Exhibit 4.1

Execution Version

AMENDED AND RESTATED CREDIT AGREEMENT

DATED AS OF DECEMBER 23, 2009

AMONG

PANOLAM INDUSTRIES INTERNATIONAL, INC.,

PANOLAM HOLDINGS CO.,

THE LENDERS LISTED HEREIN,
as Lenders,

and

CREDIT SUISSE AG,
Cayman Islands Branch,
as Administrative Agent

TABLE OF CONTENTS

i

TABLE OF CONTENTS

(continued)

ii

TABLE OF CONTENTS

(continued)

iii

TABLE OF CONTENTS

(continued)

iv

TABLE OF CONTENTS

(continued)

v

EXHIBITS

1

SCHEDULES

2

AMENDED AND RESTATED CREDIT AGREEMENT

This AMENDED AND RESTATED CREDIT AGREEMENT is dated as of December 23, 2009 and entered into by and among PANOLAM INDUSTRIES INTERNATIONAL, INC., a Delaware corporation (“Company”), PANOLAM HOLDINGS CO., a Delaware corporation (“Holdings”), THE FINANCIAL INSTITUTIONS LISTED ON THE SIGNATURE PAGES HEREOF (each individually referred to herein as a “Lender” and collectively as “Lenders”), and CREDIT SUISSE AG, Cayman Islands Branch (“Credit Suisse”), as administrative agent for Lenders (in such capacity, “Administrative Agent”).

R E C I T A L S

WHEREAS, Company, Panolam Holdings II Co., Lenders and Administrative Agent are parties to, inter alia, that certain Credit Agreement, dated as of September 30, 2005 (as amended by that certain First Amendment to Credit Agreement and Waiver dated as of February 27, 2006, as further amended by that certain Second Amendment to Credit Agreement dated as of March 1, 2006, as further amended by that certain Third Amendment to Credit Agreement and Limited Waiver dated as of March 30, 2007 and as further amended by that certain Fourth Amendment to Credit Agreement, dated as of September 14, 2009, and as may have been further amended, restated, amended and restated, supplemented or otherwise modified immediately prior to the date hereof, the “Existing Credit Agreement”).

WHEREAS, on November 4, 2009, Company, Holdings and the Domestic Subsidiaries (collectively, the “Debtors”) commenced Chapter 11 Case Nos. 09-13889 (MFW), 09-13893 (MFW), 09-13894 (MFW), 09-13896 (MFW), 09-13892 (MFW), 09-13895 (MFW), 09-13890 (MFW), and 09-13891 (MFW), as administratively consolidated as Chapter 11 Case No 09-13889 (MFW) (collectively, the “Bankruptcy Case”) by filing voluntary petitions for reorganization under Chapter 11 of Title 11 of the United States Code, 11 U.S.C. §§ 101-1532 (as now and hereafter in effect, or any successor statute, the “Bankruptcy Code”) with the United States Bankruptcy Court for the District of Delaware (the “Bankruptcy Court”).

WHEREAS, as part of the comprehensive financial restructuring (the “Restructuring”) to be implemented by the Debtors’ Chapter 11 plan of reorganization (the “Plan”) that was confirmed by the Bankruptcy Court on December 10, 2009, Company, Holdings, Lenders and Administrative Agent have agreed to amend and restate the Existing Credit Agreement in its entirety (the Existing Credit Agreement, as so amended and restated, and as further amended, restated, amended and restated, supplemented or otherwise modified from time to time, this “Agreement”) to, among other things, (a) re-evidence, ratify and reaffirm the Obligations (as such term, and other capitalized terms used but not defined in these recitals, is defined in subsection 1.1) that shall be repayable hereafter in accordance with the respective terms and provisions hereof  and (b) set forth the terms and conditions under which Lenders will from time to time hereafter make further loans or extensions of credit, as the case may be, to or for the account of Company;

WHEREAS, Company desires to continue to secure all of the Obligations hereunder and under the other Loan Documents (and it is the intent of Company, Holdings,

1

Administrative Agent and Lenders that such security be continued) by its grant to Administrative Agent, on behalf of Lenders, of a First Priority Lien on substantially all of its real, personal and mixed property, all of the Capital Stock of its Domestic Subsidiaries and 100% of the non-voting Capital Stock (if any) and 65% of the Capital Stock of its first-tier Foreign Subsidiaries;

WHEREAS, Holdings and Subsidiary Guarantors have guaranteed the Obligations hereunder and under the other Loan Documents and desire to continue to secure their guaranties (and it is the intent of Company, Holdings, Administrative Agent and Lenders that such security be continued) by granting to Administrative Agent, on behalf of Lenders, a First Priority Lien on substantially all of their real, personal and mixed property, all of the Capital Stock of their respective Domestic Subsidiaries and 100% of the non-voting Capital Stock (if any) and 65% of the Capital Stock of their respective first-tier Foreign Subsidiaries;

WHEREAS, it is the intention of Company, Holdings, Lenders and Administrative Agent that this Agreement be given in renewal and rearrangement of, and in substitution (but not in payment) for the Existing Credit Agreement and shall not constitute a novation thereof; and

WHEREAS, these Recitals shall be construed as part of this Agreement.

NOW, THEREFORE, in consideration of the premises and the agreements, provisions and covenants herein contained, Company, Holdings, Lenders and Administrative Agent agree as follows:

Section 1.                                          DEFINITIONS

1.1          Definitions.

The following terms used in this Agreement shall have the following meanings:

“Account Control Agreement” shall mean, as applicable (a) a control agreement with respect to Deposit Accounts of each Loan Party (but not including any Trust Fund Accounts or De Minimis Accounts), among such Loan Party, the bank at which such Deposit Accounts are held, the Administrative Agent and the Second Lien Agent, substantially in the form annexed as Exhibit VI hereto or otherwise in form and substance satisfactory to the Administrative Agent, or (b) a control agreement with respect to Securities Accounts of each Loan Party, among such Loan Party, the securities intermediary with which such Securities Accounts are held, the Administrative Agent and the Second Lien Agent, in form and substance satisfactory to the Administrative Agent.

“Additional Mortgaged Property” has the meaning assigned to that term in subsection 6.9.

“Additional Mortgages” has the meaning assigned to that term in subsection 6.9.

“Administrative Agent” has the meaning assigned to that term in the introduction to this Agreement and also means and includes any successor Administrative Agent appointed pursuant to subsection 9.5.

2

“Affected Lender” has the meaning assigned to that term in subsection 2.6C.

“Affected Loans” has the meaning assigned to that term in subsection 2.6C.

“Affiliate”, as applied to any Person, means any other Person directly or indirectly controlling, controlled by, or under common control with, that Person. For the purposes of this definition, “control” (including, with correlative meanings, the terms “controlling”, “controlled by” and “under common control with”), as applied to any Person, means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of that Person, whether through the ownership of voting securities or by contract or otherwise.

“Aggregate Amounts Due” has the meaning assigned to that term in subsection 10.5.

“Agreement” has the meaning assigned to that term in the recitals hereto.

“Amendments to Mortgages” has the meaning assigned to that term in subsection 4.1H(i).

“Approved Fund” means a Fund that is administered or managed by (i) a Lender, (ii) an Affiliate of a Lender or (iii) an entity or an Affiliate of an entity that administers or manages a Lender.

“Asset Sale” means the sale by Company or any of its Subsidiaries to any Person other than Company or any of its wholly owned Subsidiaries, in any single transaction or a series of transactions, of (i) any of the Capital Stock of any of Company’s Subsidiaries whether newly issued or outstanding, (ii) substantially all of the assets of any division or line of business of Company or any of its Subsidiaries, or (iii) any other property or assets (whether tangible or intangible) of Company or any of its Subsidiaries.

“Assignment Agreement” means an Assignment and Assumption in substantially the form of Exhibit IX annexed hereto.

“Bankruptcy Case” has the meaning assigned to that term in the recitals hereto.

“Bankruptcy Code” has the meaning assigned to that term in the recitals hereto.

“Bankruptcy Court” has the meaning assigned to that term in the recitals hereto.

“Base Rate” means, at any time, an interest rate per annum equal to the sum of (a) 5.00% plus (b) the highest of (i) the Prime Rate, (ii) the rate which is 1/2 of 1% in excess of the Federal Funds Effective Rate and (iii) the Eurodollar Rate for a one month Interest Period on such day (or if such day is not a Business Day, the next succeeding Business Day); provided that, for the avoidance of doubt, the Eurodollar Rate for any day shall be based on the rate determined on such day at approximately 11 a.m. (London time) by reference to the British Bankers’ Association Interest Settlement Rates for deposits in dollars (as set forth by any service selected by the Administrative Agent that has been nominated by the British Bankers’ Association as an

3

authorized vendor for the purpose of displaying such rates).  Any change in the Base Rate due to a change in the Prime Rate, the Federal Funds Effective Rate or the Eurodollar Rate shall be effective on the effective date of such change.

“Base Rate Loans” means Loans bearing interest at rates determined by reference to the Base Rate as provided in subsection 2.2A.

“Board of Governors” shall mean the Board of Governors of the Federal Reserve System of the United States.

“Borrower Materials” has the meaning assigned to that term in subsection 10.7C.

“Business Day” means any day excluding Saturday, Sunday and any day which is a legal holiday under the laws of the State of New York or is a day on which banking institutions located in such state are authorized or required by law or other governmental action to close.

“Canadian Subsidiary” means Panolam Industries, Ltd. and any wholly-owned Subsidiary of Panolam Industries, Ltd. incorporated or organized in Canada or any province or territory thereof.

“Capital Lease”, as applied to any Person, means any lease of any property (whether real, personal or mixed) by that Person as lessee that, in conformity with GAAP, is accounted for as a capital lease on the balance sheet of that Person.

“Capital Stock” means the capital stock of or other equity interests in a Person.

“Cash” means money, currency or a credit balance in a Deposit Account.

“Cash Equivalents” means, as at any date of determination, (i) marketable securities (a) issued or directly and unconditionally guaranteed as to interest and principal by the United States or Canada or (b) issued by any agency or instrumentality of the United States or Canada the obligations of which are backed by the full faith and credit of the United States or Canada, respectively, in each case maturing within one year after such date; (ii) marketable direct obligations issued by any state, commonwealth or territory of the United States or any province of Canada or any political subdivision of any such state, commonwealth, territory or province, as applicable, or any public instrumentality thereof, in each case maturing within one year after such date and having, at the time of the acquisition thereof, one of the two highest ratings obtainable from any of S&P, Moody’s or DBRS, as applicable; (iii) commercial paper maturing no more than one year from the date of creation thereof and having, at the time of the acquisition thereof, a rating of at least A-1 from S&P, at least P-1 from Moody’s or at least R-1 from DBRS, as may be applicable; (iv) certificates of deposit or bankers’ acceptances maturing within one year after such date and issued or accepted by any Lender or by any commercial bank organized under the laws of the United States or any state thereof or the District of Columbia that (a) is at least “adequately capitalized” (as defined in the regulations of its primary Federal banking regulator) and (b) has Tier 1 capital (as defined in such regulations) of not less than $100,000,000; (v) repurchase agreements entered into by any Person with a bank or trust

4

company (including any of the Lenders) or recognized securities dealer having capital and surplus in excess of $250,000,000 for direct obligations issued or fully guaranteed by the United States; (vi) shares of any money market mutual fund that (a) has at least 95% of its assets invested continuously in the types of investments referred to in clauses (i), (ii), (iii), (iv) and (v) above, and (b) has capital of not less than $500,000,000; and (vii) solely with respect to Foreign Subsidiaries, non-Dollar denominated (a) certificates of deposit of, bankers acceptances of, or time deposits with, any commercial bank which is organized and existing under the laws of the country in which such Foreign Subsidiary maintains its chief executive office and principal place of business, provided such country is a member of the Organization for Economic Cooperation and Development, and whose short-term commercial paper rating from S&P is at least A-1 or the equivalent thereof or from ▇▇▇▇▇’▇ is at least P-1 or the equivalent thereof (any such bank being an “Approved Foreign Bank”) and maturing within one year of the date of acquisition and (b) equivalents of demand deposit accounts which are maintained with an Approved Foreign Bank.

“Change in Control” means any of the following:  (i) at any time, any “person” or “group” (as such terms are used in sections 13(d) and 14(d) of the Exchange Act, but excluding any employee benefit plan of such person and its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan), excluding the Equity Holders, shall become the beneficial owner, directly or indirectly, of a percentage of the Capital Stock of Company in excess of the greater of (a) the percentage of Company’s Capital Stock (on a fully diluted basis) owned beneficially by the Equity Holders at such time, or (b) 35% of the Capital Stock (on a fully diluted basis), or (ii) during any period of twelve (12) consecutive months, the Governing Body of Company shall not consist of a majority of the Continuing Members; (iii) at any time prior to the consummation of a Qualifying IPO of the Capital Stock of Company, the failure at any time of Holdings to legally and beneficially own and control 100% of the issued and outstanding shares of Capital Stock of Company or the failure at any time of Holdings to have the ability to elect all of the Governing Body of Company; or (iv) the occurrence of any “Change in Control” as defined in the Second Lien Credit Agreement.  As used herein, the term “beneficially own” or “beneficial ownership” shall have the meaning set forth in the Exchange Act and the rules and regulations promulgated thereunder.

“Change in Law” means the occurrence, after the date of this Agreement, of any of the following:  (i) the adoption or taking effect of any law, rule, regulation, treaty or order, (ii) any change in any law, rule, regulation or treaty or in the administration, interpretation or application thereof by any Government Authority, (iii) any determination of a court or other Government Authority or (iv) the making or issuance of any request, guideline or directive (whether or not having the force of law) by any Government Authority.

“Closing Date” means September 30, 2005.

“Collateral” means, collectively, all of the property in which Liens are purported to be granted pursuant to the Collateral Documents as security for the Obligations.

“Collateral Account” has the meaning assigned to that term in the Security Agreement.

5

“Collateral Documents” means the Security Agreement, the Mortgages, all Account Control Agreements and all other instruments or documents delivered by any Loan Party pursuant to this Agreement or any of the other Loan Documents in order to grant to Administrative Agent, on behalf of Lenders, a Lien on any property of that Loan Party as security for the Obligations.

“Commercial Letter of Credit” means any letter of credit or similar instrument issued for the purpose of providing the primary payment mechanism in connection with the purchase of any materials, goods or services by Company or any of its Subsidiaries in the ordinary course of business of Company or such Subsidiary.

“Commitments” means the commitments of Lenders to make Loans as set forth in subsections 2.1 and 3.3.

“Communications” has the meaning assigned to that term in subsection 10.7B.

“Company” has the meaning assigned to that term in the introduction to this Agreement.

“Compliance Certificate” means a certificate substantially in the form of Exhibit VII annexed hereto.

“Consolidated Capital Expenditures” means, for any period, the sum of the aggregate of all expenditures (whether paid in cash or other consideration or accrued as a liability and including that portion of Capital Leases which is capitalized on the consolidated balance sheet of Company and its Subsidiaries) by Company and its Subsidiaries during that period that, in conformity with GAAP, are included in “additions to property, plant or equipment” or comparable items reflected in the consolidated statement of cash flows of Company and its Subsidiaries.  For purposes of this definition, the purchase price of any asset that is purchased substantially simultaneously with the exchange of existing assets or with Net Insurance/Condemnation Proceeds shall be included in Consolidated Capital Expenditures only to the extent of the gross amount of such purchase price less the credit granted by the seller for the assets being exchanged at such time or the amount of such Net Insurance/Condemnation Proceeds, as the case may be.

“Consolidated Cash Interest Expense” means, for any period, Consolidated Interest Expense for such period excluding, however, any interest expense not payable in Cash (including amortization of discount and amortization of debt issuance costs); provided, however, the parties agree that the Consolidated Cash Interest Expense for the third Fiscal Quarter of 2009 shall equal $3,201,624 and the Consolidated Cash Interest Expense for the fourth Fiscal Quarter of 2009 shall equal $3,201,624.

“Consolidated Current Assets” means, as at any date of determination, the total assets of Company and its Subsidiaries on a consolidated basis which may properly be classified as current assets in conformity with GAAP, excluding Cash and Cash Equivalents.

“Consolidated Current Liabilities” means, as at any date of determination, the total liabilities of Company and its Subsidiaries on a consolidated basis which may properly be

6

classified as current liabilities in conformity with GAAP, excluding the current portions of long-term Indebtedness and Capital Leases.

“Consolidated EBITDA” means, for any period, the sum, without duplication, of the amounts for such period of:

(i)            Consolidated Net Income,

(ii)           Consolidated Interest Expense,

(iii)          provisions for taxes based on income or profits and franchise or similar taxes,

(iv)          total depreciation expense,

(v)           total amortization expense,

(vi)          actual and documented customary fees, costs and expenses incurred in connection with any equity or debt offering, Investment, recapitalization or Indebtedness (in each case, as permitted by this Agreement) or in connection with the consummation of Permitted Acquisitions,

(vii)         restructuring charges or reserves (including, without limitation, retention, severance, systems establishment cost, excess pension charges, contract termination costs including future lease commitments, and costs to consolidate facilities and relocate employees), which cash restructuring charges and reserves shall not exceed $2,000,000 in any four (4) consecutive Fiscal Quarters.

(viii)        net after-tax gains or losses (less all fees and expenses or charges relating thereto) attributable to the early extinguishment of Indebtedness,

(ix)           net gain or loss under any Hedge Agreement permitted by this Agreement,

(x)            other non-cash items (including, without limitation, any impairment charges, the impact of purchase accounting including, without limitation, the amortization of inventory step-up and stock based compensation plans but excluding any such non-cash item to the extent it represents an accrual of or reserve for cash expenditures in any future period),

(xi)           to the extent actually reimbursed (and to the extent such reimbursement is not otherwise included in Consolidated Net Income), expenses incurred to the extent covered by indemnification provisions in any agreement in connection with a Permitted Acquisition,

(xii)          to the extent covered by insurance (and to the extent the proceeds of such insurance are not otherwise included in Consolidated Net Income) under which the insurer has been properly notified and has not denied or contested coverage, charges and

7

expenses with respect to liability or casualty events, business interruption or product recalls,

(xiii)         letter of credit fees, and

(xiv)        Transaction Costs,

but only, in the case of clauses (ii)-(xiv), to the extent deducted in the calculation of Consolidated Net Income, less non-cash items added in the calculation of Consolidated Net Income (other than any such non-cash item to the extent it will result in the receipt of cash payments in any future period), all of the foregoing as determined on a consolidated basis for Company and its Subsidiaries and in conformity with GAAP.

“Consolidated Excess Cash Flow” means, for any period, an amount (if positive) equal to (i) the sum, without duplication, of the amounts for such period of (a) Consolidated EBITDA and (b) the Consolidated Working Capital Adjustment minus (ii) the sum, without duplication, of the amounts for such period of (a) voluntary and scheduled repayments of Consolidated Total Debt (excluding voluntary repayments of Term Loans and repayments of Revolving Loans except to the extent the Revolving Loan Commitment Amount is permanently reduced in connection with such repayments), (b) Consolidated Capital Expenditures solely to the extent permitted under subsection 7.8 (net of any proceeds of any related financings classified as long-term Indebtedness with respect to such expenditures), (c) Consolidated Cash Interest Expense (but including all amounts in respect of items in clauses (i) and (ii) of the definition of “Consolidated Interest Expense”), (d) current taxes based on income or profits and franchise or similar taxes of Company and its Subsidiaries and paid or payable in cash with respect to such period, (e) fees, costs and expenses paid in cash in connection with any equity or debt offering, Investment, recapitalization or Indebtedness permitted by this Agreement or in connection with any Permitted Acquisition, to the extent added to Consolidated EBITDA pursuant to clause (vi) of the definition thereof, (f) the portion of the purchase price of Permitted Acquisitions funded with cash and not constituting long-term Indebtedness, (g) restructuring charges or reserves paid in cash with respect to such period, to the extent added to Consolidated EBITDA pursuant to clause (vii) of the definition thereof, and (h) amounts added to Consolidated EBITDA pursuant to clauses (viii), (ix), (xi), (xii), (xiii) and (xiv) of the definition thereof.

“Consolidated Interest Expense” means, for any period, total interest expense (including that portion attributable to Capital Leases in accordance with GAAP and capitalized interest) of Company and its Subsidiaries on a consolidated basis with respect to all outstanding Indebtedness of Company and its Subsidiaries, net of interest income, including amortization of all commissions, discounts and other fees and charges owed with respect to letters of credit and bankers’ acceptance financing, net payments under Interest Rate Agreements and amounts referred to in subsection 2.3 payable to Administrative Agent and Lenders that are considered interest expense in accordance with GAAP, but excluding, however (i) the fees paid to Administrative Agent (in its capacity as Administrative Agent under the Existing Credit Agreement), Noteholders and Senior Lender Group on the Restatement Date in connection with the Restructuring, in an aggregate amount not to exceed $3,500,000 and (ii) fees and expenses

8

associated with an Investment permitted by subsection 7.3 and issuances of Capital Stock of Company or its Subsidiaries.

“Consolidated Net Income” means, for any period, the net income (or loss) of Company and its Subsidiaries on a consolidated basis for such period taken as a single accounting period determined in conformity with GAAP; provided that there shall be excluded (i) the income (or loss) of any Person (other than a Subsidiary of Company) in which any other Person (other than Company or any of its Subsidiaries) has a joint interest, except to the extent of the amount of dividends or other distributions actually paid to Company or any of its Subsidiaries by such Person during such period, (ii) any after-tax gains or losses attributable to asset sales, (iii) the net income (but not loss) of any Subsidiary of Company (other than a Loan Party) to the extent that the declaration of dividends or similar distributions by that Subsidiary of that income is not at the time permitted by a contract, operation of law or otherwise, (iv) the income (or loss) attributable to discontinued operations (including, without limitation, operations disposed of during such period, whether or not such operations were classified as discontinued), (v) any gains realized on, or because of, the purchase or other acquisition by Company or any of its Subsidiaries of any securities of such Person or any of its Subsidiaries, (vi) the amount equivalent to the cumulative effect of a change in accounting principles of Company or any of its Subsidiaries, and (vii) (to the extent not included in clauses (i) through (vi) above) any net extraordinary gains or net extraordinary losses.

“Consolidated Senior Debt” means, as at any date of determination, the aggregate stated balance sheet amount of the Indebtedness of Company and its Subsidiaries, set forth in the “Liabilities” section of the balance sheet, in respect of the Indebtedness arising pursuant to this Agreement, determined on a consolidated basis in accordance with GAAP, net of unrestricted Cash and Cash Equivalents and Cash and Cash Equivalents restricted only in favor of (i) Administrative Agent, the Lenders or the other “Secured Parties” pursuant to the Loan Documents and (ii) the Second Lien Agent, the Second Lien Lenders or the other “Secured Parties” pursuant to the Second Lien Credit Documents.

“Consolidated Senior Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (i) Consolidated Senior Debt as at such day to (ii) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such day, calculated on a Pro Forma Basis.

“Consolidated Total Debt” means, as at any date of determination, the aggregate stated balance sheet amount of all Indebtedness of Company and its Subsidiaries, determined on a consolidated basis in accordance with GAAP, net of unrestricted Cash and Cash Equivalents and Cash or Cash Equivalents restricted only in favor of (i) Administrative Agent, the Lenders or the other “Secured Parties” pursuant to the Loan Documents and (ii) Second Lien Agent, the Second Lien Lenders or the other “Secured Parties” pursuant to the Second Lien Credit Documents.

“Consolidated Total Leverage Ratio” means, as of the last day of any Fiscal Quarter, the ratio of (i) Consolidated Total Debt as at such day to (ii) Consolidated EBITDA for the consecutive four Fiscal Quarters ending on such day, calculated on a Pro Forma Basis.

9

“Consolidated Working Capital” means, as at any date of determination, the excess (or deficit) of Consolidated Current Assets over Consolidated Current Liabilities.

“Consolidated Working Capital Adjustment” means, for any period on a consolidated basis, the amount (which may be a negative number) by which Consolidated Working Capital as of the beginning of such period exceeds (or is less than) Consolidated Working Capital as of the end of such period.

