EXHIBIT 10.2

EXECUTION COPY

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CREDIT AGREEMENT

Dated as of June 11, 2003

Among

ESTERLINE TECHNOLOGIES CORPORATION,

as Borrower,

THE INITIAL LENDERS, ISSUING BANK AND
SWING LINE BANK NAMED HEREIN,

as Initial Lenders, Issuing Bank and Swing Line Bank,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Administrative Agent,

WACHOVIA BANK, NATIONAL ASSOCIATION,

as Collateral Agent,

THE BANK OF NEW YORK,

as Syndication Agent,

and

KEYBANK NATIONAL ASSOCIATION,

as Documentation Agent

___________________________________________________________

WACHOVIA SECURITIES, LLC,

as Co-Lead Arranger and Sole Bookrunner

and

BNY CAPITAL MARKETS, INC.,

as Co-Lead Arranger

___________________________________________________________

 

 

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<PAGE>  

T A B L E  O F  C O N T E N T S

Section

Page

   

ARTICLE I DEFINITIONS AND ACCOUNTING TERMS

     

SECTION 1.01. Certain Defined Terms

1

SECTION 1.02. Computation of Time Periods; Other Definitional Provisions

20

SECTION 1.03. Accounting Terms

21

SECTION 1.04. Currency Equivalents Generally

21

   

ARTICLE II AMOUNTS AND TERMS OF THE ADVANCES AND THE LETTERS OF CREDIT

   

SECTION 2.01. The Advances and the Letters of Credit

21

SECTION 2.02. Making the Advances

22

SECTION 2.03. Issuance of and Drawings and Reimbursement Under Letters of Credit

24

SECTION 2.04. Repayment of Advances

26

SECTION 2.05. Termination or Reduction of the Commitments

27

SECTION 2.06. Prepayments

27

SECTION 2.07. Interest

28

SECTION 2.08. Fees

29

SECTION 2.09. Conversion of Advances

29

SECTION 2.10. Increased Costs, Etc.

30

SECTION 2.11. Payments and Computations

31

SECTION 2.12. Taxes

34

SECTION 2.13. Sharing of Payments, Etc.

36

SECTION 2.14. Use of Proceeds

36

SECTION 2.15. Evidence of Debt

37

SECTION 2.16. Defaulting Lenders

37

   

ARTICLE III CONDITIONS OF LENDING AND ISSUANCES OF LETTERS OF CREDIT

   

SECTION 3.01. Conditions Precedent to Initial Extension of Credit

38

SECTION 3.02. Conditions Precedent to Each Borrowing and Issuance and Renewal

42

SECTION 3.03. Determinations Under Section 3.01

43

   

ARTICLE IV REPRESENTATIONS AND WARRANTIES

     

SECTION 4.01. Representations and Warranties of the Loan Parties

43

   

ARTICLE V COVENANTS OF THE LOAN PARTIES

     

SECTION 5.01. Affirmative Covenants

49

SECTION 5.02. Negative Covenants

53

SECTION 5.03. Reporting Requirements

62

SECTION 5.04. Financial Covenants

64

   

ARTICLE VI EVENTS OF DEFAULT

     

SECTION 6.01. Events of Default

66

SECTION 6.02. Actions in Respect of the Letters of Credit upon Default

68

<PAGE>  ii

ARTICLE VII THE AGENTS

     

SECTION 7.01. Authorization and Action

69

SECTION 7.02. Agents' Reliance, Etc.

69

SECTION 7.03. Wachovia and Affiliates

70

SECTION 7.04. Lender Party Credit Decision

70

SECTION 7.05. Indemnification

70

SECTION 7.06. Successor Agents

71

SECTION 7.07. Bookrunner/ Co-Arranger, Co-Arranger, Syndication Agent and

   

Documentation Agent Have No Liability

72

   

ARTICLE VIII MISCELLANEOUS

     

SECTION 8.01. Amendments, Etc.

72

SECTION 8.02. Notices, Etc.

73

SECTION 8.03. No Waiver; Remedies; Entire Agreement

74

SECTION 8.04. Costs and Expenses

74

SECTION 8.05. Right of Set-off

75

SECTION 8.06. Binding Effect

76

SECTION 8.07. Assignments and Participations

76

SECTION 8.08. Execution in Counterparts

78

SECTION 8.09. No Liability of the Issuing Bank

78

SECTION 8.10. Confidentiality

79

SECTION 8.11. Release of Collateral

79

SECTION 8.12. Jurisdiction, Etc.

79

SECTION 8.13. GOVERNING LAW

80

SECTION 8.14. WAIVER OF JURY TRIAL

80

<PAGE>  iii

SCHEDULES

Schedule I

-

Commitments and Applicable Lending Offices

Schedule II

-

Financial Covenant Items

Schedule III

-

Subsidiary Guarantors

Schedule 4.01(b)

-

Subsidiaries

Schedule 4.01(d)

-

Authorizations, Approvals, Actions, Notices and Filings

Schedule 4.01(q)

-

Open Years

Schedule 4.01(s)

-

Existing Debt

Schedule 4.01(t)

-

Surviving Debt

Schedule 4.01(u)

-

Liens

Schedule 4.01(v)

-

Owned Real Property

Schedule 4.01(w)

-

Leased Real Property

Schedule 4.01(x)

-

Investments

Schedule 4.01(y)

-

Intellectual Property

Schedule 4.01(z)

-

Material Contracts

EXHIBITS

Exhibit A-1

-

Form of Revolving Credit Note

Exhibit A-2

-

Form of Swing Line Note

Exhibit B

-

Form of Notice of Borrowing

Exhibit C

-

Form of Assignment and Acceptance

Exhibit D

-

Form of Security Agreement

Exhibit E

-

Form of Subsidiary Guaranty

Exhibit F

-

Form of Solvency Certificate

Exhibit G

-

Form of Opinion of Counsel to the Loan Parties

<PAGE>  

CREDIT AGREEMENT

      CREDIT AGREEMENT

dated as of June  11, 2003 (as amended, supplemented, restated or otherwise
modified from time to time, this "Agreement") among ESTERLINE TECHNOLOGIES
CORPORATION, a Delaware corporation (the "Borrower"), the banks, financial
institutions and other lenders listed on the signature pages hereof as the
Initial Lenders (the "Initial Lenders"), the bank listed on the signature pages
hereof as the Issuing Bank (as further defined below, the "Issuing Bank"), the
bank listed on the signature pages hereof as the Swing Line Bank (as further
defined below, the "Swing Line Bank" and, together with the Initial Lenders and
the Issuing Bank, the "Initial Lender Parties"), WACHOVIA BANK, NATIONAL
ASSOCIATION, as collateral agent (together with any successor collateral agent
appointed pursuant to Article VII, in such capacity, the "Collateral Agent") for
the Secured Parties (as hereinafter defined), WACHOVIA BANK, NATIONAL
ASSOCIATION ("Wachovia"), as administrative agent (together with any successor
administrative agent appointed pursuant to Article VII, in such capacity, the
"Administrative Agent") for the Lender Parties (as hereinafter defined),
WACHOVIA SECURITIES, LLC, as sole bookrunner and co-lead arranger (in such
capacity, the "Bookrunner/ Co-Arranger"), BNY Capital Markets, Inc., as co-lead
arranger (in such capacity, the "Co-Arranger"), The Bank of New York, as
syndication agent, and KeyBank National Association, as documentation agent.

PRELIMINARY STATEMENTS:

      (1)  The Borrower has requested that the Lender Parties establish a
revolving credit facility (with subfacilities for letters of credit and
swingline loans) for the benefit of the Borrower in an aggregate amount equal to
$60,000,000 to refinance and replace the Borrower's existing credit facilities
and to finance the ongoing working capital and other general corporate purposes
of the Borrower and its subsidiaries. The Lender Parties have indicated their
willingness to agree to establish such revolving credit facility, but only on
the terms and conditions of this Agreement, including the granting of the
Collateral pursuant to the Collateral Documents and the guarantees pursuant to
the Subsidiary Guaranty (each, and all other capitalized terms used in these
Preliminary Statements, as defined below).

      (2)  It is a condition to the obligations of the Initial Lender Parties
and the effectiveness of this Agreement that, among other conditions, (a) the
Borrower acquire (the "Acquisition") all of the Equity Interests comprising the
Acquired Businesses from the Sellers pursuant to the Agreement for the Sale and
Purchase of the Acquired Businesses by and among the Sellers and the Buyers
dated as of May 22, 2003 (the "Acquisition Agreement") and (b) to provide a
portion of the financing for the Acquisition, the Borrower shall have either (i)
issued the Senior Subordinated Notes in an aggregate principal amount of at
least $175,000,000 or (ii) incurred the Bridge Loans in an aggregate principal
amount of at least $85,000,000.

      NOW, THEREFORE, in consideration of the premises and of the mutual
covenants and agreements contained herein, the parties hereto hereby agree as
follows:

ARTICLE I

DEFINITIONS AND ACCOUNTING TERMS

      SECTION 1.01.  Certain Defined Terms. As used in this Agreement (including
the Preliminary Statements), the following terms shall have the following
meanings (such meanings to be equally applicable to both the singular and plural
forms of the terms defined):

<PAGE>  2

 

      "Acquisition Agreement" has the meaning specified in the Preliminary
Statements to this Agreement.

     

      "Acquired Businesses" means all of the Equity Interests (and related
assets) of Pressure Systems International Limited, a private limited company
organized under the laws of England and Wales, Pressure Systems Inc., a Virginia
corporation, Norwich Aero Products Inc., a New York corporation, and Weston
Aerospace, a private unlimited company organized under the laws of England and
Wales.

     

      "Acquisition" has the meaning specified in the Preliminary Statements to
this Agreement.

     

      "Acquisition Documents" means the Acquisition Agreement and all schedules
thereto, employment agreements, the Tax Deed (as defined in the Acquisition
Agreement), and each other document related to the Acquisition.

     

      "Administrative Agent" has the meaning specified in the Preliminary
Statements to this Agreement.

     

      "Administrative Agent's Account" means the account of the Administrative
Agent maintained by the Administrative Agent with Wachovia Bank, National
Association, at its office at 201 South College Street, Charlotte Plaza 8th
Floor, Charlotte, North Carolina 28288, Account No. 5000000040942,
Attention:  Agency Services - Annette Williams, or such other account as the
Administrative Agent shall specify in writing to the Lender Parties.

     

      "Advance" means a Revolving Credit Advance, a Swing Line Advance or a
Letter of Credit Advance.

     

      "Affiliate" means, as to any Person, any other Person that, directly or
indirectly, controls, is controlled by or is under common control with such
Person or is a director or officer of such Person. For purposes of this
definition, the term "control" (including the terms "controlling", "controlled
by" and "under common control with") of a Person means the possession, direct or
indirect, of the power to vote 10% or more of the Voting Interests of such
Person or to direct or cause the direction of the management and policies of
such Person, whether through the ownership of Voting Interests, by contract or
otherwise.

     

      "Agents" means the Administrative Agent, the Collateral Agent and the
Bookrunner/ Co-Arranger.

     

      "Agreement" has the meaning specified in the Preliminary Statements to
this Agreement.

     

      "Agreement Value" means, for each Hedge Agreement, on any date of
determination, an amount equal to all obligations thereunder (includes the
amount of any termination payments that would payable on such date if the Hedge
Agreement were terminated).

     

      "Applicable Commitment Fee Percentage" means, for any period, a rate equal
to (i) 0.50% per annum if the Leverage Ratio is >2.5, (ii) 0.45% per annum if
the Leverage Ratio is £ 2.5 but >2.0, (iii) 0.40% per annum if the Leverage
Ratio is £ 2.0 but >1.5 and (iv) 0.35% per annum if the Leverage Ratio is £ 1.5.

<PAGE>  3

 

      "Applicable Lending Office" means, with respect to each Lender Party, such
Lender Party's Domestic Lending Office in the case of a Base Rate Advance and
such Lender Party's Eurodollar Lending Office in the case of a Eurodollar Rate
Advance.

     

      "Applicable Margin" means, at any time, a percentage per annum determined
by reference to the Leverage Ratio as of the end of the Fiscal Quarter most
recently ended prior to such time, as set forth below:

Leverage Ratio

Base Rate Advances

Eurodollar Rate Advances

Greater than 3.0

1.50%

2.75%

Greater than 2.5 but less than
or equal to 3.0

1.25%

2.50%

Greater than 2.0 but less than
or equal to 2.5

0.875%

2.125%

Greater than 1.5 but less than
or equal to 2.0

0.50%

1.75%

less than or equal to 1.5

0.25%

1.50%

 

      "Appropriate Lender" means, at any time, with respect to (a) the Revolving
Credit Facility, a Lender that has a Commitment with respect to such Facility at
such time, (b) the Letter of Credit Facility, (i) the Issuing Bank and (ii) if
the other Revolving Credit Lenders have made Letter of Credit Advances pursuant
to Section 2.03(c) that are outstanding at such time, each such other Revolving
Credit Lender and (c) the Swing Line Facility, (i) the Swing Line Bank and
(ii) if the other Revolving Credit Lenders have made Swing Line Advances
pursuant to Section 2.02(b) that are outstanding at such time, each such other
Revolving Credit Lender.

     

      "Approved Fund" means any Fund that is administered or managed by (a) a
Lender Party, (b) an Affiliate of a Lender Party or (c) an entity or an
Affiliate of an entity that administers or manages a Lender Party.

     

      "Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender Party and an Eligible Assignee, and accepted by the
Administrative Agent, in accordance with Section 8.07 and in substantially the
form of Exhibit C hereto.

     

      "Available Amount" of any Letter of Credit means, at any time, the maximum
amount available to be drawn under such Letter of Credit at such time (assuming
compliance at such time with all conditions to drawing).

     

      "Bankruptcy Law" means any proceeding of the type referred to in Section
6.01(f) or Title II, U.S. Code, or any similar foreign, federal or state law for
the relief of debtors.

     

      "Base Rate" means a fluctuating interest rate per annum in effect from
time to time, which rate per annum shall at all times be equal to the higher of:

<PAGE>  4

 

      (a)  the rate of interest per annum then most recently publicly announced
by Wachovia in Charlotte, North Carolina, from time to time, as Wachovia's prime
rate for Dollars loaned in the United States; and

     

      (b)  1/2 of 1% per annum above the Federal Funds Rate.

     

      The Base Rate is an index rate and is not necessarily intended to be the
lowest or best rate of interest charged to other customers in connection with
extensions of credit or to other banks.

     

      "Base Rate Advance" means an Advance that bears interest as provided in
Section 2.07(a)(i).

     

      "Bookrunner/Co-Arranger" has the meaning specified in the Preliminary
Statements to this Agreement.

     

      "Borrower" has the meaning specified in the Preliminary Statements to this
Agreement.

     

      "Borrower's Account" means the account of the Borrower maintained by the
Borrower with Wachovia Bank, National Association, at its office at 201 South
College Street, Charlotte Plaza 8th Floor, Charlotte, North Carolina 28288,
Attention: Agency Services, Account No. 5000000040942, or such other account as
the Borrower shall specify in writing to the Administrative Agent.

     

      "Borrowing" means a Revolving Credit Borrowing or a Swing Line Borrowing.

     

      "Bridge Loans" means loans in a principal amount of up to $85,000,000 lent
to the Borrower to finance the consummation of the Acquisition if the Senior
Subordinated Notes cannot be issued due to market conditions, such loans to be
made pursuant to a senior unsecured bridge loan facility on terms (including
terms for and relating to exchange notes therefor) and under documents
reasonably satisfactory to the Administrative Agent ("Bridge Documentation").

     

      "Bridge Documentation" has the meaning specified therefor in the
definition of "Bridge Loans".

     

      "Business Day" means a day of the year on which banks are not required or
authorized by law to close in New York, New York or Charlotte, North Carolina
and, if the applicable Business Day relates to any Eurodollar Rate Advances, on
which dealings are carried on in the London interbank market.

     

      "Buyers" means Esterline Technologies Corporation, a Delaware corporation,
and Esterline Technologies Acquisition Limited, a private limited company
organized under the laws of England and Wales.

     

      "Capital Expenditures" means, for any Person for any period, the sum of,
without duplication, (a) all expenditures made, directly or indirectly, by such
Person or any of its Subsidiaries during such period for equipment, fixed
assets, real property or improvements, or for replacements or substitutions
therefor or additions thereto, that have been or should be, in accordance with
GAAP, reflected as additions to property, plant or equipment on a Consolidated
balance sheet of such Person or have a useful life of more than one year plus
(b) the aggregate principal amount of all Debt (including Obligations under
Capitalized Leases) assumed or incurred in connection with any such
expenditures. For purposes of this definition, the purchase

<PAGE>  5

 

price of equipment that is purchased simultaneously with the trade-in of
existing equipment or with insurance proceeds shall be included in Capital
Expenditures only to the extent of the gross amount of such purchase price less
the credit granted by the seller of such equipment for the equipment being
traded in at such time or the amount of such proceeds, as the case may be.

     

      "Capitalized Leases" means all leases that have been or should be, in
accordance with GAAP, recorded as capitalized leases.

     

      "Cash Capital Expenditures" means, for any Person for any period, all
Capital Expenditures during such period excluding Capital Expenditures to the
extent financed with proceeds of Debt (other than Revolving Credit Advances)
that matures more than 1 year after the incurrence thereof.

     

      "Cash Equivalents" means any of the following, to the extent owned by the
Borrower or any of its Subsidiaries free and clear of all Liens other than Liens
created under the Collateral Documents and having a maturity of not greater than
180 days from the date of issuance thereof: (a) readily marketable direct
obligations of the Government of the United States or any agency or
instrumentality thereof or obligations unconditionally guaranteed by the full
faith and credit of the Government of the United States, (b) insured
certificates of deposit of or time deposits with any commercial bank that is a
Lender Party or a member of the Federal Reserve System, issues (or the parent of
which issues) commercial paper rated as described in clause (c) below, is
organized under the laws of the United States or any State thereof and has
combined capital and surplus of at least $1 billion, (c) commercial paper in an
aggregate amount of no more than $5,000,000 per issuer outstanding at any time,
issued by any corporation organized under the laws of any State of the United
States and rated at least "Prime-1" (or the then equivalent grade) by Moody's
Investors Service, Inc. ("Moody's") or "A-1" (or the then equivalent grade) by
Standard & Poor's, a division of The McGraw-Hill Companies, Inc. ("S&P") or
(d) Investments, classified in accordance with GAAP as Current Assets of the
Borrower or any of its Subsidiaries, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which are
administered by financial institutions that have the highest rating obtainable
from either Moody's or S&P, and the portfolios of which are limited solely to
Investments of the character, quality and maturity described in clauses (a), (b)
and (c) of this definition.

     

      "CERCLA" means the Comprehensive Environmental Response, Compensation and
Liability Act of 1980, as amended from time to time.

