any Lender may have against

any Defaulting Lender as a result of any default by such Defaulting Lender

hereunder.

 

(e) In the event a Defaulting Lender retroactively cures to the satisfaction of

Agent the breach which caused a Lender to become a Defaulting Lender, such

Defaulting Lender shall no longer be a Defaulting Lender and shall be treated as

a Lender under this Agreement.

 

3. INTEREST AND FEES.

 

3.1       Interest.

 

         Interest on Advances shall be payable in arrears on the first Business

Day of each month with respect to Domestic Rate Loans and, with respect to

Eurodollar Rate Loans, at the end of

<PAGE> 33

 

each Interest Period, and if such Interest Period is longer than three (3)

months, also on the 90th day of such Interest Period. Interest charges shall be

computed on the actual principal amount of Advances outstanding during the month

(the "Monthly Advances") at a rate per annum equal to, with respect to Revolving

Advances, the applicable Revolving Interest Rate. Whenever, subsequent to the

date of this Agreement, the Alternate Base Rate is increased or decreased, the

Revolving Interest Rate for Domestic Rate Loans shall be similarly changed

without notice or demand of any kind by an amount equal to the amount of such

change in the Alternate Base Rate during the time such change or changes remain

in effect. The Eurodollar Rate shall be adjusted with respect to Eurodollar Rate

Loans without notice or demand of any kind on the effective date of any change

in the Reserve Percentage as of such effective date. Upon and after the

occurrence of an Event of Default, and during the continuation thereof, (A) the

Obligations other than Eurodollar Rate Loans shall bear interest at the

Revolving Interest Rate for Domestic Rate Loans plus two percent (2%) per annum

and (B) Eurodollar Rate Loans shall bear interest at the Revolving Interest Rate

for Eurodollar Rate Loans plus two percent (2%) per annum (as applicable, the

"Default Rate").

 

3.2       Letter of Credit and Acceptance Fees.

 

(a) Borrowers shall pay (x) to Agent, for the benefit of Lenders, fees for each

Letter of Credit for the period from and excluding the date of issuance of same

to and including the date of expiration or termination, equal to the average

daily face amount of each outstanding Letter of Credit multiplied by a

percentage per annum equal to the Applicable Margin (as set forth on Schedule

1.2(A)) for the Eurodollar Rate minus one-fourth percent (.25%), such fees to be

calculated on the basis of a 360-day year for the actual number of days elapsed

and to be payable monthly in arrears on the first Business Day of each month and

on the last day of the Term, (y) to the Issuer, for its own account, fees for

each Letter of Credit for the period from and excluding the date of issuance of

same to and including the date of expiration or termination, equal to the

average daily face amount of each outstanding Letter of Credit multiplied by

one-fourth percent (.25%) per annum, such fees to be calculated on the basis of

a 360-day year for the actual number of days elapsed and to be payable monthly

in arrears on the first Business Day of each month and on the last day of the

Term, and (z) to the Issuer, any and all fees and expenses as agreed upon by the

Issuer and the Borrowing Agent in connection with any Letter of Credit,

including, without limitation, in connection with the opening, amendment or

renewal of any such Letter of Credit and any acceptances created thereunder and

shall reimburse Agent for any and all fees and expenses, if any, paid by Agent

to the Issuer (all of the foregoing fees, the "Letter of Credit and Acceptance

Fees"). All such charges shall be deemed earned in full on the date when the

same are due and payable hereunder and shall not be subject to rebate or

proration upon the termination of this Agreement for any reason. Any such charge

in effect at the time of a particular transaction shall be the charge for that

transaction, notwithstanding any subsequent change in the Issuer's prevailing

charges for that type of transaction. All Letter of Credit and Acceptance Fees

payable hereunder shall be deemed earned in full on the date when the same are

due and payable hereunder and shall not be subject to rebate or proration upon

the termination of this Agreement for any reason.

 

(b) Following the occurrence of an Event of Default and on demand of the Agent,

Borrowers will cause cash to be deposited and maintained in an account with

Agent, as cash collateral, in an amount equal to one hundred and five percent

(105%) of the outstanding Letters

<PAGE> 34

 

of Credit and Acceptances, and each Borrower hereby irrevocably authorizes

Agent, in its discretion, on such Borrower's behalf and in such Borrower's name,

to open such an account and to make and maintain deposits therein, or in an

account opened by such Borrower, in the amounts required to be made by such

Borrower, out of the proceeds of Receivables or other Collateral or out of any

other funds of such Borrower coming into any Lender's possession at any time.

Agent will invest such cash collateral (less applicable reserves) in such short-

term money-market items as to which Agent and such Borrower mutually agree and

the net return on such investments shall be credited to such account and

constitute additional cash collateral. No Borrower may withdraw amounts credited

to any such account except upon payment and performance in full of all

Obligations and termination of this Agreement.

 

3.3       Facility Fee.

 

         If, for any month during the Term, the average daily unpaid balance of

the Advances for each day of such month does not equal the Maximum Revolving

Advance Amount, then Borrowers shall pay to Agent for the ratable benefit of

Lenders a fee at a rate equal to the Facility Fee per annum on the amount by

which the Maximum Revolving Advance Amount exceeds such average daily unpaid

balance. Such fee shall be payable to Agent in arrears on the first Business Day

of each month.

 

3.4       Reserved.

 

3.5       Computation of Interest and Fees.

 

         Interest and fees hereunder shall be computed on the basis of a year of

360 days and for the actual number of days elapsed. If any payment to be made

hereunder becomes due and payable on a day other than a Business Day,