“Contingent Obligation”, as applied to any Person, means any direct or indirect liability, contingent or otherwise, of that Person (i) with respect to any Indebtedness, lease, dividend or other payment obligation of another if the primary purpose or intent thereof by the Person incurring the Contingent Obligation is to provide assurance to the obligee of such obligation of another that such obligation of another will be paid or discharged, or that any agreements relating thereto will be complied with, or that the holders of such obligation will be protected (in whole or in part) against loss in respect thereof, (ii) with respect to any letter of credit issued for the account of that Person or as to which that Person is otherwise liable for reimbursement of drawings, or (iii) under Hedge Agreements.  Contingent Obligations shall include (a) the direct or indirect guaranty or endorsement (other than for collection or deposit in the ordinary course of business) by such Person of the payment obligation of another, (b) the obligation to make take-or-pay or similar payments if required regardless of non-performance by any other party or parties to an agreement, and (c) any liability of such Person for the obligation of another through any agreement (contingent or otherwise) (1) to purchase, repurchase or otherwise acquire such obligation or any security therefor, or to provide funds for the payment or discharge of such obligation (whether in the form of loans, advances, stock purchases, capital contributions or otherwise) or (2) to maintain the solvency or any balance sheet item, level of income or financial condition of another if, in the case of any agreement described under subclauses (1) or (2) of this sentence, the primary purpose or intent thereof is as described in clause (i) of the preceding sentence.  The amount of any Contingent Obligation shall be equal to the amount of the obligation so guaranteed or otherwise supported or, if less, the amount to which such Contingent Obligation is specifically limited.

“Continuing Member” means, as of any date of determination any member of the Governing Body of the Qualifying IPO Issuer who (i) was a member of such Governing Body on the Restatement Date or (ii) was nominated for election or elected to such Governing Body with the affirmative vote of a majority of the members who were either members of such Governing Body on the Restatement Date or whose nomination or election was previously so approved or received the vote of the Equity Holders in his or her election by the stockholders of the Qualifying IPO Issuer.

“Contractual Obligation”, as applied to any Person, means any provision of any Security issued by that Person or of any material indenture, mortgage, deed of trust, contract, undertaking, agreement or other instrument to which that Person is a party or by which it or any of its properties is bound or to which it or any of its properties is subject.

“Credit Suisse” has the meaning assigned to that term in the introduction to this Agreement.

10

“DBRS” means Dominion Bond Rating Service.

“Debtors” has the meaning assigned to that term in the recitals hereto.

“Default Excess” has the meaning assigned to that term in subsection 2.9.

“Default Period” has the meaning assigned to that term in subsection 2.9.

“Defaulted Loan” has the meaning assigned to that term in subsection 2.9.

“Defaulting Lender” has the meaning assigned to that term in subsection 2.9.

“De Minimis Account” has the meaning assigned to that term in subsection 5.17.

“Deposit Account” means a demand, time, savings, passbook or similar account maintained with a Person engaged in the business of banking, including a savings bank, savings and loan association, credit union or trust company.

“Disclosure Statement” means the Disclosure Statement Relating to the Debtors’ Joint Prepackaged Plan of Reorganization under Chapter 11 of the Bankruptcy Code of Panolam Holdings Co., Panolam Holdings II Co., Panolam Industries International, Inc., Panolam Industries, Inc., Pioneer Plastics Corporation, Nevamar Holdings Corp., Nevamar Holdco, LLC and Nevamar Company, LLC, Docket No. 5.

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

“Domestic Subsidiary” means any Subsidiary of Company that is incorporated or organized under the laws of the United States, any state thereof or in the District of Columbia other than a Subsidiary (x) which is a disregarded entity for U.S. federal income tax purposes and (y) substantially all of the assets of which are equity interests in Foreign Subsidiaries.

“Eligible Assignee” means (i) any Lender, any Affiliate of any Lender or any Approved Fund of any Lender; and (ii) any other Person (other than a natural person) approved by the Administrative Agent and, in the case of any assignment of a Revolving Loan Commitment, each Issuing Lender; provided that neither Company, nor any of its Affiliates (other than the Equity Holders and their Permitted Successors) nor any Defaulting Lender, Affiliate of a Defaulting Lender or Approved Fund of any Defaulting Lender shall be an Eligible Assignee; provided, further that any Lender may convert its Loans to Capital Stock of Holdings or its direct or indirect parent and may contribute its Loans to Company or any of its Affiliates via an Assignment Agreement in order to effectuate such conversion.

“Employee Benefit Plan” means any “employee benefit plan” as defined in Section 3(3) of ERISA (i) which is currently maintained or contributed to by Company, its Subsidiaries or any of their ERISA Affiliates, (ii) which was at any time during the last six years maintained, contributed to or terminated by Company, its Subsidiaries or any of their ERISA Affiliates, including any Person which was at such time an ERISA Affiliate of Company, or (iii) with respect to which there is any potential or outstanding liability of Company.

11

“Environmental Claim” means any investigation, notice, notice of violation, claim, action, suit, proceeding, demand, abatement order or other order or directive (conditional or otherwise), by any Government Authority or any other Person, arising (i) pursuant to or in connection with any actual or alleged violation of any Environmental Law, (ii) in connection with any Hazardous Materials or any Hazardous Materials Activity, or (iii) in connection with any actual or alleged damage, injury, threat or harm to natural resources or the environment.

“Environmental Laws” means any and all current or future applicable statutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations, or any other requirements of any Government Authority relating to (i) environmental matters, including those relating to any Hazardous Materials Activity or (ii) the generation, use, storage, transportation or disposal of Hazardous Materials in any manner applicable to Company or any of its Subsidiaries or any Facility.

“Equity Holders” means, collectively, the Persons receiving “New Capital Stock” under, and as defined in the Plan, and/or, their respective Affiliates (including, as applicable, related funds, general partners thereof and limited partners thereof) and, except for purposes of the definitions of “Change in Control” and “Eligible Assignee,” the Management Shareholders.

“ERISA” means the Employee Retirement Income Security Act of 1974, as amended from time to time, and any successor thereto.

“ERISA Affiliate”, as applied to any Person, means (i) any corporation that is a member of a controlled group of corporations within the meaning of Section 414(b) of the Internal Revenue Code of which that Person is a member; (ii) any trade or business (whether or not incorporated) that is a member of a group of trades or businesses under common control within the meaning of Section 414(c) of the Internal Revenue Code of which that Person is a member; and (iii) any member of an affiliated service group within the meaning of Section 414(m) or (o) of the Internal Revenue Code of which that Person, any corporation described in clause (i) above or any trade or business described in clause (ii) above is a member.

“ERISA Event” means (i) a “reportable event” within the meaning of Section 4043 of ERISA and the regulations issued thereunder with respect to any Pension Plan (excluding those for which the provision for 30-day notice to the PBGC has been waived by regulation); (ii) the failure to meet the minimum funding standard of Section 412 of the Internal Revenue Code with respect to any Pension Plan (whether or not waived in accordance with Section 412(d) of the Internal Revenue Code) or the failure to make by its due date a required installment under Section 412(m) of the Internal Revenue Code with respect to any Pension Plan or the failure to make any required contribution to a Multiemployer Plan; (iii) the provision by the administrator of any Pension Plan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminate such plan in a distress termination described in Section 4041(c) of ERISA; (iv) the withdrawal by Company, any of its Subsidiaries or any of their respective ERISA Affiliates from any Pension Plan with two or more contributing sponsors or the termination of any such Pension Plan resulting in liability pursuant to Section 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedings to terminate any Pension Plan, or the occurrence of any event or condition which might constitute grounds under ERISA for the termination of, or the

12

appointment of a trustee to administer, any Pension Plan; (vi) the imposition of liability on Company, any of its Subsidiaries or any of their respective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or by reason of the application of Section 4212(c) of ERISA; (vii) the withdrawal of Company, any of its Subsidiaries or any of their respective ERISA Affiliates in a complete or partial withdrawal (within the meaning of Sections 4203 and 4205 of ERISA) from any Multiemployer Plan if there is any potential liability therefor, or the receipt by Company, any of its Subsidiaries or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in reorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA; (viii) the assertion of a material claim (other than routine claims for benefits) against any Employee Benefit Plan other than a Multiemployer Plan or the assets thereof, or against  Company, any of its Subsidiaries or any of their respective ERISA Affiliates in connection with any Employee Benefit Plan; (ix) receipt from the Internal Revenue Service of notice of the failure of any Pension Plan (or any other Employee Benefit Plan intended to be qualified under Section 401(a) of the Internal Revenue Code) to qualify under Section 401(a) of the Internal Revenue Code, or the failure of any trust forming part of any Pension Plan to qualify for exemption from taxation under Section 501(a) of the Internal Revenue Code; or (x) the imposition of a Lien pursuant to Section 401(a)(29) or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to any Pension Plan.

“Eurodollar Rate” means, for any Interest Rate Determination Date with respect to an Interest Period for a Eurodollar Rate Loan, an interest rate equal to the greater of (a) 2.5% per annum and (b) the interest rate per annum obtained by dividing (i) (A) the rate per annum determined by the Administrative Agent at approximately 11:00 a.m. (London time) on such Interest Rate Determination Date by reference to the British Bankers’ Association Interest Settlement Rates for deposits in Dollars (as set forth by the Bloomberg Information Service or any successor thereto or any other service selected by the Administrative Agent which has been nominated by the British Bankers’ Association as an authorized information vendor for the purpose of displaying such rates) for a period equivalent to such Interest Period or (B) to the extent that an interest rate is not ascertainable pursuant to the foregoing provisions of this definition, the interest rate per annum determined by the Administrative Agent to be the average of the rates per annum at which deposits in Dollars are offered for such relevant Interest Period to major banks in the London interbank market in London, England at approximately 11:00 a.m. (London time) on such Interest Rate Determination Date by (ii) a percentage equal to (A) 100% minus (B) the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) established by the Board of Governors and any other banking authority, domestic or foreign, to which Administrative Agent or any Lender (including any branch, Affiliate or other fronting office making or holding a Loan) is subject for Eurocurrency Liabilities (as defined in Regulation D (or any successor category of liabilities under Regulation D)), which shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.  Eurodollar Rate Loans shall be deemed to constitute such Eurocurrency Liabilities and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D.

“Eurodollar Rate Loans” means Loans bearing interest at rates determined by reference to the Eurodollar Rate as provided in subsection 2.2A.

13

“Event of Default” means each of the events set forth in Section 8.

“Exchange Act” means the Securities Exchange Act of 1934, as amended from time to time, and any successor statute.

“Exchange Rate” means, on any date when an amount expressed in a currency other than Dollars is to be determined with respect to any Letter of Credit, the nominal rate of exchange of Administrative Agent in the New York foreign exchange market for the sale of such currency in exchange for Dollars at 12:00 noon (New York City time) one Business Day prior to such date, expressed as a number of units of such currency per one Dollar.

“Excluded Taxes” means, with respect to Administrative Agent, any Lender, or any other recipient of any payment to be made by or on account of any obligation of Company hereunder (i) taxes that are imposed on the overall net income and franchise taxes imposed in lieu thereof (a) by the United States, (b) by any other Government Authority under the laws of which such Lender is organized, has its principal office or maintains its applicable lending office, or (c) by any Government Authority solely as a result of a present or former connection between such recipient and the jurisdiction of such Government Authority (other than any such connection arising solely from such recipient having executed, delivered or performed its obligations or received a payment under, or enforced, any of the Loan Documents), (ii) gross receipts taxes imposed in lieu of net income taxes by the jurisdiction under the laws of which such Lender is organized, has its principal office or maintains its applicable lending office, (iii) any branch profits taxes imposed by the United States or any similar tax imposed by any other jurisdiction in which Company is located, (iv) in the case of a Foreign Lender (other than an assignee pursuant to a request of Company under subsection 2.10), any United States withholding tax that (x) is imposed on amounts payable to such Foreign Lender at the time it becomes a party hereto (or designates a new lending office), (y) is attributable to such Foreign Lender’s failure or inability (except as a result of a Change in Law other than a Change in Law described in subsection 2.7B(iv)(g)) to comply with its obligations under subsection 2.7B(iv), except to the extent that such Foreign Lender (or its assignor, if any) was entitled, at the time of designation of a new lending office (or assignment), to receive additional amounts from Company with respect to such withholding tax pursuant to subsection 2.7B, or (z) is required to be deducted under applicable law from any payment hereunder on the basis of the information provided by such Foreign Lender pursuant to clause (d) of subsection 2.7B(iv), and (v) all liabilities, penalties and interest with respect to any of the foregoing excluded taxes.

“Existing Credit Agreement” has the meaning assigned to that term in the recitals hereto.

“Existing Loans” has the meaning assigned to that term in subsection 2.1A.

“Existing Mortgage Policies” means, collectively, the ALTA mortgagee title insurance policies listed on Schedule 1.1A; each, individually an “Existing Mortgage Policy.”

“Existing Mortgaged Properties” means, collectively, the Real Property Assets listed on Schedule 4.1H; each, individually an “Existing Mortgaged Property.”

14

“Existing Mortgages” means, collectively, the Mortgages listed on Schedule 1.1B; each, individually an “Existing Mortgage.”

“Existing Revolving Loans” means the “Revolving Loans” as defined in the Existing Credit Agreement immediately prior to the Restatement Date, in the aggregate outstanding principal balance of $25,927,897.

“Existing Term Loans” means the “Term Loans” as defined in the Existing Credit Agreement immediately prior to the Restatement Date, in the aggregate outstanding principal balance of $167,586,498.19.

“Facilities” means any and all real property (including all buildings, fixtures or other improvements located thereon) owned, leased, operated or used by Company or any of its Subsidiaries.

“Federal Funds Effective Rate” means, for any period, a fluctuating interest rate equal for each day during such period to the weighted average of the rates on overnight Federal funds transactions with members of the Federal Reserve System arranged by Federal funds brokers, as published for such day (or, if such day is not a Business Day, for the next succeeding Business Day) by the Federal Reserve Bank of New York, or, if such rate is not so published for any day which is a Business Day, the average of the quotations for such day on such transactions received by Administrative Agent from three Federal funds brokers of recognized standing selected by Administrative Agent.

“Financial Officer” means an Officer who is the chief executive officer, chief financial officer or a vice president of finance, or any other Officer who serves in a similar capacity to any of the foregoing.

“Financial Plan” has the meaning assigned to that term in subsection 6.1L(ii).

“First Priority” means, with respect to any Lien purported to be created in any Collateral pursuant to any Collateral Document, that such Lien is perfected and has priority over any other Lien on such Collateral (other than Liens permitted pursuant to clauses (i)-(xvi), (xviii)-(xx) or (xxii) of subsection 7.2A).

“Fiscal Month” means a fiscal month of any Fiscal Year.

“Fiscal Quarter” means a fiscal quarter of any Fiscal Year.

“Fiscal Year” means the fiscal year of Company and its Subsidiaries ending on December 31 of each calendar year.  For purposes of this Agreement, any particular Fiscal Year shall be designated by reference to the calendar year in which such Fiscal Year ends.

“Flood Hazard Property” means an Existing Mortgaged Property or an Additional Mortgaged Property located in an area designated by the Federal Emergency Management Agency as having special flood or mud slide hazards.

15

“Foreign Lender” means any Lender that is organized under the laws of a jurisdiction other than that in which Company is resident for tax purposes.  For purposes of this definition, the United States, each state thereof and the District of Columbia shall be deemed to constitute a single jurisdiction.

“Foreign Plan” means any employee benefit plan maintained by Company or any of its Subsidiaries that is mandated or governed by any law, rule or regulation of any Government Authority other than the United States, any state thereof or any other political subdivision thereof.

“Foreign Subsidiary” means any Subsidiary of Company that is not a Domestic Subsidiary.

“Fund” means any Person (other than a natural Person) that is (or will be) engaged in making, purchasing, holding or otherwise investing in commercial loans and similar extensions of credit in the ordinary course of business.

“Funding and Payment Account” means the account specified in the payment instructions appearing below Administrative Agent’s signature herein or at the account designated as such in any other written notice delivered by Administrative Agent to Company and each Lender.

“Funding and Payment Office” means the office of Administrative Agent located at Eleven ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇  ▇▇▇▇▇ or such other office of Administrative Agent as may from time to time hereafter be designated as such in a written notice delivered by Administrative Agent to Company and each Lender.

“Funding Date” means the date of funding of a Loan.

“Funding Default” has the meaning assigned to that term in subsection 2.9.

“GAAP” means generally accepted accounting principles set forth in opinions and pronouncements of the Accounting Principles Board of the American Institute of Certified Public Accountants and statements and pronouncements of the Financial Accounting Standards Board or in such other statements by such other entity as may be approved by a significant segment of the accounting profession, in each case as the same are applicable to the circumstances as of the date of determination, subject to subsection 1.2.

“Governing Body” means the board of directors or other body having the power to direct or cause the direction of the management and policies of a Person that is a corporation, partnership, trust or limited liability company.

“Government Authority” means the government of the United States or any other nation, or any state, regional or local political subdivision or department thereof, and any other governmental or regulatory agency, authority, body, commission, central bank, board, bureau, court, instrumentality or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government, in each case

16

whether federal, state, local or foreign (including supra-national bodies such as the European Union or the European Central Bank).

“Governmental Authorization” means any permit, license, registration or other authorization of or from, or notice to, any Government Authority.

“Granting Lender” has the meaning assigned to that term in subsection 10.1B(iii).

“Guaranties” means the Holdings Guaranty and the Subsidiary Guaranty.

“Hazardous Materials” means (i) any chemical, material or substance at any time defined as or included in the definition of “hazardous substances”, “hazardous wastes”, “hazardous materials”, “extremely hazardous waste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous waste”, “pollutant”, “toxic pollutant”, “contaminant”, “restricted hazardous waste”, “infectious waste”, “toxic substances”, or any other term or expression intended to define, list or classify substances by reason of properties harmful to the environment (including harmful properties such as ignitability, corrosivity, reactivity, carcinogenicity, toxicity, reproductive toxicity, “TCLP toxicity” or “EP toxicity” or words of similar import under any applicable Environmental Laws); (ii) any oil, petroleum, petroleum fraction or petroleum derived substance; (iii) any drilling fluids, produced waters and other wastes associated with the exploration, development or production of crude oil, natural gas or geothermal resources; (iv) any flammable substances or explosives; (v) any radioactive materials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foam insulation; (viii) electrical equipment which contains any oil or dielectric fluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any other chemical, material or substance, exposure to which is prohibited, limited or regulated by any Government Authority having jurisdiction over the foregoing.

“Hazardous Materials Activity” means any activity, event or occurrence involving any Hazardous Materials, including the use, manufacture, possession, storage, holding, presence, existence, location, Release, placement, generation, transportation, processing, construction, treatment, abatement, removal, remediation, disposition or handling of any Hazardous Materials, and any corrective action or response action with respect to any of the foregoing.

“Hedge Agreement” means an Interest Rate Agreement or any exchange contract, swap agreement, futures contract, option contract, synthetic cap or collar or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.

“Holdings” has the meaning assigned to that term in the introduction to this Agreement.

“Holdings Guaranty” means the Amended and Restated Holdings First Lien Guaranty executed and delivered by Holdings on the Restatement Date, substantially in the form of Exhibit XIII annexed hereto.

17

“Indebtedness”, as applied to any Person, means, without duplication, (i) all indebtedness for borrowed money, (ii) that portion of obligations with respect to Capital Leases that is properly classified as a liability on a balance sheet in conformity with GAAP, (iii) notes payable and similar instruments representing extensions of credit whether or not representing obligations for borrowed money, (iv) any obligation owed for all or any part of the deferred purchase price of property or services, which purchase price is (a) due more than six months from the date of incurrence of the obligation in respect thereof or (b) evidenced by a note or similar written instrument excluding, in each case (x) any such obligations incurred under ERISA, (y) trade payables in the ordinary course of business and (z) any earn out obligation until such obligation appears in the liability section of the balance sheet of such Person, and (v) all indebtedness secured by any Lien on any property or asset owned or held by that Person regardless of whether the indebtedness secured thereby shall have been assumed by that Person or is nonrecourse to the credit of that Person.

“Indemnified Liabilities” has the meaning assigned to that term in subsection 10.3.

“Indemnified Taxes” means Taxes other than Excluded Taxes.

“Indemnitee” has the meaning assigned to that term in subsection 10.3.

“Intellectual Property” means all patents, trademarks, tradenames, copyrights, technology, software, know-how and processes used in or necessary for the conduct of the business of Company and its Subsidiaries.

“Intercreditor Agreement” means that certain Intercreditor Agreement dated as of the Restatement Date by and among Company, the Subsidiary Grantors (as defined therein) and Subsidiaries of Company and Holdings from time to time party thereto, Holdings, the Administrative Agent as First Lien Collateral Agent and Second Lien Agent as Second Lien Collateral Agent.

“Interest Payment Date” means (i) with respect to any Base Rate Loan, the last Business Day of each March, June, September and December of each year, commencing on December 31, 2009, and (ii) with respect to any Eurodollar Rate Loan, the last day of each Interest Period applicable to such Loan; provided that in the case of each Interest Period of longer than three months, “Interest Payment Date” shall also include each date that is three months, or a multiple thereof, after the commencement of such Interest Period.

“Interest Period” has the meaning assigned to that term in subsection 2.2B.

“Interest Rate Agreement” means any interest rate swap agreement, interest rate cap agreement, interest rate collar agreement or other similar agreement or arrangement to which Company or any of its Subsidiaries is a party.

“Interest Rate Determination Date”, with respect to any Interest Period, means the second Business Day prior to the first day of such Interest Period.

18

“Internal Revenue Code” means the Internal Revenue Code of 1986, as amended to the date hereof and from time to time hereafter, and any successor statute.

“Investment” means (i) any direct or indirect purchase or other acquisition by Company or any of its Subsidiaries of, or of a beneficial interest in, any Securities of any other Person (including any Subsidiary of Company) or any acquisition, by purchase or otherwise, of all or substantially all the business, property or fixed assets of any Person, or any division or line of business of any Person, (ii) any direct or indirect redemption, retirement, purchase or other acquisition for value, by any Subsidiary of Company from any Person other than Company or any of its Subsidiaries, of any equity Securities of such Subsidiary or (iii) any direct or indirect loan, advance (other than advances to employees for moving, entertainment and travel expenses, drawing accounts and similar expenditures in the ordinary course of business) or capital contribution by Company or any of its Subsidiaries to any other Person, including all indebtedness and accounts receivable from that other Person that are not current assets or did not arise from sales to that other Person in the ordinary course of business. The amount of any Investment shall be the original cost of such Investment plus the cost of all additions thereto, without any adjustments for increases or decreases in value, or write-ups, write-downs or write-offs with respect to such Investment (other than adjustments for the repayment of, or the refund of capital with respect to, the original principal amount of any such Investment).

“IP Collateral” means, collectively, the Intellectual Property that constitutes Collateral under the Security Agreement.

“IP Filing Office” means the United States Patent and Trademark Office, the United States Copyright Office or any successor or substitute office in which filings are necessary or, in the reasonable discretion of Administrative Agent, desirable in order to create or perfect Liens on, or evidence the interest of Administrative Agent and Lenders in, any IP Collateral.

“Issuing Lender”, with respect to any Letter of Credit, means the Revolving Lender that agrees or is otherwise obligated to issue such Letter of Credit, determined as provided in subsection 3.1B(ii).

“Joint Venture” means a joint venture, partnership or other similar arrangement, whether in corporate, partnership or other legal form.

“Leasehold Property” means any material leasehold interest of any Loan Party (other than a Foreign Subsidiary) as lessee under any lease of real property used for manufacturing, other than any such leasehold interest designated from time to time by Administrative Agent in its reasonable discretion as not being required to be included in the Collateral, which designation may be made based upon a determination by Administrative Agent in its reasonable discretion that the costs of obtaining a security interest in such leasehold interest are unreasonably excessive in relation to the benefit to Lenders of the security afforded thereby.

“Lender” and “Lenders” means the Persons identified as “Lenders” and listed on the signature pages of this Agreement, together with their successors and permitted assigns

19

pursuant to subsection 10.1; provided that the term “Lenders”, when used in the context of a particular Commitment, shall mean Lenders having that Commitment.

“Letter of Credit” or “Letters of Credit” means Commercial Letters of Credit and Standby Letters of Credit issued by Issuing Lenders for the account of Company pursuant to subsection 3.1.

“Letter of Credit Usage” means, as at any date of determination, the sum of (i) the maximum aggregate undrawn amount under all Letters of Credit then outstanding plus (ii) the aggregate amount of all drawings under Letters of Credit honored by Issuing Lenders and not theretofore reimbursed out of the proceeds of Revolving Loans pursuant to subsection 3.3B or otherwise reimbursed by Company.  For purposes of this definition, any amount described in clause (i) or (ii) of the preceding sentence which is denominated in a currency other than Dollars shall be valued based on the applicable Exchange Rate for such currency as of the applicable date of determination.

“Lien” means any lien, mortgage, pledge, assignment, security interest, charge or encumbrance of any kind (including any conditional sale or other title retention agreement, any lease in the nature thereof, and any agreement to give any security interest) and any option, trust or other preferential arrangement in the nature of security.