     

      "CERCLIS" means the Comprehensive Environmental Response, Compensation and
Liability Information System maintained by the U.S. Environmental Protection
Agency.

     

      "CFC" means a controlled foreign corporation as defined in Section 957(a)
of the Internal Revenue Code.

     

      "Change of Control" means the occurrence of any of the following: (a) any
Person or two or more Persons acting in concert shall have acquired beneficial
ownership (within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities and Exchange Act of 1934) directly or
indirectly, of Voting Interests of the Borrower (or other securities convertible
into such Voting Interests) representing 30% or more of the combined voting
power of all Voting Interests of the Borrower; or (b) during any period of up to
24 consecutive months, commencing after the date hereof, individuals who at the
beginning of such 24-month period were directors (or directors who were
nominated or approved by such directors) of the Borrower shall cease for any
reason to constitute a majority of the board of directors of the

<PAGE>  6

 

Borrower; (c) any Person or two or more Persons acting in concert shall have
acquired by contract (other than customary employment contracts for seniors
officers) or otherwise, or shall have entered into a contract or arrangement
that, upon consummation, will result in its or their acquisition of the power to
exercise, directly or indirectly, a controlling influence over the management
policies of the Borrower; or (d) any "Change of Control" or similar occurrence
as defined in the Senior Subordinated Notes, the Senior Notes or in any other
instrument relating to Material Debt for Borrowed Money.

     

      "Chief Financial Officer" means the officer of the Borrower or other Loan
Parties holding such title, such holder as of the date hereof being Mr. Robert
D. George.

     

      "Co-Arranger" has the meaning specified in the Preliminary Statements to
this Agreement.

     

      "Collateral" means all "Collateral" referred to in the Collateral
Documents and all other property that is or is intended to be subject to any
Lien in favor of the Collateral Agent for the benefit of the Secured Parties.

     

      "Collateral Agent" has the meaning specified in the Preliminary Statements
to this Agreement.

     

      "Collateral Documents" means the Security Agreement, the Intellectual
Property Security Agreement, the U.K. Security Documents, each of the collateral
documents, instruments and agreements delivered pursuant to Section 5.01(j) or
(k), and each other agreement that creates or purports to create a Lien in favor
of the Collateral Agent for the benefit of the Secured Parties.

     

      "Commitment" means a Revolving Credit Commitment, a Swing Line Commitment
or a Letter of Credit Commitment.

     

      "Confidential Information" means information that any Loan Party furnishes
to any Agent or any Lender Party in a writing designated as confidential, but
does not include any such information that is or becomes generally available to
the public or that is or becomes available to such Agent or such Lender Party
from a source other than the Loan Parties.

     

      "Confidential Information Memorandum" means the initial confidential
information memorandum dated May 2003 used by the Bookrunner/ Co-Arranger in
connection with the syndication of the Commitments.

     

      "Consolidated" refers to the consolidation of accounts in accordance with
GAAP.

     

      "Consolidated Net Income" and "Consolidated Net Loss" means, respectively,
for any period, the aggregate net income or loss from continuing operations of
the Borrower and its Subsidiaries on a Consolidated basis.

     

      "Contingent Obligation" means, with respect to any Person, any Obligation
or arrangement of such Person to guarantee or intended to guarantee any Debt,
leases, dividends or other payment Obligations ("primary obligations") of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, including, without limitation, (a) the direct or indirect guarantee,
endorsement (other than for collection or deposit in the ordinary course of
business), co-making, discounting with recourse or sale with recourse by such
Person of the Obligation of a primary obligor, (b) the Obligation to make
take-or-pay or similar payments, if

<PAGE>  7

 

required, regardless of nonperformance by any other party or parties to an
agreement or (c) any Obligation of such Person, whether or not contingent,
(i) to purchase any such primary obligation or any property constituting direct
or indirect security therefor, (ii) to advance or supply funds (A) for the
purchase or payment of any such primary obligation or (B) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
assets, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the holder of any primary obligation against loss in respect thereof. The amount
of any Contingent Obligation shall be deemed to be an amount equal to the stated
or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made (or, if less, the maximum amount of such primary
obligation for which such Person may be liable pursuant to the terms of the
instrument evidencing such Contingent Obligation) or, if not stated or
determinable, the maximum reasonably anticipated liability in respect thereof
(assuming such Person is required to perform thereunder), as determined by such
Person in good faith.

     

      "Conversion", "Convert" and "Converted" each refer to a conversion of
Advances of one Type into Advances of the other Type pursuant to Section 2.09 or
2.10.

     

      "Current Assets" of any Person means all assets of such Person that would,
in accordance with GAAP, be classified as current assets of a company conducting
a business the same as or similar to that of such Person.

     

      "Debt" of any Person means, without duplication for purposes of
calculating financial ratios, (a) all indebtedness of such Person for borrowed
money, (b) all Obligations of such Person for the deferred purchase price of
property or services (other than trade payables not overdue by more than 60 days
incurred in the ordinary course of such Person's business), (c) all Obligations
of such Person evidenced by notes, bonds, debentures or other similar
instruments, (d) all Obligations of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (e) all Obligations of such Person as lessee under
Capitalized Leases, (f) all Obligations of such Person under acceptances,
letters of credit or other similar arrangements or credit support facilities,
(g) all Obligations of such Person to purchase, redeem, retire, defease or
otherwise make any payment in respect of any Equity Interests in such Person or
any other Person or any warrants, rights or options to acquire such Equity
Interests, valued, in the case of Redeemable Preferred Interests, at the greater
of its voluntary or involuntary liquidation preference plus accrued and unpaid
dividends, (h) all Obligations of such Person in respect of Hedge Agreements,
valued at the Agreement Value thereof, (i) all Contingent Obligations and
Off-Balance Sheet Obligations of such Person and (j) all indebtedness and other
payment Obligations referred to in clauses (a) through (i) above of another
Person secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien on property (including,
without limitation, accounts and contract rights) owned by such Person, even
though such Person has not assumed or become liable for the payment of such
indebtedness or other payment Obligations.

     

      "Debt for Borrowed Money" of any Person means, at any date of
determination, all items that, in accordance with GAAP, would be classified as
indebtedness on a Consolidated balance sheet of such Person and all Off-Balance
Sheet Obligations of such Person at such date.

<PAGE>  8

 

      "Default" means any Event of Default or any event that would constitute an
Event of Default but for the passage of time or the requirement that notice be
given or both.

     

      "Default Interest" has the meaning set forth in Section 2.07(b).

     

      "Defaulting Lender" has the meaning set forth in Section 2.16.

     

      "Deposit Account" has the meaning specified in the Security Agreement.

     

      "Domestic Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Domestic Lending Office" opposite
its name on Schedule I hereto or in the Assignment and Acceptance pursuant to
which it became a Lender Party, as the case may be, or such other office of such
Lender Party as such Lender Party may from time to time specify to the Borrower
and the Administrative Agent.

     

      "EBITDA" means, for any period, (a) Consolidated Net Income or
Consolidated Net Loss, as the case may be, for such period plus (b) the sum of
(i) interest expense, (ii) income tax expense, (iii) depreciation expense,
(iv) amortization expense and (v) non cash items, in each case, which were
deducted in determining Consolidated Net Income or Consolidated Net Loss, as the
case may be, of the Borrower and its Subsidiaries on a Consolidated basis for
such period.

     

      "Effective Date" means the first date on which the conditions set forth in
Article III shall have been satisfied.

     

      "Eligible Assignee" means (a) a Lender; (b) an Affiliate of a Lender; (c)
an Approved Fund; (d) a commercial bank organized under the laws of the United
States, or any State thereof, and having total assets in excess of $5 billion,
(e) a finance company, insurance company or other financial institution or fund
(whether a corporation, partnership, trust or other entity) that is engaged in
making, purchasing or otherwise investing in commercial loans in the ordinary
course of its business and having total assets in excess of $300,000,000 and (f)
any other Person (other than a natural person) approved by (i) the
Bookrunner/Co-Arranger and the Administrative Agent, (ii) in the case of any
assignment of a Revolving Credit Commitment, the Issuing Bank and the Swing Line
Bank, in each case, with notice to the Bookrunner/Co-Arranger, Administrative
Agent and the Borrower, and (iii) unless a Default has occurred and is
continuing or if determined by the Bookrunner/Co-Arranger (after consultation
with the Borrower) to be necessary to achieve a successful initial syndication
of the Facilities, the Borrower (each such approval not to be unreasonably
withheld or delayed); provided that notwithstanding the foregoing, "Eligible
Assignee" shall not include the Borrower or any of the Borrower's Affiliates or
Subsidiaries.

     

      "Environmental Action" means any action, suit, demand, demand letter,
claim, notice of non-compliance or violation, notice of liability or potential
liability, investigation, proceeding, consent order or consent agreement
relating in any way to any Environmental Law, any Environmental Permit or
Hazardous Material or arising from alleged injury or threat to health, safety or
the environment, including, without limitation, (a) by any governmental or
regulatory authority for enforcement, cleanup, removal, response, remedial or
other actions or damages and (b) by any governmental or regulatory authority or
third party for damages, contribution, indemnification, cost recovery,
compensation or injunctive relief.

     

      "Environmental Law" means any Federal, state, local or foreign statute,
law, ordinance, rule, regulation, code, order, writ, judgment, injunction,
decree or judicial or agency

<PAGE>  9

 

interpretation, policy or guidance relating to pollution or protection of the
environment, health, safety or natural resources, including, without limitation,
those relating to the use, handling, transportation, treatment, storage,
disposal, release or discharge of Hazardous Materials.

     

      "Environmental Permit" means any permit, approval, identification number,
license or other authorization required under any Environmental Law.

     

      "Equity Interests" means, with respect to any Person, shares of capital
stock of (or other ownership or profit interests in) such Person, warrants,
options or other rights for the purchase or other acquisition from such Person
of shares of capital stock of (or other ownership or profit interests in) such
Person, securities convertible into or exchangeable for shares of capital stock
of (or other ownership or profit interests in) such Person or warrants, rights
or options for the purchase or other acquisition from such Person of such shares
(or such other interests), and other ownership or profit interests in such
Person (including, without limitation, partnership, member or trust interests
therein), whether voting or nonvoting, and whether or not such shares, warrants,
options, rights or other interests are authorized or otherwise existing on any
date of determination.

     

      "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations promulgated and rulings issued
thereunder.

     

      "ERISA Affiliate" means any Person that for purposes of Title IV of ERISA
is a member of the controlled group of any Loan Party, or under common control
with any Loan Party, within the meaning of Section 414 of the Internal Revenue
Code.

     

      "ERISA Event" means (a) unless the applicable 30-day notice requirement
with respect to such event has been waived by the PBGC, (i) the occurrence of a
reportable event, within the meaning of Section 4043 of ERISA, with respect to
any Plan or (ii) the requirements of Section 4043(b) of ERISA apply with respect
to a contributing sponsor, as defined in Section 4001(a)(13) of ERISA, of a
Plan, and an event described in paragraph (9), (10), (11), (12) or (13) of
Section 4043(c) of ERISA is reasonably expected to occur with respect to such
Plan within the following 30 days; (b) the application for a minimum funding
waiver with respect to a Plan; (c) the provision by the administrator of any
Plan of a notice of intent to terminate such Plan, pursuant to
Section 4041(a)(2) of ERISA (including any such notice with respect to a plan
amendment referred to in Section 4041(e) of ERISA); (d) the cessation of
operations at a facility of any Loan Party or any ERISA Affiliate in the
circumstances described in Section 4062(e) of ERISA; (e) the withdrawal by any
Loan Party or any ERISA Affiliate from a Multiple Employer Plan during a plan
year for which it was a substantial employer, as defined in Section 4001(a)(2)
of ERISA; (f) the conditions for imposition of a lien under Section 302(f) of
ERISA shall have been met with respect to any Plan; (g) the adoption of an
amendment to a Plan requiring the provision of security to such Plan pursuant to
Section 307 of ERISA; or (h) the institution by the PBGC of proceedings to
terminate a Plan pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition described in Section 4042 of ERISA that constitutes grounds
for the termination of, or the appointment of a trustee to administer, such
Plan.

     

      "Escrow Bank" has the meaning specified in Section 2.15(b).

     

      "Eurocurrency Liabilities" has the meaning specified in Regulation D of
the Board of Governors of the Federal Reserve System, as in effect from time to
time.

     

      "Eurodollar Lending Office" means, with respect to any Lender Party, the
office of such Lender Party specified as its "Eurodollar Lending Office"
opposite its name on Schedule I hereto

<PAGE>  10

 

or in the Assignment and Acceptance pursuant to which it became a Lender Party
(or, if no such office is specified, its Domestic Lending Office), or such other
office of such Lender Party as such Lender Party may from time to time specify
to the Borrower and the Administrative Agent.

     

      "Eurodollar Rate" means, for any Interest Period for all Eurodollar Rate
Advances comprising part of the same Borrowing, an interest rate per annum
determined by the Administrative Agent to be equal to the rate per annum
obtained by dividing (a) (i) the rate per annum (rounded upwards, if necessary,
to the nearest 1/100 of 1%) appearing on Telerate Page 3750 (or any successor or
substitution page) as the London interbank offered rate for deposits in U.S.
dollars at 11:00 A.M. (London time) two Business Days before the first day of
such Interest Period for a period equal to such Interest Period (provided that,
if for any reason such rate is not available, the term "Eurodollar Rate" shall
mean, for any Interest Period for all Eurodollar Rate Advances comprising part
of the same Borrowing, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as the London
interbank offered rate for deposits in Dollars at approximately 11:00 A.M.
(London time) two Business Days prior to the first day of such Interest Period
for a term comparable to such Interest Period; provided, however, if more than
one rate is specified on Reuters Screen LIBO Page, the applicable rate shall be
the arithmetic mean of all such rates), or (ii) if such rate is for any reason
not available, the rate per annum equal to the rate at which the Administrative
Agent or its designee is offered Dollar deposits at or about 11:00 A.M. (London
time) two Business Days prior to the beginning of such Interest Period in the
interbank eurodollar market for delivery on the first day of such Interest
Period for the number of days comprised therein and in the amount requested to
be outstanding, by (b) a percentage equal to 100% minus the Eurodollar Rate
Reserve Percentage for such Interest Period.

     

      "Eurodollar Rate Advance" means an Advance that bears interest as provided
in Section 2.07(a)(ii).

     

      "Eurodollar Rate Reserve Percentage" for any Interest Period for all
Eurodollar Rate Advances comprising part of the same Borrowing means the reserve
percentage applicable two Business Days before the first day of such Interest
Period under regulations issued from time to time by the Board of Governors of
the Federal Reserve System (or any successor) for determining the maximum
reserve requirement (including, without limitation, any emergency, supplemental
or other marginal reserve requirement) for a member bank of the Federal Reserve
System in New York City with respect to liabilities or assets consisting of or
including Eurocurrency Liabilities (or with respect to any other category of
liabilities that includes deposits by reference to which the interest rate on
Eurodollar Rate Advances is determined) having a term equal to such Interest
Period.

     

      "Events of Default" has the meaning specified in Section 6.01.

     

      "Existing Debt" means Debt of each Loan Party and its Subsidiaries
outstanding immediately before the occurrence of the Effective Date.

     

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

     

      "Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum 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 preceding Business

<PAGE>  11

 

Day) by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average of the quotations for
such day for such transactions received by the Administrative Agent from three
Federal funds brokers of recognized standing selected by it.

     

      "Fee Letter" means the fee letter dated May 20, 2003, among the Borrower,
the Administrative Agent and the Bookrunner/Co-Arranger.

     

      "Fiscal Quarter" means a fiscal quarter of a Fiscal Year.

     

      "Fiscal Year" means a fiscal year of the Borrower and its Consolidated
Subsidiaries ending on the last Friday of October in any calendar year.

     

      "Fixed Charge Coverage Ratio" means, for any Measurement Period, the ratio
of (a) Pro Forma EBITDA to (b) the sum of (i) interest payable on, and
amortization of debt discount in respect of, all Debt for Borrowed Money,
(ii) Cash Capital Expenditures, (iii) cash taxes and (iv) the sum of (A)
principal amounts of all Debt for Borrowed Money paid during the four Fiscal
Quarters ending on or about a date of determination (other than repayments of
any Revolving Credit Borrowings, Debt under revolving lines of credit permitted
hereunder and the amount of voluntary prepayments of long-term Debt) plus (B) an
amount equal to all current maturities of long-term Debt for Borrowed Money
(other than the Revolving Credit Commitments), such sum divided by (C) 2, in
each case, of or by the Borrower and its Subsidiaries for such Measurement
Period.

     

      "Foreign Collateral" means the Equity Interests of all foreign
Subsidiaries that are direct Subsidiaries of any Loan Party to the extent such
Equity Interests constitute Collateral.

     

      "Fund" means any Person (other than an individual) 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 its business.

     

      "GAAP" has the meaning specified in Section 1.03.

     

      "Governmental Authority" means any nation or government, any state,
province, city, municipal entity or other political subdivision thereof, and any
governmental, executive, legislative, judicial, administrative or regulatory
agency, department, authority, instrumentality, commission, board, bureau or
similar body, whether federal, state, provincial, territorial, local or foreign.

     

      "Governmental Authorization" means any authorization, approval, consent,
franchise, license, order, ruling, permit, certification, exemption, notice,
declaration or similar right, undertaking or other action of, to or by, or any
filing, qualification or registration with, any Governmental Authority.

     

      "Hazardous Materials" means (a) petroleum or petroleum products,
by-products or breakdown products, radioactive materials, asbestos-containing
materials, polychlorinated biphenyls and radon gas and (b) any other chemicals,
materials or substances designated, classified or regulated as hazardous or
toxic or as a pollutant or contaminant under any Environmental Law.

<PAGE>  12

 

      "Hedge Agreements" means interest rate swap, cap or collar agreements,
interest rate future or option contracts, currency swap agreements, currency
future or option contracts and other hedging agreements.

     

      "Hedge Bank" means any Person in its capacity as a party to a Secured
Hedge Agreement that was a Lender Party or an Affiliate of a Lender Party at the
time such Hedge Agreement was entered into.

     

      "Indemnified Party" has the meaning specified in Section 8.04(b).

     

      "Initial Extension of Credit" means the earlier to occur of the initial
Borrowing and the initial issuance of a Letter of Credit hereunder.

     

      "Initial Lender Parties" and "Initial Lenders" each has the meaning
specified in the Preliminary Statements to this Agreement.

     

      "Insufficiency" means, with respect to any Plan, the amount, if any, by
which its benefit liabilities, as defined in Section 4001(a)(16) of ERISA,
determined using the actuarial assumptions used for funding purposes in the most
recent actuarial report prepared for such Plan, exceeds the fair market value of
such Plan's assets.

     

      "Intellectual Property Security Agreement" has the meaning specified in
Section 3.01(a)(v).

     

      "Interest Period" means, for each Eurodollar Rate Advance comprising part
of the same Borrowing, the period commencing on the date of such Eurodollar Rate
Advance or the date of the Conversion of any Base Rate Advance into such
Eurodollar Rate Advance, and ending on the last day of the period selected by
the Borrower pursuant to the provisions below and, thereafter, each subsequent
period commencing on the last day of the immediately preceding Interest Period
and ending on the last day of the period selected by the Borrower pursuant to
the provisions below. The duration of each such Interest Period shall be one,
two, three or six months, as the Borrower may, upon notice received by the
Administrative Agent not later than 2:00 P.M. (New York City time) on the third
Business Day prior to the first day of such Interest Period, select; provided,
however, that:

       

      (a)    the Borrower may not select any Interest Period with respect to any
Eurodollar Rate Advance that ends after the Termination Date;

         

      (b)    Interest Periods commencing on the same date for Eurodollar Rate
Advances comprising part of the same Borrowing shall be of the same duration;

         

      (c)    whenever the last day of any Interest Period would otherwise occur
on a day other than a Business Day, the last day of such Interest Period shall
be extended to occur on the next succeeding Business Day, provided, however,
that, if such extension would cause the last day of such Interest Period to
occur in the next following calendar month, the last day of such Interest Period
shall occur on the next preceding Business Day; and

         

      (d)    whenever the first day of any Interest Period occurs on a day of an
initial calendar month for which there is no numerically corresponding day in
the calendar month that succeeds such initial calendar month by the number of
months equal to the

<PAGE>  13

   

number of months in such Interest Period, such Interest Period shall end on the
last Business Day of such succeeding calendar month.

     

      "Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time (including any successor law).

     

      "Inventory" means all Inventory referred to in Section 1(b) of the
Security Agreement.

     

      "Investment" in any Person means any loan or advance to such Person, any
purchase or other acquisition of any Equity Interests or Debt or the assets
comprising a division or business unit or a substantial part or all of the
business of such Person, any capital contribution to such Person or any other
direct or indirect investment in such Person, including, without limitation, any
acquisition by way of a merger or consolidation (or similar transaction) and any
arrangement pursuant to which the investor incurs Debt of the types referred to
in clause (i) or (j) of the definition of "Debt" in respect of such Person.

     

      "Issuing Bank" means the Issuing Bank referred to in the Preliminary
Statements to this Agreement and any Eligible Assignees to which the Letter of
Credit Commitment hereunder has been assigned pursuant to Section 8.07 so long
as each such Eligible Assignee expressly agrees to perform in accordance with
their terms all of the obligations that by the terms of this Agreement are
required to be performed by it as the Issuing Bank and notifies the
Administrative Agent of its Applicable Lending Office and the amount of its
Letter of Credit Commitment (which information shall be recorded by the
Administrative Agent in the Register), for so long as the Issuing Bank or
Eligible Assignee, as the case may be, shall have a Letter of Credit Commitment.

     

      "L/C Disbursement" shall mean a payment or disbursement made by the
Issuing Bank pursuant to a Letter of Credit.

     

      "L/C Related Documents" has the meaning specified in Section 2.04(c)(ii).

     

      "Lender Party" means the Initial Lender Parties and any other Person that
becomes a Lender, the Issuing Bank or the Swing Line Bank.

     

      "Lenders" means the Initial Lenders and each Person that shall become a
Lender hereunder pursuant to Section 8.07 for so long as such Initial Lender or
Person, as the case may be, shall be a party to this Agreement.

     

      "Letter of Credit Advance" means an advance made by the Issuing Bank or
any Revolving Credit Lender pursuant to Section 2.03(d).

     

      "Letter of Credit Agreement" has the meaning specified in Section 2.03(a).

     

      "Letter of Credit Commitment" means, with respect to the Issuing Bank at
any time, the amount set forth opposite the Issuing Bank's name on Schedule I
hereto under the caption "Letter of Credit Commitment" or, if the Issuing Bank
has entered into an Assignment and Acceptance, set forth for the Issuing Bank in
the Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as the Issuing Bank's "Letter of Credit Commitment", as such amount may be
reduced at or prior to such time pursuant to Section 2.05.

<PAGE>  14

 

      "Letter of Credit Facility" means, at any time, an amount equal to the
amount of the Issuing Bank's Letter of Credit Commitment at such time, as such
amount may be reduced at or prior to such time pursuant to Section 2.05.

     

      "Letters of Credit" has the meaning specified in Section 2.01(c).

     

      "Leverage Ratio" means, at any date of determination, the ratio of (a) (i)
Consolidated total Debt for Borrowed Money at such date plus (ii) the face
amount of all outstanding Letters of Credit at such date less (A) if Advances
under the Revolving Credit Facility in an aggregate principal amount of
$10,000,000 or less are outstanding, cash and Cash Equivalents on hand or (B) if
Advances under the Revolving Credit Facility in an aggregate principal amount
greater than $10,000,000 are outstanding, cash and Cash Equivalents on hand in
an amount not to exceed $5,000,000, in each case of the Borrower and its
Subsidiaries to (b) Pro Forma EBITDA for the most recently completed Measurement
Period.

     

      "Lien" means any lien, security interest or other charge or encumbrance of
any kind, or any other type of preferential arrangement, including, without
limitation, the lien or retained security title of a conditional vendor and any
easement, right of way or other encumbrance on title to real property.

     

      "Loan Documents" means (a) this Agreement, (b) the Notes, (c) the
Subsidiary Guaranty, (d) the Collateral Documents, (e) the Fee Letter, (f) each
Letter of Credit Agreement, (g) each Secured Hedge Agreement and (h) the
Post-Closing Agreement, in each case as amended.

     

      "Loan Parties" means the Borrower and the Subsidiary Guarantors.

     

      "Margin Stock" has the meaning specified in Regulation U.

     

      "Material Adverse Change" means any material adverse change in the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole.

     

      "Material Adverse Effect" means a material adverse effect on (a) the
business, condition (financial or otherwise), operations, performance,
properties or prospects of the Borrower and its Subsidiaries, taken as a whole,
(b) the rights and remedies of any Agent or any Lender Party under any Loan
Document or (c) the ability of any Loan Party to perform its Obligations under
any Loan Document to which it is or is to be a party.

     

      "Material Contract" means, with respect to the Borrower or its
Subsidiaries, each contract to which such Person is a party involving aggregate
consideration payable to or by such Person in excess of 10% of Consolidated
revenues in any year of the Borrower and its Subsidiaries, taken as a whole, or
otherwise material to the business, condition (financial or otherwise),
operations, performance, properties or prospects of the Borrower and its
Subsidiaries, taken as a whole.

     

      "Material Debt" means Debt for Borrowed Money in an aggregate principal
amount in excess of $15,000,000.

     

      "Measurement Period" means, at any date of determination, the most
recently completed four consecutive Fiscal Quarters of the Borrower ending on or
prior to such date; provided, that

<PAGE>  15

 

for any Fiscal Quarter commenced prior to the Initial Extension of Credit, the
amount of any item included in the calculation of a financial ratio or financial
covenant, during any such Fiscal Quarter shall be as set forth on Schedule II
hereto.

     

      "Multiemployer Plan" means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which any Loan Party or any ERISA Affiliate is
making or accruing an obligation to make contributions, or has within any of the
preceding five plan years made or accrued an obligation to make contributions.

     

      "Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and at least one Person other than the Loan Parties
and the ERISA Affiliates or (b) was so maintained and in respect of which any
Loan Party or any ERISA Affiliate could reasonably be expected to have liability
under Section 4064 or 4069 of ERISA in the event such plan has been or were to
be terminated.

     

      "Note" means a Swing Line Note or a Revolving Credit Note.

     

      "Note Purchase Agreement" means the note purchase agreement among the
Borrower, certain of its Subsidiaries and the initial purchasers party thereto
dated as of November 1, 1998, pursuant to which the Senior Notes were issued, as
amended or otherwise modified to the extent permitted under Section 5.02(j).

     

      "Notice of Borrowing" has the meaning specified in Section 2.02(a).

     

      "Notice of Issuance" has the meaning specified in Section 2.03(a).

     

      "Notice of Renewal" has the meaning specified in Section 2.01(c).

     

      "Notice of Swing Line Borrowing" has the meaning specified in
Section 2.02(b).

     

      "Notice of Termination" has the meaning specified in Section 2.01(c).

     

      "NPL" means the National Priorities List under CERCLA.

     

      "Obligation" means, with respect to any Person, any payment, performance
or other obligation of such Person of any kind, including, without limitation,
any liability of such Person on any claim, whether or not the right of any
creditor to payment in respect of such claim is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, disputed, undisputed, legal,
equitable, secured or unsecured, and whether or not such claim is discharged,
stayed or otherwise affected by any proceeding referred to in Section 6.01(f).
Without limiting the generality of the foregoing, the Obligations of any Loan
Party under the Loan Documents include (a) the obligation to pay principal,
interest, Letter of Credit commissions, charges, expenses, fees, attorneys' fees
and disbursements, indemnities and other amounts payable by such Loan Party
under any Loan Document and (b) the obligation of such Loan Party to reimburse
any amount in respect of any of the foregoing that any Lender Party, in its sole
discretion, may elect to pay or advance on behalf of such Loan Party.

     

      "Off Balance Sheet Obligation" means, with respect to any Person, any
Obligation of such Person under a synthetic lease, tax retention operating
lease, off-balance sheet loan or similar off-balance sheet financing classified
as an operating lease in accordance with GAAP, if

<PAGE>  16

 

such Obligations would give rise to a claim against such Person in a proceeding
referred to in Section 6.01(f).

     

      "Open Year" has the meaning specified in Section 4.01(q)(iii).

     

      "Other Taxes" has the meaning specified in Section 2.12(b).

     

      "PBGC" means the Pension Benefit Guaranty Corporation (or any successor).

     

      "Permitted Liens" means such of the following as to which no enforcement,
collection, execution, levy or foreclosure proceeding shall have been commenced:
(a) Liens for taxes, assessments and governmental charges or levies to the
extent not required to be paid under Section 5.01(b); (b) Liens imposed by law,
such as materialmen's, mechanics', carriers', workmen's and repairmen's Liens
and other similar Liens arising in the ordinary course of business securing
obligations that (i) are not overdue for a period of more than 30 days and
(ii) individually or together with all other Permitted Liens outstanding on any
date of determination do not materially adversely affect the use of the property
to which they relate; (c) pledges or deposits to secure obligations under
workers' compensation laws or similar legislation or to secure public or
statutory obligations; (d) easements, rights of way and other encumbrances on
title to real property that do not render title to the property encumbered
thereby unmarketable or materially adversely affect the use of such property for
its present purposes; and (e) Liens of a collection bank in the ordinary course
of business under Section 4-208 of the Uniform Commercial Code in effect in any
relevant jurisdiction.

     

      "Person" means an individual, partnership, corporation (including a
business trust), limited liability company, joint stock company, trust,
unincorporated association, joint venture or other entity, or a government or
any political subdivision or agency thereof.

     

      "Plan" means a Single Employer Plan or a Multiple Employer Plan.

     

      "Pledged Debt" has the meaning specified in the Security Agreement.

     

      "Post Closing Agreement" means the agreement dated the date hereof between
the Borrower and the Administrative Agent with respect to the satisfaction of
certain conditions set forth in Sections 3.01 and 3.02 after the date hereof.

     

      "Preferred Interests" means, with respect to any Person, Equity Interests
issued by such Person that are entitled to a preference or priority over any
other Equity Interests issued by such Person upon any distribution of such
Person's property and assets, whether by dividend or upon liquidation.

     

      "Pro Forma EBITDA" means, for any period, Consolidated EBITDA adjusted to
give effect to the Acquisition or any other acquisition consummated by the
Borrower or any of its Subsidiaries in accordance with this Agreement as if it
had occurred on the first day of such period.

     

      "Pro Rata Share" of any amount means, with respect to any Revolving Credit
Lender at any time, the product of such amount times a fraction the numerator of
which is the amount of such Lender's Revolving Credit Commitment at such time
(or, if the Commitments shall have been terminated pursuant to Section 2.05 or
6.01, such Lender's Revolving Credit Commitment as in effect immediately prior
to such termination) and the denominator of which is the Revolving

<PAGE>  17

 

Credit Facility at such time (or, if the Commitments shall have been terminated
pursuant to Section 2.05 or 6.01, the Revolving Credit Facility as in effect
immediately prior to such termination).

     

      "Receivables" means all Receivables referred to in Section 1(c) of the
Security Agreement.

     

      "Redeemable" means, with respect to any Equity Interest, any Debt or any
other right or Obligation, any such Equity Interest, Debt, right or Obligation
that (a) the issuer has undertaken to redeem at a fixed or determinable date or
dates, whether by operation of a sinking fund or otherwise, or upon the
occurrence of a condition not solely within the control of the issuer or (b) is
redeemable at the option of the holder.

     

      "Register" has the meaning specified in Section 8.07(d).

     

      "Regulation U" means Regulation U of the Board of Governors of the Federal
Reserve System, as in effect from time to time.

     

      "Required Lenders" means, at any time, Lenders owed or holding at least a
majority in interest of the sum of (a) the aggregate principal amount of the
Advances outstanding at such time, (b) the aggregate Available Amount of all
Letters of Credit outstanding at such time and (c) the aggregate Unused
Revolving Credit Commitments at such time. For purposes of this definition, the
aggregate principal amount of Swing Line Advances owing to the Swing Line Bank
and of Letter of Credit Advances owing to the Issuing Bank and the Available
Amount of each Letter of Credit shall be considered to be owed to the Revolving
Credit Lenders ratably in accordance with their respective Revolving Credit
Commitments.

     

      "Responsible Officer" means any officer of any Loan Party or any of its
Subsidiaries.

     

      "Revolving Credit Advance" has the meaning specified in Section 2.01(a).

     

      "Revolving Credit Borrowing" means a borrowing consisting of simultaneous
Revolving Credit Advances of the same Type made by the Revolving Credit Lenders.

     

      "Revolving Credit Commitment" means, with respect to any Revolving Credit
Lender at any time, the amount set forth opposite such Lender's name on
Schedule I hereto under the caption "Revolving Credit Commitment" or, if such
Lender has entered into one or more Assignment and Acceptances, set forth for
such Lender in the Register maintained by the Administrative Agent pursuant to
Section 8.07(d) as such Lender's "Revolving Credit Commitment", as such amount
may be reduced at or prior to such time pursuant to Section 2.05.

     

      "Revolving Credit Facility" means, at any time, the aggregate amount of
the Revolving Credit Lenders' Revolving Credit Commitments at such time.

     

      "Revolving Credit Lender" means any Lender that has a Revolving Credit
Commitment.

     

      "Revolving Credit Note" means a promissory note of the Borrower payable to
the order of any Revolving Credit Lender, in substantially the form of
Exhibit A-1 hereto, evidencing the aggregate indebtedness of the Borrower to
such Lender resulting from the Revolving Credit Advances, Letter of Credit
Advances and Swing Line Advances made by such Lender, as amended, endorsed or
replaced.

<PAGE>  18

 

      "Secured Hedge Agreement" means any Hedge Agreement required or permitted
under Article V that is entered into by and between any Loan Party and any Hedge
Bank and that is secured by the Collateral Documents.

     

      "Secured Obligations" has the meaning specified in Section 2 of the
Security Agreement.

     

      "Secured Parties" means the Agents, the Lender Parties and the Hedge
Banks.

     

      "Security Agreement" has the meaning specified in Section 3.01(a)(iiI).

     

      "Sellers" means, collectively, Roxboro Overseas Limited, a private limited
company organized under the laws of England and Wales, Roxboro Holdings, Inc., a
Delaware corporation, Weston Group Limited, a private limited company organized
under the laws of England and Wales, and The Roxboro Group plc, a private
limited company organized under the laws of England and Wales.

     

      "Senior Notes" means the senior notes of the Borrower in an aggregate
principal amount of $100,000,000, issued pursuant to the Note Purchase
Agreement.

     

      "Senior Subordinated Indenture" means the Indenture dated as of June 11,
2003, among Esterline Technologies Corporation, as issuer, the subsidiary
guarantors party thereto, and The Bank of New York, as trustee, pursuant to
which the Senior Subordinated Notes shall have been issued, as amended or
otherwise modified to the extent permitted under Section 5.02(j).

     

      "Senior Subordinated Notes" means the senior subordinated notes of the
Borrower in an aggregate principal amount of $175,000,000 to be issued pursuant
to the Senior Subordinated Indenture.

     

      "Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of any Loan
Party or any ERISA Affiliate and no Person other than the Loan Parties and the
ERISA Affiliates or (b) was so maintained and in respect of which any Loan Party
or any ERISA Affiliate could reasonably be expected to have liability under
Section 4069 of ERISA in the event such plan has been or were to be terminated.

     

      "Solvent" and "Solvency" mean, with respect to any Person on a particular
date, that on such date (a) the fair value of the property of such Person is
greater than the total amount of liabilities, including, without limitation,
contingent liabilities, of such Person, (b) the present fair saleable value of
the assets of such Person is not less than the amount that will be required to
pay the probable liability of such Person on its debts as they become absolute
and matured, (c) such Person does not intend to, and does not believe that it
will, incur debts or liabilities beyond such Person's ability to pay such debts
and liabilities as they mature and (d) such Person is not engaged in business or
a transaction, and is not about to engage in business or a transaction, for
which such Person's property would constitute an unreasonably small capital. The
amount of contingent liabilities at any time shall be computed as the amount
that, in the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.

     

      "Subsidiary" of any Person means any corporation, partnership, joint
venture, limited liability company, trust or estate of which (or in which) more
than 50% of (a) the issued and outstanding capital stock having ordinary voting
power to elect a majority of the Board of Directors of such corporation
(irrespective of whether at the time capital stock of any other class

<PAGE>  19

 

or classes of such corporation shall or might have voting power upon the
occurrence of any contingency), (b) the interest in the capital or profits of
such partnership, joint venture or limited liability company or (c) the
beneficial interest in such trust or estate is at the time directly or
indirectly owned or controlled by such Person, by such Person and one or more of
its other Subsidiaries or by one or more of such Person's other Subsidiaries.

     

      "Subsidiary Guarantors" mean the Subsidiaries of the Borrower listed on
Schedule III hereto and each other Subsidiary of the Borrower that shall be
required to execute and deliver a guaranty pursuant to Section 5.01(j) or (k).

     

      "Subsidiary Guaranty" has the meaning specified in Section 3.01(a)(iv),
together with each other guaranty and guaranty supplement delivered pursuant to
Section 5.01(j) or (k), in each case as amended.

     

      "Surviving Debt" means Debt of each Loan Party and its Subsidiaries
outstanding immediately before and after giving effect to the occurrence of the
Effective Date and described in Schedule 4.01(t) attached hereto.