“Liquidity” means the sum of (i) Company’s Cash and Cash Equivalents plus (ii) the difference between (a) the Revolving Loan Commitment Amount and (b) the Total Utilization of Revolving Loan Commitments, in each case as of the date of determination.

“Loan” or “Loans” means one or more of the loans continued, exchanged or made pursuant to subsection 2.1.

“Loan Documents” means this Agreement, the Notes, the Letters of Credit (and any applications for, or reimbursement agreements or other documents or certificates executed by Company in favor of an Issuing Lender relating to, the Letters of Credit (collectively, a “Letter of Credit Application”)), the Guaranties and the Collateral Documents.  In the event that any Letter of Credit Application includes representations and warranties, covenants and/or events of default that do not contain the materiality qualifiers, exceptions or thresholds that are applicable to the analogous provisions of this Agreement or other Loan Documents, or are otherwise more restrictive, the relevant qualifiers, exceptions and thresholds contained herein shall be incorporated therein or, to the extent more restrictive, shall be deemed for purposes of such Letter of Credit Application to be the same as the analogous provisions herein.  Further, in the event of any conflict between this Agreement and any other Loan Document, this Agreement shall govern and control.

“Loan Exposure” means the sum of (i) the aggregate Term Loan Exposure of all Lenders plus (ii) the aggregate Revolving Loan Exposure of all Lenders.

“Loan Party” means each of Holdings, Company and any of Company’s Domestic Subsidiaries from time to time executing a Loan Document, and “Loan Parties” means all such Persons, collectively.

20

“Management Shareholders” means ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. and other members of management of Company and its Subsidiaries, who own Capital Stock of Company as of the Restatement Date.

“Margin Stock” has the meaning assigned to that term in Regulation U of the Board of Governors as in effect from time to time.

“Material Adverse Effect” means a material adverse effect upon (i) the business, results of operations or condition (financial or otherwise) of Holdings, Company and their respective Subsidiaries taken as a whole or (ii) the impairment of the ability of (a) Company or the Loan Parties (taken as a whole) to perform their respective obligations under the Loan Documents to which they are a party, or (b) Administrative Agent or Lenders to enforce their rights and remedies in respect of the Obligations.

“Maximum Consolidated Capital Expenditures Amount” has the meaning assigned to that term in subsection 7.8.

“Modification Title Endorsements” has the meaning assigned to that term in subsection 4.1H.

“Moody’s” means ▇▇▇▇▇’▇ Investors Service, Inc.

“Mortgage” means (i) a security instrument (whether designated as a deed of trust or a mortgage or by any similar title) executed and delivered by any Loan Party, in such form as may be approved by Administrative Agent in its reasonable discretion, in each case with such changes thereto as may be recommended by Administrative Agent’s local counsel based on local laws or customary local mortgage or deed of trust practices, or (ii) at Administrative Agent’s option, in the case of an Additional Mortgaged Property, an amendment to an existing Mortgage, in form reasonably satisfactory to Administrative Agent, adding such Additional Mortgaged Property to the Real Property Assets encumbered by such existing Mortgage.  “Mortgages” means all such instruments, including the Existing Mortgages and any Additional Mortgages, collectively.

“Multiemployer Plan” means any Employee Benefit Plan that is a “multiemployer plan” as defined in Section 3(37) of ERISA.

“Net Asset Sale Proceeds”, with respect to any Asset Sale pursuant to subsections 7.7B(vi), (xiii) or (xvii) means Cash payments (including any Cash received by way of deferred payment pursuant to, or by monetization of, a note receivable or otherwise, but only as and when so received) received from such Asset Sale, net of any bona fide direct costs incurred in connection with such Asset Sale, including (i) income taxes reasonably estimated to be actually payable as a result of any gain recognized in connection with such Asset Sale, (ii) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is repaid under the terms thereof as a result of such Asset Sale, (iii) the out-of-pocket expenses (including, without limitation, attorneys’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other

21

customary fees) incurred in connection with such Asset Sale, and (iv) for so long as such reserve is maintained, any reserve for adjustment in respect of (a) the sale price of such asset or assets established in accordance with GAAP and (b) any liabilities associated with such asset or assets and retained after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction; provided, however, that Net Asset Sale Proceeds shall not include any cash payments received from any Asset Sale by a Foreign Subsidiary unless such proceeds may be repatriated (by reason of a repayment of an intercompany note or otherwise) to the United States without (in the reasonable judgment of Company) resulting in a material Tax liability to Company.

“Net Insurance/Condemnation Proceeds” means any Cash payments or proceeds received by Holdings or any of its Domestic Subsidiaries (i) under any casualty insurance policy in respect of a covered loss thereunder or (ii) as a result of the taking of any assets of Holdings, Company or any of their respective Subsidiaries by any Person pursuant to the power of eminent domain, condemnation or otherwise, or pursuant to a sale of any such assets to a purchaser with such power under threat of such a taking, in each case, net of any actual and reasonable documented costs incurred by Holdings, Company or any of their respective Subsidiaries, as applicable, in connection with the adjustment or settlement of any claims of Holdings, Company or such Subsidiary in respect thereof including, without limitation, (1) income taxes reasonably estimated to be actually payable as a result of any gain recognized in connection with such event, (2) payment of the outstanding principal amount of, premium or penalty, if any, and interest on any Indebtedness (other than the Loans) that is secured by a Lien on the stock or assets in question and that is repaid under the terms thereof as a result of such event, (3) the out-of-pocket expenses (including, without limitation, attorneys’ fees, investment banking fees, survey costs, title insurance premiums, and related search and recording charges, transfer taxes, deed or mortgage recording taxes, other customary expenses and brokerage, consultant and other customary fees) incurred in connection with such event, and (4) for so long as such reserve is maintained, any reasonable reserve calculated in good faith for adjustment in respect of (a) the sale price of such asset or assets established in accordance with GAAP and (b) any liabilities associated with such asset or assets and retained after such sale or other disposition thereof, including, without limitation, pension and other post-employment benefit liabilities and liabilities related to environmental matters or against any indemnification obligations associated with such transaction; provided, however, that Net Insurance/Condemnation Proceeds shall not include any cash payments received by a Foreign Subsidiary unless such proceeds may be repatriated (by reason of a repayment of an intercompany note or otherwise) to the United States without (in the reasonable judgment of Company) resulting in a material Tax liability to Company.

“Net Securities Proceeds” means the cash proceeds (net of (i) underwriting discounts and commissions and other reasonable out-of-pocket expenses associated therewith, including reasonable attorneys fees, investment banking fees, other customary expenses and brokerage, consultant and other customary fees, and (ii) taxes) from the issuance of Capital Stock of or incurrence of Indebtedness by Holdings, Company or any of their respective Subsidiaries.

“Non-Consenting Lender” has the meaning assigned to that term in subsection 2.10.

22

“Noteholders” means the holders of Senior Subordinated Note Claims (as defined in the Plan).

“Notes” means one or more of the Term Notes or Revolving Notes or any combination thereof.

“Notice of Borrowing” means a notice substantially in the form of Exhibit I annexed hereto.

“Notice of Conversion/Continuation” means a notice substantially in the form of Exhibit II annexed hereto.

“Notice of Prepayment” means a notice substantially in the form of Exhibit XIV annexed hereto.

“Obligations” means all obligations of every nature of each Loan Party from time to time owed to Administrative Agent, Lenders or any of them under the Loan Documents, whether for principal, interest, reimbursement of amounts drawn under Letters of Credit, fees, expenses, indemnification or otherwise.

“OFAC” has the meaning assigned to that term in subsection 5.20.

“Officer” means the president, chief executive officer, any vice president, chief financial officer, treasurer, general partner (if an individual), managing member (if an individual) or other individual appointed by the Governing Body or the Organizational Documents of a corporation, partnership, trust or limited liability company to serve in a similar capacity as the foregoing.

“Officer’s Certificate”, as applied to any Person that is a corporation, partnership, trust or limited liability company, means a certificate executed on behalf of such Person by one or more Officers of such Person or one or more Officers of a general partner or a managing member if such general partner or managing member is a corporation, partnership, trust or limited liability company.

“Operating Lease”, as applied to any Person, means any lease (including leases that may be terminated by the lessee at any time) of any property (whether real, personal or mixed) that is not a Capital Lease other than any such lease under which that Person is the lessor.

“Organizational Documents” means the documents (including bylaws, if applicable) pursuant to which a Person that is a corporation, partnership, trust or limited liability company is organized.

“Other Taxes” means all present or future stamp or documentary taxes or any other excise or property taxes, charges, fees, expenses or similar levies arising from any payment made hereunder or under any other Loan Document or from the execution, delivery or enforcement of, or otherwise with respect to, this Agreement or any other Loan Document.

23

“Outstanding Tax Refunds” means such portion of a Loan Party’s United States federal income Tax refunds, and Canadian Tax refunds for the Fiscal Year ended December 31, 2008 that is not received prior to the Restatement Date.

“Participant” means a purchaser of a participation in the rights and obligations under this Agreement pursuant to subsection 10.1C.

“Participant Register” has the meaning assigned to that term in subsection 10.1C.

“Patriot Act” means the Uniting And Strengthening America By Providing Appropriate Tools Required To Intercept And Obstruct Terrorism Act of 2001 (Title III of Pub. L. No. 107-56 (signed into law October 26, 2001)).

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

“Pension Plan” means any Employee Benefit Plan, other than a Multiemployer Plan, that is subject to Section 412 of the Internal Revenue Code or Section 302 of ERISA, and for purposes of subsection 8.10, any Foreign Plan.

“Permitted Acquisition” means the acquisition of all or substantially all of a business, its assets, or the Capital Stock of any Person, which acquisition is permitted pursuant to clause (xv) of subsection 7.3.

“Permitted Cure Issuance” has the meaning assigned to that term in subsection 8.3.

“Permitted Holders” means (i) the Equity Holders or (ii) any of the Permitted Transferees of any Person in clause (i) hereof.

“Permitted Refinancing” means, with respect to any Person, any modification, refinancing, refunding, renewal or extension of any Indebtedness of such Person; provided that (a) the principal amount (or accreted value, if applicable) thereof does not exceed the principal amount (or accreted value, if applicable) of the Indebtedness so modified, refinanced, refunded, renewed or extended (the “Refinanced Indebtedness”) except by an amount equal to unpaid accrued interest and premium, if any, thereon plus other reasonable amounts paid, and fees and expenses reasonably incurred, in connection with such modification, refinancing, refunding, renewal or extension and by any amount equal to any existing commitments unutilized thereunder or as otherwise permitted pursuant to subsection 7.1, (b) such modification, refinancing, refunding, renewal or extension has a final maturity date equal to or later than the final maturity date of the Refinanced Indebtedness, (c) if the Refinanced Indebtedness is subordinated in right of payment to the Obligations, such modification, refinancing, refunding, renewal or extension is subordinated in right of payment to the Obligations on terms at least as favorable to the Lenders as those contained in the documentation governing the Refinanced Indebtedness, taken as a whole, (d) any Lien provided in connection with such modification, refinancing, refunding, renewal or extension does not extend to any additional property beyond the property subject to a Lien in favor of the Refinanced Indebtedness, other than (1) after-

24

acquired property that is affixed or incorporated into the property covered by such Lien or financed by Indebtedness permitted under subsection 7.1, (2) proceeds and products thereof and (3) property serving as collateral for a financing which is cross-collateralized to the financing secured by such Lien provided by the same Person or its Affiliate, (e) the direct or any contingent obligor with respect to the Refinanced Indebtedness is not changed in any respect, and (f) at the time thereof, no Event of Default shall have occurred and be continuing.

“Permitted Successors” means, with respect to any Equity Holder, (i) the legal successor to such Equity Holder or (ii) its Affiliates.

“Permitted Transferees” means, with respect to any Person, (i) any Affiliate of such Person, (ii) the heirs, executors, administrators, testamentary trustees, legatees or beneficiaries of any such Person or (iii) a trust, the beneficiaries of which, or a corporation or partnership, the stockholders, or general and limited partners, of which, or a limited liability company, the members of which, include only such Person or his or her spouse or lineal descendants, in each case to whom such Person has transferred the beneficial ownership of any Securities of Holdings (or any direct or indirect parent company).

“Person” means and includes natural persons, corporations, limited partnerships, general partnerships, limited liability companies, limited liability partnerships, joint stock companies, Joint Ventures, associations, companies, trusts, banks, trust companies, land trusts, business trusts or other organizations, whether or not legal entities, and Government Authorities.

“Pioneer Plastics Maine Guaranty” means that certain guaranty dated June 15, 2005 by Panolam Industries Holdings, Inc. and Pioneer Plastics Corporation for the benefit of the Superintendent of the Bureau of Insurance of Maine.

“Plan” has the meaning assigned to that term in the recitals hereto.

“Platform” has the meaning assigned to that term in subsection 10.7C.

“Potential Event of Default” means a condition or event that, after notice or lapse of time or both, would constitute an Event of Default.

“Preliminary Financial Plan” has the meaning assigned to that term in subsection 6.1L(i)

“Prepayment Excess” has the meaning assigned to that term in subsection 2.4B(iv)(b)(1).

“Prime Rate” means the rate that Credit Suisse announces from time to time as its prime lending rate, as in effect from time to time at its principal office in New York City. The Prime Rate is based upon various factors including Credit Suisse’s costs and desired return, general economic conditions and other factors, and is used as a reference point for pricing some loans, which may be priced at, above, or below such rate.  Credit Suisse or any other Lender may make commercial loans or other loans at rates of interest at, above or below the Prime Rate.

25

“Proceedings” means any action, suit, proceeding (whether administrative, judicial or otherwise) or arbitration.

“Pro Forma Basis” means, with respect to compliance with any test or covenant hereunder, compliance with such test or covenant after giving effect to (i) any Permitted Acquisition, (ii) any Asset Sale of a Subsidiary or operating entity or (iii) any incurrence of Indebtedness being given pro forma effect or any incurrence of Indebtedness in connection with any Permitted Acquisition being given pro forma effect (including (a) pro forma adjustments arising out of events which are directly attributable to the proposed Permitted Acquisition, Asset Sale or incurrence of Indebtedness, are factually supportable and are expected to have a continuing impact, in each case as determined on a basis consistent with Article 11 of Regulation S-X of the Securities Act, as interpreted by the Staff of the Securities and Exchange Commission, (b) pro forma adjustments reasonably acceptable to Administrative Agent arising out of operating expense reductions attributable to such transaction being given pro forma effect that (1) have been implemented or (2) will be implemented following such transaction and are supportable and quantifiable and, in each case, including, but not limited to, (A) reduction in personnel expenses, (B) reduction of costs related to administrative functions, (C) reductions of costs related to leased or owned properties and (D) reductions from the consolidation of operations and streamlining of corporate overhead and (c) such other adjustments as are reasonably satisfactory to Administrative Agent, in each case as certified by a Financial Officer of Company) using, for purposes of determining such compliance, the historical financial statements of all entities or assets so acquired or sold and the consolidated financial statements of Company and its Subsidiaries, which shall be reformulated as if such Permitted Acquisition or Asset Sale, and all other Permitted Acquisitions or Asset Sales that have been consummated during the period, and any Indebtedness or other liabilities repaid in connection therewith had been consummated and incurred or repaid at the beginning of such period (and assuming that such Indebtedness to be incurred bears interest during any portion of the applicable measurement period prior to the relevant acquisition at the interest rate which is or would be in effect with respect to such Indebtedness as at the relevant date of determination).

“Pro Forma Compliance” means, at any date of determination, that Company shall be in pro forma compliance with any or all of the covenants set forth in subsections 7.6A and 7.6B, as applicable, as of the date of such determination or the last day of the most recently completed Fiscal Quarter, as the case may be (computed on the basis of (i) balance sheet amounts as of such date and (ii) income statement amounts for the most recently completed period of four consecutive Fiscal Quarters for which financial statements shall have been delivered to Administrative Agent and calculated on a Pro Forma Basis in respect of the event giving rise to such determination).

“Proposed Act” has the meaning assigned to that term in subsection 2.7B(iv)(g).

“Pro Rata Share” means (i) with respect to all payments, computations and other matters relating to the Term Loan of any Lender, the percentage obtained by dividing (a) the Term Loan Exposure of that Lender by (b) the aggregate Term Loan Exposure of all Lenders, (ii) with respect to all payments, computations and other matters relating to the Revolving Loan Commitment or the Revolving Loans of any Lender or any Letters of Credit issued or participations therein deemed purchased by any Lender, the percentage obtained by dividing (a) 

26

the Revolving Loan Exposure of that Lender by (b) the aggregate Revolving Loan Exposure of all Lenders, and (iii) for all other purposes with respect to each Lender, the percentage obtained by dividing (a) the sum of the Term Loan Exposure of that Lender plus the Revolving Loan Exposure of that Lender by (b) the Loan Exposure, in any such case as the applicable percentage may be adjusted by assignments permitted pursuant to subsection 10.1.

“Public Lender” has the meaning assigned to that term in subsection 10.7C.

“Qualifying IPO” means the issuance by the Qualifying IPO Issuer of its common Capital Stock in an underwritten primary public offering (other than a public offering pursuant to a registration statement on Form S-8) pursuant to an effective registration statement filed with the Securities and Exchange Commission in accordance with the Securities Act of 1933 (whether alone or in connection with a secondary public offering).

“Qualifying IPO Issuer” means Holdings, Company or a corporation or other legal entity which owns, directly or indirectly, one hundred percent (100%) of the outstanding equity interests of Holdings.

“Real Property Asset” means, at any time of determination, any interest then owned by any Loan Party (other than any Foreign Subsidiary) in any real property.

“Recorded Leasehold Interest” means a Leasehold Property with respect to which a Record Document (as hereinafter defined) has been recorded in all places necessary or desirable, in Administrative Agent’s reasonable judgment, to give constructive notice of such Leasehold Property to third-party purchasers and encumbrancers of the affected real property.  For purposes of this definition, the term “Record Document” means, with respect to any Leasehold Property, (a) the lease evidencing such Leasehold Property or a memorandum thereof, executed and acknowledged by the owner of the affected real property, as lessor, or (b) if such Leasehold Property was acquired or subleased from the holder of a Recorded Leasehold Interest, the applicable assignment or sublease document, executed and acknowledged by such holder.

“Register” has the meaning assigned to that term in subsection 2.1F.

“Registered Loan” has the meaning assigned to that term in subsection 2.1F.

“Regulation D” means Regulation D of the Board of Governors, as in effect from time to time.

“Reimbursement Date” has the meaning assigned to that term in subsection 3.3B.

“Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective members, directors, trustees, officers, employees, agents, advisors of such Person and such Person’s Affiliates.

“Release” means any release, spill, emission, leaking, pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal, dumping, leaching or migration of

27

Hazardous Materials into the environment, including the movement of any Hazardous Materials through the air, soil, surface water or groundwater.

“Request for Issuance” means a request substantially in the form of Exhibit III annexed hereto.

“Requisite Lenders” means Lenders having or holding more than 50% of the Loan Exposure; provided that, in accordance with subsection 2.9, the Term Loan Exposure and Revolving Loan Exposure of any Defaulting Lender shall not be included and such Defaulting Lender shall not be deemed a “Lender” for purposes of calculating Requisite Lenders.

“Restatement Date” means December 23, 2009.

“Restatement Date Revolving Loans” has the meaning assigned to that term in subsection 2.1C(i).

“Restricted Junior Payment” means (i) any dividend or other distribution, direct or indirect, on account of any shares of any class of Capital Stock of Company now or hereafter outstanding, except a dividend payable solely in Capital Stock, (ii) any redemption, retirement, sinking fund or similar payment, purchase or other acquisition for value, direct or indirect, of any shares of any class of Capital Stock of Company now or hereafter outstanding, (iii) any payment made to retire, or to obtain the surrender of, any outstanding warrants, options or other rights to acquire shares of any class of Capital Stock of Company now or hereafter outstanding, and (iv) any payment or prepayment of principal of, premium, if any, or interest on, or redemption, purchase, retirement, defeasance (including in-substance or legal defeasance), sinking fund or similar payment with respect to, any Subordinated Indebtedness.

“Restructuring” has the meaning assigned to that term in the recitals hereto.

“Revolving Lender” means a Lender that has a Revolving Loan Commitment and/or that has an outstanding Revolving Loan.

“Revolving Loan Commitment” means the commitment of a Revolving Lender to make Revolving Loans to Company pursuant to subsection 2.1C, and “Revolving Loan Commitments” means such commitments of all Revolving Lenders in the aggregate.

“Revolving Loan Commitment Amount” means, at any date, the aggregate amount of the Revolving Loan Commitments of all Revolving Lenders.

“Revolving Loan Commitment Termination Date” means June 30, 2013.

“Revolving Loan Exposure”, with respect to any Revolving Lender, means, as of any date of determination (i) prior to the termination of the Revolving Loan Commitments, the amount of that Lender’s Revolving Loan Commitment, and (ii) after the termination of the Revolving Loan Commitments, the sum of (a) the aggregate outstanding principal amount of the Revolving Loans of that Lender plus (b) in the event that Lender is an Issuing Lender, the aggregate Letter of Credit Usage in respect of all Letters of Credit issued by that Lender (in each case net of any participations purchased by other Lenders in such Letters of Credit or in any

28

unreimbursed drawings thereunder) plus (c) the aggregate amount of all participations purchased by that Lender in any outstanding Letters of Credit or any unreimbursed drawings under any Letters of Credit.

“Revolving Loans” means the Loans (i) continued pursuant to subsection 2.1A and (ii) made by Revolving Lenders to Company pursuant to subsection 2.1C.

“Revolving Notes” means the amended and restated revolving promissory notes of Company issued to evidence the Revolving Loans of any Revolving Lenders, substantially in the form of Exhibit V annexed hereto.

“S&P” means Standard & Poor’s Ratings Group.

“SEC” means the Securities and Exchange Commission.

“Second Lien Agent” means Apollo Laminates Agent LLC, as Administrative Agent for the Second Lien Lenders under the Second Lien Credit Agreement.

“Second Lien Credit Agreement” means the Second Lien Credit Agreement dated as of the date hereof by and among Company, Holdings, the Second Lien Lenders and Second Lien Agent.

“Second Lien Credit Documents” means the Second Lien Credit Agreement and all of the Loan Documents (as defined in the Second Lien Credit Agreement).

“Second Lien Lenders” means the lenders from time to time party to the Second Lien Credit Agreement.

“Second Lien Notes” means one or more of the term notes issued pursuant to the Second Lien Credit Agreement.

“Securities” means any stock, shares, partnership interests, voting trust certificates, certificates of interest or participation in any profit-sharing agreement or arrangement, options, warrants, bonds, debentures, notes, or other evidences of indebtedness, secured or unsecured, convertible, subordinated, certificated or uncertificated, or otherwise, or in general any instruments commonly known as “securities.”

“Securities Account” has the meaning set forth in Article 8 of the UCC.

“Securities Act” means the Securities Act of 1933, as amended from time to time, and any successor statute.

“Security Agreement” means the Amended and Restated Security Agreement executed and delivered on the Restatement Date, substantially in the form of Exhibit XII annexed hereto.

“Senior Lender Group”  means the holders of Senior Lender Credit Agreement Claims (as defined in the Plan).

29

“Solvent”, with respect to any Person, means that as of the date of determination (i) the then fair saleable value of the property of such Person is (a) greater than the total amount of liabilities (including contingent liabilities) of such Person and (b) not less than the amount that will be required to pay the probable liabilities on such Person’s then existing debts as they become absolute and due considering all financing alternatives and potential asset sales reasonably available to such Person; (ii) such Person’s capital is not unreasonably small in relation to its business or any contemplated or undertaken transaction; and (iii) such Person does not intend to incur, or believe (nor should it reasonably believe) that it will incur, debts beyond its ability to pay such debts as they become due.  For purposes of this definition, the amount of any contingent liability at any time shall be computed as the amount that, in light of all of the facts and circumstances existing at such time, represents the amount that can reasonably be expected to become an actual or matured liability.

“SPC” has the meaning assigned to that term in subsection 10.1B(iii).

“Standby Letter of Credit” means any standby letter of credit or similar instrument issued for the purpose of supporting (i) Indebtedness of Company or any of its Subsidiaries in respect of industrial revenue or development bonds or financings, (ii) workers’ compensation liabilities of Company or any of its Subsidiaries, (iii) the obligations of third party insurers of Company or any of its Subsidiaries arising by virtue of the laws of any jurisdiction requiring third party insurers, (iv) obligations with respect to Capital Leases or Operating Leases of Company or any of its Subsidiaries, (v) performance, payment, deposit or surety obligations of Company or any of its Subsidiaries, in any case if required by law or governmental rule or regulation or in accordance with custom and practice in the industry and (vi) other lawful corporate purposes of Company or any of its Subsidiaries.

“Subject Lender” has the meaning assigned to that term in subsection 2.10.

“Subordinated Indebtedness” means (i) the Indebtedness of Company incurred pursuant to the Second Lien Credit Agreement, and (ii) any Indebtedness of Company incurred from time to time and subordinated in right of payment to the Obligations.

“Subsidiary”, with respect to any Person, means any corporation, partnership, trust, limited liability company, association, Joint Venture or other business entity of which more than 50% of the total ordinary voting power of shares of stock or other ownership interests entitled (without regard to the occurrence of any contingency) to vote in the election of the members of the Governing Body is at the time owned or controlled, directly or indirectly, by that Person or one or more of the other Subsidiaries of that Person or a combination thereof.

“Subsidiary Guarantor” means any Domestic Subsidiary of Company that executes and delivers a counterpart of the Subsidiary Guaranty on the Restatement Date or from time to time thereafter pursuant to subsection 6.8.

“Subsidiary Guaranty” means the Amended and Restated Subsidiary First Lien Guaranty executed and delivered by existing Domestic Subsidiaries of Company on the Restatement Date and to be executed and delivered by additional Domestic Subsidiaries of

30

Company from time to time thereafter in accordance with subsection 6.8, substantially in the form of Exhibit XI annexed hereto.

“Supplemental Collateral Agent” has the meaning assigned to that term in subsection 9.1B.

“Swap Counterparty” means a Lender or an Affiliate of a Lender that has entered into a Hedge Agreement with Company or one of its Subsidiaries, the obligations under which are secured pursuant to the Collateral Documents and guarantied pursuant to the Guaranties.

“Taking” means a taking or voluntary conveyance during the term hereof of all or part of any Existing Mortgaged Property, or any interest therein or right accruing thereto or use thereof, as the result of, or in settlement of, any condemnation or other eminent domain proceeding by any Governmental Authority affecting such Existing Mortgaged Property or any portion thereof whether or not the same shall have actually been commenced.

“Tax” or “Taxes” means any and all present or future tax, levy, impost, duty, fee, assessment, deduction, withholding or other similar charge imposed by a Government Authority, including interest, penalties, additions to tax and any similar liabilities with respect thereto.

“Term Lender” means a Lender that has an outstanding Term Loan pursuant to subsection 2.1B.

“Term Loan Exposure”, with respect to any Lender, means, as of any date of determination the outstanding principal amount of the Term Loan of that Lender.

“Term Loans” means the Loans evidenced by this Agreement continued or given in exchange for a portion of the aggregate principal amount of the Existing Term Loans and Existing Revolving Loans pursuant to the Plan.  “Term Loan” as to any Term Lender shall mean the principal amount of such Term Loans set forth on Schedule 2.1B with respect to such Term Lender.

“Term Notes” means those amended and restated promissory notes of Company issued to evidence the Term Loans of any Lenders, substantially in the form of Exhibit IV annexed hereto.

“Title Company” means one or more title insurance companies reasonably satisfactory to Administrative Agent.

“Total Utilization of Revolving Loan Commitments” means, as at any date of determination, the sum of (i) the aggregate principal amount of all outstanding Revolving Loans plus (ii) the Letter of Credit Usage.

“Transaction Costs” means the reasonable, documented and out of pocket fees, costs and expenses payable by Company in connection with the transactions contemplated by the Plan, the Restructuring and the Loan Documents.

31

“Trust Funds” shall mean any Cash and Cash Equivalents constituting (i) accrued and unpaid compensation of Company’s or any of its Subsidiaries’ employees  (including salaries, wages and benefits arising under any “employee benefit plan” (as such term is defined in Section 3(3) of ERISA) that is currently maintained or contributed to by Company or any of its Subsidiaries), (ii) all taxes required to be collected or withheld and paid over to a taxing authority (including, without limitation, payroll taxes and federal and state withholding taxes (including the employer’s share thereof)) and (iii) other trust or fiduciary funds, in all cases for which Company or any of its Subsidiaries, or any of their respective directors, officers or employees would have or would reasonably be expected to have,  criminal or personal liability for the failure to pay or remit such amounts to the appropriate recipient.

“Trust Fund Accounts” means all Deposit Accounts and/or Securities Accounts of any Loan Party containing only Trust Funds.

“UCC” means the Uniform Commercial Code as in effect in any applicable jurisdiction.

“Unasserted Obligations” means, at any time, Obligations for taxes, costs, indemnifications, reimbursements, damages and other liabilities (except for (i) the principal of and interest on, and fees relating to, the Indebtedness evidenced by this Agreement and (ii) contingent reimbursement obligations in respect of amounts that may be drawn under Letters of Credit) in respect of which no claim or demand for payment has been made (or, in the case of Obligations for indemnification, no notice for indemnification has been issued by the Indemnitee) at such time.

“Uniform Customs” has the meaning assigned to that term in subsection 10.14.

“United States” means the United States of America.

1.2                               Accounting Terms; Utilization of GAAP for Purposes of Calculations Under Agreement.

A.                                   Except as otherwise expressly provided in this Agreement, all accounting terms not otherwise defined herein shall have the meanings assigned to them in conformity with GAAP.  Financial statements and other information required to be delivered by Company to Lenders pursuant to this Agreement and calculations in connection with the definitions, covenants and other provisions of this Agreement shall be prepared in accordance with GAAP or the application thereof as in effect at the time of such preparation.  If at any time any change in GAAP or the application thereof  would affect the computation of any financial ratio set forth in any Loan Document, and Company or Requisite Lenders shall so request, Administrative Agent and Company shall negotiate in good faith to amend such ratio or requirement to preserve the original intent thereof in light of such change in GAAP or the application thereof  (subject to the approval of Requisite Lenders), provided that, until so amended, such ratio or requirement shall continue to be computed in accordance with GAAP or the application thereof  prior to such change therein and Company shall provide to Administrative Agent and Lenders reconciliation statements provided for in subsection 6.1G.

32

B.                                     Notwithstanding anything to the contrary contained herein, financial ratios and other financial calculations pursuant to this Agreement (other than pursuant to subsection 7.8) shall, following any Permitted Acquisition or any Asset Sale of a Subsidiary or operating entity, be calculated on a Pro Forma Basis until the completion of four full Fiscal Quarters following such transaction (or, in the case of pro forma adjustments arising out of prospective annual operating expense reductions attributable to a Permitted Acquisition, such longer period as is acceptable to the Administrative Agent).

C.                                     Notwithstanding the foregoing, the parties hereto hereby acknowledge and agree that for purposes of calculating any financial covenant or similar ratio under this Agreement, Indebtedness shall be valued at par (or par plus accrued Indebtedness, as appropriate).

1.3                               Other Definitional Provisions and Rules of Construction.

A.                                   Any of the terms defined herein may, unless the context otherwise requires, be used in the singular or the plural, depending on the reference.

B.                                     References to “Sections” and “subsections” shall be to Sections and subsections of, and the words “herein,” “hereof,” “hereto” and “hereunder” and words of similar import, respectively, shall be references to, this Agreement unless otherwise specifically provided.  Section and subsection headings in any Loan Document are included herein for convenience of reference only and shall not constitute a part of this Agreement for any other purpose or be given any substantive effect.

C.                                     The use in any of the Loan Documents of the word “include” or “including”, when following any general statement, term or matter, shall not be construed to limit such statement, term or matter to the specific items or matters set forth immediately following such word or to similar items or matters, whether or not nonlimiting language (such as “without limitation” or “but not limited to” or words of similar import) is used with reference thereto, but rather shall be deemed to refer to all other items or matters that fall within the broadest possible scope of such general statement, term or matter.

D.                                    Unless otherwise expressly provided herein, (a) references to Organizational Documents, agreements (including the Loan Documents) and other contractual instruments shall be deemed to include all subsequent amendments, restatements, extensions, supplements and other modifications thereto; and (b) references to any law shall include all statutory and regulatory provisions consolidating, amending, replacing, supplementing or interpreting such law.

1.4                               Rounding.

Any financial ratios required to be maintained pursuant to this Agreement (or required to be satisfied in order for a specific action to be permitted under this Agreement) shall be calculated by dividing the appropriate component by the other component, carrying the result to one place more than the number of places by which such ratio is expressed herein and rounding the result up or down to the nearest number (with a rounding-up if there is no nearest number).

33

Section 2.                                          AMOUNTS AND TERMS OF COMMITMENTS AND LOANS

2.1                               Existing Loans; Term Loans; Revolving Loans; Making of Loans; the Register; Optional Notes.

A.                                   Confirmation of Existing Loans.  Each of Holdings, Company, each Lender and Administrative Agent hereby confirms and acknowledges that each Lender has heretofore made Existing Revolving Loans and/or Existing Term Loans in the principal amounts set forth next to such Lender’s name on Schedule 2.1A annexed hereto (collectively, “Existing Loans”), the aggregate outstanding principal amount of which is $193,514,395.19, which amount consists of $25,927,897 in Existing Revolving Loans and $167,586,498.19 in Existing Term Loans.  Company agrees, ratifies and confirms that the Existing Loans, together with all accrued and unpaid interest thereon, are due and owing to Lenders and are not subject to any offset, counterclaims or defenses of any kind or nature.

B.                                     Term Loans Following the Restructuring.  As of the Restatement Date and after giving effect to the Plan, the Existing Term Loans shall be reduced to an aggregate principal amount of $133,115,866.70 as of the Restatement Date, and shall constitute “Term Loans” under this Agreement.  Term Loan amounts repaid or prepaid may not be reborrowed.

C.                                     Revolving Loans.  As of the Restatement Date and after giving effect to the Plan, the Existing Revolving Loans shall be reduced to an aggregate principal amount of $5,900,000 as of the Restatement Date, and shall constitute “Revolving Loans” under this Agreement.  Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, each Revolving Lender hereby severally agrees to make the Revolving Loans as follows:

(i)                                     Each Revolving Lender severally agrees, subject to the limitations set forth below with respect to the maximum amount of Revolving Loans permitted to be outstanding from time to time, to lend to Company from time to time during the period from the Restatement Date to but excluding the Revolving Loan Commitment Termination Date an aggregate amount not exceeding its Pro Rata Share of the aggregate amount of the Revolving Loan Commitments to be used for the purposes identified in subsection 2.5B; provided that not more than $5,900,000 of the Revolving Loans may be made on the Restatement Date (the “Restatement Date Revolving Loans”).  The amount of each Revolving Lender’s Revolving Loan Commitment is set forth on Schedule 2.1C annexed hereto and the Revolving Loan Commitment Amount is $15,000,000, of which $5,000,000 is reserved for Letters of Credit issued in accordance with Section 3; provided that the amount of the Revolving Loan Commitment of each Revolving Lender shall be adjusted to give effect to any assignment of such Revolving Loan Commitment pursuant to subsection 10.1B and shall be reduced from time to time by the amount of any reductions thereto made pursuant to subsection 2.4.  Each Revolving Lender’s Revolving Loan Commitment shall expire on the Revolving Loan Commitment Termination Date and all Revolving Loans and all other amounts owed hereunder with respect to the Revolving Loans and the Revolving Loan Commitments shall be paid in full no later than that date.  Amounts borrowed under this subsection

34

2.1C(i) may be repaid and reborrowed to but excluding the Revolving Loan Commitment Termination Date.

(ii)                                  Anything contained in this Agreement to the contrary notwithstanding, the Revolving Loans and the Revolving Loan Commitments shall be subject to the limitation that in no event shall the Total Utilization of Revolving Loan Commitments at any time exceed the Revolving Loan Commitment Amount then in effect.

D.                                    Borrowing Mechanics.  Revolving Loans made as Base Rate Loans on any Funding Date (other than Revolving Loans made pursuant to subsection 3.3B) shall be in an aggregate minimum amount of $1,000,000 and multiples of $100,000 in excess of that amount.  Revolving Loans made as Eurodollar Rate Loans with a particular Interest Period shall be in an aggregate minimum amount of $1,000,000 and multiples of $100,000 in excess of that amount.  Whenever Company desires that Lenders make Revolving Loans it shall deliver to Administrative Agent a duly executed Notice of Borrowing no later than 1:00 P.M. (New York City time) at least three Business Days in advance of the proposed Funding Date (in the case of a Eurodollar Rate Loan) or at least one Business Day in advance of the proposed Funding Date (in the case of a Base Rate Loan).  Revolving Loans may be continued as or converted into Base Rate Loans and Eurodollar Rate Loans in the manner provided in subsection 2.2D.  In lieu of delivering a Notice of Borrowing, Company may give Administrative Agent telephonic notice by the required time of any proposed borrowing under this subsection 2.1D; provided that such notice shall be promptly confirmed in writing by delivery of a duly executed Notice of Borrowing to Administrative Agent on or before the applicable Funding Date.

Neither Administrative Agent nor any Lender shall incur any liability to Company in acting upon any telephonic notice referred to above that Administrative Agent believes in good faith to have been given by an Officer or other person authorized to borrow on behalf of Company.

Company shall notify Administrative Agent prior to the funding of any Loans in the event that any of the matters to which Company is required to certify in the applicable Notice of Borrowing is no longer true and correct as of the applicable Funding Date, and the acceptance by Company of the proceeds of any Loans shall constitute a re-certification by Company, as of the applicable Funding Date, as to the matters to which Company is required to certify in the applicable Notice of Borrowing.

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Borrowing for a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable and Company shall be bound to make a borrowing in accordance therewith.

E.                                      Disbursement of Funds.  All Revolving Loans under this Agreement shall be made by Lenders simultaneously and proportionately to their respective Pro Rata Shares, it being understood that neither Administrative Agent nor any Lender shall be responsible for any other Lender’s default in its obligation to make a Loan requested hereunder nor shall the amount of the Commitment of any Lender to make the particular type of Loan requested or Pro

35

Rata Share of any Lender be increased or decreased as a result of such other Lender’s default in its obligation to make a Loan requested hereunder.

Promptly after receipt by Administrative Agent of a Notice of Borrowing pursuant to subsection 2.1D (or telephonic notice in lieu thereof), Administrative Agent shall notify each Revolving Lender.  Each Revolving Lender shall make the amount of its Revolving Loan available to Administrative Agent at the Funding and Payment Office not later than 1:00 P.M. (New York City time) on the applicable Funding Date, in same day funds in Dollars.  Except as provided in subsection 3.3B with respect to Revolving Loans used to reimburse any Issuing Lender for the amount of a drawing under a Letter of Credit issued by it, upon satisfaction or waiver of the conditions precedent specified in subsections 4.1 (in the case of Revolving Loans made on the Restatement Date) and 4.2 (in the case of all Revolving Loans), Administrative Agent shall make the proceeds of such Revolving Loans available to Company on the applicable Funding Date by causing an amount of same day funds in Dollars equal to the proceeds of all such Revolving Loans received by Administrative Agent from Revolving Lenders to be credited to the account designated by Company in the applicable Notice of Borrowing.

Unless Administrative Agent shall have been notified by any Revolving Lender prior to a Funding Date that such Revolving Lender does not intend to make available to Administrative Agent such Revolving Lender’s Pro Rata Share of the Loan requested on such Funding Date, Administrative Agent may assume that such Revolving Lender has made such amount available to Administrative Agent on such Funding Date and Administrative Agent may, in its sole discretion, but shall not be obligated to, make available to Company a corresponding amount on such Funding Date.  If such corresponding amount is not in fact made available to Administrative Agent by such Revolving Lender, Administrative Agent shall be entitled to recover such corresponding amount on demand from such Revolving Lender together with interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the customary rate set by Administrative Agent for the correction of errors among banks for three Business Days and thereafter at the Base Rate.  If such Revolving Lender does not pay such corresponding amount forthwith upon Administrative Agent’s demand therefor, Administrative Agent shall promptly notify Company and Company shall immediately pay such corresponding amount to Administrative Agent together with interest thereon, for each day from such Funding Date until the date such amount is paid to Administrative Agent, at the rate payable under this Agreement for the applicable Revolving Loan.  Nothing in this subsection 2.1E shall be deemed to relieve any Revolving Lender from its obligation to fulfill its Commitments hereunder or to prejudice any rights that Company may have against any Lender as a result of any default by such Lender hereunder.

F.                                      The Register.  Administrative Agent, acting for these purposes solely as a non-fiduciary agent of Company (it being acknowledged that Administrative Agent, in such capacity, and its Related Parties shall constitute Indemnitees under subsection 10.3), shall maintain (and make available for inspection by Company and any Lender (solely in respect of its own entries and not that of any other Lender) upon reasonable prior notice) at its address referred to in subsection 10.7 a register for the recordation of, and shall record, the names and addresses of Lenders and the respective amounts of the Revolving Loan Commitment, Term Loans and Revolving Loans (including principal and interest) of each Lender from time to time (the “Register” and each such Loan recorded thereon, a “Registered Loan”).  Company,

36

Administrative Agent and Lenders shall, absent manifest error, deem and treat the Persons listed as Lenders in the Register as the holders and owners of the corresponding Commitments and Loans listed therein for all purposes hereof; all amounts owed with respect to any Commitment or Loan shall be owed to the Lender listed in the Register as the owner thereof; and any request, authority or consent of any Person who, at the time of making such request or giving such authority or consent, is listed in the Register as a Lender shall be conclusive and binding on any subsequent holder, assignee or transferee of the corresponding Commitments or Loans.  Each Lender shall record on its internal records the amount of its Loans and Commitments and each payment in respect hereof, and any such recordation shall be conclusive and binding on Company, absent manifest error, subject to the entries in the Register, which shall, absent manifest error, govern in the event of any inconsistency with any Lender’s records.  Failure to make any recordation in the Register or in any Lender’s records, or any error in such recordation, shall not affect any Loans or Commitments or any Obligations in respect of any Loans.

G.                                     Optional Notes.  If so requested by any Lender by written notice to Company (with a copy to Administrative Agent) at least two Business Days prior to the Restatement Date or at any time thereafter, Company shall execute and deliver to such Lender (and/or, if applicable and if so specified in such notice, to any Person who is an assignee of such Lender pursuant to subsection 10.1) on the Restatement Date (or, if such notice is delivered after the Restatement Date, promptly after Company’s receipt of such notice) a promissory note or promissory notes to evidence such Lender’s Term Loans or Revolving Loans, substantially in the form of Exhibit IV or Exhibit V annexed hereto, respectively, with appropriate insertions.

2.2                               Interest on the Loans.

A.                                   Rate of Interest.  Subject to the provisions of subsections 2.6 and 2.7, each Term Loan and each Revolving Loan shall bear interest on the unpaid principal amount thereof from the Restatement Date through maturity (whether by acceleration or otherwise) at a rate determined by reference to the Base Rate or the Eurodollar Rate.  The applicable basis for determining the rate of interest with respect to any Revolving Loan shall be selected by Company initially at the time a Notice of Borrowing is given with respect to such Revolving Loan pursuant to subsection 2.1D, and the basis for determining the interest rate with respect to any Term Loan or any Revolving Loan may be changed from time to time pursuant to subsection 2.2D.  If on any day a Term Loan or Revolving Loan is outstanding with respect to which notice has not been delivered to Administrative Agent in accordance with the terms of this Agreement specifying the applicable basis for determining the rate of interest, then for that day that Loan shall bear interest determined by reference to the Base Rate.

(i)                                     Term Loans.  Subject to the provisions of subsections 2.2E, 2.2G and 2.7, the Term Loans shall bear interest through maturity as follows: (a) if a Base Rate Loan, then at the Base Rate; or (b) if a Eurodollar Rate Loan, then at the sum of the Eurodollar Rate plus 6.00%.

(ii)                                  Revolving Loans.  Subject to the proviso at the end of this clause (ii) and the provisions of subsections 2.2E, 2.2G and 2.7, the Revolving Loans shall bear interest through maturity as follows:

(a)                                  if a Eurodollar Rate Loan, then at the sum of the Eurodollar Rate plus 6.00%; or

37

(b)                                 if a Base Rate Loan, then at the Base Rate.

B.                                     Interest Periods.  In connection with each Eurodollar Rate Loan, Company may, pursuant to the applicable Notice of Borrowing or Notice of Conversion/Continuation, as the case may be, select an interest period (each an “Interest Period”) to be applicable to such Loan, which Interest Period shall be, at Company’s option, either a one, two, three or six month period or, if deposits in the interbank Eurodollar market are generally available for such period (as determined by Administrative Agent), a nine or twelve month period; provided that:

(i)                                     the initial Interest Period for any Eurodollar Rate Loan shall commence on the Funding Date in respect of such Loan, in the case of a Loan initially made as a Eurodollar Rate Loan, or on the date specified in the applicable Notice of Conversion/Continuation, in the case of a Loan converted to a Eurodollar Rate Loan;

(ii)                                  in the case of immediately successive Interest Periods applicable to a Eurodollar Rate Loan continued as such pursuant to a Notice of Conversion/Continuation, each successive Interest Period shall commence on the day on which the next preceding Interest Period expires;

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

(iv)                              any Interest Period that begins on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the calendar month at the end of such Interest Period) shall, subject to clause (v) of this subsection 2.2B, end on the last Business Day of a calendar month;

(v)                                 no Interest Period with respect to any portion of the Term Loans shall extend beyond December 31, 2013, and no Interest Period with respect to any portion of the Revolving Loans shall extend beyond the Revolving Loan Commitment Termination Date;

(vi)                              no Interest Period with respect to any Term Loan shall extend beyond a date on which Company is required to make a scheduled payment of principal of such Term Loan, unless the sum of (a) the aggregate principal amount of such Term Loan that is a Base Rate Loan plus (b) the aggregate principal amount of such Term Loan that is a Eurodollar Rate Loan with Interest Periods expiring on or before such date equals or exceeds the principal amount required to be paid on such Term Loan on such date;

(vii)                           there shall be no more than ten Interest Periods outstanding at any time; and

38

(viii)                        in the event Company fails to specify an Interest Period for any Eurodollar Rate Loan in the applicable Notice of Borrowing or Notice of Conversion/Continuation, Company shall be deemed to have selected an Interest Period of one month.

C.                                     Interest Payments.  Subject to the provisions of subsection 2.2E, interest on each Loan shall be payable in arrears on and to each Interest Payment Date applicable to that Loan, upon any prepayment of that Loan (to the extent accrued on the amount being prepaid) and at maturity (including final maturity); provided that, in the event any Revolving Loans that are Base Rate Loans are prepaid pursuant to subsection 2.4B(i), interest accrued on such Loans through the date of such prepayment shall be payable on the next succeeding Interest Payment Date applicable to Base Rate Loans (or, if earlier, at final maturity).

D.                                    Conversion or Continuation.  Subject to the provisions of subsection 2.6, Company shall have the option (i) to convert at any time all or any part of its outstanding Term Loans or Revolving Loans equal to $1,000,000 and multiples of $100,000 in excess of that amount from Loans bearing interest at a rate determined by reference to one basis to Loans bearing interest at a rate determined by reference to an alternative basis or (ii) upon the expiration of any Interest Period applicable to a Eurodollar Rate Loan, to continue the entire amount of such Loan remaining outstanding at such time, or to continue any portion of such Loan equal to $1,000,000 and multiples of $100,000 in excess of that amount, as a Eurodollar Rate Loan; provided, however, that a Eurodollar Rate Loan may only be converted into a Base Rate Loan on the expiration date of an Interest Period applicable thereto.

Company shall deliver a duly executed Notice of Conversion/Continuation to Administrative Agent no later than 1:00 P.M. (New York City time) at least one Business Day in advance of the proposed conversion date in the case of a conversion to a Base Rate Loan and at least three Business Days in advance of the proposed conversion/continuation date (in the case of a conversion to, or a continuation of, a Eurodollar Rate Loan).  In lieu of delivering a Notice of Conversion/Continuation, Company may give Administrative Agent telephonic notice by the required time of any proposed conversion/continuation under this subsection 2.2D; provided that such notice shall be promptly confirmed in writing by delivery of a duly executed Notice of Conversion/Continuation to Administrative Agent on or before the proposed conversion/continuation date.  Administrative Agent shall notify each Lender of any Loan subject to a Notice of Conversion/Continuation.

Except as otherwise provided in subsections 2.6B, 2.6C and 2.6G, a Notice of Conversion/Continuation for conversion to, or continuation of, a Eurodollar Rate Loan (or telephonic notice in lieu thereof) shall be irrevocable and Company shall be bound to effect a conversion or continuation in accordance therewith.