     

      "Swing Line Advance" means an advance made by (a) the Swing Line Bank
pursuant to Section 2.01(d) or (b) any Revolving Credit Lender pursuant to
Section 2.02(b).

     

      "Swing Line Bank" means the Swing Line Bank referred to in the Preliminary
Statements to this Agreement and any Eligible Assignees to which the Swing Line
Commitment hereunder has been assigned pursuant to Section 8.07 so long as such
Eligible Assignee expressly agrees to perform in accordance with their terms all
obligations that by the terms of this Agreement are required to be performed by
it as a Swing Line Bank and notifies the Administrative Agent of its Applicable
Lending Office and the amount of its Swing Line Commitment (which information
shall be recorded by the Administrative Agent in the Register), for so long as
such Swing Line Bank or Eligible Assignee, as the case may be, shall have a
Swing Line Commitment.

     

      "Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank pursuant to Section 2.01(b) or the Revolving
Credit Lenders pursuant to Section 2.02(b).

     

      "Swing Line Commitment" means, with respect to the Swing Line Bank at any
time, the amount set forth opposite the Swing Line Bank's name on Schedule I
hereto under the caption "Swing Line Commitment" or, if the Swing Line Bank has
entered into an Assignment and Acceptances, set forth for the Swing Line Bank in
the Register maintained by the Administrative Agent pursuant to Section 8.07(d)
as the Swing Line Bank's "Swing Line Commitment", as such amount may be reduced
at or prior to such time pursuant to Section 2.05.

     

      "Swing Line Facility" has the meaning specified in Section 2.01(b).

     

      "Swing Line Note" means a promissory note of the Borrower payable to the
order of the Swing Line Bank and any other Lender that has made Swing Line
Advances, in substantially the form of Exhibit A-2 hereto, evidencing the
indebtedness of the Borrower to such Lender resulting from Swing Line Advances
made by such Lender, as amended, endorsed or replaced.

     

      "Taxes" has the meaning specified in Section 2.12(a).

<PAGE>  20

 

      "Tax Returns" means all returns, reports, statements, declarations and
schedules required to be filed with a governmental or taxing authority with
respect to any taxes.

     

      "Termination Date" means the earlier of (a) the date of termination in
whole of the Revolving Credit Commitments, the Letter of Credit Commitment and
the Swing Line Commitment pursuant to Section 2.05 or 6.01 and (b) June 30,
2008.

     

      "Treasurer" means the officer of certain of the Loan Parties holding such
title, such holder as of the date hereof being Mr. Robert D. George.

     

      "Treasury Regulations" means Treasury regulations promulgated under the
Internal Revenue Code.

     

      "Total Debt to Capitalization Ratio" means, at any date of determination,
the ratio of (a) total Debt for Borrowed Money outstanding to (b) (i) total Debt
for Borrowed Money outstanding plus (ii) total shareholder equity, in each case
for the Borrower and its Subsidiaries on a Consolidated basis as of such date of
determination.

     

      "Type" refers to the distinction between Advances bearing interest at the
Base Rate and Advances bearing interest at the Eurodollar Rate.

     

      "U.K. Security Documents" means each of the charge over shares between
Advanced Input Devices, Inc. and the Collateral Agent and the charge over shares
between Kirkhill-TA Co. and the Collateral Agent each dated on or about the date
hereof.

     

      "Unused Revolving Credit Commitment" means, with respect to any Revolving
Credit Lender at any time, an amount equal to (a) such Lender's Revolving Credit
Commitment at such time minus (b) the sum of (i) the aggregate principal amount
of all Revolving Credit Advances, Swing Line Advances and Letter of Credit
Advances made by such Lender (in its capacity as a Lender) and outstanding at
such time plus (ii) such Lender's Pro Rata Share of (A) the aggregate Available
Amount of all Letters of Credit outstanding at such time, (B) the aggregate
principal amount of all Letter of Credit Advances made by the Issuing Bank
pursuant to Section 2.03(c) and outstanding at such time and (C) the aggregate
principal amount of all Swing Line Advances made by the Swing Line Bank pursuant
to Section 2.01(d) and outstanding at such time.

     

      "Voting Interests" means shares of capital stock issued by a corporation,
or equivalent Equity Interests in any other Person, the holders of which are
ordinarily, in the absence of contingencies, entitled to vote for the election
of directors (or persons performing similar functions) of such Person, even if
the right so to vote has been suspended by the happening of such a contingency.

     

      "Wachovia" has the meaning specified in the Preliminary Statements to this
Agreement.

     

      "Withdrawal Liability" has the meaning specified in Part 1 of Subtitle E
of Title IV of ERISA.

      SECTION 1.02.  Computation of Time Periods; Other Definitional Provisions.
In this Agreement and the other Loan Documents in the computation of periods of
time from a specified date to a later specified date, the word "from" means
"from and including" and the words "to" and "until" each mean "to but
excluding". References in the Loan Documents to any agreement or contract "as
amended"

<PAGE>  21

shall mean and be a reference to such agreement or contract as amended, amended
and restated, supplemented or otherwise modified from time to time in accordance
with its terms.

      SECTION 1.03.  Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with generally accepted
accounting principles consistent with those applied in the preparation of the
financial statements referred to in Section 4.01(g) ("GAAP").

      SECTION 1.04.  Currency Equivalents Generally. Any amount specified in
this Agreement (other than in Articles II, VII and IX) or any of the other Loan
Documents to be in U.S. dollars shall also include the equivalent of such amount
in any currency other than U.S. dollars, such equivalent amount to be determined
at the rate of exchange quoted by Wachovia in New York, New York at the close of
business on the Business Day immediately preceding any date of determination
thereof, to prime banks in New York, New York for the spot purchase in the New
York foreign exchange market of such amount in U.S. dollars with such other
currency.

ARTICLE II

AMOUNTS AND TERMS OF THE ADVANCES
AND THE LETTERS OF CREDIT

      SECTION 2.01.  The Advances and the Letters of Credit.  (a)  The Revolving
Credit Advances. Each Revolving Credit Lender severally agrees, on the terms and
conditions hereinafter set forth, to make advances (each, a "Revolving Credit
Advance") to the Borrower from time to time on any Business Day during the
period from the Effective Date until the Termination Date in respect of the
Revolving Credit Facility in an amount for each such Advance not to exceed such
Lender's Unused Revolving Credit Commitment at such time. Each Revolving Credit
Borrowing shall be in an aggregate amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof (other than a Borrowing the proceeds of which
shall be used solely to repay or prepay in full outstanding Swing Line Advances
or outstanding Letter of Credit Advances) and shall consist of Revolving Credit
Advances made simultaneously by the Revolving Credit Lenders ratably according
to their Revolving Credit Commitments. Within the limits of each Revolving
Credit Lender's Unused Revolving Credit Commitment in effect from time to time,
the Borrower may borrow under this Section 2.01(a), prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(a).

      (b)  The Swing Line Advances. The Swing Line Bank agrees, on the terms and
conditions hereinafter set forth, to make Swing Line Advances to the Borrower
from time to time on any Business Day during the period from the Effective Date
until the Termination Date in respect of the Revolving Credit Facility (i) in an
aggregate amount not to exceed at any time outstanding the Swing Line Commitment
(the "Swing Line Facility") and (ii) in an amount for each such Swing Line
Borrowing not to exceed the aggregate of the Unused Revolving Credit Commitments
of the Revolving Credit Lenders at such time. No Swing Line Advance shall be
used for the purpose of funding the payment of principal of any other Swing Line
Advance. Each Swing Line Borrowing shall be in an amount of $100,000 or an
integral multiple of $25,000 in excess thereof and shall be made as a Base Rate
Advance. Within the limits of the Swing Line Facility and within the limits
referred to in clause (ii) above, the Borrower may borrow under this
Section 2.01(b), repay pursuant to Section 2.04(d) or prepay pursuant to
Section 2.06(a) and reborrow under this Section 2.01(b).

      (c)  The Letters of Credit. The Issuing Bank agrees, on the terms and
conditions hereinafter set forth, to issue (or cause any of its Affiliates that
constitute a commercial bank to issue on its behalf) letters of credit (the
"Letters of Credit") in U.S. Dollars for the account of the Borrower from

<PAGE>  22

time to time on any Business Day during the period from the Effective Date until
one year after the Termination Date in respect of the Revolving Credit Facility
(provided that any Letter of Credit maturing later than five Business days prior
to the Termination Date shall be cash-collateralized in an amount equal to 110%
of the face amount of such Letter of Credit no later than five Business Days
prior to the Termination Date) in an aggregate Available Amount (i) for all
Letters of Credit not to exceed at any time the lesser of (x) the Letter of
Credit Facility at such time and (y)  the Issuing Bank's Letter of Credit
Commitment at such time and (ii) for each such Letter of Credit not to exceed
the Unused Revolving Credit Commitments of the Revolving Credit Lenders at such
time. No Letter of Credit shall have an expiration date (including all rights of
the Borrower or the beneficiary to require renewal) later than 30 days before
the Termination Date in respect of the Revolving Credit Facility, but may by its
terms be renewable annually upon written notice (a "Notice of Renewal") given to
the Issuing Bank that issued such Letter of Credit and the Administrative Agent
on or prior to any date for notice of renewal set forth in such Letter of Credit
but in any event at least three Business Days prior to the date of the proposed
renewal of such Letter of Credit and upon fulfillment of the applicable
conditions set forth in Article III unless the Issuing Bank has notified the
Borrower (with a copy to the Administrative Agent) on or prior to the date for
notice of termination set forth in such Letter of Credit but in any event at
least 30 Business Days prior to the date of automatic renewal of its election
not to renew such Letter of Credit (a "Notice of Termination"); provided that
the terms of each Letter of Credit that is automatically renewable annually
shall (x) require the Issuing Bank that issued such Letter of Credit to give the
beneficiary named in such Letter of Credit notice of any Notice of Termination,
(y) permit such beneficiary, upon receipt of such notice, to draw under such
Letter of Credit prior to the date such Letter of Credit otherwise would have
been automatically renewed and (z) not permit the expiration date (after giving
effect to any renewal) of such Letter of Credit in any event to be extended to a
date later than 30 days before the Termination Date in respect of the Revolving
Credit Facility. If either a Notice of Renewal is not given by the Borrower or a
Notice of Termination is given by the Issuing Bank pursuant to the immediately
preceding sentence, such Letter of Credit shall expire on the date on which it
otherwise would have been automatically renewed. Within the limits of the Letter
of Credit Facility, and subject to the limits referred to above, the Borrower
may request the issuance of Letters of Credit under this Section 2.01(c), repay
any Letter of Credit Advances resulting from drawings thereunder pursuant to
Section 2.03(c) and request the issuance of additional Letters of Credit under
this Section 2.01(c).

      SECTION 2.02.  Making the Advances. (a) Except as otherwise provided in
Section 2.02(b) or 2.03, each Borrowing shall be made on notice, given not later
than 2:00 P.M. (New York City time) on the third Business Day prior to the date
of the proposed Borrowing in the case of a Borrowing consisting of Eurodollar
Rate Advances, or the first Business Day prior to the date of the proposed
Borrowing in the case of a Borrowing consisting of Base Rate Advances, by the
Borrower to the Administrative Agent, which shall give to each Appropriate
Lender prompt notice thereof. Each such notice of a Borrowing (a "Notice of
Borrowing") shall be by telephone, confirmed immediately in writing, or telex or
telecopier, in substantially the form of Exhibit B hereto, specifying therein
the requested (i) date of such Borrowing, (ii) Facility under which such
Borrowing is to be made, (iii) Type of Advances comprising such Borrowing,
(iv) aggregate amount of such Borrowing and (v) in the case of a Borrowing
consisting of Eurodollar Rate Advances, initial Interest Period for each such
Advance. Each Appropriate Lender shall, before 2:00 P.M. (New York City time) on
the date of such Borrowing, make available for the account of its Applicable
Lending Office to the Administrative Agent at the Administrative Agent's
Account, in same day funds, such Lender's ratable portion of such Borrowing in
accordance with the respective Commitments under the applicable Facility of such
Lender and the other Appropriate Lenders. After the Administrative Agent's
receipt of such funds and upon fulfillment of the applicable conditions set
forth in Article III, the Administrative Agent will make such funds available to
the Borrower by crediting the Borrower's Account; provided, however, that, in
the case of any Revolving Credit Borrowing, the Administrative Agent shall first
make a portion of such funds equal to the aggregate principal amount of any
Swing Line Advances and Letter of Credit Advances made by the

<PAGE>  23

Swing Line Bank or the Issuing Bank, as the case may be, and by any other
Revolving Credit Lender and outstanding on the date of such Revolving Credit
Borrowing, plus interest accrued and unpaid thereon to and as of such date,
available to the Swing Line Bank or the Issuing Bank, as the case may be, and
such other Revolving Credit Lenders for repayment of such Swing Line Advances
and Letter of Credit Advances.

      (b)  Each Swing Line Borrowing shall be made on notice, given not later
than 2:00 P.M. (New York City time) on the date of the proposed Swing Line
Borrowing, by the Borrower to the Swing Line Bank and the Administrative Agent.
Each such notice of a Swing Line Borrowing (a "Notice of Swing Line Borrowing")
shall be by telephone, confirmed immediately in writing, or telex or telecopier,
specifying therein the requested (i) date of such Borrowing, (ii) amount of such
Borrowing and (iii) maturity of such Borrowing (which maturity shall be no later
than the seventh day after the requested date of such Borrowing). The Swing Line
Bank will make the amount of the requested Swing Line Advances available to the
Administrative Agent at the Administrative Agent's Account, in same day funds.
After the Administrative Agent's receipt of such funds and upon fulfillment of
the applicable conditions set forth in Article III, the Administrative Agent
will make such funds available to the Borrower by crediting the Borrower's
Account. Upon written demand by the Swing Line Bank, with a copy of such demand
to the Administrative Agent, or in any event automatically upon the maturity of
each Swing Line Advance, each other Revolving Credit Lender shall purchase from
the Swing Line Bank, and the Swing Line Bank shall sell and assign to each such
other Revolving Credit Lender, such other Lender's Pro Rata Share of such
outstanding Swing Line Advance as of the date of such demand, by making
available for the account of its Applicable Lending Office to the Administrative
Agent for the account of the Swing Line Bank, by deposit to the Administrative
Agent's Account, in same day funds, an amount equal to the portion of the
outstanding principal amount of such Swing Line Advance to be purchased by such
Lender. The Borrower hereby agrees to each such sale and assignment. Each
Revolving Credit Lender agrees to purchase its Pro Rata Share of an outstanding
Swing Line Advance on (i) the Business Day on which demand therefor is made by
the Swing Line Bank, or in any event automatically upon the maturity of each
Swing Line Advance, provided that notice of such demand is given not later than
2:00 P.M. (New York City time) on such Business Day or (ii) the first Business
Day next succeeding such demand if notice of such demand is given after such
time. Upon any such assignment by the Swing Line Bank to any other Revolving
Credit Lender of a portion of a Swing Line Advance, the Swing Line Bank
represents and warrants to such other Lender that the Swing Line Bank is the
legal and beneficial owner of such interest being assigned by it, but makes no
other representation or warranty and assumes no responsibility or recourse with
respect to such Swing Line Advance, the Loan Documents or any Loan Party. If and
to the extent that any Revolving Credit Lender shall not have so made the amount
of such Swing Line Advance available to the Administrative Agent, such Revolving
Credit Lender agrees to pay to the Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date of demand by
the Swing Line Bank until the date such amount is paid to the Administrative
Agent, at the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such amount for the account of the Swing Line Bank on any Business Day,
such amount so paid in respect of principal shall constitute a Swing Line
Advance made by such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Swing Line Advance made by the Swing
Line Bank shall be reduced by such amount on such Business Day.

      (c)  Anything in subsection (a) above to the contrary notwithstanding,
(i) the Borrower may not select Eurodollar Rate Advances for the initial
Borrowing hereunder or for any Borrowing if the aggregate amount of such
Borrowing is less than $5,000,000 or if the obligation of the Appropriate
Lenders to make Eurodollar Rate Advances shall then be suspended pursuant to
Section 2.09 or 2.10 and (ii) the Revolving Credit Advances may not be
outstanding as part of more than 5 separate Borrowings.

<PAGE>  24

      (d)  Each Notice of Borrowing and each Notice of Swing Line Borrowing
shall be irrevocable and binding on the Borrower. In the case of any Borrowing
that the related Notice of Borrowing specifies is to be comprised of Eurodollar
Rate Advances, the Borrower shall indemnify each Appropriate Lender against any
loss, cost or expense incurred by such Lender as a result of any failure to
fulfill on or before the date specified in such Notice of Borrowing for such
Borrowing the applicable conditions set forth in Article III, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by such Lender to fund the Advance to be made by such Lender as part of
such Borrowing when such Advance, as a result of such failure, is not made on
such date.

      (e)  Unless the Administrative Agent shall have received written notice
from an Appropriate Lender prior to the date of any Borrowing under a Facility
under which such Lender has a Commitment that such Lender will not make
available to the Administrative Agent such Lender's ratable portion of such
Borrowing, the Administrative Agent may assume that such Lender has made such
portion available to the Administrative Agent on the date of such Borrowing in
accordance with subsection (a) of this Section 2.02 and the Administrative Agent
may, in reliance upon such assumption, make available to the Borrower on such
date a corresponding amount. If and to the extent that such Lender shall not
have so made such ratable portion available to the Administrative Agent, such
Lender and the Borrower severally agree to repay or pay to the Administrative
Agent forthwith on demand such corresponding amount and to pay interest thereon,
for each day from the date such amount is made available to the Borrower until
the date such amount is repaid or paid to the Administrative Agent, at (i) in
the case of the Borrower, the interest rate applicable at such time under
Section 2.07 to Advances comprising such Borrowing and (ii) in the case of such
Lender, the Federal Funds Rate. If such Lender shall pay to the Administrative
Agent such corresponding amount, such amount so paid shall constitute such
Lender's Advance as part of such Borrowing for all purposes.

      (f)  The failure of any Lender to make the Advance to be made by it as
part of any Borrowing shall not relieve any other Lender of its obligation, if
any, hereunder to make its Advance on the date of such Borrowing, but no Lender
shall be responsible for the failure of any other Lender to make the Advance to
be made by such other Lender on the date of any Borrowing.

      (g)  The Administrative Agent may conclusively rely on the purported
genuineness of all telephonic notices, without any responsibility or liability,
except for its own gross negligence or willful misconduct.