E.                                      Default Rate.  Upon the occurrence and during the continuation of any Event of Default all amounts outstanding under this Agreement and the other Loan Documents shall bear interest (after as well as before judgment) payable on demand by Administrative Agent, to the extent permitted by law, (i) in the case of principal, at a rate that is 2.0% per annum in excess of the interest rate otherwise payable under this Agreement with respect to the applicable Loans and (ii) in all other cases (including post-petition interest in any proceeding

39

under the Bankruptcy Code or other applicable bankruptcy laws), at a rate that is 2.0% per annum in excess of the interest rate otherwise then payable under this Agreement for Base Rate Loans; provided that, in the case of Eurodollar Rate Loans, upon the expiration of the Interest Period in effect at the time any such increase in interest rate is effective, such Eurodollar Rate Loans shall thereupon become Base Rate Loans and shall thereafter bear interest payable upon demand by Administrative Agent at a rate which is 2% per annum in excess of the interest rate otherwise then payable under this Agreement for Base Rate Loans.  Payment or acceptance of the increased rates of interest provided for in this subsection 2.2E is not a permitted alternative to timely payment and shall not constitute a waiver of any Event of Default or otherwise prejudice or limit any rights or remedies of Administrative Agent or any Lender.

F.                                      Computation of Interest.  Interest on the Loans shall be computed (i) in the case of Base Rate Loans, on the basis of a 365-day or 366-day year, as the case may be, and (ii) in the case of Eurodollar Rate Loans, on the basis of a 360-day year, in each case for the actual number of days elapsed in the period during which it accrues.  In computing interest on any Loan, the date of the making of such Loan or the first day of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted from a Eurodollar Rate Loan, the date of conversion of such Eurodollar Rate Loan to such Base Rate Loan, as the case may be, shall be included, and the date of payment of such Loan or the expiration date of an Interest Period applicable to such Loan or, with respect to a Base Rate Loan being converted to a Eurodollar Rate Loan, the date of conversion of such Base Rate Loan to such Eurodollar Rate Loan, as the case may be, shall be excluded; provided that if a Loan is repaid on the same day on which it is made, one day’s interest shall be paid on that Loan.

G.                                     Maximum Rate.  Notwithstanding the foregoing provisions of this subsection 2.2, in no event shall the rate of interest payable by Company with respect to any Loan exceed the maximum rate of interest permitted to be charged under applicable law.

2.3                               Fees.

A.                                   Facility Fee.  Company agrees to pay to Administrative Agent, for distribution to each Revolving Lender in proportion to that Lender’s Pro Rata Share, a facility fee equal to 1.0% per annum on the daily unused amount of the Revolving Loan Commitment of such Revolving Lender during the Fiscal Quarter preceding the date of payment of such facility fee (or other period commencing with the Restatement Date or ending with the Revolving Loan Commitment Termination Date or the date on which the Revolving Loan Commitments of such Revolving Lender shall expire or be terminated)

All facility fees payable hereunder shall be calculated on the basis of a 360-day year and the actual number of days elapsed and to be payable quarterly in arrears on (i) the last Business Day of each March, June, September and December of each year, commencing on the first such date to occur after the Restatement Date, and (ii) the Revolving Loan Commitment Termination Date.

B.                                     Other Fees.  Company agrees to pay to Administrative Agent such fees in the amounts and at the times separately agreed upon between Company and Administrative Agent.

40

2.4                               Repayments, Prepayments and Reductions of Commitments and Loans; General Provisions Regarding Payments; Application of Proceeds of Collateral and Payments Under Guaranties.

A.                                   Scheduled Payments of Term Loans.  Company shall make principal payments on the Term Loans in installments on the dates and in the amounts set forth below:

; provided that the scheduled installments of principal of the Term Loans set forth above shall be reduced in connection with any voluntary or mandatory prepayments of the Term Loans in accordance with subsection 2.4B(iv); and provided, further that the Term Loans and all other amounts owed hereunder with respect to the Term Loans shall be paid in full no later than December 31, 2013, and the final installment payable by Company in respect of the Term Loans on such date shall be in an amount, if such amount is different from that specified above, sufficient to repay all amounts owing by Company under this Agreement with respect to the Term Loans.

B.                                     Prepayments and Reductions in Revolving Loan Commitment Amount and Loans.

(i)                                     Voluntary Prepayments.  Company may, upon not less than one Business Day’s prior written or telephonic notice, in the case of Base Rate Loans, and three Business Days’ prior written or telephonic notice, in the case of Eurodollar Rate Loans, in each case given to Administrative Agent by 1:00 P.M. (New York City time) on the date required and, if given by telephone, promptly confirmed in writing to Administrative Agent, who will promptly notify each Lender whose Loans are to be prepaid of such prepayment, at any time and from time to time prepay, without premium or penalty but subject to subsection 2.6D, any Term Loans or Revolving Loans on any Business Day in whole or in part in an aggregate minimum amount of $1,000,000 and multiples of $100,000 in excess of that amount.  All written notices delivered pursuant to this subsection 2.4B(i) shall be in the form of a Notice of Prepayment and all notices whether written or telephonic delivered pursuant to this subsection 2.4B(i) shall be irrevocable, and once given as aforesaid, the principal amount of the Loans specified in such notice shall become due and payable on the prepayment date specified therein; provided, however, that notwithstanding anything to the contrary contained in this Agreement, Company may rescind a Notice of Prepayment under this subsection 2.4B(i) and/or subsection 2.4B(ii) if such prepayment would have resulted from a refinancing of

41

the Commitments and Loans outstanding hereunder, which refinancing shall not be consummated or shall otherwise be delayed.  Any such voluntary prepayment shall be applied as specified in subsection 2.4B(iv).

(ii)                                  Voluntary Reductions of Revolving Loan Commitments.  Company may, upon not less than three Business Days’ prior written or telephonic notice confirmed in writing to Administrative Agent, or upon such lesser number of days’ prior written or telephonic notice, as determined by Administrative Agent in its sole discretion, at any time and from time to time, terminate in whole or permanently reduce in part, without premium or penalty, the Revolving Loan Commitment Amount in an amount up to the amount by which the Revolving Loan Commitment Amount exceeds the Total Utilization of Revolving Loan Commitments at the time of such proposed termination or reduction; provided that any such partial reduction of the Revolving Loan Commitment Amount shall be in an aggregate minimum amount of $1,000,000 and multiples of $100,000 in excess of that amount.  The Notice of Prepayment shall designate the date (which shall be a Business Day) of such termination or reduction and the amount of any partial reduction, and such termination or reduction shall be effective on the date specified in Company’s notice and shall reduce the amount of the Revolving Loan Commitment of each Revolving Lender proportionately to its Pro Rata Share.  Administrative Agent will promptly notify each Revolving Lender of such notice.  Any such voluntary reduction of the Revolving Loan Commitment Amount shall be applied as specified in subsection 2.4B(iv)(b)(3).  All written notices delivered pursuant to this subsection 2.4B(ii) shall be in the form of a Notice of Prepayment, all notices, whether written or telephonic, delivered pursuant to this subsection 2.4B(ii) shall be, subject to the proviso set forth in subsection 2.4B(i), irrevocable and Company shall be bound to the termination or reduction of the Revolving Loan Commitments referenced in such notice.

(iii)                               Mandatory Prepayments.  The Loans shall be prepaid in the amounts and under the circumstances (including the giving of the Notice of Prepayment and Officer’s Certificate required by subsection 2.4B(iii)(g)), set forth below, all such prepayments to be applied as provided in subsection 2.4B(iv) or as more specifically provided in subsection 2.4D:

(a)                                  Prepayments from Net Asset Sale Proceeds.  No later than the date which is ten (10) Business Days after the date of receipt by Company or any Subsidiary Guarantor of any Net Asset Sale Proceeds, Company shall either (1) prepay the Loans in an aggregate amount equal to such Net Asset Sale Proceeds or (2) with respect to any Asset Sale pursuant to subsection 7.7B(vi), so long as no Event of Default shall have occurred and be continuing, deliver to Administrative Agent an Officer’s Certificate setting forth (x) that portion of such Net Asset Sale Proceeds that Holdings, Company or such Subsidiary intends to reinvest or cause to be reinvested in the business of Company or a Subsidiary Guarantor within 360 days of such date of receipt and (y) such other information with respect to such reinvestment as Administrative Agent may reasonably request.  Company shall, no later than 360 days after receipt of such Net Asset Sale Proceeds that have not theretofore been applied to the Obligations or that

42

have not been so reinvested as provided above, make a prepayment of the Loans in the full amount of all such Net Asset Sale Proceeds.

(b)                                 Prepayments from Net Insurance/Condemnation Proceeds.  No later than the date which is ten (10) Business Days after the date of receipt by Company or any Subsidiary Guarantor of any Net Insurance/Condemnation Proceeds, Company shall either (1) prepay the Loans in an aggregate amount equal to such Net Insurance/Condemnation Proceeds or (2), so long as no Event of Default shall have occurred and be continuing, deliver to Administrative Agent an Officer’s Certificate setting forth (x) that portion of such Net Insurance/Condemnation Proceeds that Holdings, Company or such Subsidiary intends to reinvest or cause to be reinvested in the business of Company or a Subsidiary Guarantor within 360 days of such date of receipt and (y) such other information with respect to such reinvestment as Administrative Agent may reasonably request.  Company shall, no later than 360 days after receipt of such Net Insurance/Condemnation Proceeds that have not theretofore been applied to the Obligations or that have not been so reinvested as provided above, make a prepayment of the Loans in the full amount of all such Net Insurance/Condemnation Proceeds.

(c)                                  Prepayments Due to Issuance of Equity Securities.

(1)                                  No later than the date which is five (5) Business Days after the date of receipt of the Net Securities Proceeds from the issuance of any Capital Stock of Holdings or Company (but excluding the Net Securities Proceeds of any issuance of Capital Stock in connection with (1) the making of any Investment permitted by subsection 7.3(xv) or 7.3(xvi), (2) a Permitted Cure Issuance (which Net Securities Proceeds shall be applied pursuant to clause (2) of this subsection 2.4B(iii)(c)) and (3) issuances of Capital Stock of Company to Holdings), Company shall prepay the Loans in an aggregate amount equal to 50% of such Net Securities Proceeds; provided, however, that if the Consolidated Total Leverage Ratio is less than or equal to (y) 2.75:1.00 as of the last day of the most recently ended Fiscal Quarter, then Company shall instead prepay the Loans in an aggregate amount equal to 25% of such Net Securities Proceeds, and (z) 1.75:1.00 as of the last day of the most recently ended Fiscal Quarter, then Company shall not be required to prepay the Loans with any of such Net Securities Proceeds.

(2)                                  No later than the date which is five (5) Business Days after the date of receipt of the Net Securities Proceeds of any issuance of Capital Stock in connection with a Permitted Cure Issuance, Company shall prepay the Loans in an aggregate amount equal to 100% of such Net Securities Proceeds.

(d)                                 Prepayments Due to Issuance of Indebtedness.  No later than the date which is five (5) Business Days after the date of receipt of (1) the

43

Net Securities Proceeds from the issuance of any Indebtedness of Company, Holdings or any of its Domestic Subsidiaries after the Restatement Date, other than Indebtedness not prohibited pursuant to subsection 7.1, or (2) the Net Securities Proceeds from the issuance of any Indebtedness of a Canadian Subsidiary pursuant to subsection 7.1(xvii), Company shall prepay the Loans in an aggregate amount equal to such Net Securities Proceeds.

(e)                                  Prepayments from Excess Cash.

(1)                                  No later than February 1, 2010 Company shall prepay the Loans in an aggregate amount equal to 100% of the Cash and Cash Equivalents reflected on Company’s consolidated balance sheet as at December 31, 2009 (including, without limitation, the amount of any Outstanding Tax Refunds received on or prior to December 31, 2009) in excess of $20,000,000 of Liquidity, if any.

(2)                                  In the event that there shall be Consolidated Excess Cash Flow for any Fiscal Year (commencing with Fiscal Year 2010), Company shall, no later than the date which is five (5) Business Days after the audited financial statements are required to be delivered pursuant to subsection 6.1D(ii), prepay the Loans in an aggregate amount equal to 100% of such Consolidated Excess Cash Flow; provided, however, that if the Consolidated Senior Leverage Ratio is less than or equal to (1) 5.00:1.00 as of the last day of the most recently ended Fiscal Quarter, then Company shall instead prepay the Loans in an aggregate amount equal to 75% of such Consolidated Excess Cash Flow, and (2) 4.00:1.00 as of the last day of the most recently ended Fiscal Quarter, then Company shall instead prepay the Loans in an aggregate amount equal to 50% of such Consolidated Excess Cash Flow; provided, further, that the amount payable under this subsection 2.4B(iii)(e) with respect to any Fiscal Year shall be reduced on a dollar-for-dollar basis by the amount of voluntary prepayments of the Term Loans and voluntary reductions of the Revolving Loan Commitments made during such Fiscal Year.

(f)                                    Prepayments from Outstanding Tax Refunds.  No later than the date which is five (5) Business Days after the date of receipt by any Loan Party of any Outstanding Tax Refunds (if such date of receipt is on or after January 1, 2010), Company shall prepay the Loans in an aggregate amount equal to 100% of such Outstanding Tax Refunds received after January 1, 2010.

(g)                                 Calculations of Net Proceeds Amounts; Additional Prepayments Based on Subsequent Calculations.  Company shall provide Administrative Agent with not less than one Business Day’s prior written notice by delivery of a Notice of Prepayment or prior telephonic notice promptly confirmed in writing by the delivery of a Notice of Prepayment, of any prepayment of the Loans pursuant to subsections 2.4B(iii)(a)-(f).  Such written or telephonic notice shall be irrevocable and Company shall be bound to make the

44

mandatory prepayment referenced in such notice on the date indicated in such notice.  Administrative Agent shall promptly notify each Lender of such prepayment and of the amount of the prepayment proposed to be applied to such Lender’s Loans.  Concurrently with any prepayment of the Loans, Company shall deliver to Administrative Agent an Officer’s Certificate demonstrating the calculation of the amount of the applicable Net Asset Sale Proceeds, Net Insurance/Condemnation Proceeds, Net Securities Proceeds, or Consolidated Excess Cash Flow, as the case may be, that gave rise to such prepayment.  In the event that Company shall subsequently determine that the actual amount was greater than the amount set forth in such Officer’s Certificate, Company shall promptly make an additional prepayment of the Loans in an amount equal to the amount of such excess, and Company shall concurrently therewith deliver to Administrative Agent an Officer’s Certificate demonstrating the derivation of the additional amount resulting in such excess.

(h)                                 Prepayments Due to Reductions of Revolving Loan Commitment Amount.  Company shall from time to time prepay the Revolving Loans (and, after prepaying all Revolving Loans, Cash collateralize any outstanding Letters of Credit by depositing the requisite amount in the Collateral Account) to the extent necessary so that the Total Utilization of Revolving Loan Commitments shall not at any time exceed the Revolving Loan Commitment Amount then in effect.  At such time as the Total Utilization of Revolving Loan Commitments shall be equal to or less than the Revolving Loan Commitment Amount, if no Event of Default has occurred and is continuing, to the extent any Cash collateral was provided by Company and has not been applied to any Obligations as provided in the Security Agreement, such amount shall automatically be released to Company.

(iv)                              Application of Prepayments and Reductions of Commitments and Loans.

(a)                                  Application of Voluntary Prepayments by Type of Loans and Order of Maturity.  Any voluntary prepayments pursuant to subsection 2.4B(i) shall be applied as specified by Company in the applicable Notice of Prepayment; provided that in the event Company fails to specify the Loans to which any such prepayment shall be applied, such prepayment shall be applied first to repay outstanding Revolving Loans to the full extent thereof, and second to repay outstanding Term Loans to the full extent thereof on a pro rata basis (in accordance with the respective outstanding principal amounts thereof) by application of such prepayment in direct chronological order to any unpaid installments of principal of the Term Loans.

(b)                                 Application of Mandatory Prepayments by Type of Loans.

(1)                                  Subject to the terms of subsection 2.4D and clause (2) of this subsection 2.4B(iv)(b), any amount required to be applied as a mandatory prepayment of the Loans shall be applied to prepay all

45

outstanding Loans proportionately to each Lender’s Pro Rata Share (as determined pursuant to clause (iii) of the definition of “Pro Rata Share”); provided that to the extent that any Revolving Lender’s Pro Rata Share of the applicable prepayment is in excess of the amount of such Revolving Lender’s outstanding Revolving Loans (the “Prepayment Excess”), the amount of the Prepayment Excess shall be applied as an additional prepayment of such Revolving Lender’s outstanding Term Loans; provided, further, that if the Prepayment Excess is in excess of the amount of such Revolving Lender’s outstanding Term Loans, such excess shall be deposited in the Collateral Account to Cash collateralize any outstanding Letters of Credit; provided, further, that if there still remains a Prepayment Excess once all outstanding Letters of Credit have been Cash collateralized, the remaining amount of the Prepayment Excess shall be deposited in the Collateral Account to Cash collateralize such Revolving Lender’s Revolving Loan Commitment (and then all other Revolving Loan Commitments); and provided, further, that if any amount of the Prepayment Excess still remains once all Revolving Loan Commitments have been Cash collateralized, such remaining amount shall be applied as an additional prepayment of all outstanding Term Loans proportionately to each Term Lender’s Pro Rata Share.

(2)                                  Notwithstanding the foregoing, if at the time of any mandatory prepayment, the Revolving Loan Commitments have been terminated, such mandatory prepayment shall be first, applied to prepay the Term Loans to the full extent thereof, second, to the extent of any remaining portion of such prepayment, applied to prepay the Revolving Loans to the full extent thereof, and third, to the extent of any still remaining portion of such prepayment, deposited in the Collateral Account to Cash collateralize any outstanding Letters of Credit.

(3)                                  Any mandatory reduction of the Revolving Loan Commitment Amount pursuant to this subsection 2.4B shall be in proportion to each Revolving Lender’s Pro Rata Share.

(c)                                  Application of Mandatory Prepayments of Term Loans and the Scheduled Installments of Principal Thereof.  Except as provided in subsection 2.4D, any mandatory prepayments of the Term Loans pursuant to subsection 2.4B(iii) shall be applied first, to reduce in direct chronological order any unpaid installments of principal of the Term Loans scheduled to be made within the first twelve months from the date of such prepayment and, second, to reduce the remaining scheduled installments of principal of the Term Loans on a pro rata basis (in accordance with the respective outstanding principal amounts thereof).

(d)                                 Application of Prepayments to Base Rate Loans and Eurodollar Rate Loans.  Considering Term Loans and Revolving Loans being prepaid separately, any prepayment thereof shall be applied first to Base Rate

46

Loans to the full extent thereof before application to Eurodollar Rate Loans, in each case in a manner that minimizes the amount of any payments required to be made by Company pursuant to subsection 2.6D; provided, however, that Company may elect that the remainder of such prepayments not applied to prepay Base Rate Loans be deposited in the Collateral Account and applied thereafter to prepay the Eurodollar Rate Loan or Loans with Interest Periods expiring on a date or dates nearest the date of deposit in accordance with this subsection 2.4B(iv), upon expiration of such Interest Periods.

C.                                     General Provisions Regarding Payments.

(i)                                     Manner and Time of Payment.  All payments by Company of principal, interest, fees and other Obligations shall be made in Dollars in same day funds, without defense, setoff or counterclaim, free of any restriction or condition, and delivered to Administrative Agent not later than 3:00 P.M. (New York City time) on the date due at the Funding and Payment Account for the account of Lenders; funds received by Administrative Agent after that time on such due date shall be deemed to have been paid by Company on the next succeeding Business Day.  Notwithstanding the foregoing, payments of amounts deposited in the Collateral Account pursuant to the proviso to subsection 2.4B(iv)(d) shall be deemed to have been paid by Company on the applicable date or dates such amounts are applied to prepay Eurodollar Rate Loans and Company hereby authorizes Administrative Agent to charge the Collateral Account in order to cause timely payment to be made to Administrative Agent of such Eurodollar Rate Loans.

(ii)                                  Application of Payments to Principal and Interest.  Except as provided in subsection 2.2C, all payments in respect of the principal amount of any Loan shall include payment of accrued interest on the principal amount being repaid or prepaid, and all such payments shall be applied to the payment of interest before application to principal.

(iii)                               Apportionment of Payments.  Aggregate principal and interest payments in respect of Term Loans and Revolving Loans shall be apportioned among all outstanding Loans to which such payments relate, in each case proportionately to Lenders’ respective Pro Rata Shares; provided, that all payments in respect of Revolving Loans shall first be applied in the following priority to repay any amounts owing to Issuing Lenders due to the failure of any Revolving Lender to (A) fund a Revolving Loan for the purpose of repaying any unreimbursed amounts of a drawing under a Letter of Credit pursuant to subsection 3.3B or (B) fund a participation in any such unreimbursed Letter of Credit drawing pursuant to subsection 3.3C.  Administrative Agent shall promptly distribute to each Lender, at the account specified in the payment instructions delivered to Administrative Agent by such Lender, its Pro Rata Share of all such payments received by Administrative Agent and the facility fees and letter of credit fees of such Lender, if any, when received by Administrative Agent pursuant to subsections 2.3 and 3.2.  Notwithstanding the foregoing provisions of this subsection 2.4C(iii), if, pursuant to the provisions of subsection 2.6C, any Notice of Conversion/Continuation is withdrawn as to any Affected Lender or if any Affected Lender makes Base Rate Loans

47

in lieu of its Pro Rata Share of any Eurodollar Rate Loans, Administrative Agent shall give effect thereto in apportioning interest payments received thereafter.

(iv)                              Payments and Performance on Business Days.  Whenever any payment or performance to be made hereunder shall be stated to be due on a day that is not a Business Day, subject to the provisions of subsection 2.2B with respect to payments of interest on Eurodollar Rate Loans, such payment or performance shall be made on the next succeeding Business Day.

(v)                                 Notation of Payment.  Each Lender agrees that before disposing of any Note held by it, or any part thereof (other than by granting participations therein), that Lender will make a notation thereon of all Loans evidenced by that Note and all principal payments previously made thereon and of the date to which interest thereon has been paid; provided that the failure to make (or any error in the making of) a notation of any Loan made under such Note shall not limit or otherwise affect the obligations of Company hereunder or under such Note with respect to any Loan or any payments of principal or interest on such Note.

D.                                    Application of Proceeds of Collateral and Payments after Event of Default.  Upon the occurrence and during the continuation of an Event of Default, if requested by Requisite Lenders, or upon acceleration of the Obligations pursuant to Section 8, (a) all payments received by Administrative Agent, whether from Company, Holdings or any Subsidiary Guarantor or otherwise, and (b) all proceeds received by Administrative Agent in respect of any sale of, collection from, or other realization upon all or any part of the Collateral under any Collateral Document may, in the discretion of Administrative Agent, be held by Administrative Agent as Collateral for, and/or (then or at any time thereafter) applied in full or in part by Administrative Agent, in each case in the following order of priority:

(i)                                     to the payment of all costs and expenses of such sale, collection or other realization, all other expenses, liabilities and advances made or incurred by Administrative Agent in connection therewith, and all amounts for which Administrative Agent is entitled to compensation (including the fees described in subsection 2.3), reimbursement and indemnification under any Loan Document and all advances made by Administrative Agent thereunder for the account of the applicable Loan Party, and to the payment of all costs and expenses paid or incurred by Administrative Agent in connection with the Loan Documents, all in accordance with subsections 9.4, 10.2 and 10.3 and the other terms of this Agreement and the Loan Documents;

(ii)                                  thereafter, to the Cash collateralization of any outstanding Letter of Credit (by deposit of the applicable amount into the Collateral Account);

(iii)                               thereafter, to the payment of all other Obligations and obligations of Loan Parties under any Hedge Agreement between a Loan Party and a Swap Counterparty for the ratable benefit of the holders thereof (subject to the provisions of subsection 2.4C(ii) hereof); and

48

(iv)                              thereafter, to the payment to or upon the order of such Loan Party or to whosoever may be lawfully entitled to receive the same or as a court of competent jurisdiction may direct.

2.5                                 Use of Proceeds.

A.                                   [Reserved.]

B.                                     Revolving Loans.  The proceeds of any Revolving Loans made hereunder shall be applied by Company for working capital and other general corporate purposes, which may include the making of intercompany loans to any of Company’s Domestic Subsidiaries, in accordance with subsection 7.1(iv), for their own general corporate purposes (including the payment of any expenses incurred in connection with the Restructuring) and Investments permitted by subsection 7.3.

C.                                     Margin Regulations.  No portion of the proceeds of any borrowing under this Agreement shall be used by Company or any of its Subsidiaries in any manner that would cause the borrowing or the application of such proceeds to violate Regulation U, Regulation T or Regulation X of the Board of Governors or any other regulation of the Board of Governors or to violate the Exchange Act, in each case as in effect on the date or dates of such borrowing and such use of proceeds.