      SECTION 2.03.  Issuance of and Drawings and Reimbursement Under Letters of
Credit.  (a)  Request for Issuance. Each Letter of Credit shall be issued upon
notice, given not later than 11:00 A.M. (New York City time) on the fifth
Business Day prior to the date of the proposed issuance of such Letter of
Credit, by the Borrower to the Issuing Bank, which shall give to the
Administrative Agent and each Revolving Credit Lender prompt notice thereof by
telecopier or electronic communication. Each such notice of issuance of a Letter
of Credit (a "Notice of Issuance") shall be by telephone, confirmed immediately
in writing, or telecopier or electronic communication, specifying therein the
requested (i) date of such issuance (which shall be a Business Day),
(ii) Available Amount of such Letter of Credit (which amount shall not be less
than $50,000), (iii) expiration date of such Letter of Credit, (iv) name and
address of the beneficiary of such Letter of Credit and (v) form of such Letter
of Credit, and shall be accompanied by such application and agreement for letter
of credit as the Issuing Bank may specify to the Borrower for use in connection
with such requested Letter of Credit (a "Letter of Credit Agreement"). If
(A) the requested form of such Letter of Credit is acceptable to the Issuing
Bank in its sole discretion and (B) it has not received notice of objection to
such issuance from the Required Lenders, the Issuing Bank will, upon fulfillment
of the applicable conditions set forth in Article III, make such Letter of
Credit available to the Borrower at its office referred to in Section 8.02 or as
otherwise agreed

<PAGE>  25

with the Borrower in connection with such issuance. In the event and to the
extent that the provisions of any Letter of Credit Agreement shall conflict with
this Agreement, the provisions of this Agreement shall govern.

      (b)  Letter of Credit Reports. The Issuing Bank shall furnish (i) to the
Administrative Agent on the first Business Day of each week a written report
summarizing issuance and expiration dates of Letters of Credit issued during the
previous week and drawings during such week under all Letters of Credit, (ii) to
each Revolving Credit Lender on the first Business Day of each month a written
report summarizing issuance and expiration dates of Letters of Credit issued
during the preceding month and drawings during such month under all Letters of
Credit and (iii) to the Administrative Agent and each Revolving Credit Lender on
the first Business Day of each calendar quarter a written report setting forth
the average daily aggregate Available Amount during the preceding calendar
quarter of all Letters of Credit.

      (c)  Participations in Letters of Credit. Upon the issuance of a Letter of
Credit by the Issuing Bank under Section 2.03(a), the Issuing Bank shall be
deemed, without further action by any party hereto, to have sold to each
Revolving Credit Lender, and each such Revolving Credit Lender shall be deemed,
without further action by any party hereto, to have purchased from the Issuing
Bank, a participation in such Letter of Credit in an amount for each Revolving
Credit Lender equal to such Lender's Pro Rata Share of the Available Amount of
such Letter of Credit, effective upon the issuance of such Letter of Credit. In
consideration and in furtherance of the foregoing, each Revolving Credit Lender
hereby absolutely and unconditionally agrees to pay such Lender's Pro Rata Share
of each L/C Disbursement made by the Issuing Bank and not reimbursed by the
Borrower forthwith on the date due as provided in Section 2.04(e) (or which has
been so reimbursed but must be returned or restored by the Issuing Bank because
of the occurrence of an event specified in Section 6.01(f) or otherwise) by
making available for the account of its Applicable Lending Office to the
Administrative Agent for the account of the Issuing Bank by deposit to the
Administrative Agent's Account, in same day funds, an amount equal to such
Lender's Pro Rata Share of such L/C Disbursement. Each Revolving Credit Lender
acknowledges and agrees that its obligation to acquire participations pursuant
to this Section 2.03(c) in respect of Letters of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including the occurrence and continuance of a Default or an Event of Default or
the termination of the Commitments, and that each such payment shall be made
without any off-set, abatement, withholding or reduction whatsoever. If and to
the extent that any Revolving Credit Lender shall not have so made the amount of
such L/C Disbursement available to the Administrative Agent, such Revolving
Credit Lender agrees to pay to the Administrative Agent forthwith on demand such
amount together with interest thereon, for each day from the date such L/C
Disbursement is due pursuant to Section 2.04(e) until the date such amount is
paid to the Administrative Agent, at the Federal Funds Rate for its account or
the account of the Issuing Bank. If such Lender shall pay to the Administrative
Agent such amount for the account of the Issuing Bank on any Business Day, such
amount so paid in respect of principal shall constitute a Letter of Credit
Advance made by such Lender on such Business Day for purposes of this Agreement,
and the outstanding principal amount of the Letter of Credit Advance made by the
Issuing Bank shall be reduced by such amount on such Business Day.

      (d)  Drawing and Reimbursement. The payment by the Issuing Bank of a draft
drawn under any Letter of Credit shall constitute for all purposes of this
Agreement the making by the Issuing Bank of a Letter of Credit Advance, which
shall be a Base Rate Advance, in the amount of such draft.

      (e)  Failure to Make Letter of Credit Advances. The failure of any Lender
to make the Letter of Credit Advance to be made by it on the date specified in
Section 2.03(d) shall not relieve any other Lender of its obligation hereunder
to make its Letter of Credit Advance on such date, but no Lender

<PAGE>  26

shall be responsible for the failure of any other Lender to make the Letter of
Credit Advance to be made by such other Lender on such date

      (f)  Applicability of ISP98. Unless otherwise expressly agreed by the
Issuing Bank and the Borrower when a Letter of Credit is issued, the rules of
the "International Standby Practices 1998" published by the Institute of
International Banking Law & Practice (or such later version thereof as may be in
effect at the time of issuance) shall apply to each Letter of Credit.

      SECTION 2.04.  Repayment of Advances.  (a)  Revolving Credit Advances. The
Borrower shall repay to the Administrative Agent for the ratable account of the
Revolving Credit Lenders on the Termination Date in respect of the Revolving
Credit Facility the aggregate principal amount of the Revolving Credit Advances
then outstanding.

      (b)  Swing Line Advances. The Borrower shall repay to the Administrative
Agent for the account of the Swing Line Bank and each other Revolving Credit
Lender that has made a Swing Line Advance the outstanding principal amount of
each Swing Line Advance made by each of them on the earlier of the maturity date
specified in the applicable Notice of Swing Line Borrowing (which maturity shall
be no later than the seventh day after the requested date of such Borrowing) and
the Termination Date in respect of the Revolving Credit Facility.

      (c)  Letter of Credit Advances.  (i)  The Borrower shall repay to the
Administrative Agent for the account of the Issuing Bank and each other
Revolving Credit Lender that has made a Letter of Credit Advance on the earlier
of demand and the Termination Date in respect of the Revolving Credit Facility
the outstanding principal amount of each Letter of Credit Advance made by each
of them.

      (ii)    The Obligations of the Borrower and the Revolving Credit Lenders
under this Agreement, any Letter of Credit Agreement and any other agreement or
instrument relating to any Letter of Credit shall be unconditional and
irrevocable, and shall be paid strictly in accordance with the terms of this
Agreement, such Letter of Credit Agreement and such other agreement or
instrument under all circumstances, including, without limitation, the following
circumstances:

 

      (A)  any lack of validity or enforceability of any Loan Document, any
Letter of Credit Agreement, any Letter of Credit or any other agreement or
instrument relating thereto (all of the foregoing being, collectively, the "L/C
Related Documents");

       

      (B)  any change in the time, manner or place of payment of, or in any
other term of, all or any of the Obligations of the Borrower in respect of any
L/C Related Document or any other amendment or waiver of or any consent to
departure from all or any of the L/C Related Documents;

       

      (C)  the existence of any claim, set-off, defense or other right that the
Borrower may have at any time against any beneficiary or any transferee of a
Letter of Credit (or any Persons for which any such beneficiary or any such
transferee may be acting), the Issuing Bank or any other Person, whether in
connection with the transactions contemplated by the L/C Related Documents or
any unrelated transaction;

       

      (D)  any statement or any other document presented under a 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;

<PAGE>  27

 

      (E)  payment by the Issuing Bank under a Letter of Credit against
presentation of a draft, certificate or other document that does not strictly
comply with the terms of such Letter of Credit;

       

      (F)  any exchange, release or non-perfection of any Collateral or other
collateral, or any release or amendment or waiver of or consent to departure
from the Subsidiary Guaranties or any other guarantee, for all or any of the
Obligations of the Borrower in respect of the L/C Related Documents; or

       

      (G)  any other circumstance or happening whatsoever, whether or not
similar to any of the foregoing, including, without limitation, any other
circumstance that might otherwise constitute a defense available to, or a
discharge of, the Borrower or a guarantor.

      SECTION 2.05.  Termination or Reduction of the
Commitments.  (a)  Optional. The Borrower may, upon at least five Business Days'
written notice to the Administrative Agent, terminate in whole or reduce in part
the unused portions of the Swing Line Facility and the Letter of Credit Facility
and the Unused Revolving Credit Commitments; provided, however, that each
partial reduction of a Facility (i) shall be in an aggregate amount of at least
$5,000,000 or an integral multiple of $1,000,000 in excess thereof and
(ii) shall be made ratably among the Appropriate Lenders in accordance with
their Commitments with respect to such Facility.

      (b)  Mandatory.  (i)  The Letter of Credit Facility shall be permanently
reduced from time to time on the date of each reduction in the Revolving Credit
Facility by the amount, if any, by which the amount of the Letter of Credit
Facility exceeds the Revolving Credit Facility after giving effect to such
reduction of the Revolving Credit Facility.

      (ii)    The Swing Line Facility shall be permanently reduced from time to
time on the date of each reduction in the Revolving Credit Facility by the
amount, if any, by which the amount of the Swing Line Facility exceeds the
Revolving Credit Facility after giving effect to such reduction of the Revolving
Credit Facility.

      SECTION 2.06.  Prepayments.  (a)  Optional.  The Borrower may, upon at
least one Business Day's notice (which may be telephonic, with prompt written
notice to confirm such notice and with no liability on the part of the
Administrative Agent for acting on such notice) in the case of Base Rate
Advances and three Business Days' notice in the case of Eurodollar Rate
Advances, in each case to the Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, and if such notice is given the
Borrower shall, prepay the outstanding aggregate principal amount of the
Advances comprising part of the same Borrowing in whole or ratably in part,
together with accrued interest to the date of such prepayment on the aggregate
principal amount prepaid; provided, however, that (i) each partial prepayment
shall be in an aggregate principal amount of $5,000,000 or an integral multiple
of $1,000,000 in excess thereof (or, if less, the aggregate amount of Revolving
Credit Borrowings then outstanding) and (ii) if any prepayment of a Eurodollar
Rate Advance is made on a date other than the last day of an Interest Period for
such Advance, the Borrower shall also pay any amounts owing pursuant to Section
8.04(c).

      (b)  Mandatory.  (i) The Borrower shall, on each applicable Business Day,
prepay an aggregate principal amount of the Revolving Credit Advances comprising
part of the same Borrowings, the Letter of Credit Advances and the Swing Line
Advances and deposit an amount in the Deposit Account in an amount equal to the
amount by which (A) the sum of the aggregate principal amount of (x) the
Revolving Credit Advances, (y) the Letter of Credit Advances and (z) the Swing
Line Advances then outstanding plus the aggregate Available Amount of all
Letters of Credit then outstanding exceeds (B) the Revolving Credit Facility on
such Business Day.

<PAGE>  28

      (ii)    The Borrower shall, on each applicable Business Day, pay to the
Administrative Agent for deposit in the Deposit Account an amount sufficient to
cause the aggregate amount on deposit in the Deposit Account to equal the amount
by which the aggregate Available Amount of all Letters of Credit then
outstanding exceeds the Letter of Credit Facility on such Business Day.

      (iii)    Prepayments of the Revolving Credit Facility made pursuant to
clause (i) shall be first applied to prepay Letter of Credit Advances then
outstanding until such Advances are paid in full, second applied to prepay Swing
Line Advances then outstanding until such Advances are paid in full, and third
applied to prepay Revolving Credit Advances then outstanding comprising part of
the same Borrowings until such Advances are paid in full and fourth deposited in
the Deposit Account to cash collateralize 100% of the Available Amount of the
Letters of Credit then outstanding. Upon the drawing of any Letter of Credit for
which funds are on deposit in the Deposit Account, such funds shall be applied
to reimburse the Issuing Bank or Revolving Credit Lenders, as applicable.

      (iv)    All prepayments under this subsection (b) shall be made together
with accrued interest to the date of such prepayment on the principal amount
prepaid, together with any amounts owing pursuant to Section 8.04(c). If any
payment of Eurodollar Rate Advances otherwise required to be made under this
Section 2.06(b) would be made on a day other than the last day of the applicable
Interest Period therefor, the Borrower may direct the Administrative Agent to
(and if so directed, the Administrative Agent shall) deposit such payment in the
Deposit Account until the last day of the applicable Interest Period at which
time the Administrative Agent shall apply the amount of such payment to the
prepayment of such Advances; provided, however, that such Advances shall
continue to bear interest as set forth in Section 2.07 until the last day of the
applicable Interest Period therefor.

      SECTION 2.07.  Interest.  (a)  Scheduled Interest. The Borrower shall pay
interest on the unpaid principal amount of each Advance owing to each Lender
from the date of such Advance until such principal amount shall be paid in full,
at the following rates per annum:

 

      (i)    Base Rate Advances. During such periods as such Advance is a Base
Rate Advance, a rate per annum equal at all times to the sum of (A) the Base
Rate in effect from time to time plus (B) the Applicable Margin in effect from
time to time, payable in arrears quarterly on the last day of each February,
May, August and November during such periods and on the date such Base Rate
Advance shall be Converted or paid in full.

     

      (ii)    Eurodollar Rate Advances. During such periods as such Advance is a
Eurodollar Rate Advance, a rate per annum equal at all times during each
Interest Period for such Advance to the sum of (A) the Eurodollar Rate for such
Interest Period for such Advance plus (B) the Applicable Margin in effect on the
first day of such Interest Period, payable in arrears on the last day of such
Interest Period and, if such Interest Period has a duration of more than three
months, on each day that occurs during such Interest Period every three months
from the first day of such Interest Period and on the date such Eurodollar Rate
Advance shall be Converted or paid in full.

      (b)  Default Interest. Upon the occurrence and during the continuance of
an Event of Default, the Administrative Agent may, and upon the request of the
Required Lenders shall, require that the Borrower pay interest ("Default
Interest") on (i) the unpaid principal amount of each Advance owing to each
Lender Party, payable in arrears on the dates referred to in clause (i) or (ii)
of Section 2.07(a), as applicable, and on demand, at a rate per annum equal at
all times to 2% per annum above the highest rate per annum pursuant to the
definition of "Applicable Margin", and (ii) to the fullest extent permitted by
applicable law, the amount of any interest, fee or other amount payable under
this Agreement or any other Loan Document to any Agent or any Lender Party that
is not paid when due, from the date such amount shall be due until such amount
shall be paid in full, payable in arrears on the date such amount shall be

<PAGE>  29

paid in full and on demand, at a rate per annum equal at all times to 2% per
annum above the rate per annum required to be paid, in the case of interest, on
the Type of Advance on which such interest has accrued pursuant to clause (i) or
(ii) of Section 2.07(a), as applicable, and, in all other cases, on Base Rate
Advances pursuant to clause (i) of Section 2.07(a); provided, however, that
following the acceleration of the Advances, or the giving of notice by the
Administrative Agent to accelerate the Advances, pursuant to Section 6.01,
Default Interest shall accrue and be payable hereunder whether or not previously
required by the Administrative Agent.

      (c)  Notice of Interest Period and Interest Rate. Promptly after receipt
of a Notice of Borrowing pursuant to Section 2.02(a), a notice of Conversion
pursuant to Section 2.09 or a notice of selection of an Interest Period pursuant
to the terms of the definition of "Interest Period", the Administrative Agent
shall give notice to the Borrower and each Appropriate Lender of the applicable
Interest Period and the applicable interest rate determined by the
Administrative Agent for purposes of clause (a)(i) or (a)(ii) above.

      SECTION 2.08.  Fees.  (a)  Commitment Fee. The Borrower shall pay to the
Administrative Agent for the account of the Lenders a commitment fee, from the
date hereof in the case of each Initial Lender and from the effective date
specified in the Assignment and Acceptance pursuant to which it became a Lender
in the case of each other Lender until the Termination Date, payable in arrears
quarterly on the last day of each February, May, August and November, commencing
August 30, 2003, and on the Termination Date in respect of the applicable
Facility, at the Applicable Commitment Fee Percentage on the sum of the average
daily Unused Revolving Credit Commitment of such Lender plus its Pro Rata Share
of the average daily outstanding Swing Line Advances during such quarter.

      (b)  Letter of Credit Fees, Etc.  (i)  The Borrower shall pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commission, payable in arrears quarterly on the last day of each February, May,
August and November, commencing August 30, 2003, and on the Termination Date in
respect of the Letter of Credit Facility, on such Lender's Pro Rata Share of the
average daily aggregate Available Amount during such quarter of all Letters of
Credit of the Applicable Margin for Eurodollar Rate Advances under the Revolving
Credit Facility. Upon the occurrence and during the continuance of an Event of
Default, the amount of commission payable by the Borrower under this clause
(b)(i) shall be increased by 2% per annum (without duplication of amounts
payable under Section 2.07(b)).

      (ii)    The Borrower shall pay to the Issuing Bank, for its own account,
such commissions, issuance fees, fronting fees, transfer fees and other fees and
charges in connection with the issuance or administration of each Letter of
Credit as the Borrower and the Issuing Bank shall agree, with the initial
fronting fee equal to 0.125% per annum on the Available Amount of all Letters of
Credit issued by the Issuing Bank payable quarterly in arrears on the last day
of each February, May, August and November, commencing August 30, 2003.

      (c)  Agents' Fees. The Borrower shall pay to each Agent for its own
account such fees as may from time to time be agreed between the Borrower and
such Agent, including the fees set forth in the Fee Letter.

      SECTION 2.09.  Conversion of Advances.  (a)  Optional. The Borrower may on
any Business Day, upon notice given to the Administrative Agent not later than
11:00 A.M. (New York City time) on the third Business Day prior to the date of
the proposed Conversion and subject to the provisions of Sections 2.07 and 2.10,
Convert all or any portion of the Advances of one Type comprising the same
Borrowing into Advances of the other Type; provided, however, that any
Conversion of Eurodollar Rate Advances into Base Rate Advances shall be made
only on the last day of an Interest Period for such

<PAGE>  30

Eurodollar Rate Advances, any Conversion of Base Rate Advances into Eurodollar
Rate Advances shall be in an amount not less than the minimum amount specified
in Section 2.02(c), no Conversion of any Advances shall result in more separate
Borrowings than permitted under Section 2.02(c) and each Conversion of Advances
comprising part of the same Borrowing under any Facility shall be made ratably
among the Appropriate Lenders in accordance with their Commitments under such
Facility. Each such notice of Conversion shall, within the restrictions
specified above, specify (i) the date of such Conversion, (ii) the Advances to
be Converted and (iii) if such Conversion is into Eurodollar Rate Advances, the
duration of the initial Interest Period for such Advances. Each notice of
Conversion shall be irrevocable and binding on the Borrower.