2.6                                 Special Provisions Governing Eurodollar Rate Loans.

Notwithstanding any other provision of this Agreement to the contrary, the following provisions shall govern with respect to Eurodollar Rate Loans as to the matters covered:

A.                                   Determination of Applicable Interest Rate.  On each Interest Rate Determination Date, Administrative Agent shall determine in accordance with the terms of this Agreement (which determination shall, absent manifest error, be conclusive and binding upon all parties) the interest rate that shall apply to the Eurodollar Rate Loans for which an interest rate is then being determined for the applicable Interest Period and shall promptly give notice thereof (in writing or by telephone confirmed in writing) to Company and each applicable Lender.

B.                                     Inability to Determine Applicable Interest Rate.  In the event that Administrative Agent shall have determined (which determination shall be conclusive and binding upon all parties hereto), on any Interest Rate Determination Date that by reason of circumstances affecting the interbank Eurodollar market adequate and reasonable means do not exist for ascertaining the interest rate applicable to such Loans on the basis provided for in the definition of Eurodollar Rate, Administrative Agent shall on such date give notice (by telefacsimile or by telephone confirmed in writing) to Company and each Lender of such determination, whereupon (i) no Loans may be made as, or converted to, Eurodollar Rate Loans until such time as Administrative Agent notifies Company and Lenders that the circumstances giving rise to such notice no longer exist and (ii) any Notice of Borrowing or Notice of Conversion/Continuation given by Company with respect to the Loans in respect of which such determination was made shall be deemed to be for a Base Rate Loan.

49

C.                                     Illegality of Eurodollar Rate Loans.  In the event that on any date any Lender shall have determined (which determination shall be conclusive and binding upon all parties hereto but shall be made only after consultation with Company and Administrative Agent) that the making, maintaining or continuation of its Eurodollar Rate Loans has become unlawful as a result of compliance by such Lender in good faith with any law, treaty, governmental rule, regulation, guideline or order, then, and in any such event, such Lender shall be an “Affected Lender” and it shall on that day give notice (by telefacsimile or by telephone confirmed in writing) to Company and Administrative Agent of such determination.  Administrative Agent shall promptly notify each other Lender of the receipt of such notice.  Thereafter (i) the obligation of the Affected Lender to make Loans as, or to convert Loans to, Eurodollar Rate Loans shall be suspended until such notice shall be withdrawn by the Affected Lender, (ii) to the extent such determination by the Affected Lender relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, the Affected Lender shall make such Loan as (or convert such Loan to, as the case may be) a Base Rate Loan, (iii) the Affected Lender’s obligation to maintain its outstanding Eurodollar Rate Loans (the “Affected Loans”) shall be terminated at the earlier to occur of the expiration of the Interest Period then in effect with respect to the Affected Loans or when required by law, and (iv) the Affected Loans shall automatically convert into Base Rate Loans on the date of such termination.  Notwithstanding the foregoing, to the extent a determination by an Affected Lender as described above relates to a Eurodollar Rate Loan then being requested by Company pursuant to a Notice of Borrowing or a Notice of Conversion/Continuation, Company shall have the option, subject to the provisions of subsection 2.6D, to rescind such Notice of Borrowing or Notice of Conversion/Continuation as to all Lenders by giving notice (by telefacsimile or by telephone confirmed in writing) to Administrative Agent of such rescission on the date on which the Affected Lender gives notice of its determination as described above.  Administrative Agent shall promptly notify each other Lender of the receipt of such notice.  Except as provided in the immediately preceding sentence, nothing in this subsection 2.6C shall affect the obligation of any Lender other than an Affected Lender to make or maintain Loans as, or to convert Loans to, Eurodollar Rate Loans in accordance with the terms of this Agreement.

D.                                    Compensation For Breakage or Non-Commencement of Interest Periods.  Company shall compensate each Lender, upon written request by that Lender pursuant to subsection 2.8, for all reasonable losses, expenses and liabilities (including any interest paid by that Lender to lenders of funds borrowed by it to make or carry its Eurodollar Rate Loans and any loss, expense or liability sustained by that Lender in connection with the liquidation or re-employment of such funds) which that Lender may sustain:  (i) if for any reason (other than a default by that Lender) a borrowing of any Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Borrowing or a telephonic request therefor, or a conversion to or continuation of any Eurodollar Rate Loan does not occur on a date specified therefor in a Notice of Conversion/Continuation or a telephonic request therefor, (ii) if any prepayment or other principal payment or any conversion of any of its Eurodollar Rate Loans (including any prepayment or conversion occasioned by the circumstances described in subsection 2.6C) occurs on a date prior to the last day of an Interest Period applicable to that Loan, (iii) if any prepayment of any of its Eurodollar Rate Loans is not made on any date specified in a Notice of Prepayment given by Company, or (iv) as a consequence of any other default by Company in the repayment of its Eurodollar Rate Loans when required by the terms of this Agreement.

50

E.                                      Booking of Eurodollar Rate Loans.  Any Lender may make, carry or transfer Eurodollar Rate Loans at, to, or for the account of any of its branch offices or the office of an Affiliate of that Lender.

F.                                      Assumptions Concerning Funding of Eurodollar Rate Loans.  Calculation of all amounts payable to a Lender under this subsection 2.6 and under subsection 2.7A shall be made as though that Lender had funded each of its Eurodollar Rate Loans through the purchase of a Eurodollar deposit bearing interest at the greater of the rates obtained pursuant to clause (a) and clause (b)(i) of the definition of Eurodollar Rate in an amount equal to the amount of such Eurodollar Rate Loan and having a maturity equivalent to the relevant Interest Period, whether or not its Eurodollar Rate Loans had been funded in such manner.

G.                                     Eurodollar Rate Loans After Default.  After the occurrence of and during the continuation of an Event of Default, (i) Company may not elect to have a Loan be made or maintained as, or converted to, a Eurodollar Rate Loan after the expiration of any Interest Period then in effect for that Loan and (ii) subject to the provisions of subsection 2.6D, any Notice of Borrowing or Notice of Conversion/Continuation given by Company with respect to a requested borrowing or conversion/continuation that has not yet occurred shall be deemed to be for a Base Rate Loan or, if the conditions to making a Loan set forth in subsection 4.2 cannot then be satisfied, to be rescinded by Company.

2.7                               Increased Costs; Taxes; Capital Adequacy.

A.                                   Compensation for Increased Costs.  Subject to the provisions of subsection 2.7B (which shall be controlling with respect to the matters covered thereby), in the event that any Lender (including any Issuing Lender) shall reasonably determine (which determination shall, absent manifest error, be final and conclusive and binding upon all parties hereto) that any Change in Law:

(i)                                     imposes, modifies or holds applicable any reserve, special deposit, compulsory loan, insurance charge or similar requirement against assets held by, or deposits or other liabilities in or for the account of, or advances or loans by, or other credit extended by, or any other acquisition of funds by, any office of such Lender (other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Eurodollar Rate); or

(ii)                                  imposes any other condition (other than with respect to Taxes) on or affecting such Lender or its obligations hereunder or the interbank Eurodollar market;

and the result of any of the foregoing is to increase the cost to such Lender of agreeing to make, making or maintaining its Loans or Commitments or agreeing to issue, issuing or maintaining any Letter of Credit or agreeing to purchase, purchasing or maintaining any participation therein or to reduce any amount received or receivable by such Lender with respect thereto; then, in any such case, Company shall promptly pay to such Lender, upon receipt of the statement referred to in subsection 2.8A, such additional amount or amounts (in the form of an increased rate of, or a different method of calculating, interest or otherwise as such Lender shall reasonably determine) as may be necessary to compensate such Lender for any such increased cost or reduction in

51

amounts received or receivable hereunder.  Company shall not be required to compensate a Lender pursuant to this subsection 2.7A for any increased cost or reduction in respect of a period occurring more than ninety (90) days prior to the date on which such Lender notifies Company of such Change in Law and such Lender’s intention to claim compensation therefor, except, if the Change in Law giving rise to such increased cost or reduction is retroactive, no such time limitation shall apply to such retroactive period so long as such Lender requests compensation within ninety (90) days from the date on which the applicable Government Authority informed such Lender of such Change in Law.

B.                                     Taxes.

(i)                                     Payments to Be Free and Clear.  Any and all payments by or on account of any obligation of Company under this Agreement and the other Loan Documents shall be made free and clear of, and without any deduction or withholding on account of, any Indemnified Taxes or Other Taxes (which Other Taxes Company shall pay to the relevant Government Authority in accordance with applicable law).

(ii)                                  Grossing-up of Payments.  If Company or any other Loan Party is required by law to make any deduction or withholding on account of any Tax from any sum paid or payable by Company to Administrative Agent or any Lender under any of the Loan Documents:

(a)                                  Company or such Loan Party, as the case may be, shall notify Administrative Agent of any such requirement or any change in any such requirement as soon as Company or such Loan Party, as the case may be, becomes aware of it;

(b)                                 Company or such Loan Party, as the case may be, shall timely pay any such Tax to the relevant Government Authority when such Tax is due, in accordance with applicable law;

(c)                                  unless such Tax is an Excluded Tax, the sum payable by Company shall be increased to the extent necessary to ensure that, after making the required deductions (including deductions applicable to additional sums payable under this subsection 2.7B(ii)), Administrative Agent or such Lender, as the case may be, receives on the due date a net sum equal to the sum it would have received had no such deduction been required or made; and

(d)                                 within 30 days after paying any sum from which it is required by law to make any such deduction, and within 30 days after the due date of payment of any Tax which it is required by clause (b) above to pay, Company shall deliver to Administrative Agent the original or a certified copy of an official receipt or other document reasonably satisfactory to the Administrative Agent and other affected parties to evidence the payment and its remittance to the relevant Government Authority.

(iii)                               Indemnification by Company.  Company shall indemnify Administrative Agent and each Lender, within 30 days after demand therefor, for the full

52

amount of any Indemnified Taxes or Other Taxes (including for the full amount of any Indemnified Taxes or Other Taxes imposed or asserted on or attributable to amounts payable under this subsection 2.7B(iii)) paid by Administrative Agent or such Lender, as the case may be, and any penalties, interest and reasonable expenses arising therefrom or with respect thereto, whether or not such Indemnified Taxes or Other Taxes were correctly or legally imposed or asserted by the relevant Government Authority.  A certificate as to the amount of such payment or liability delivered to Company by a Lender (with a copy to Administrative Agent), or by Administrative Agent on its own behalf or on behalf of a Lender, shall be conclusive absent manifest error.

(iv)                              Tax Status of Lenders.  Unless not legally entitled to do so:

(a)                                  any Lender, if requested by Company or Administrative Agent, shall deliver such forms or other documentation prescribed by applicable law or reasonably requested by Company or Administrative Agent as will enable Company or Administrative Agent to determine whether or not such Lender is subject to backup withholding or information reporting requirements;

(b)                                 any Foreign Lender that is entitled to an exemption from or reduction of any Tax with respect to payments hereunder or under any other Loan Document shall deliver to Company and Administrative Agent, on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter, as may be necessary in the determination of Company or Administrative Agent, each in the reasonable exercise of its discretion), such properly completed and duly executed forms or other  documentation prescribed by applicable law as will permit such payments to be made without withholding or at a reduced rate of withholding;

(c)                                  without limiting the generality of the foregoing, in the event that Company is resident for tax purposes in the United States, any Foreign Lender shall deliver to Company and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Foreign Lender becomes a Lender under this Agreement (and from time to time thereafter, as may be necessary in the determination of Company or Administrative Agent, each in the reasonable exercise of its discretion), whichever of the following is applicable:

(1)                                  properly completed and duly executed copies of Internal Revenue Service Form W-8BEN claiming eligibility for benefits of an income tax treaty to which the United States is a party,

(2)                                  properly completed and duly executed copies of Internal Revenue Service Form W-8ECI,

(3)                                  in the case of a Foreign Lender claiming the benefits of the “portfolio interest” exemption under Section 881(c) of the Internal Revenue Code, (A) a duly executed certificate to the effect that

53

such Foreign Lender is not (i) a “bank” within the meaning of Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a ten-percent shareholder (within the meaning of Section 881(c)(3)(B) of the Internal Revenue Code) of Company or Holdings or (iii) a controlled foreign corporation described in Section 881(c)(3)(C) of the Internal Revenue Code and (B) properly completed and duly executed copies of Internal Revenue Service Form W-8BEN,

(4)                                  properly completed and duly executed copies of any other form prescribed by applicable law as a basis for claiming exemption from or a reduction in any Tax,

in each case together with such supplementary documentation as may be prescribed by applicable law to permit Company and Administrative Agent to determine the withholding or deduction required to be made, if any;

(d)                                 without limiting the generality of the foregoing, in the event that Company is resident for tax purposes in the United States, any Foreign Lender that does not act or ceases to act for its own account with respect to any portion of any sums paid or payable to such Lender under any of the Loan Documents (for example, in the case of a typical participation by such Lender) shall deliver to Administrative Agent and Company (in such number of copies as shall be requested by the recipient), on or prior to the date such Foreign Lender becomes a Lender, or on such later date when such Foreign Lender ceases to act for its own account with respect to any portion of any such sums paid or payable, and from time to time thereafter, as may be necessary in the determination of Company or Administrative Agent (each in the reasonable exercise of its discretion):

(1)                                  duly executed and properly completed copies of the forms and statements required to be provided by such Foreign Lender under clause (c) of subsection 2.7B(iv), to establish the portion of any such sums paid or payable with respect to which such Lender acts for its own account and may be entitled to an exemption from or a reduction of the applicable Tax, and

(2)                                  duly executed and properly completed copies of Internal Revenue Service Form W-8IMY (or any successor forms) properly completed and duly executed by such Foreign Lender, together with any information, if any, such Foreign Lender chooses to transmit with such form, and any other certificate or statement of exemption required under the Internal Revenue Code or the regulations thereunder, to establish that such Foreign Lender is not acting for its own account with respect to a portion of any such sums payable to such Foreign Lender;

(e)                                  without limiting the generality of the foregoing, in the event that Company is resident for tax purposes in the United States, any Lender that is not a Foreign Lender and has not otherwise established to the reasonable

54

satisfaction of Company and Administrative Agent that it is an exempt recipient (as defined in section 6049(b)(4) of the Internal Revenue Code and the United States Treasury Regulations thereunder) shall deliver to Company and Administrative Agent (in such number of copies as shall be requested by the recipient) on or prior to the date on which such Lender becomes a Lender under this Agreement (and from time to time thereafter as prescribed by applicable law or upon the request of Company or Administrative Agent), duly executed and properly completed copies of Internal Revenue Service Form W-9;

(f)                                    without limiting the generality of the foregoing, each Lender hereby agrees, from time to time after the initial delivery by such Lender of such forms, whenever a lapse in time or change in circumstances renders such forms, certificates or other evidence so delivered obsolete or inaccurate in any material respect, that such Lender shall promptly (1) deliver to Administrative Agent and Company two original copies of renewals, amendments or additional or successor forms, properly completed and duly executed by such Lender, together with any other certificate or statement of exemption required in order to confirm or establish that such Lender is entitled to an exemption from or reduction of any Tax with respect to payments to such Lender under the Loan Documents and, if applicable, that such Lender does not act for its own account with respect to any portion of such payment, or (2) notify Administrative Agent and Company of its inability to deliver any such forms, certificates or other evidence;

(g)                                 without limiting the generality of the foregoing, each Foreign Lender shall comply with any information gathering and reporting requirements, in each case, that are required to obtain the maximum available exemption from U.S. federal withholding taxes under Title I of the proposed Foreign Account Tax Compliance Act of 2009 (the “Proposed Act”) if such proposed legislation is enacted into law (or under enacted legislation that is substantially similar to Title I of the Proposed Act) with respect to payments received by or on behalf of such Foreign Lender;

(h)                                 If Administrative Agent or a Lender has received a refund of any Taxes or Other Taxes as to which it has been indemnified by Company or with respect to which Company has paid additional amounts pursuant to this subsection 2.7, it shall pay over such refund to Company (but only to the extent of indemnity payments made, or additional amounts paid by Company under this subsection 2.7 with respect to the Taxes or Other Taxes giving rise to such refund), net of all out-of-pocket expenses of Administrative Agent or such Lender and without interest (other than any interest paid by the relevant Government Authority with respect to such refund); provided that Company, upon the request of Administrative Agent or such Lender, agrees to repay the amount paid over to Company (plus any penalties, interest or other charges imposed by the relevant Government Authority) to Administrative Agent or such Lender in the event Administrative Agent or such Lender is required to repay such refund to such Government Authority. This subsection shall not be construed to require

55

Administrative Agent or Lender to make available its tax returns (or any other information relating to its taxes which it deems confidential) to Company or any other Person; and

(i)                                     In the event of any inconsistency between any other provision contained herein and this subsection 2.7B, this subsection 2.7B shall govern.

C.                                     Capital Adequacy Adjustment.  If any Lender shall have determined that any Change in Law regarding capital adequacy has or would have the effect of reducing the rate of return on the capital of such Lender or any corporation controlling such Lender as a consequence of, or with reference to, such Lender’s Loans or Commitments or Letters of Credit or participations therein or other obligations hereunder with respect to the Loans or the Letters of Credit (in each case other than any such reserve or other requirements with respect to Eurodollar Rate Loans that are reflected in the definition of Eurodollar Rate) to a level below that which such Lender or such controlling corporation could have achieved but for such Change in Law (taking into consideration the policies of such Lender or such controlling corporation with regard to capital adequacy), then from time to time, within 30 Business Days after receipt by Company from such Lender of the statement referred to in subsection 2.8A, Company shall pay to such Lender such additional amount or amounts as will compensate such Lender or such controlling corporation for such reduction, increased to the extent necessary to take into account any Tax incurred or payable by such Lender as a result of the obligation of Company to pay such additional amounts.  Company shall not be required to compensate a Lender pursuant to this subsection 2.7C for any reduction in respect of a period occurring more than ninety (90) days prior to the date on which such Lender notifies Company of such Change in Law and such Lender’s intention to claim compensation therefor, except, if the Change in Law giving rise to such reduction is retroactive, no such time limitation shall apply to such retroactive period so long as such Lender requests compensation within ninety (90) days from the date on which the applicable Government Authority informed such Lender of such Change in Law.

2.8                               Statement of Lenders; Obligation of Lenders and Issuing Lenders to Mitigate.

A.                                   Statements.  Each Lender claiming compensation or reimbursement pursuant to subsection 2.6C, 2.6D, 2.7 or 2.8B shall deliver to Company (with a copy to Administrative Agent) a written statement, setting forth in reasonable detail the basis of the calculation of such compensation or reimbursement, which statement shall be conclusive and binding upon all parties hereto absent manifest error.

B.                                     Mitigation.  Each Lender and Issuing Lender agrees that, as promptly as practicable after the officer of such Lender or Issuing Lender responsible for administering the Loans or Letters of Credit of such Lender or Issuing Lender, as the case may be, becomes aware of the occurrence of an event or the existence of a condition that would cause such Lender to become an Affected Lender or that would entitle such Lender or Issuing Lender to receive payments under subsection 2.7, it will use reasonable efforts to make, issue, fund or maintain the Commitments of such Lender or the Loans or Letters of Credit of such Lender or Issuing Lender through another lending or letter of credit office of such Lender or Issuing Lender, if (i) as a

56

result thereof the circumstances which would cause such Lender to be an Affected Lender would cease to exist or the additional amounts which would otherwise be required to be paid to such Lender or Issuing Lender pursuant to subsection 2.7 would be materially reduced and (ii) as determined by such Lender or Issuing Lender in its sole discretion, such action would not otherwise be materially disadvantageous to such Lender or Issuing Lender; provided that such Lender or Issuing Lender will not be obligated to utilize such other lending or letter of credit office pursuant to this subsection 2.8B unless Company agrees to pay all incremental expenses incurred by such Lender or Issuing Lender as a result of utilizing such other lending or letter of credit office as described above.

2.9                               Defaulting Lenders.

Anything contained herein to the contrary notwithstanding, in the event that any Lender (a “Defaulting Lender”) defaults (a “Funding Default”) in its obligation to fund any Loan (a “Defaulted Loan”) in accordance with subsection 2.1 or to fund its participation in a Letter of Credit pursuant to subsection 3.3, then (i) during any Default Period (as defined below) with respect to such Defaulting Lender, such Defaulting Lender shall be deemed not to be a “Lender”, and the amount of  such Defaulting Lender’s Commitments and Loans shall be excluded for purposes of voting, and the calculation of voting, on any matters (including the granting of any consents or waivers) with respect to any of the Loan Documents, (ii) to the extent permitted by applicable law, until such time as the Default Excess (as defined below) with respect to such Defaulting Lender shall have been reduced to zero, (a) any voluntary prepayment of such Loans pursuant to subsection 2.4B(i) shall, if Company so directs at the time of making such voluntary prepayment, be applied to the Loans of other Lenders as if such Defaulting Lender had no such Loans outstanding and the Revolving Loan Exposure or the Term Loan Exposure, as applicable, of such Defaulting Lender were zero, and (b) any mandatory prepayment of the Loans pursuant to subsection 2.4B(iii) shall, if Company so directs at the time of making such mandatory prepayment, be applied to the Loans of other Lenders (but not to the Loans of such Defaulting Lender) as if such Defaulting Lender had funded all Defaulted Loans of such Defaulting Lender, it being understood and agreed that Company shall be entitled to retain any portion of any mandatory prepayment of the Loans that is not paid to such Defaulting Lender solely as a result of the operation of the provisions of this clause (b), (iii) the unfunded portion of such Defaulting Lender’s Revolving Loan Commitment shall be excluded for purposes of calculating the facility fee payable to Revolving Lenders pursuant to subsection 2.3A in respect of any day during any Default Period with respect to such Defaulting Lender, and such Defaulting Lender shall not be entitled to receive any facility fee pursuant to subsection 2.3A with respect to the unfunded portion of such Defaulting Lender’s Revolving Loan Commitment in respect of any Default Period with respect to such Defaulting Lender, and (iv) the Total Utilization of Revolving Loan Commitments as at any date of determination shall be calculated as if such Defaulting Lender had funded all Defaulted Loans that are Revolving Loans of such Defaulting Lender.

For purposes of this Agreement, (I) “Default Period” means, with respect to any Defaulting Lender, the period commencing on the date of the applicable Funding Default and ending on the earliest of the following dates:  (A) the date on which all Revolving Loan Commitments are cancelled or terminated and/or the Obligations are declared or become immediately due and payable, (B) the date on which (1) the Default Excess with respect to such

57

Defaulting Lender shall have been reduced to zero (whether by the funding by such Defaulting Lender of any Defaulted Loans of such Defaulting Lender or by the non-pro rata application of any voluntary or mandatory prepayments of the Revolving Loans in accordance with the terms hereof or any combination thereof), and (2) such Defaulting Lender shall have delivered to Company and Administrative Agent a written reaffirmation of its intention to honor its obligations under this Agreement with respect to its Loans and Commitments, and (C) the date on which Company, Administrative Agent and Requisite Lenders waive all Funding Defaults of such Defaulting Lender in writing, and (II) “Default Excess” means, with respect to any Defaulting Lender, the excess, if any, of such Defaulting Lender’s Pro Rata Share of the aggregate outstanding principal amount of Loans of all Lenders (calculated as if all Defaulting Lenders (including such Defaulting Lender) had funded all of their respective Defaulted Loans) over the aggregate outstanding principal amount of Loans of such Defaulting Lender.

No amount of the Commitment of any Lender shall be increased or otherwise affected, and, except as otherwise expressly provided in this subsection 2.9, performance by Company of its obligations under this Agreement and the other Loan Documents shall not be excused or otherwise modified, as a result of any Funding Default or the operation of this subsection 2.9.  The rights and remedies against a Defaulting Lender under this subsection 2.9 are in addition to other rights and remedies that Company may have against such Defaulting Lender with respect to any Funding Default and that Administrative Agent or any Lender may have against such Defaulting Lender with respect to any Funding Default.

2.10                        Replacement of a Lender.

If Company receives a statement of amounts due pursuant to subsection 2.8A from a Lender, a Lender is a Defaulting Lender, a Lender becomes an Affected Lender, Company is required to pay any additional amounts under subsection 2.7 or a Lender (a “Non-Consenting Lender”) refuses to consent to an amendment, modification or waiver of this Agreement that, pursuant to subsection 10.6, either (i) requires consent of 100% of the Lenders or 100% of the Lenders with Obligations directly affected or (ii) requires consent of Requisite Lenders, (any such Lender, a “Subject Lender”), so long as (1) Company has obtained a commitment from another Lender or an Eligible Assignee to purchase at par the Subject Lender’s Loans and assume the Subject Lender’s Commitments and all other obligations of the Subject Lender hereunder, (2) such Lender is not an Issuing Lender with respect to any Letters of Credit outstanding (unless all such Letters of Credit are terminated or arrangements acceptable to such Issuing Lender (such as a “back-to-back” letter of credit) are made) and (3), if applicable, the Subject Lender is unwilling or unable to withdraw the notice delivered to Company pursuant to subsection 2.8, Company may require the Subject Lender to assign all of its Loans and Commitments to such other Lender, Lenders, Eligible Assignee or Eligible Assignees pursuant to the provisions of subsection 10.1B; provided that, prior to or concurrently with such replacement, (A) Company has paid to the Lender giving such notice all amounts under subsections 2.6D, 2.7 and/or 2.8B (if applicable) through such date of replacement, (B) the processing fee required to be paid by subsection 10.1B(i) shall have been paid to Administrative Agent, (C) all of the requirements for such assignment contained in subsection 10.1B have been fulfilled, including, the consent of Administrative Agent and, with respect to assignments of Revolving Loans and Revolving Loan Commitments, any Issuing Lender, and the receipt by Administrative Agent of an executed Assignment Agreement and other supporting documents,

58

and (D) in the event such Subject Lender is a Non-Consenting Lender, each assignee shall consent, at the time of such assignment, to each matter in respect of which such Subject Lender was a Non-Consenting Lender and Company requires each other Subject Lender that is a Non-Consenting Lender to assign its Loans and Commitments.

Each Lender and each Issuing Bank hereby grants to Administrative Agent an irrevocable power of attorney (which power is coupled with an interest) to execute and deliver, on behalf of such Lender or such Issuing Bank, as the case may be, as assignor, any Assignment Agreement necessary to effectuate any assignment of such Lender’s or such Issuing Bank’s interests hereunder in the circumstances contemplated by this subsection 2.10.

For the avoidance of doubt, if a Lender is a Non-Consenting Lender solely because it refused to consent to an amendment, modification or waiver that required the consent of 100% of Lenders with Obligations directly affected thereby (which amendment, modification or waiver did not accordingly require the consent of 100% of all Lenders) the Loans and Commitments of such Non-Consenting Lender that are subject to the assignments required by this subsection 2.10 shall include only those Loans and Commitments that constitute the Obligations directly affected by the amendment, modification or waiver to which such Non-Consenting Lender refused to provide its consent.

Section 3.                                          LETTERS OF CREDIT

3.1                               Issuance of Letters of Credit and Lenders’ Purchase of Participations Therein.

A.                                   Letters of Credit.  Company may request, in accordance with the provisions of this subsection 3.1, from time to time during the period from the Restatement Date to but excluding the tenth Business Day prior to the Revolving Loan Commitment Termination Date, that Administrative Agent or one or more Revolving Lenders issue Letters of Credit payable on a sight basis for the account of Company for the purposes specified in the definitions of Commercial Letters of Credit and Standby Letters of Credit.  Subject to the terms and conditions of this Agreement and in reliance upon the representations and warranties of Company herein set forth, any one or more Revolving Lenders may, but (except as provided in subsection 3.1B(ii)) shall not be obligated to, issue such Letters of Credit in accordance with the provisions of this subsection 3.1; provided that Company shall not request that any Revolving Lender issue (and no Revolving Lender shall issue):

(i)                                     any Letter of Credit if, after giving effect to such issuance, the Total Utilization of Revolving Loan Commitments would exceed the Revolving Loan Commitment Amount then in effect;

(ii)                                  any Letter of Credit if, after giving effect to such issuance, the Letter of Credit Usage would exceed $5,000,000, it being understood that as of the Restatement Date, the Letter of Credit Usage equals $4,072,103;

(iii)                               any Standby Letter of Credit having an expiration date later than the earlier of (a) five Business Days prior to the Revolving Loan Commitment Termination Date and (b) the date which is one year from the date of issuance of such

59

Standby Letter of Credit; provided that the immediately preceding clause (b) shall not prevent any Issuing Lender from agreeing that a Standby Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each, which in no event may extend beyond the period specified in the preceding clause (a), unless such Issuing Lender elects not to extend for any such additional period; and provided, further that such Issuing Lender may elect not to extend such Standby Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing (and has not been waived in accordance with subsection 10.6) at the time such Issuing Lender must elect whether or not to allow such extension;

(iv)                              any Standby Letter of Credit issued for the purpose of supporting (a) trade payables or (b) any Indebtedness constituting “antecedent debt” (as that term is used in Section 547 of the Bankruptcy Code);

(v)                                 any Commercial Letter of Credit having an expiration date (a) later than the earlier of (1) the date which is five Business Days prior to the Revolving Loan Commitment Termination Date and (2) the date which is one year from the date of issuance of such Commercial Letter of Credit; provided that the immediately preceding clause (2) shall not prevent any Issuing Lender from agreeing that a Commercial Letter of Credit will automatically be extended for one or more successive periods not to exceed one year each, which in no event may extend beyond the period specified in the preceding clause (1), unless such Issuing Lender elects not to extend for any such additional period; and provided, further that such Issuing Lender may elect not to extend such Commercial Letter of Credit if it has knowledge that an Event of Default has occurred and is continuing (and has not been waived in accordance with subsection 10.6) at the time such Issuing Lender must elect whether or not to allow such extension or (b) that is otherwise unacceptable to the applicable Issuing Lender in its reasonable discretion; or

(vi)                              any Letter of Credit denominated in a currency that in the reasonable judgment of Administrative Agent or the applicable Issuing Lender is not readily and freely available.

B.                                     Mechanics of Issuance.

(i)                                     Request for Issuance.  Whenever Company desires the issuance of a Letter of Credit, it shall deliver to Administrative Agent a Request for Issuance no later than 1:00 P.M. (New York City time) at least three Business Days, or such shorter period as may be agreed to by the Issuing Lender in any particular instance, in advance of the proposed date of issuance.  The Issuing Lender, in its reasonable discretion, may require changes in the text of the proposed Letter of Credit or any documents described in or attached to the Request for Issuance.  In furtherance of the provisions of subsection 10.7, and not in limitation thereof, Company may submit Requests for Issuance by telefacsimile and Administrative Agent and Issuing Lenders may rely and act upon any such Request for Issuance without receiving an original signed copy thereof.  No Letter of Credit shall require payment against a conforming demand for payment to be made thereunder on the same business day (under the laws of the jurisdiction in which the

60

office of the Issuing Lender to which such demand for payment is required to be presented is located) that such demand for payment is presented if such presentation is made after 1:00 P.M. (in the time zone of such office of the Issuing Lender) on such business day.

Company shall notify the applicable Issuing Lender (and Administrative Agent, if Administrative Agent is not such Issuing Lender) prior to the issuance of any Letter of Credit in the event that any of the matters to which Company is required to certify in the applicable Request for Issuance is no longer true and correct as of the proposed date of issuance of such Letter of Credit, and upon the issuance of any Letter of Credit Company shall be deemed to have re-certified, as of the date of such issuance, as to the matters to which Company is required to certify in the applicable Request for Issuance.

(ii)                                  Determination of Issuing Lender.  Upon receipt of a Request for Issuance pursuant to subsection 3.1B(i) requesting the issuance of a Letter of Credit by Administrative Agent or another Revolving Lender acceptable to Company and Administrative Agent, Administrative Agent or the Revolving Lender so requested to issue such Letter of Credit shall promptly notify Company (and Administrative Agent, if Administrative Agent is not the requested issuer) whether or not, in its sole discretion, it has elected to issue such Letter of Credit, and Administrative Agent or such Revolving Lender that so elects to issue such Letter of Credit shall be the Issuing Lender with respect thereto.  With respect to Standby Letters of Credit only, in the event that all other Revolving Lenders shall have declined to issue such Standby Letter of Credit, notwithstanding the prior election of Administrative Agent not to issue such Standby Letter of Credit, Administrative Agent shall be obligated to issue such Standby Letter of Credit and shall be the Issuing Lender with respect thereto, notwithstanding the fact that the Letter of Credit Usage with respect to such Standby Letter of Credit and with respect to all other Letters of Credit issued by Administrative Agent, when aggregated with Administrative Agent’s outstanding Revolving Loans, may exceed the amount of Administrative Agent’s Revolving Loan Commitment then in effect.

(iii)                               Issuance of Letter of Credit.  Upon satisfaction or waiver (in accordance with subsection 10.6) of the conditions set forth in subsection 4.3, the Issuing Lender shall issue the requested Letter of Credit in accordance with the Issuing Lender’s standard operating procedures.

(iv)                              Notification to Revolving Lenders.  Upon the issuance of or amendment to any Letter of Credit the applicable Issuing Lender shall promptly notify Administrative Agent and Company of such issuance or amendment in writing.  Upon receipt of such notice (or, if Administrative Agent is the Issuing Lender, together with such notice), Administrative Agent shall notify each Revolving Lender in writing of such issuance or amendment and the amount of such Revolving Lender’s respective participation in such  Letter of Credit or amendment, and, if so requested by a Revolving Lender, Administrative Agent shall provide such Lender with a copy of such Letter of Credit or amendment.  In the case of Commercial Letters of Credit, in the event that Issuing Lender is other than Administrative Agent, such Issuing Lender will send by facsimile transmission to Administrative Agent, promptly upon the first Business Day of

61

each week, a report of its daily aggregate maximum amount available for drawing under Commercial Letters of Credit for the previous week.  Administrative Agent shall notify each Revolving Lender in writing on a quarterly basis of the contents thereof.

C.                                     Revolving Lenders’ Purchase of Participations in Letters of Credit.  Immediately upon the issuance of each Letter of Credit, each Revolving Lender shall be deemed to, and hereby agrees to, have irrevocably purchased from the Issuing Lender a participation in such Letter of Credit and any drawings honored thereunder in an amount equal to such Revolving Lender’s Pro Rata Share of the maximum amount that is or at any time may become available to be drawn thereunder.

3.2                               Letter of Credit Fees.

Company agrees to pay the following amounts with respect to Letters of Credit issued hereunder:

(i)                                     with respect to each Letter of Credit, (a) a fronting fee, payable directly to the applicable Issuing Lender for its own account, equal to 0.125% per annum of the daily amount available to be drawn under such Letter of Credit and (b) a letter of credit fee, payable to Administrative Agent for the account of Revolving Lenders, equal to 2.25% plus, upon the application of increased rates of interest pursuant to subsection 2.2E, 2% per annum, multiplied by the daily amount available to be drawn under such Letter of Credit, each such fronting fee or letter of credit fee to be payable quarterly in arrears on and to (but excluding) the last Business Day of each March, June, September and December of each year, and on the Revolving Loan Commitment Termination Date, and computed on the basis of a 360-day year for the actual number of days elapsed; and

(ii)                                  with respect to the issuance, amendment or transfer of each Letter of Credit and each payment of a drawing made thereunder (without duplication of the fees payable under clause (i) above), documentary and processing charges payable directly to the applicable Issuing Lender for its own account in accordance with such Issuing Lender’s standard schedule for such charges in effect at the time of such issuance, amendment, transfer or payment, as the case may be.

For purposes of calculating any fees payable under clauses (i) and (ii) of this subsection 3.2, (1) the daily amount available to be drawn under any Letter of Credit shall be determined as of the close of business on any date of determination and (2) any amount described in such clauses which is denominated in a currency other than Dollars shall be valued based on the applicable Exchange Rate for such currency as of the applicable date of determination (such date to be determined at the discretion of Administrative Agent).  Promptly upon receipt by Administrative Agent of any amount described in clause (i)(b) of this subsection 3.2, Administrative Agent shall distribute to each Revolving Lender its Pro Rata Share of such amount.

3.3                               Drawings and Reimbursement of Amounts Paid Under Letters of Credit.

A.                                   Responsibility of Issuing Lender With Respect to Drawings.  In determining whether to honor any drawing under any Letter of Credit by the beneficiary thereof, the Issuing Lender shall be responsible only to examine the documents delivered under such

62

Letter of Credit with reasonable care so as to ascertain whether they appear on their face to be in accordance with the terms and conditions of such Letter of Credit.

B.                                     Reimbursement by Company of Amounts Paid Under Letters of Credit.  In the event an Issuing Lender has determined to honor a drawing under a Letter of Credit issued by it, such Issuing Lender shall immediately notify Company and Administrative Agent, and Company shall reimburse such Issuing Lender on or before the Business Day immediately following the date on which such drawing is honored (the “Reimbursement Date”) in an amount in Dollars (which amount, in the case of a payment under a Letter of Credit which is denominated in a currency other than Dollars, shall be calculated by reference to the applicable Exchange Rate) or, at the option of such Issuing Lender, in the case of a Letter of Credit denominated in a currency other than Dollars, in such other currency and in same day funds equal to the amount of such payment; provided that, anything contained in this Agreement to the contrary notwithstanding, (i) unless Company shall have notified Administrative Agent and such Issuing Lender prior to 1:00 P.M. (New York City time) on the date such drawing is honored that Company intends to reimburse such Issuing Lender for the amount of such payment with funds other than the proceeds of Revolving Loans, Company shall be deemed to have given a timely Notice of Borrowing to Administrative Agent requesting Revolving Lenders to make Revolving Loans that are Base Rate Loans on the Reimbursement Date in an amount in Dollars (which amount, in the case of a payment under a Letter of Credit which is denominated in a currency other than Dollars, shall be calculated by reference to the applicable Exchange Rate) equal to the amount of such payment and (ii) subject to satisfaction or waiver (in accordance with subsection 10.6) of the conditions specified in subsection 4.2B, Revolving Lenders shall, on the Reimbursement Date, make Revolving Loans that are Base Rate Loans in the amount of such payment, the proceeds of which shall be applied directly by Administrative Agent to reimburse such Issuing Lender for the amount of such payment; and provided, further that if for any reason proceeds of Revolving Loans are not received by such Issuing Lender on the Reimbursement Date in an amount equal to the amount of such payment, Company shall reimburse such Issuing Lender, on demand, in an amount in same day funds equal to the excess of the amount of such payment over the aggregate amount of such Revolving Loans, if any, which are so received.  Nothing in this subsection 3.3B shall be deemed to relieve any Revolving Lender from its obligation to make Revolving Loans on the terms and conditions set forth in this Agreement, and Company shall retain any and all rights it may have against any Revolving Lender resulting from the failure of such Revolving Lender to make such Revolving Loans under this subsection 3.3B.

C.                                     Payment by Lenders of Unreimbursed Amounts Paid Under Letters of Credit.

(i)                                     Payment by Revolving Lenders.  In the event that Company shall fail for any reason to reimburse any Issuing Lender as provided in subsection 3.3B in an amount (calculated, in the case of a payment under a Letter of Credit denominated in a currency other than Dollars, by reference to the applicable Exchange Rate) equal to the amount of any payment by such Issuing Lender under a Letter of Credit issued by it, such Issuing Lender shall promptly notify Administrative Agent, who shall notify each other Revolving Lender of the unreimbursed amount of such honored drawing and of such other Revolving Lender’s respective participation therein based on such Revolving Lender’s Pro Rata Share.  Each Revolving Lender (other than such Issuing Lender) shall

63

make available to Administrative Agent an amount equal to its respective participation, in Dollars and in same day funds, at the Funding and Payment Account, not later than 12:00 Noon (New York City time) on the first Business Day after the date notified by Administrative Agent and Administrative Agent shall make available to such Issuing Lender in Dollars in same day funds, at the office of such Issuing Lender on such Business Day, the aggregate amount of the participation payments so received by Administrative Agent.  In the event that any Revolving Lender fails to make available to Administrative Agent on such Business Day the amount of such Revolving Lender’s participation in such Letter of Credit as provided in this subsection 3.3C, such Issuing Lender shall be entitled to recover such amount on demand from such Revolving Lender together with interest thereon at the Federal Funds Effective Rate.  Nothing in this subsection 3.3C shall be deemed to prejudice the right of Administrative Agent to recover, for the benefit of Revolving Lenders, from any Issuing Lender any amounts made available to such Issuing Lender pursuant to this subsection 3.3C in the event that it is determined by the final judgment of a court of competent jurisdiction that the payment with respect to a Letter of Credit by such Issuing Lender in respect of which such participation payments were made by Revolving Lenders constituted gross negligence or willful misconduct on the part of such Issuing Lender.

(ii)                                  Distribution to Lenders of Reimbursements Received From Company.  In the event any Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i) for all or any portion of any payment by such Issuing Lender under a Letter of Credit issued by it, and Administrative Agent or such Issuing Lender thereafter receives any payments from Company in reimbursement of such payment under the Letter of Credit, to the extent any such payment is received by such Issuing Lender, it shall distribute such payment to Administrative Agent, and Administrative Agent shall distribute to each other Revolving Lender that has paid all amounts payable by it under subsection 3.3C(i) with respect to such payment such Revolving Lender’s Pro Rata Share of all payments subsequently received by Administrative Agent or by such Issuing Lender from Company.  Any such distribution shall be made to a Revolving Lender at the account specified in subsection 2.4C(iii).

D.                                    Interest on Amounts Paid Under Letters of Credit.

(i)                                     Payment of Interest by Company.  Company agrees to pay to Administrative Agent, with respect to payments under any Letters of Credit issued by any Issuing Lender, interest on the amount paid by such Issuing Lender in respect of each such payment from the date a drawing is honored to but excluding the date such amount is reimbursed by Company (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 3.3B) at a rate equal to, (a) for the period from the date such drawing is honored to but excluding the Reimbursement Date, the rate then in effect under this Agreement with respect to Revolving Loans that are Base Rate Loans and (b) thereafter, a rate which is 2% per annum in excess of the rate of interest otherwise payable under this Agreement with respect to Revolving Loans that are Base Rate Loans.  Interest payable pursuant to this subsection 3.3D(i) shall be computed on the basis of a 365-day or 366-day year for the actual number of days elapsed in the period during which

64

it accrues and shall be payable on demand or, if no demand is made, on the date on which the related drawing under a Letter of Credit is reimbursed in full.

(ii)                                  Distribution of Interest Payments by Administrative Agent.  Promptly upon receipt by Administrative Agent of any payment of interest pursuant to subsection 3.3D(i) with respect to a payment under a Letter of Credit, (a) Administrative Agent shall distribute to (x) each Revolving Lender (including the Revolving Lender that paid such drawing), out of the interest received by Administrative Agent in respect of the period from the date such drawing is honored to but excluding the date on which the applicable Issuing Lender is reimbursed for the amount of such payment (including any such reimbursement out of the proceeds of Revolving Loans pursuant to subsection 3.3B), the amount that such Revolving Lender would have been entitled to receive in respect of the letter of credit fee that would have been payable in respect of such Letter of Credit for such period pursuant to subsection 3.2 if no drawing had been honored under such Letter of Credit and (y) such Issuing Lender the amount, if any, remaining after payment of the amounts applied pursuant to the immediately preceding clause (x), and (b) in the event such Issuing Lender shall have been reimbursed by other Revolving Lenders pursuant to subsection 3.3C(i) for all or any portion of such payment, Administrative Agent shall distribute to each Revolving Lender (including such Issuing Lender) that has paid all amounts payable by it under subsection 3.3C(i) with respect to such payment such Revolving Lender’s Pro Rata Share of any interest received by Administrative Agent in respect of that portion of such payment so made by Revolving Lenders for the period from the date on which such Issuing Lender was so reimbursed to but excluding the date on which such portion of such payment is reimbursed by Company.  Any such distribution shall be made to a Revolving Lender at the account specified in subsection 2.4C(iii).

E.                                      Cash Collateralization.  If Administrative Agent notifies Company at any time that, due to a fluctuation in the applicable Exchange Rate or otherwise, the Letter of Credit Usage at such time exceeds 105% of the sublimit for Letters of Credit specified in subsection 3.1A(ii), then, within two Business Days after receipt of such notice, Company shall deposit in the Collateral Account established pursuant to the Security Agreement an amount equal to the amount by which the Letter of Credit Usage exceeds such sublimit, which amount shall constitute Collateral and be subject to the provisions of the Security Agreement.  At such time as the Letter of Credit Usage shall be equal to or less than such sublimit, if no Event of Default has occurred and is continuing, such amount shall be released to Company.

3.4                               Obligations Absolute.

The obligation of Company to reimburse each Issuing Lender for payments under the Letters of Credit issued by it and to repay any Revolving Loans made by Revolving Lenders pursuant to subsection 3.3B and the obligations of Revolving Lenders under subsection 3.3C(i) shall be unconditional and irrevocable and shall be paid strictly in accordance with the terms of this Agreement under all circumstances including any of the following circumstances:

(i)                                     any lack of validity or enforceability of any Letter of Credit;

65

(ii)                                  the existence of any claim, set-off, defense or other right which Company or any Lender may have at any time against a beneficiary or any transferee of any Letter of Credit (or any Persons for whom any such transferee may be acting), any Issuing Lender or other Revolving Lender or any other Person or, in the case of a Revolving Lender, against Company, whether in connection with this Agreement, the transactions contemplated herein or any unrelated transaction (including any underlying transaction between Company or one of its Subsidiaries and the beneficiary for which any Letter of Credit was procured);

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

(iv)                              payment by the applicable Issuing Lender under any Letter of Credit against presentation of a draft or other document which does not substantially comply with the terms of such Letter of Credit;

(v)                                 any adverse change in the business, operations, properties, assets, condition (financial or otherwise) or prospects of Company or any of its Subsidiaries;

(vi)                              any breach of this Agreement or any other Loan Document by any party thereto;

(vii)                           any other circumstance or happening whatsoever, whether or not similar to any of the foregoing; or

(viii)                        the fact that an Event of Default or a Potential Event of Default shall have occurred and be continuing;

provided, in each case, that payment by the applicable Issuing Lender under the applicable Letter of Credit shall not have constituted gross negligence or willful misconduct of such Issuing Lender under the circumstances in question (as determined by a final judgment of a court of competent jurisdiction).

3.5                               Nature of Issuing Lenders’ Duties.

As between Company and any Issuing Lender, Company assumes all risks of the acts and omissions of, or misuse of the Letters of Credit issued by such Issuing Lender by, the respective beneficiaries of such Letters of Credit.  In furtherance and not in limitation of the foregoing, such Issuing Lender 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 and 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; (ii) the validity 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) failure of the beneficiary of any such Letter of Credit to comply fully with any conditions required in order to draw upon such Letter of Credit; (iv) errors, omissions, interruptions or delays in transmission or delivery of any

66

messages, by mail, cable, telegraph, telex, telefacsimile 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 such Issuing Lender, including any act or omission by a Government Authority, and none of the above shall affect or impair, or prevent the vesting of, any of such Issuing Lender’s rights or powers hereunder.

In furtherance and extension and not in limitation of the specific provisions set forth in the first paragraph of this subsection 3.5, any action taken or omitted by any Issuing Lender under or in connection with the Letters of Credit issued by it or any documents and certificates delivered thereunder, if taken or omitted in good faith, shall not put such Issuing Lender under any resulting liability to Company.

Notwithstanding anything to the contrary contained in this subsection 3.5, Company shall retain any and all rights it may have against any Issuing Lender for any liability arising solely out of the gross negligence or willful misconduct of such Issuing Lender, as determined by a final judgment of a court of competent jurisdiction.

Section 4.                                          CONDITIONS TO LOANS AND LETTERS OF CREDIT

The obligations of Lenders to make Loans and the issuance of Letters of Credit hereunder are subject to the satisfaction of the following conditions.

4.1                               Conditions to Restatement Date Loans.

The obligations of Lenders to continue the Term Loans and Revolving Loans and to make any Revolving Loans to be made on the Restatement Date are, in addition to the conditions precedent specified in subsection 4.2, subject to prior or substantially concurrent satisfaction of the following conditions:

A.                                   Loan Party Documents.  On or before the Restatement Date, Company shall, and shall cause each other Loan Party to, deliver to Administrative Agent with sufficient originally executed copies, where appropriate, for each Lender the following with respect to Company or such Loan Party, as the case may be, each, unless otherwise noted, dated the Restatement Date:

(i)                                     Copies of the Organizational Documents of such Person, certified by the Secretary of State of its jurisdiction of organization or, if such document is of a type that may not be so certified, certified by the secretary or similar officer of the applicable Loan Party, together with a good standing certificate from the Secretary of State of its jurisdiction of organization and, to the extent generally available, a certificate or other evidence of good standing as to payment of any applicable franchise or similar taxes of such jurisdiction of organization, each dated a recent date prior to the Restatement Date;

67

(ii)                                  Resolutions of the Governing Body of such Person approving and authorizing the execution, delivery and performance of the Loan Documents to which it is a party, certified as of the Restatement Date by the secretary or similar officer of such Person as being in full force and effect without modification or amendment;

(iii)                               Signature and incumbency certificates of the officers of such Person executing the Loan Documents to which it is a party;

(iv)                              Executed originals of the Loan Documents to which such Person is a party; and

(v)                                 Such other documents as Administrative Agent may reasonably request.