      (b)  Mandatory.  (i)  On the date on which the aggregate unpaid principal
amount of Eurodollar Rate Advances comprising any Borrowing shall be reduced, by
payment or prepayment or otherwise, to less than $5,000,000, such Advances shall
automatically, on the last day of the then existing Interest Period therefor,
Convert into Base Rate Advances.

      (ii)  If the Borrower shall fail to select the duration of any Interest
Period for any Eurodollar Rate Advances in accordance with the provisions
contained in the definition of "Interest Period" in Section 1.01, the
Administrative Agent will forthwith so notify the Borrower and the Appropriate
Lenders, whereupon each such Eurodollar Rate Advance shall automatically, on the
last day of the then existing Interest Period therefor, Convert into a Base Rate
Advance.

      (iii)  Upon the occurrence and during the continuance of any Default,
(A) each Eurodollar Rate Advance will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (B) upon
written notice from the Administrative Agent (in its discretion or as required
by the Required Lenders in writing) to the Borrower, the obligation of the
Lenders to make, or to Convert Advances into, Eurodollar Rate Advances shall be
suspended.

      SECTION 2.10.  Increased Costs, Etc.  (a)  If, due to either (i) the
introduction of or any change in or in the interpretation of any law or
regulation or (ii) the compliance with any guideline or request from any central
bank or other governmental authority (whether or not having the force of law),
there shall be any increase in the cost to any Lender Party of agreeing to make
or of making, funding or maintaining Eurodollar Rate Advances or of agreeing to
issue or of issuing or maintaining or participating in Letters of Credit or of
agreeing to make or of making or maintaining Letter of Credit Advances
(excluding, for purposes of this Section 2.10, any such increased costs
resulting from (x) Taxes or Other Taxes (as to which Section 2.12 shall govern
exclusively) and (y) changes in the basis of taxation of overall net income or
overall gross income by the United States or by the foreign jurisdiction or
state under the laws of which such Lender Party is organized or has its
Applicable Lending Office, in each case including any political subdivision
thereof), then the Borrower shall from time to time, upon demand by such Lender
Party (with a copy of such demand to the Administrative Agent), pay to the
Administrative Agent for the account of such Lender Party additional amounts
sufficient to compensate such Lender Party for such increased cost; provided,
however, that a Lender Party claiming additional amounts under this Section
2.10(a) agrees to use reasonable efforts (consistent with its internal policy
and legal and regulatory restrictions) to designate a different Applicable
Lending Office if the making of such a designation would avoid the need for, or
reduce the amount of, such increased cost that may thereafter accrue and would
not, in the reasonable judgment of such Lender Party, be otherwise
disadvantageous to such Lender Party. A certificate as to the amount of such
increased cost, submitted to the Borrower by such Lender Party, shall be
conclusive and binding for all purposes, absent manifest error.

      (b)  If, due to either (i) the introduction or effectiveness of or any
change in or in the interpretation of any law or regulation or (ii) the
compliance with any guideline or request from any central bank or other
governmental authority (whether or not having the force of law), there shall be
any

<PAGE>  31

increase in the amount of capital required or expected to be maintained by any
Lender Party or any corporation controlling such Lender Party as a result of or
based upon the existence of such Lender Party's commitment to lend or to issue
or participate in Letters of Credit hereunder and other commitments of such type
or the issuance or maintenance of or participation in the Letters of Credit (or
similar contingent obligations), then, upon demand by such Lender Party or such
corporation (with a copy of such demand to the Administrative Agent), the
Borrower shall pay to the Administrative Agent for the account of such Lender
Party, from time to time as specified by such Lender Party, additional amounts
sufficient to compensate such Lender Party in the light of such circumstances,
to the extent that such Lender Party reasonably determines such increase in
capital to be allocable to the existence of such Lender Party's commitment to
lend or to issue or participate in Letters of Credit hereunder or to the
issuance or maintenance of or participation in any Letters of Credit. A
certificate as to such amounts submitted to the Borrower by such Lender Party
shall be conclusive and binding for all purposes, absent manifest error.

      (c)  If, with respect to any Eurodollar Rate Advances under any Facility,
Lenders owed at least 51% of the then aggregate unpaid principal amount thereof
notify the Administrative Agent in good faith that the Eurodollar Rate for any
Interest Period for such Advances will not adequately reflect the cost to such
Lenders of making, funding or maintaining their Eurodollar Rate Advances for
such Interest Period, the Administrative Agent shall forthwith so notify the
Borrower and the Appropriate Lenders, whereupon (i) each such Eurodollar Rate
Advance under such Facility will automatically, on the last day of the then
existing Interest Period therefor, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lenders have determined that the circumstances
causing such suspension no longer exist.

      (d)  Notwithstanding any other provision of this Agreement, if the
introduction or effectiveness of or any change in or in the interpretation of
any law or regulation shall make it unlawful, or any central bank or other
governmental authority shall assert that it is unlawful, for any Lender or its
Eurodollar Lending Office to perform its obligations hereunder to make
Eurodollar Rate Advances or to continue to fund or maintain Eurodollar Rate
Advances hereunder, then, on notice thereof and demand therefor by such Lender
to the Borrower through the Administrative Agent, (i) each Eurodollar Rate
Advance under each Facility under which such Lender has a Commitment will
automatically, upon such demand, Convert into a Base Rate Advance and (ii) the
obligation of the Appropriate Lenders to make, or to Convert Advances into,
Eurodollar Rate Advances shall be suspended until the Administrative Agent shall
notify the Borrower that such Lender has determined that the circumstances
causing such suspension no longer exist; provided, however, that, before making
any such demand, such Lender agrees to use reasonable efforts (consistent with
its internal policy and legal and regulatory restrictions) to designate a
different Eurodollar Lending Office if the making of such a designation would
allow such Lender or its Eurodollar Lending Office to continue to perform its
obligations to make Eurodollar Rate Advances or to continue to fund or maintain
Eurodollar Rate Advances and would not, in the judgment of such Lender, be
otherwise disadvantageous to such Lender.

      SECTION 2.11.  Payments and Computations.  (a)  The Borrower shall make
each payment hereunder and under the Notes, irrespective of any right of
counterclaim or set-off (except as otherwise provided in Section 2.15), not
later than 2:00 P.M. (New York City time) on the day when due in U.S. dollars to
the Administrative Agent at the Administrative Agent's Account in same day
funds, with payments being received by the Administrative Agent after such time
being deemed to have been received on the next succeeding Business Day. The
Administrative Agent will promptly thereafter cause like funds to be distributed
(i) if such payment by the Borrower is in respect of principal, interest,
commitment fees or any other Obligation then payable hereunder and under the
Notes to more than one Lender Party, to such Lender Parties for the account of
their respective Applicable Lending Offices

<PAGE>  32

ratably in accordance with the amounts of such respective Obligations then
payable to such Lender Parties and (ii) if such payment by the Borrower is in
respect of any Obligation then payable hereunder to one Lender Party, to such
Lender Party for the account of its Applicable Lending Office, in each case to
be applied in accordance with the terms of this Agreement. Upon its acceptance
of an Assignment and Acceptance and recording of the information contained
therein in the Register pursuant to Section 8.07(d), from and after the
effective date of such Assignment and Acceptance, the Administrative Agent shall
make all payments hereunder and under the Notes in respect of the interest
assigned thereby to the Lender Party assignee thereunder, and the parties to
such Assignment and Acceptance shall make all appropriate adjustments in such
payments for periods prior to such effective date directly between themselves.

      (b)  The Borrower hereby authorizes each Lender Party and each of its
Affiliates, if and to the extent payment owed to such Lender Party is not made
when due hereunder or, in the case of a Lender, under the Note held by such
Lender, to charge from time to time, to the fullest extent permitted by law,
against any or all of the Borrower's accounts with such Lender Party or such
Affiliate any amount so due.

      (c)  All computations of interest based on the Base Rate shall be made by
the Administrative Agent on the basis of a year of 365 or 366 days, as the case
may be, and all computations of interest based on the Eurodollar Rate or the
Federal Funds Rate and of fees and Letter of Credit commissions shall be made by
the Administrative Agent on the basis of a year of 360 days, in each case for
the actual number of days (including the first day but excluding the last day)
occurring in the period for which such interest, fees or commissions are
payable. Each determination by the Administrative Agent of an interest rate, fee
or commission hereunder shall be conclusive and binding for all purposes, absent
manifest error.

      (d)  Whenever any payment hereunder or under the Notes shall be stated to
be due on a day other than a Business Day, such payment shall be made on the
next succeeding Business Day, and such extension of time shall in such case be
included in the computation of payment of interest or commitment or letter of
credit fee or commission, as the case may be; provided, however, that, if such
extension would cause payment of interest on or principal of Eurodollar Rate
Advances to be made in the next following calendar month, such payment shall be
made on the next preceding Business Day.

      (e)  Unless the Administrative Agent shall have received notice from the
Borrower prior to the date on which any payment is due to any Lender Party
hereunder that the Borrower will not make such payment in full, the
Administrative Agent may assume that the Borrower has made such payment in full
to the Administrative Agent on such date and the Administrative Agent may, in
reliance upon such assumption, cause to be distributed to each such Lender Party
on such due date an amount equal to the amount then due such Lender Party. If
and to the extent the Borrower shall not have so made such payment in full to
the Administrative Agent, each such Lender Party shall repay to the
Administrative Agent forthwith on demand such amount distributed to such Lender
Party together with interest thereon, for each day from the date such amount is
distributed to such Lender Party until the date such Lender Party repays such
amount to the Administrative Agent, at the Federal Funds Rate.

      (f)  Whenever any payment received by the Administrative Agent under this
Agreement or any of the other Loan Documents is insufficient to pay in full all
amounts due and payable to the Agents and the Lender Parties under or in respect
of this Agreement and the other Loan Documents on any date, such payment shall
be distributed by the Administrative Agent and applied by the Agents and the
Lender Parties in the following order of priority:

<PAGE>  33

 

      (i)    first, to the payment of all of the fees, indemnification payments,
costs and expenses that are due and payable to the Agents (solely in their
respective capacities as Agents) under or in respect of this Agreement and the
other Loan Documents on such date, ratably based upon the respective aggregate
amounts of all such fees, indemnification payments, costs and expenses owing to
the Agents on such date;

     

      (ii)    second, to the payment of all of the fees, indemnification
payments, costs and expenses that are due and payable to the Issuing Bank and
the Swing Line Bank (solely in their respective capacities as such) under or in
respect of this Agreement and the other Loan Documents on such date, ratably
based upon the respective aggregate amounts of all such fees, indemnification
payments, costs and expenses owing to the Issuing Bank and the Swing Line Bank
on such date;

     

      (iii)    third, to the payment of all of the indemnification payments,
costs and expenses that are due and payable to the Lenders under Sections 8.04
hereof, Section 21 of the Security Agreement and any similar section of any of
the other Loan Documents on such date, ratably based upon the respective
aggregate amounts of all such indemnification payments, costs and expenses owing
to the Lenders on such date;

     

      (iv)    fourth, to the payment of all of the amounts that are due and
payable to the Administrative Agent and the Lender Parties under Sections 2.10
and 2.12 hereof on such date, ratably based upon the respective aggregate
amounts thereof owing to the Administrative Agent and the Lender Parties on such
date;

     

      (v)    fifth, to the payment of all of the fees that are due and payable
to the Lenders under Section 2.08(a) on such date, ratably based upon the
respective aggregate Commitments of the Lenders under the Facilities on such
date;

     

      (vi)    sixth, to the payment of all of the accrued and unpaid interest on
the Obligations of the Borrower under or in respect of the Loan Documents that
is due and payable to the Administrative Agent and the Lender Parties under
Section 2.07(b) on such date, ratably based upon the respective aggregate
amounts of all such interest owing to the Administrative Agent and the Lender
Parties on such date;

     

      (vii)    seventh, to the payment of all of the accrued and unpaid interest
on the Advances that is due and payable to the Administrative Agent and the
Lender Parties under Section 2.07(a) and all Obligations arising under Secured
Hedge Agreements on such date, ratably based upon the respective aggregate
amounts of all such interest owing to the Administrative Agent and the Lender
Parties on such date;

     

      (viii)    eighth, to the payment of the principal amount of all of the
outstanding Advances that is due and payable to the Administrative Agent and the
Lender Parties on such date, ratably based upon the respective aggregate amounts
of all such principal owing to the Administrative Agent and the Lender Parties
on such date; and

     

      (ix)    ninth, to the payment of all other Obligations of the Loan Parties
owing under or in respect of the Loan Documents that are due and payable to the
Administrative Agent and the other Secured Parties on such date, ratably based
upon the respective aggregate amounts of all such Obligations owing to the
Administrative Agent and the other Secured Parties on such date.

<PAGE>  34

      (g)  If the Administrative Agent receives funds for application to the
Obligations of the Loan Parties under or in respect of the Loan Documents under
circumstances for which the Loan Documents do not specify the Advances or the
Facility to which, or the manner in which, such funds are to be applied, the
Administrative Agent may, but shall not be obligated to, elect to distribute
such funds to each of the Lender Parties in accordance with such Lender Party's
Pro Rata Share of the sum of (a) the aggregate principal amount of all Advances
outstanding at such time and (b) the aggregate Available Amount of all Letters
of Credit outstanding at such time, in repayment or prepayment of such of the
outstanding Advances or other Obligations then owing to such Lender Party.

      SECTION 2.12.  Taxes.  (a)  Any and all payments by any Loan Party to or
for the account of any Lender Party or any Agent hereunder or under the Notes or
any other Loan Document shall be made, in accordance with Section 2.11 or the
applicable provisions of such other Loan Document, if any, free and clear of and
without deduction for any and all present or future taxes, levies, imposts,
deductions, charges or withholdings, and all liabilities with respect thereto,
excluding, in the case of each Lender Party and each Agent, taxes that are
imposed on its overall net income by the United States and taxes that are
imposed on its overall net income (and franchise or similiar taxes imposed in
lieu thereof) by the state or foreign jurisdiction under the laws of which such
Lender Party or such Agent, as the case may be, is organized or any political
subdivision thereof and, in the case of each Lender Party, taxes that are
imposed on its overall net income (and franchise taxes imposed in lieu thereof)
by the state or foreign jurisdiction of such Lender Party's Applicable Lending
Office or any political subdivision thereof (all such non-excluded taxes,
levies, imposts, deductions, charges, withholdings and liabilities in respect of
payments hereunder or under the Notes being hereinafter referred to as "Taxes").
If any Loan Party shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder or under any Note or any other Loan
Document to any Lender Party or any Agent, (i) the sum payable by the Borrower
shall be increased as may be necessary so that after such Loan Party and the
Administrative Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 2.12) such Lender Party
or such Agent, as the case may be, receives an amount equal to the sum it would
have received had no such deductions been made, (ii) such Loan Party shall make
all such deductions and (iii) such Loan Party shall pay the full amount deducted
to the relevant taxation authority or other authority in accordance with
applicable law.

      (b)  In addition, a Loan Party shall pay any present or future stamp,
documentary, excise, property or similar taxes, charges or levies that arise
from any payment made by such Loan Party hereunder or under any Notes or any
other Loan Documents or from the execution, delivery or registration of,
performance under, or otherwise with respect to, this Agreement, the Notes or
the other Loan Documents (hereinafter referred to as "Other Taxes").

      (c)  The Loan Parties shall indemnify each Lender Party and each Agent for
and hold them harmless against the full amount of Taxes and Other Taxes, and for
the full amount of taxes of any kind imposed or asserted by any jurisdiction on
amounts payable under this Section 2.12, imposed on or paid by such Lender Party
or such Agent (as the case may be) and any liability (including penalties,
additions to tax, interest and expenses) arising therefrom or with respect
thereto. This indemnification shall be made within 30 days from the date such
Lender Party or such Agent (as the case may be) makes written demand therefor.

      (d)  Within 30 days after the date of any payment of Taxes, the
appropriate Loan Party shall furnish to the Administrative Agent, at its address
referred to in Section 8.02, the original or a certified copy of a receipt
evidencing such payment, to the extent such a receipt is issued therefor, or
other written proof of payment thereof that is reasonably satisfactory to the
Administrative Agent. In the case of any payment hereunder or under the Notes or
the other Loan Documents by or on behalf of a Loan Party through an account or
branch outside the United States or by or on behalf of a Loan Party by a

<PAGE>  35

payor that is not a United States person, if such Loan Party determines that no
Taxes are payable in respect thereof, such Loan Party shall furnish, or shall
cause such payor to furnish, to the Administrative Agent, at such address, an
opinion of counsel acceptable to the Administrative Agent stating that such
payment is exempt from Taxes. For purposes of subsections (d) and (e) of this
Section 2.12, the terms "United States" and "United States person" shall have
the meanings specified in Section 7701 of the Internal Revenue Code.

      (e)  Each Lender Party organized under the laws of a jurisdiction outside
the United States shall, on or prior to the date of its execution and delivery
of this Agreement in the case of each Initial Lender Party and on the date of
the Assignment and Acceptance pursuant to which it becomes a Lender Party in the
case of each other Lender Party, and from time to time thereafter as reasonably
requested in writing by the Borrower (but only so long thereafter as such Lender
Party remains lawfully able to do so), provide each of the Administrative Agent
and the Borrower with two original Internal Revenue Service Forms W-8BEN or
W-8EC1 or (in the case of a Lender Party that has certified in writing to the
Administrative Agent that it is not (i) a "bank" as defined in Section
881(c)(3)(A) of the Internal Revenue Code, (ii) a 10-percent shareholder (within
the meaning of Section 871(h)(3)(B) of the Internal Revenue Code) of the
Borrower or (iii) a CFC related to the Borrower (within the meaning of Section
864(d)(4) of the Internal Revenue Code), Internal Revenue Service Form W-8BEN,
as appropriate) any successor or other form prescribed by the Internal Revenue
Service, certifying that such Lender Party is exempt from or entitled to a
reduced rate of United States withholding tax on payments pursuant to this
Agreement or the Notes or any other Loan Document or such other Internal Revenue
Service form as may be applicable to a Lender Party which will entitle the
Lender Party to an exemption from or a reduced rate of withholding tax on
payments pursuant to this Agreement or the Notes or any other Loan Document. If
the forms provided by a Lender Party at the time such Lender Party first becomes
a party to this Agreement indicate a United States interest withholding tax rate
in excess of zero, withholding tax at such rate shall be considered excluded
from Taxes unless and until such Lender Party provides the appropriate forms
certifying that a lesser rate applies, whereupon withholding tax at such lesser
rate only shall be considered excluded from Taxes for periods governed by such
forms; provided, however, that if, at the effective date of the Assignment and
Acceptance pursuant to which a Lender Party becomes a party to this Agreement,
the Lender Party assignor was entitled to payments under subsection (a) of this
Section 2.12 in respect of United States withholding tax with respect to
interest paid at such date, then, to such extent, the term Taxes shall include
(in addition to withholding taxes that may be imposed in the future or other
amounts otherwise includable in Taxes) United States withholding tax, if any,
applicable with respect to the Lender Party assignee on such date. If any form
or document referred to in this subsection (e) requires the disclosure of
information, other than information necessary to compute the tax payable and
information required on the date hereof by Internal Revenue Service Form W-8BEN
or W-8ECI or the related certificate described above, that the applicable Lender
Party reasonably considers to be confidential, such Lender Party shall give
notice thereof to the Borrower and shall not be obligated to include in such
form or document such confidential information.

      (f)  For any period with respect to which a Lender Party has failed to
provide the Borrower with the appropriate form, certificate or other document
described in subsection (e) above (other than if such failure is due to a change
in law, or in the interpretation or application thereof, occurring after the
date on which a form, certificate or other document originally was required to
be provided or if such form, certificate or other document otherwise is not
required under subsection (e) above), such Lender Party shall not be entitled to
indemnification under subsection (a) or (c) of this Section 2.12 with respect to
Taxes imposed by the United States by reason of such failure; provided, however,
that should a Lender Party become subject to Taxes because of its failure to
deliver a form, certificate or other document required hereunder, the Loan
Parties shall take such steps as such Lender Party shall reasonably request to
assist such Lender Party to recover such Taxes.

<PAGE>  36

      (g)  Any Lender Party claiming any additional amounts payable pursuant to
this Section 2.12 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Lender Party, be
otherwise disadvantageous to such Lender Party.

      SECTION 2.13.  Sharing of Payments, Etc.  If any Lender Party shall obtain
at any time any payment (whether voluntary, involuntary, through the exercise of
any right of set-off, or otherwise, other than as a result of an assignment
pursuant to Section 8.07) (a) on account of Obligations due and payable to such
Lender Party hereunder and under the Notes and the other Loan Documents at such
time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations due and payable to such Lender Party at such time to
(ii) the aggregate amount of the Obligations due and payable to all Lender
Parties hereunder and under the Notes and the other Loan Documents at such time)
of payments on account of the Obligations due and payable to all Lender Parties
hereunder and under the Notes at such time obtained by all the Lender Parties at
such time or (b) on account of Obligations owing (but not due and payable) to
such Lender Party hereunder and under the Notes and the other Loan Documents at
such time in excess of its ratable share (according to the proportion of (i) the
amount of such Obligations owing to such Lender Party at such time to (ii) the
aggregate amount of the Obligations owing (but not due and payable) to all
Lender Parties hereunder and under the Notes and the other Loan Documents at
such time) of payments on account of the Obligations owing (but not due and
payable) to all Lender Parties hereunder and under the Notes at such time
obtained by all of the Lender Parties at such time, such Lender Party shall
forthwith purchase from the other Lender Parties such interests or participating
interests in the Obligations due and payable or owing to them, as the case may
be, as shall be necessary to cause such purchasing Lender Party to share the
excess payment ratably with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from such purchasing
Lender Party, such purchase from each other Lender Party shall be rescinded and
such other Lender Party shall repay to the purchasing Lender Party the purchase
price to the extent of such Lender Party's ratable share (according to the
proportion of (i) the purchase price paid to such Lender Party to (ii) the
aggregate purchase price paid to all Lender Parties) of such recovery together
with an amount equal to such Lender Party's ratable share (according to the
proportion of (i) the amount of such other Lender Party's required repayment to
(ii) the total amount so recovered from the purchasing Lender Party) of any
interest or other amount paid or payable by the purchasing Lender Party in
respect of the total amount so recovered; provided further that, so long as the
Obligations under the Loan Documents shall not have been accelerated, any excess
payment received by any Appropriate Lender shall be shared on a pro rata basis
only with other Appropriate Lenders. The Borrower agrees that any Lender Party
so purchasing an interest or participating interest from another Lender Party
pursuant to this Section 2.13 may, to the fullest extent permitted by law,
exercise all its rights of payment (including the right of set-off) with respect
to such interest or participating interest, as the case may be, as fully as if
such Lender Party were the direct creditor of the Borrower in the amount of such
interest or participating interest, as the case may be.

      SECTION 2.14.  Use of Proceeds.  The proceeds of the Advances and
issuances of Letters of Credit shall be available (and the Borrower agrees that
it shall use such proceeds and Letters of Credit) solely to refinance certain
Existing Debt of the Borrower, and to finance the ongoing working capital and
other general corporate purposes of the Borrower and its Subsidiaries. The
proceeds of any Advances may not be used to finance any Investment or
acquisition permitted under Section 5.02(f) unless such Investment or
acquisition is made on a consensual basis (approved by the board of directors or
analogous governing body of any Person to be acquired or all or substantially
all of whose assets are to be acquired).

<PAGE>  37

      SECTION 2.15.  Evidence of Debt.  (a)  Each Lender Party shall maintain in
accordance with its usual practice an account or accounts evidencing the
indebtedness of the Borrower to such Lender resulting from each Advance owing to
such Lender Party from time to time, including the amounts of principal and
interest payable and paid to such Lender from time to time hereunder. The
Borrower agrees that upon notice by any Lender Party to the Borrower (with a
copy of such notice to the Administrative Agent) to the effect that a promissory
note or other evidence of indebtedness is required or appropriate in order for
such Lender Party to evidence (whether for purposes of pledge, enforcement or
otherwise) the Advances owing to, or to be made by, such Lender Party, the
Borrower shall promptly execute and deliver to such Lender Party, with a copy to
the Administrative Agent, a Revolving Credit Note and a Swing Line Note, as
applicable, in substantially the form of Exhibits A-1 and A-2 hereto,
respectively, payable to the order of such Lender Party in a principal amount
equal to the Revolving Credit Commitment and the Swing Line Commitment,
respectively, of such Lender Party. All references to Notes in the Loan
Documents shall mean Notes, if any, to the extent issued hereunder.

      (b)  The Register maintained by the Administrative Agent pursuant to
Section 8.07(d) shall include a control account, and a subsidiary account for
each Lender Party, in which accounts (taken together) shall be recorded (i) the
date and amount of each Borrowing made hereunder, the Type of Advances
comprising such Borrowing and, if appropriate, the Interest Period applicable
thereto, (ii) the terms of each Assignment and Acceptance delivered to and
accepted by it, (iii) the amount of any principal or interest due and payable or
to become due and payable from the Borrower to each Lender Party hereunder, and
(iv) the amount of any sum received by the Administrative Agent from the
Borrower hereunder and each Lender Party's share thereof.

      (c)  Entries made in good faith by the Administrative Agent in the
Register pursuant to subsection (b) above, and by each Lender Party in its
account or accounts pursuant to subsection (a) above, shall be prima facie
evidence of the amount of principal and interest due and payable or to become
due and payable from the Borrower to, in the case of the Register, each Lender
Party and, in the case of such account or accounts, such Lender Party, under
this Agreement, absent manifest error; provided, however, that the failure of
the Administrative Agent or such Lender Party to make an entry, or any finding
that an entry is incorrect, in the Register or such account or accounts shall
not limit or otherwise affect the obligations of the Borrower under this
Agreement.

      SECTION 2.16.  Defaulting Lenders.  Notwithstanding anything in this
Agreement to the contrary, as to any Lender which (a) has refused (which refusal
has not been retracted) to make available its portion of any Borrowing or to
fund its portion of any unreimbursed (or disgorged) payment under Section
2.03(c) or (b) has given notice to the Administrative Agent and/or the Borrower
that it does not intend to comply with its obligations under Section 2.01 or
under Section 2.03(c) (a "Defaulting Lender"):

 

      (i)    such lender shall not be deemed a Required Lender hereunder and
such Lender's (A) Revolving Credit Notes, (B) Revolving Commitments, (C)
Advances and (D) Letter of Credit Advances shall be excluded from the
calculations set forth in the definition of Required Lenders above,

     

      (ii)    such Lender shall not be entitled to receive any portion of (A)
Letter of Credit fees, (B) interest payable with respect to any Letter of Credit
Advances or (C) amounts received in respect of Letter of Credit Advances; and

     

      (iii)    such Lender shall not be entitled to receive any commitment fee
payable in respect of the Revolving Credit Commitments.

<PAGE>  38

In addition to the foregoing, and notwithstanding Section 2.01(c), if any Lender
shall fall within the description set forth in clause (a) or (b) above, the
Issuing Bank shall not be required to issue any Letter of Credit unless
arrangements reasonably satisfactory to the Issuing Bank have been entered into
(the Issuing Bank having made a good faith effort to enter into such
arrangements) to eliminate the Issuing Bank's risk with respect to the
participation in Letters of Credit by such Lender, including cash
collateralizing such Lender's Letter of Credit commitment. The provisions of
this Section 2.16 are not in lieu of any other claim the Borrower may have
against such Defaulting Lender.

ARTICLE III

CONDITIONS OF LENDING AND
ISSUANCES OF LETTERS OF CREDIT

      SECTION 3.01.  Conditions Precedent to Initial Extension of Credit. The
obligation of each Lender to make an Advance or of the Issuing Bank to issue a
Letter of Credit on the occasion of the Initial Extension of Credit hereunder is
subject to the satisfaction of the following conditions precedent before or
concurrently with the Initial Extension of Credit:

 

      (a)  The Administrative Agent shall have received on or before the day of
the Initial Extension of Credit the following, each dated such day (unless
otherwise specified), in form and substance satisfactory to the Administrative
Agent (unless otherwise specified) and (except for the Notes) in sufficient
copies for each Lender Party:

         

      (i)    The Notes payable to the order of the Lenders to the extent
requested by the Lenders pursuant to the terms of Section 2.15.

         

      (ii)    Evidence satisfactory to it that either (i) Senior Subordinated
Notes in a principal amount of $175,000,000 have been issued pursuant to the
Senior Subordinated Indenture, together with true and complete copies of the
Senior Subordinated Indenture or (ii) Bridge Loans in a principal amount of at
least $85,000,000 are outstanding, together with true and complete copies of the
Bridge Documentation.

         

      (iii)    A security agreement in substantially the form of Exhibit D
hereto (together with each other security agreement and security agreement
supplement delivered pursuant to Section 5.01(j), in each case as amended, the
"Security Agreement"), duly executed by each Loan Party, together with:

           

      (A)    certificates representing the Pledged Shares referred to therein
accompanied by undated stock powers executed in blank and instruments evidencing
the Pledged Debt indorsed in blank,

             

      (B)    proper financing statements in form appropriate for filing under
the Uniform Commercial Code of all jurisdictions that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Security Agreement,
covering the Collateral described in the Security Agreement,

             

      (C)    completed requests for information, dated on or before the date of
the Initial Extension of Credit, listing all effective financing statements
filed in the jurisdictions referred to in clause (B) above that name any Loan
Party, the

<PAGE>  39

     

Acquired Businesses or their respective Subsidiaries as debtor, together with
copies of such other financing statements,

             

      (D)    evidence of the completion of all other recordings and filings of
or with respect to the Security Agreement that the Administrative Agent may deem
necessary or desirable in order to perfect and protect the security interest
created thereunder,

             

      (E)    evidence of the insurance required by the terms of the Security
Agreement,

             

      (F)    evidence that all other action that the Administrative Agent may
deem necessary or desirable in order to perfect and protect the liens and
security interests, and the priority thereof, created under the Security
Agreement has been taken (including, without limitation, receipt of duly
executed payoff letters, UCC-3 termination statements and landlords' and
bailees' waiver and consent agreements).

         

      (iv)    A guaranty substantially in the form of Exhibit E hereto (together
with each other guaranty and guaranty supplement delivered pursuant to Section
5.01(j), in each case as amended, the "Subsidiary Guaranty"), duly executed by
each Subsidiary Guarantor.

         

      (v)    An intellectual property security agreement in substantially the
form of Exhibit C to the Security Agreement (together with each other
intellectual property security agreement and intellectual property security
agreement supplement delivered pursuant to Section 5.01(j), in each case as
amended, the "Intellectual Property Security Agreement"), duly executed by each
Loan Party, together with evidence that all action that the Administrative Agent
may deem necessary or desirable in order to perfect and protect the first
priority liens and security interests created under the Intellectual Property
Security Agreement has been taken.

         

      (vi)    Certified copies of the resolutions of the Board of Directors of
each Loan Party approving the transactions contemplated hereby and each Loan
Document to which it is or is to be a party, and of all documents evidencing
other necessary corporate action and governmental and other third party
approvals and consents, if any, with respect to the transactions contemplated
hereby and each Loan Document to which it is or is to be a party.

         

      (vii)    A copy of a certificate of the Secretary of State of the
jurisdiction of organization of each Loan Party, dated reasonably near the date
of the Initial Extension of Credit, certifying (A) as to a true and correct copy
of the charter or other constitutive document of such Loan Party and each
amendment thereto on file in such Secretary's office and (B) that (1) such
amendments are the only amendments to such Loan Party's charter or other
constitutive document on file in such Secretary's office, (2) such Loan Party
has paid all franchise taxes to the date of such certificate and (3) such Loan
Party is duly organized and in good standing or presently subsisting under the
laws of the State of the jurisdiction of its organization.

         

      (viii)    A certificate of each Loan Party, signed on behalf of such Loan
Party by its President or a Vice President and its Secretary or any Assistant
Secretary, dated the

<PAGE>  40

   

date of the Initial Extension of Credit (the statements made in which
certificate shall be true on and as of the date of the Initial Extension of
Credit), certifying as to (A) the absence of any amendments to the charter or
other constitutive document of such Loan Party since the date of the Secretary
of State's certificate referred to in Section 3.01(a)(v), (B) a true and correct
copy of the bylaws or other governing document of such Loan Party as in effect
on the date on which the resolutions referred to in Section 3.01(a)(iv) were
adopted and on the date of the Initial Extension of Credit, (C) the due
organization and good standing or valid existence of such Loan Party under the
laws of the jurisdiction of its organization, and the absence of any proceeding
for the dissolution or liquidation of such Loan Party, (D) the truth of the
representations and warranties contained in the Loan Documents as though made on
and as of the date of the Initial Extension of Credit and (E) the absence of any
event occurring and continuing, or resulting from the Initial Extension of
Credit, that constitutes a Default.

         

      (ix)    A certificate of the Secretary or an Assistant Secretary of each
Loan Party certifying the names and true signatures of the officers of such Loan
Party authorized to sign each Loan Document to which it is or is to be a party
and the other documents to be delivered hereunder and thereunder.

         

      (x)    Copies of the Acquisition Documents, which shall be in form and
substance satisfactory to the Lender Parties, together with all agreements,
instruments and other documents delivered in connection therewith as the
Administrative Agent shall request.

         

      (xi)    Certificate in substantially the form of Exhibit F hereto,
attesting to the Solvency of the Loan Parties, before and after giving effect to
the Acquisition and the transactions contemplated hereby, from its Chief
Financial Officer or Treasurer, as the case may be.

         

      (xii)    Such financial, business and other information regarding each
Loan Party, the Acquired Businesses and their respective Subsidiaries as the
Administrative Agent shall have requested, including, without limitation: (A)
audited combined financial statements of the Acquired Businesses and their
respective Subsidiaries for the fiscal year ended December 31, 2002, (B) an
unaudited income statement of the Acquired Businesses and their respective
Subsidiaries for the Fiscal Quarter ended March 31, 2003, (C) pro forma
Consolidated balance sheet of the Borrower and its Subsidiaries giving effect to
the Acquisition for the Fiscal Quarter ending immediately prior to closing,
which in each case, shall meet the requirements of Regulation S-X under the
Securities Act of 1933, as amended, and all other accounting rules and
regulations of the SEC promulgated thereunder, and (D) a written certification
from the Chief Financial Officer that the pro forma financial statements
delivered pursuant to clause (C) above and the forecasts heretofore delivered to
the Administrative Agent were prepared in good faith on the basis of the
assumptions stated therein, which assumptions are fair and reasonable in light
of then existing conditions.

         

      (xiii)    Evidence of insurance naming the Collateral Agent as additional
insured and loss payee with such responsible and reputable insurance companies
or associations, and in such amounts and covering such risks, as is satisfactory
to the Lender Parties, including, without limitation, business interruption
insurance with a reputable insurer and on terms and in amounts reasonably
acceptable to the Administrative Agent.

<PAGE>  41

   

      (xiv)    Copies of each employment agreement and other compensation
arrangement with each executive officer of any Loan Party or any of its
Subsidiaries as the Administrative Agent shall request.

         

      (xv)    Copies of all Material Contracts of each Loan Party and its
Subsidiaries as the Administrative Agent shall request.

         

      (xvi)    A Notice of Borrowing or Notice of Issuance, as applicable,
relating to the Initial Extension of Credit.

         

      (xvii)    A favorable opinion of Perkins Coie LLP, counsel for the Loan
Parties, in substantially the form of Exhibit G hereto and as to such other
matters as the Administrative Agent may reasonably request.

       

      (b)  The Administrative Agent shall be reasonably satisfied with, after
giving effect to the Acquisition (and other related transactions, including any
related mergers), the corporate and legal structure and capitalization of each
Loan Party and each of its Subsidiaries, including the terms and conditions of
the charter, bylaws or other constitutive documents and each class of Equity
Interest in each Loan Party and each such Subsidiary and of each agreement or
instrument relating to such structure or capitalization.

     

      (c)  The Administrative Agent shall be satisfied that all Existing Debt,
other than Surviving Debt, has been prepaid, redeemed or defeased in full or
otherwise satisfied and extinguished from cash on hand of the Borrower and all
commitments relating thereto terminated and that all Surviving Debt shall be on
terms and conditions satisfactory to the Administrative Agent.

     

      (d)  There shall have occurred no Material Adverse Change since January
31, 2003.

     

      (e)  There shall exist no action, suit, investigation, litigation or
proceeding affecting any Loan Party, the Acquired Businesses or any of their
respective Subsidiaries pending or threatened before any Governmental Authority
that (i) could be reasonably likely to have a Material Adverse Effect,
(ii) purports to affect the legality, validity or enforceability of any Loan
Document, (iii) seeks to enjoin, restrain, restrict, set aside or prohibit, to
impose material conditions upon, or to obtain substantial damages in respect of,
the consummation of the Acquisition or the transactions relating thereto or
contemplated hereby or (iv) in the reasonable opinion of the
Bookrunner/Co-Arranger, is material to the Borrower and its Subsidiaries, taken
as a whole, or any of their respective assets, business operations or financial
condition.

     

      (f)  There shall be no pending or threatened litigation, proceeding,
bankruptcy or insolvency, injunction, order or claim with respect to the
Borrower, the Acquired Businesses or any of their respective Subsidiaries that
is material to the Borrower and its Subsidiaries, taken as a whole.