B.                                     Fees.  Company shall have paid to Administrative Agent, for distribution (as appropriate) to Administrative Agent and Lenders, the fees payable on the Restatement Date referred to in subsection 2.3.

C.                                     Financial Statements; Financial Plan.  On or before the Restatement Date, Company shall have made available to Lenders (i) unaudited financial statements of Panolam Industries International, Inc. and its Subsidiaries for the eleven (11) months ended November 30, 2009; and (ii) the Preliminary Financial Plan for Fiscal Year 2010.

D.                                    Opinions of Counsel to Loan Parties.  Lenders shall have received originally executed copies of one or more written opinions of Weil, Gotshal & ▇▇▇▇▇▇ LLP, counsel for Loan Parties, in form reasonably satisfactory to Administrative Agent and its counsel, dated as of the Restatement Date and setting forth substantially the matters in the opinions designated in Exhibit VIII annexed hereto and as to such other matters as Administrative Agent acting on behalf of Lenders may reasonably request (this Agreement constituting a written request by Company to such counsel to deliver such opinions to Lenders).

E.                                      Evidence of Insurance.  Administrative Agent shall have received a certificate from Company’s insurance broker or other evidence satisfactory to it that all insurance required to be maintained pursuant to subsection 6.4 is in full force and effect and that Administrative Agent on behalf of Lenders has been named as additional insured and/or loss payee thereunder to the extent required under subsection 6.4.

F.                                      Necessary Governmental Authorizations and Consents; Expiration of Waiting Periods, Etc.  Company shall have obtained all Governmental Authorizations and all consents of other material Persons, in each case that are necessary in connection with the transactions contemplated by the Loan Documents.  All applicable waiting periods shall have expired without any action being taken or threatened by any competent authority that would restrain, prevent or otherwise impose adverse conditions on the Restructuring or the transactions contemplated by the Loan Documents.  No action, request for stay, petition for review or rehearing, reconsideration, or appeal with respect to any of the foregoing shall be pending.

G.                                     Security Interests in Personal and Mixed Property.  To the extent not otherwise satisfied (with respect to real property) pursuant to subsection 4.1H, Administrative

68

Agent shall have received evidence satisfactory to it that Holdings, Company and Subsidiary Guarantors shall have taken or caused to be taken all such actions, executed and delivered or caused to be executed and delivered all such agreements, documents and instruments, in the reasonable opinion of Administrative Agent, desirable in order to create in favor of Administrative Agent, for the benefit of Lenders, a valid and (upon such filing and recording) perfected First Priority security interest in the entire personal and mixed property Collateral.  Except as otherwise provided in subsection 6.15, such actions shall include the following:

(i)                                     Stock Certificates and Instruments.  Delivery to Administrative Agent of (a) certificates (which certificates shall be accompanied by irrevocable undated stock powers, duly endorsed in blank and otherwise satisfactory in form and substance to Administrative Agent) representing all Capital Stock pledged pursuant to the Security Agreement and (b) all promissory notes or other instruments (duly endorsed, where appropriate, in a manner satisfactory to Administrative Agent) evidencing any Collateral;

(ii)                                  Lien Searches and UCC Termination Statements.  Delivery to Administrative Agent of (a) the results of a recent search of all effective UCC financing statements and fixture filings which may have been made with respect to any personal or mixed property of any Loan Party, together with copies of all such filings disclosed by such search, and (b) duly completed UCC termination statements, and authorization of the filing thereof from the applicable secured party, as may be necessary to terminate any effective UCC financing statements or fixture filings disclosed in such search (other than any such financing statements or fixture filings in respect of Liens permitted to remain outstanding pursuant to the terms of this Agreement);

(iii)                               UCC Financing Statements and Fixture Filings.  Delivery to Administrative Agent of duly completed UCC financing statements and, where appropriate, fixture filings, with respect to all personal and mixed property Collateral of such Loan Party, for filing in all jurisdictions as may be necessary or, in the reasonable opinion of Administrative Agent, desirable to perfect the security interests created in such Collateral pursuant to the Collateral Documents; and

(iv)                              IP Filings.  Delivery to Administrative Agent of releases duly executed (if necessary) of security interests by all applicable Persons for filing in all applicable jurisdictions as may be necessary to terminate any effective filings in any IP Filing Office in respect of any IP Collateral (other than any such filings in respect of Liens permitted to remain outstanding pursuant to the terms of this Agreement).

H.                                    Existing Mortgages; Existing Mortgage Policies; Etc.  On or before the Restatement Date, Administrative Agent shall have received from Company and each applicable Subsidiary Guarantor:

(i)                                     Amendments to Existing Mortgages.  Fully executed and notarized amendments to the Existing Mortgages (each an “Amendment to Mortgage” and, collectively, the “Amendments to Mortgages”), either with evidence of recordation or, if not recorded, in proper form for recording in all appropriate places, in all applicable jurisdictions, amending each of the Existing Mortgages;

69

(ii)                                  Opinions of Local Counsel.  An opinion of counsel (which counsel shall be reasonably satisfactory to Administrative Agent) in each state in which an Existing Mortgaged Property is located with respect to the (a) enforceability of the form(s) of the Amendments to Mortgages to be recorded in such state, (b) the continued enforceability of the Existing Mortgages recorded prior to the Restatement Date, as amended by the Amendments to Mortgages, and (c) such other matters as Administrative Agent may reasonably request, in each case in form reasonably satisfactory to Administrative Agent;

(iii)                               Title Insurance.  (a) Date down and ALTA 110.5 modification endorsements to the Existing Mortgage Policies (collectively, the “Modification Title Endorsements”) assuring Administrative Agent that the applicable Existing Mortgages, as amended by the Amendments to Mortgage, continue to create valid and enforceable First Priority mortgage Liens on the respective Existing Mortgaged Properties encumbered thereby, subject only to a standard survey exception; and (b) evidence satisfactory to Administrative Agent that such Loan Party has (i) delivered to the Title Company all certificates and affidavits required by the Title Company in connection with the issuance of the Modification Title Endorsements and (ii) paid to the Title Company or to the appropriate Government Authorities all expenses and premiums of the Title Company in connection with the issuance of the Modification Title Endorsements and all recording and stamp taxes (including mortgage recording and intangible taxes) payable in connection with recording the Amendment to Mortgages in the appropriate real estate records;

(iv)                              Title Reports.  With respect to each Existing Mortgaged Property listed in Schedule 4.1H annexed hereto, a title date down report issued by the Title Company with respect thereto, satisfactory in form and substance to Administrative Agent;

(v)                                 Copies of Documents Relating to Title Exceptions.  Copies of all recorded documents listed as exceptions to title or otherwise referred to in the title reports delivered pursuant to subsection 4.1H(iv); and

(vi)                              Matters Relating to Flood Hazard Properties.  (a) Evidence, which may be in the form of a letter from an insurance broker or a municipal engineer, as to whether (1) any Existing Mortgaged Property is a Flood Hazard Property and (2) the community in which any such Flood Hazard Property is located is participating in the National Flood Insurance Program, (b) if there are any such Flood Hazard Properties, such Loan Party’s written acknowledgement of receipt of written notification from Administrative Agent (1) as to the existence of each such Flood Hazard Property and (2) as to whether the community in which each such Flood Hazard Property is located is participating in the National Flood Insurance Program, and (c) in the event any such Flood Hazard Property is located in a community that participates in the National Flood Insurance Program, evidence that Company has obtained flood insurance in respect of such Flood Hazard Property to the extent required under the applicable regulations of the Board of Governors.

70

I.                                         Solvency Assurances.  On the Restatement Date, Administrative Agent and Lenders shall have received an Officer’s Certificate of Company and its Subsidiaries, certified by a Financial Officer of Company, dated the Restatement Date, substantially in the form of Exhibit X annexed hereto, certifying that, after giving effect to the consummation of the transactions contemplated by the Loan Documents and Second Lien Credit Documents, Company and its Subsidiaries on a consolidated basis will be Solvent.

J.                                        Patriot Act Compliance.  Administrative Agent shall have received, at least five Business Days prior to the Restatement Date, all documentation and other information required by bank regulatory authorities under the applicable “know your customer” and anti-money laundering rules and regulations, including without limitation the Patriot Act.

K.                                    Bankruptcy Court.  The Plan shall have been confirmed by the Bankruptcy Court.

L.                                      Second Lien Credit Documents.

(i)                                     Form of Second Lien Credit Agreement.  The Second Lien Credit Documents shall be reasonably satisfactory in form and substance to Administrative Agent.

(ii)                                  Officer’s Certificate.  Administrative Agent shall have received an Officer’s Certificate to the effect that the Second Lien Credit Documents attached thereto are in full force and effect and are true and correct copies of the executed versions of such agreements.

M.                                 [Reserved].

N.                                    [Reserved].

O.                                    No Material Adverse Effect.  Other than events giving rise to, arising or occurring in connection with or as a result of the Bankruptcy Case, or the Restructuring, there shall have been (a) no material adverse effect on the business, operations, properties, assets, condition (financial or otherwise) or operating results of Holdings and its Subsidiaries, taken as a whole or (b) no condition or event or series of events that has resulted in, or could reasonably be expected to result in, any losses, liabilities, obligations, damages, costs and expenses of any kind to such Person of $15,000,000 or more; provided, however, that any such effect shall not include an effect resulting from (i) a change in applicable laws, (ii) a change in economic, business or financial market conditions generally, so long as such conditions do not disproportionately affect Holdings, Company and Company’s Subsidiaries or (iii) any act of war.

4.2                               Conditions to All Loans.

The obligation of each Lender to continue its Loans on the Restatement Date and to make its Loans on each Funding Date are subject to the following further conditions precedent:

71

A.                                   Administrative Agent shall have received on or before a Funding Date, in accordance with the provisions of subsection 2.1D, a duly executed Notice of Borrowing, in each case signed by a duly authorized Officer of Company.

B.                                     As of the Restatement Date and any Funding Date:

(i)                                     The representations and warranties contained herein and in the other Loan Documents shall be true, correct and complete in all material respects on and as of that Funding Date to the same extent as though made on and as of that date, except to the extent such representations and warranties specifically relate to an earlier date, in which case such representations and warranties shall have been true, correct and complete in all material respects on and as of such earlier date; and

(ii)                                  No event shall have occurred and be continuing or would result from the continuance of the Loans or the consummation of the borrowing contemplated by such Notice of Borrowing, as applicable, that would constitute an Event of Default or a Potential Event of Default.

4.3                               Conditions to Letters of Credit.

The issuance of any Letter of Credit hereunder is subject to the following conditions precedent:

A.                                   On or before the date of issuance of such Letter of Credit, Administrative Agent shall have received, in accordance with the provisions of subsection 3.1B(i), an originally executed Request for Issuance (or a facsimile copy thereof) in each case signed by a duly authorized Officer of Company, together with all other information specified in subsection 3.1B(i) and such other documents or information as the applicable Issuing Lender may reasonably require in connection with the issuance of such Letter of Credit.

B.                                     On the date of issuance of such Letter of Credit, all conditions precedent described in subsection 4.2B shall be satisfied to the same extent as if the issuance of such Letter of Credit were the making of a Loan and the date of issuance of such Letter of Credit were a Funding Date.

Section 5.                                          COMPANY’S REPRESENTATIONS AND WARRANTIES

In order to induce (a) the Agent, the Issuing Lenders and the Lenders to amend and restate the Existing Credit Agreement hereby and continue and restructure the outstanding extensions of credit under the Existing Credit Agreement, (b) the Issuing Lenders to continue the Existing Letters of Credit and issue Letters of Credit hereunder, and (c) the Revolving Lenders to make the Revolving Loans, Company represents and warrants to the Agent, the Issuing Lenders and the Lenders that as of the Restatement Date and each Funding Date thereafter (unless specified otherwise below):

72

5.1                               Organization, Powers, Qualification, Good Standing, Business and Subsidiaries.

A.                                   Organization and Powers.  Each of Holdings and Company is a corporation duly organized or formed, validly existing and in good standing under the laws of its jurisdiction of incorporation or organization as specified in Schedule 5.1A annexed hereto.  Each of Holdings and Company has all requisite power and authority to own, lease and operate its assets, to carry on its business, except, in each of the foregoing cases, where the failure to have such power and authority could not reasonably be expected to have a Material Adverse Effect, and to enter into the Loan Documents to which it is a party and to carry out the transactions contemplated thereby.

B.                                     Qualification and Good Standing.  Each of Holdings and Company is qualified to do business and in good standing in every jurisdiction where ownership, lease or operation of its assets or conduct of its business and operations require such qualification, except in jurisdictions where the failure to be so qualified or in good standing could not reasonably be expected to result in a Material Adverse Effect.

C.                                     Subsidiaries.  As of the Restatement Date, all of the Subsidiaries of Holdings, their jurisdictions of organization and the ownership interest of Holdings and each of its Subsidiaries in each of the Subsidiaries of Holdings are identified in Schedule 5.1C annexed hereto.  The Capital Stock of each of the Subsidiaries of Holdings identified in Schedule 5.1C annexed hereto is duly authorized, validly issued, fully paid, nonassessable and is owned by Holdings or Company, directly or indirectly, free and clear of all consensual Liens (other than Liens created under the Collateral Documents and the Second Lien Credit Documents).  Each of the Subsidiaries of Holdings identified in Schedule 5.1C annexed hereto is a corporation, partnership, trust or limited liability company duly organized, validly existing and in good standing under the laws of its respective jurisdiction of incorporation or organization set forth therein, has all requisite power and authority to own, lease and operate its assets and to carry on its business, and is qualified to do business and in good standing in every jurisdiction where ownership, lease or operation of its assets or conduct of its business and operations require such qualification, in each case except where failure to be so qualified or in good standing or a lack of such power and authority could not reasonably be expected to result in a Material Adverse Effect.  Except as set forth on Schedule 5.1C, as of the Restatement Date, there are no outstanding subscriptions, options, warrants, calls, put rights or any other agreements or commitments of any nature with respect to the Capital Stock of any Subsidiary of Holdings.

5.2                               Authorization of Borrowing, etc.

A.                                   Authorization of Borrowing.  The execution, delivery and performance of the Loan Documents have been duly authorized by all necessary action on the part of each Loan Party that is a party thereto.

B.                                     No Conflict.  The execution, delivery and performance by Loan Parties of the Loan Documents to which they are parties and the consummation of the transactions contemplated by the Loan Documents do not and will not (i) violate any provision of any law or any governmental rule or regulation applicable to Holdings or any of its Subsidiaries, the Organizational Documents of Holdings or any of its Subsidiaries or any order, judgment or decree of any court or other Government Authority binding on Holdings or any of its Subsidiaries, (ii) conflict with, result in a breach of or constitute (with due notice or lapse of time

73

or both) a default under any Contractual Obligation of Holdings or any of its Subsidiaries, (iii) result in or require the creation or imposition of any Lien upon any of the properties or assets of Holdings or any of its Subsidiaries (other than any Liens permitted by subsection 7.2), or (iv) require any approval of stockholders or any approval or consent of any Person under any Contractual Obligation of Holdings or any of its Subsidiaries, except for such approvals or consents which will be obtained on or before the Restatement Date and except, in each case, to the extent such violation, conflict, Lien or failure to obtain such approval or consent could not reasonably be expected to result in a Material Adverse Effect.

C.                                     Governmental Consents.  The execution, delivery and performance by Loan Parties of the Loan Documents to which they are parties and the consummation of the transactions contemplated by the Loan Documents do not and will not require any Governmental Authorization, except (i) Governmental Authorizations that have been obtained, (ii) filings necessary to perfect the Liens on the Collateral granted by the Loan Parties in favor of Administrative Agent on behalf of Lenders and (iii) Governmental Authorizations the failure of which to obtain or make could not reasonably be expected to have a Material Adverse Effect.

D.                                    Binding Obligation.  Each of the Loan Documents has been duly executed and delivered by each Loan Party that is a party thereto and is the legally valid and binding obligation of such Person, enforceable against such Person in accordance with its respective terms, except as may be limited by bankruptcy, insolvency, reorganization, receivership, moratorium or similar laws relating to or limiting creditors’ rights generally or by equitable principles relating to enforceability.

5.3                               Financial Condition.

Company has heretofore delivered to Lenders (i) audited financial statements for the Fiscal Years ended 2006, 2007 and 2008, (ii) unaudited financial statements for the first three Fiscal Quarters of 2009 and (iii) unaudited financial statements for the portion of the Fiscal Year 2009 ended November 30, 2009.  All such statements (other than the statements for the eleven (11) month portion of the Fiscal Year ended November 30, 2009) were, and all financials statements which shall hereafter be furnished by or on behalf of any Loan Party to the Agent pursuant to subsection 6.1B, C or D will be, prepared in conformity with GAAP (except as otherwise expressly noted therein) and fairly present, in all material respects, the financial position (on a consolidated basis) of the entities described in such financial statements as at the respective dates thereof and the results of operations and cash flows (on a consolidated basis) of the entities described therein for each of the periods then ended, subject, in the case of any such unaudited financial statements, to changes resulting from audit and normal year-end adjustments.

5.4                               No Material Adverse Change.

Except for events giving rise to, arising or occurring in connection with or as a result of the Bankruptcy Case or the Restructuring or as set forth on Schedule 5.4, since December 31, 2008, no event or change has occurred that has resulted in or evidences, either in any case or in the aggregate, a Material Adverse Effect.

74

5.5                               Title to Properties; Liens; Real Property; Intellectual Property.

A.                                   Title to Properties; Liens.  Company and its Subsidiaries have (i) good and legal title to (in the case of fee interests in real property), (ii) valid leasehold interests in (in the case of leasehold interests in real or personal property), or (iii) good title to (in the case of all other personal property), all of their respective properties and assets necessary in the ordinary conduct of its business, and all such properties and assets are free and clear of Liens, except for (a) Liens permitted by this Agreement, (b) minor defects on title that do not materially interfere with Company’s or its Subsidiaries’ ability to conduct its business or to utilize such assets for their intended purposes and (c) where the failure to have such title or other property interests described above could not reasonably be expected to have, individually or in the aggregate, a Material Adverse Effect.

B.                                     Real Property.  As of the Restatement Date, Schedule 5.5B annexed hereto contains a true, accurate and complete list of (i) all fee interests in any Real Property Assets and (ii) all leases, subleases or assignments of leases (together with all amendments, modifications, supplements, renewals or extensions of any thereof) affecting each Real Property Asset, regardless of whether a Loan Party is the landlord or tenant (whether directly or as an assignee or successor in interest) under such lease, sublease or assignment.

(i)                                     Condemnation.  No Taking has been commenced or, to Company’s knowledge, is contemplated with respect to all or any portion of any Existing Mortgaged Property or for the relocation of roadways providing access to such Existing Mortgaged Property, which Taking, contemplated Taking or condemnation could reasonably be expected to materially and adversely affect the use of such Existing Mortgaged Property.

C.                                     Intellectual Property.  Company and its Subsidiaries own or have the right to use, all Intellectual Property necessary for the conduct of their business, except where the failure to own or have such right to use in the aggregate could not reasonably be expected to result in a Material Adverse Effect.  No claim has been asserted and is pending by any Person challenging or questioning the use of any such Intellectual Property or the validity or effectiveness of any such Intellectual Property, nor does Company know of any valid basis for any such claim, except for such claims that in the aggregate could not reasonably be expected to result in a Material Adverse Effect.  The use of such Intellectual Property by Company and its Subsidiaries does not infringe on the rights of any Person, except for such claims and infringements that, in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.  All material federal, state and foreign registrations of and applications for Intellectual Property that are owned or licensed by Company or any of its Subsidiaries on the Restatement Date are described on Schedule 5.5C annexed hereto.

5.6                               Litigation; Adverse Facts.

Except as disclosed on Schedule 5.6, there are no Proceedings (whether or not purportedly on behalf of Company or any of its Subsidiaries) at law or in equity, before or by any court or other Government Authority (including any Environmental Claims) that are pending or, to the knowledge of Company, threatened in writing against Company or any of its Subsidiaries or any property of Company or any of its Subsidiaries and that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect.  Neither Company nor any of its Subsidiaries (i) is in violation of any applicable laws (including

75

Environmental Laws) or (ii) is subject to or in default with respect to any final judgments, writs, injunctions, decrees, rules or regulations of any court or other Government Authority, except for such violations or defaults (a) that are being contested in good faith by appropriate proceedings or (b) that, individually or in the aggregate, could not reasonably be expected to result in a Material Adverse Effect.

5.7                               Payment of Taxes.

Except to the extent permitted by subsection 6.3, all Tax returns and reports of Holdings and its Subsidiaries required to be filed by any of them have been timely filed, and all Taxes shown on such Tax returns to be due and payable and all assessments, fees, other governmental charges and any other Tax upon Holdings and its Subsidiaries and upon their respective properties, assets, income, businesses and franchises that are due and payable have been paid when due and payable except those (i) which are not overdue by more than thirty (30) days and intended to be contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP, (ii) which are being contested in good faith by appropriate proceedings diligently conducted and for which adequate reserves have been provided in accordance with GAAP or (iii) with respect to which the failure to make such filing or payment could not reasonably be expected to have a Material Adverse Effect and will not result in a Lien securing such Taxes, assessments, fees or other governmental charges in excess of $900,000.

5.8                               Governmental Regulation.

Neither Company nor any of its Subsidiaries is subject to regulation under the Public Utility Holding Company Act of 1935 or the Investment Company Act of 1940.

5.9                               Securities Activities.

A.                                   Neither Company nor any of its Subsidiaries is engaged principally, or as one of its important activities, in the business of extending credit for the purpose of purchasing or carrying any Margin Stock.

B.                                     Following application of the proceeds of each Loan, not more than 25% of the value of the assets (either of Company only or of Company and its Subsidiaries on a consolidated basis) subject to the provisions of subsection 7.2 or 7.7 or subject to any restriction contained in any agreement or instrument, between Company and any Lender or any Affiliate of any Lender, relating to Indebtedness and within the scope of subsection 8.2, will be Margin Stock.

5.10                        Employee Benefit Plans.

A.                                   Company, each of its Subsidiaries and each of their respective ERISA Affiliates are in compliance in all material respects with all applicable provisions and requirements of ERISA and the regulations and published interpretations thereunder with respect to each Employee Benefit Plan, and have performed in all material respects all their obligations under each Employee Benefit Plan, except to the extent that the failure to comply therewith could not reasonably be expected to have a Material Adverse Effect.  Each Employee Benefit

76

Plan that is intended to qualify under Section 401(a) of the Internal Revenue Code is so qualified except as would reasonably be expected to have a Material Adverse Effect.

B.                                     No ERISA Event has occurred or is reasonably expected to occur (i) other than in connection with the Bankruptcy Case or (ii) that could reasonably be expected to have a Material Adverse Effect.

C.                                     As of the most recent valuation date for any Pension Plan, the amount of unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA), individually or in the aggregate for all Pension Plans (excluding for purposes of such computation any Pension Plans with respect to which assets exceed benefit liabilities), could not reasonably be expected to have a Material Adverse Effect.

D.                                    As of the most recent valuation date for each Multiemployer Plan for which the actuarial report is available, the potential liability of Company, its Subsidiaries and their respective ERISA Affiliates for a complete withdrawal from such Multiemployer Plan (within the meaning of Section 4203 of ERISA), when aggregated with such potential liability for a complete withdrawal from all Multiemployer Plans, based on information available pursuant to Section 4221(e) of ERISA, could not reasonably be expected to have a Material Adverse Effect.

E.                                      As of the date hereof, Company and its Subsidiaries have made full payment when due of all required contributions to any Foreign Plan, except to the extent the failure to make such contributions could not reasonably be expected to have a Material Adverse Effect.

5.11                        Certain Fees.

No broker’s or finder’s fee or commission will be payable with respect to this Agreement.

5.12                        Environmental Protection.

Except as set forth in Schedule 5.12 annexed hereto:

(i)                                     neither Company nor any of its Subsidiaries nor any of their respective Facilities or operations are subject to any outstanding written order, consent decree or settlement agreement with any Person relating to (a) any Environmental Law, (b) any Environmental Claim, or (c) any Hazardous Materials Activity that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect;

(ii)                                  there are and, to Company’s knowledge, have been no conditions, occurrences, or Hazardous Materials Activities that, as of the date of this Agreement, could reasonably be expected to form the basis of an Environmental Claim against Company or any of its Subsidiaries that, individually or in the aggregate, could reasonably be expected to result in a Material Adverse Effect; and

77

(iii)                               Company and its Subsidiaries are in compliance with all Environmental Laws, except for such non-compliance as would not, individually or in the aggregate, be reasonably expected to result in a Material Adverse Effect.

5.13                        Employee Matters.