     

      (g)  All Governmental Authorizations and third party consents and
approvals necessary in connection with the Acquisition (and any related mergers)
and the transactions contemplated hereby shall have been obtained (without the
imposition of any conditions that are not acceptable to the Lender Parties) and
shall remain in effect; all applicable waiting periods in connection with the
transactions contemplated hereby shall have expired without any action being
taken by any competent authority, and no law or regulation shall be applicable
in the judgment of the Lender Parties, in each case that restrains, prevents or
imposes materially adverse conditions upon the

<PAGE>  42

 

Acquisition (and any related mergers) and the transactions contemplated hereby
or the rights of the Loan Parties or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them.

     

      (h)  The Borrower shall have paid all accrued fees of the Agents and the
Lender Parties and all accrued expenses of the Agents (including the accrued
fees and expenses of counsel to the Administrative Agent and local counsel to
the Lender Parties).

     

      (i)  The Acquisition and related transactions shall have been consummated
for a purchase price not in excess of [POUND] 55,000,000 (excluding transaction
costs and expenses) strictly in accordance with the terms of the Acquisition
Agreement, without any waiver or amendment not consented to by the
Administrative Agent of any term, provision or condition set forth therein, and
in compliance with all applicable laws. The Administrative Agent shall be
reasonably satisfied with the Acquisition Documents and all legal, tax and other
matters relating to the Acquisition or to the Borrower and its Subsidiaries
after giving effect thereto. The Acquisition Agreement shall be in full force
and effect.

     

      (j)  Neither the Administrative Agent nor the Bookrunner/ Co-Arranger
shall have become aware of any information, event, change or other matter that
is inconsistent with any confidential information or other matter previously
disclosed to them.

     

      (k)  The Bookrunner/ Co-Arranger and the Administrative Agent shall be
reasonably satisfied that (i) Pro Forma EBITDA (as determined by the
Administrative Agent) of the Borrower and its Subsidiaries for the four
consecutive quarterly periods ending with the last calendar quarter immediately
preceding the date hereof shall not be less than $75,000,000; and (ii) the
Leverage Ratio (as determined by the Administrative Agent) of the Borrower and
its Subsidiaries (after giving effect to the Acquisition on a pro forma basis as
if the Acquisition had been consummated on the first day of the most recently
completed four consecutive Fiscal Quarters) shall not exceed 2.5:1.0 as of the
date hereof.

      SECTION 3.02.  Conditions Precedent to Each Borrowing and Issuance and
Renewal. The obligation of each Appropriate Lender to make an Advance (other
than a Letter of Credit Advance made by the Issuing Bank or a Revolving Credit
Lender pursuant to Section 2.03(c) and a Swing Line Advance made by a Revolving
Credit Lender pursuant to Section 2.02(b)) on the occasion of each Borrowing
(including the initial Borrowing), and the obligation of each Issuing Bank to
issue a Letter of Credit (including the initial issuance) or renew a Letter of
Credit and the right of the Borrower to request a Swing Line Borrowing, shall be
subject to the further conditions precedent that on the date of such Borrowing
or issuance or renewal (a) the following statements shall be true (and each of
the giving of the applicable Notice of Borrowing, Notice of Swing Line Borrowing
or Notice of Issuance or Notice of Renewal and the acceptance by the Borrower of
the proceeds of such Borrowing or of such Letter of Credit or the renewal of
such Letter of Credit shall constitute a representation and warranty by the
Borrower that both on the date of such notice and on the date of such Borrowing
or issuance or renewal such statements are true):

 

      (i)    the representations and warranties contained in each Loan Document
are correct in all material respects on and as of such date, before and after
giving effect to such Borrowing or issuance or renewal and to the application of
the proceeds therefrom, as though made on and as of such date, other than any
such representations or warranties that, by their express terms, refer to a
specific date other than the date of such Borrowing or issuance or renewal, in
which case as of such specific date; and

<PAGE>  43

 

      (ii)    no Default has occurred and is continuing, or would result from
such Borrowing or issuance or renewal or from the application of the proceeds
therefrom.

      (b)  The Administrative Agent shall have received such other approvals,
opinions (including but not limited to reliance letters with respect to any
legal opinions), documents or information as the Administrative Agent may
reasonably request.

      SECTION 3.03.  Determinations Under Section 3.01. For purposes of
determining compliance with the conditions specified in Section 3.01, each
Lender Party shall be deemed to have consented to, approved or accepted or to be
satisfied with each document or other matter required thereunder to be consented
to or approved by or acceptable or satisfactory to the Lender Parties unless an
officer of the Administrative Agent responsible for the transactions
contemplated by the Loan Documents shall have received notice from such Lender
Party prior to the Initial Extension of Credit specifying its objection thereto
and, if the Initial Extension of Credit consists of a Borrowing, such Lender
Party shall not have made available to the Administrative Agent such Lender
Party's ratable portion of such Borrowing.

ARTICLE IV

REPRESENTATIONS AND WARRANTIES

      SECTION 4.01.  Representations and Warranties of the Loan Parties.  Each
Loan Party represents and warrants as follows:

 

      (a)  Each Loan Party and each of its Subsidiaries (i) is a duly organized,
validly existing and in good standing under the laws of the jurisdiction of its
organization, (ii) is duly qualified and in good standing as a foreign
corporation in each other jurisdiction in which it owns or leases property or in
which the conduct of its business requires it to so qualify or be licensed
except where the failure to so qualify or be licensed could not be reasonably
likely to have a Material Adverse Effect and (iii) has all requisite corporate
power and authority (including, without limitation, all Governmental
Authorizations) to own or lease and operate its properties and to carry on its
business as now conducted and as proposed to be conducted. All of the
outstanding Equity Interests in the Borrower have been validly issued, are fully
paid and non-assessable and are owned free and clear of all Liens, except those
created under the Collateral Documents.

     

      (b)  Set forth on Schedule 4.01(b) hereto is a complete and accurate list
of all Subsidiaries of each Loan Party, showing as of the date hereof (as to
each such Subsidiary) the jurisdiction of its organization, the number of shares
of each class of its Equity Interests authorized, and the number outstanding, on
the date hereof and the percentage of each such class of its Equity Interests
owned (directly or indirectly) by such Loan Party and the number of shares
covered by all outstanding options, warrants, rights of conversion or purchase
and similar rights at the date hereof. All of the outstanding Equity Interests
in each Loan Party's Subsidiaries have been validly issued, are fully paid and
non-assessable and are owned by such Loan Party or one or more of its
Subsidiaries free and clear of all Liens, except those created under the
Collateral Documents.

     

      (c)  The execution, delivery and performance by each Loan Party of each
Loan Document to which it is or is to be a party, and the consummation of the
transactions contemplated hereby, are within such Loan Party's corporate powers,
have been duly authorized by all necessary corporate action, and do not
(i) contravene such Loan Party's constitutive or governing

<PAGE>  44

 

documents, (ii) violate any law, rule, regulation (including, without
limitation, Regulation X of the Board of Governors of the Federal Reserve
System), order, writ, judgment, injunction, decree, determination or award,
(iii) conflict with or result in the breach of, or constitute a default or
require any payment to be made under, any contract, loan agreement, indenture,
mortgage, deed of trust, lease or other instrument binding on or affecting any
Loan Party, any of its Subsidiaries or any of their properties, including,
without limitation, the Senior Subordinated Indenture or (iv) except for the
Liens created under the Loan Documents, result in or require the creation or
imposition of any Lien upon or with respect to any of the properties of any Loan
Party or any of its Subsidiaries. No Loan Party or any of its Subsidiaries is in
violation of any such law, rule, regulation, order, writ, judgment, injunction,
decree, determination or award or in breach of any such contract, loan
agreement, indenture, mortgage, deed of trust, lease or other instrument, the
violation or breach of which could be reasonably likely to have a Material
Adverse Effect.

     

      (d)  No Governmental Authorization, and no notice to or filing with, any
Governmental Authority or any other third party in the United States is required
for (i) the due execution, delivery, recordation, filing or performance by any
Loan Party of any Loan Document to which it is or is to be a party, or for the
consummation of the transactions contemplated hereby, (ii) the grant by any Loan
Party of the Liens granted by it pursuant to the Collateral Documents, (iii) the
perfection or maintenance of the Liens created under the Collateral Documents
(including the first priority nature thereof, except with respect to liens
permitted under Section 5.02(a)(ii)), or (iv) the exercise by any Agent or any
Lender Party of its rights under the Loan Documents or the remedies in respect
of the Collateral pursuant to the Collateral Documents, except for the
authorizations, approvals, actions, notices and filings listed on
Schedule 4.01(d) hereto, all of which have been duly obtained, taken, given or
made and are in full force and effect. All applicable waiting periods in
connection with the transactions contemplated hereby have expired without any
action having been taken by any competent authority restraining, preventing or
imposing materially adverse conditions upon the transactions contemplated hereby
or the rights of the Loan Parties or their Subsidiaries freely to transfer or
otherwise dispose of, or to create any Lien on, any properties now owned or
hereafter acquired by any of them. The Acquisition has been consummated in
accordance with the Acquisition Agreement and applicable law.

     

      (e)  This Agreement has been, and each other Loan Document when delivered
hereunder will have been, duly executed and delivered by each Loan Party party
thereto. This Agreement is, and each other Loan Document when delivered
hereunder will be, the legal, valid and binding obligation of each Loan Party
party thereto, enforceable against such Loan Party in accordance with its terms.

     

      (f)  There is no action, suit, investigation, litigation or proceeding
affecting any Loan Party or any of its Subsidiaries, including any Environmental
Action, pending or threatened before any Governmental Authority or arbitrator
that (i) could be reasonably likely to have a Material Adverse Effect or
(ii) purports to affect the legality, validity or enforceability of any Loan
Document or the consummation of the transactions contemplated hereby.

     

      (g)  The Consolidated balance sheet of the Borrower and its Subsidiaries
as at October 25, 2002, and the related Consolidated and consolidating
statements of income and Consolidated statement of cash flows of the Borrower
and its Subsidiaries for the fiscal year then ended, accompanied by (in the case
of Consolidated statements) an unqualified opinion of Ernst & Young, independent
public accountants, and the Consolidated balance sheet of the Borrower and its
Subsidiaries as at January 31, 2003, and the related Consolidated and
consolidating statements of income and Consolidated statement of cash flows of
the Borrower and its Subsidiaries for the three months then ended, duly
certified by the Chief Financial Officer, copies of which have been

<PAGE>  45

 

furnished to each Lender Party, fairly present the Consolidated and
consolidating financial condition of the Borrower and its Subsidiaries as at
such dates and the Consolidated and consolidating results of operations of the
Borrower and its Subsidiaries for the periods ended on such dates, all in
accordance with generally accepted accounting principles applied on a consistent
basis, and (i) for the period through the Effective Date, since October 25,
2002, and (ii) for the period after the Effective Date, since the Effective
Date, there has been no Material Adverse Change.

     

      (h)  The Consolidated pro forma balance sheet of the Borrower and its
Subsidiaries as at January 31, 2003, and the related Consolidated and
consolidating pro forma statements of income and cash flows of the Borrower and
its Subsidiaries for the three months then ended, certified by the Chief
Financial Officer, copies of which have been furnished to each Lender Party,
fairly present the Consolidated and consolidating pro forma financial condition
of the Borrower and its Subsidiaries as at such date and the Consolidated and
consolidating pro forma results of operations of the Borrower and its
Subsidiaries for the period ended on such date, in each case giving effect to
the Acquisition and the transactions contemplated hereby, all in accordance with
GAAP.

     

      (i)  The Consolidated and consolidating forecasted balance sheets,
statements of income and statement of cash flows of the Borrower and its
Subsidiaries delivered to the Lender Parties pursuant to Section 3.01(a)(xvii)
or 5.03 were prepared in good faith on the basis of the assumptions stated
therein, which assumptions were fair in light of the conditions existing at the
time of delivery of such forecasts, and represented, at the time of delivery,
the Borrower's best estimate of its future financial performance.

     

      (j)  Neither the Confidential Information Memorandum nor any other
information, exhibit or report furnished by or on behalf of any Loan Party to
any Agent or any Lender Party in connection with the negotiation and syndication
of the Loan Documents or pursuant to the terms of the Loan Documents contained
any untrue statement of a material fact or omitted to state a material fact
necessary to make the statements made therein not misleading.

     

      (k)  The Borrower is not engaged in the business of extending credit for
the purpose of purchasing or carrying Margin Stock, and no proceeds of any
Advance or drawings under any Letter of Credit will be used to purchase or carry
any Margin Stock or to extend credit to others for the purpose of purchasing or
carrying any Margin Stock.

     

      (l)  Neither any Loan Party nor any of its Subsidiaries is an "investment
company", or an "affiliated person" of, or "promoter" or "principal underwriter"
for, an "investment company", as such terms are defined in the Investment
Company Act of 1940, as amended. Neither any Loan Party nor any of its
Subsidiaries is a "holding company", or a "subsidiary company" of a "holding
company", or an "affiliate" of a "holding company" or of a "subsidiary company"
of a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended. Neither the making of any Advances, nor the
issuance of any Letters of Credit, nor the application of the proceeds or
repayment thereof by the Borrower, nor the consummation of the other
transactions contemplated by the Loan Documents, will violate any provision of
any such Act or any rule, regulation or order of the Securities and Exchange
Commission thereunder.

     

      (m)  Neither any Loan Party nor any of its Subsidiaries is a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any charter (or constitutive) or corporate restriction
that could be reasonably likely to have a Material Adverse Effect.

<PAGE>  46

 

      (n)  All filings and other actions necessary or desirable in the United
States to perfect and protect the security interest in the Collateral created
under the Collateral Documents have been duly made or taken and are in full
force and effect, other than the entering into of deposit account control
agreements in accordance with Section 9-312(b)(1) and (2) of the UCC. The
Collateral Documents create in favor of the Collateral Agent for the benefit of
the Secured Parties a valid and, together with such filings and other actions,
perfected first priority security interest in the Collateral to the extent such
security interest can be perfected in the United States (except to the extent
that deposits account control agreements have not been entered into and for the
liens permitted under the Loan Documents) securing the payment of the Secured
Obligations, and all filings and other actions necessary or desirable to perfect
and protect such security interest in the United States have been duly taken.
The Loan Parties are the legal and beneficial owners of the Collateral free and
clear of any Lien, except for the liens and security interests created or
permitted under the Loan Documents.

     

      (o)  Each Loan Party is, individually and together with its Subsidiaries,
Solvent.

     

      (p)  (i)  The operations and properties of each Loan Party and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws and Environmental Permits, all past non-compliance with such Environmental
Laws and Environmental Permits has been resolved without any material ongoing
obligations or costs, and no circumstances exist that could be reasonably likely
to (A) form the basis of an Environmental Action against any Loan Party or any
of its Subsidiaries or any of their properties that could reasonably be expected
to have a Material Adverse Effect or (B) cause any such property to be subject
to any restrictions on ownership, occupancy, use or transferability under any
Environmental Law.

     

      (ii)    (A) None of the properties currently or formerly owned or operated
by any Loan Party or any of its Subsidiaries is listed on the NPL, or on the
CERCLIS, or, to the best of our knowledge, on any analogous foreign, state or
local list, or, to the best of our knowledge, proposed for listing on the NPL or
on the CERCLIS or any analogous foreign, state or local list; (B) except as
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect, there are no and never have been any underground or
aboveground storage tanks or any surface impoundments, septic tanks, pits, sumps
or lagoons in which Hazardous Materials are being or have been treated, stored
or disposed on any property currently owned or operated by any Loan Party or any
of its Subsidiaries or, to the best of its knowledge, on any property formerly
owned or operated by any Loan Party or any of its Subsidiaries; (C) except as
individually or in the aggregate could not reasonably be expected to have a
Material Adverse Effect, there is no asbestos or asbestos-containing material on
any property currently owned or operated by any Loan Party or any of its
Subsidiaries; and (D) except as individually or in the aggregate could not
reasonably be expected to have a Material Adverse Effect, Hazardous Materials
have not been released, discharged or disposed of on any property currently or
formerly owned or operated by any Loan Party or any of its Subsidiaries.

     

      (iii)    Neither any Loan Party nor any of its Subsidiaries is
undertaking, and has not completed, either individually or together with other
potentially responsible parties, any investigation or assessment or remedial or
response action relating to any actual or threatened release, discharge or
disposal of Hazardous Materials at any site, location or operation, either
voluntarily or pursuant to the order of any governmental or regulatory authority
or the requirements of any Environmental Law that could reasonably be expected
to have a Material Adverse Effect; and all Hazardous Materials generated, used,
treated, handled or stored at, or transported to or from, any property currently
or formerly owned or operated by any Loan Party

<PAGE>  47

 

or any of its Subsidiaries have been disposed of in a manner not reasonably
expected to result in material liability to any Loan Party or any of its
Subsidiaries.

     

      (q)  (i)  Neither any Loan Party nor any of its Subsidiaries is party to
any tax sharing agreement other than a tax sharing agreement approved by the
Required Lenders.

     

      (ii)    Each Loan Party and each of its Subsidiaries and Affiliates has
filed, has caused to be filed or has been included in all Tax Returns required
to be filed and has paid all taxes shown thereon to be due, together with
applicable interest and penalties.

     

      (iii)    Set forth on Schedule 4.01(q) hereto is a complete and accurate
list, as of the date hereof, of each taxable year of each Loan Party and each of
its Subsidiaries and Affiliates for which Federal income tax returns have been
filed and for which the expiration of the applicable statute of limitations for
assessment or collection has not occurred by reason of extension or otherwise
(an "Open Year").

     

      (iv)    As of the date hereof, no issues have been raised by the Internal
Revenue Service in any manner whatsoever, whether by proposed adjustment or
otherwise, with respect to federal income tax liability of the Loan Parties of
any of their respective Subsidiaries and Affiliates for any Open Years that, in
the aggregate, could be reasonably likely to have a Material Adverse Effect.

     

      (v)    As of the date hereof, no issues have been raised by any state,
local and foreign taxing authority in any manner whatsoever, whether by proposed
adjustment or otherwise, with respect to the state, local and foreign tax
liability of the Loan Parties or any of their respective Subsidiaries and
Affiliates for any Open Year that, in the aggregate, could be reasonably likely
to have a Material Adverse Effect.

     

      (vi)    The Acquisition will not be taxable to the Borrower or any of its
Subsidiaries or Affiliates.

     

      (vii)    No "ownership change" as defined in Section 382(g) of the
Internal Revenue Code, and no event that would result in the application of the
"separate return limitation year" or "consolidated return change of ownership"
limitations under the applicable Treasury Regulations, has occurred with respect
to the Borrower.

     

      (r)  Neither the business nor the properties of any Loan Party or any of
its Subsidiaries are affected by any fire, explosion, accident, strike, lockout
or other labor dispute, drought, storm, hail, earthquake, embargo, act of God or
of the public enemy or other casualty (whether or not covered by insurance) that
could be reasonably likely to have a Material Adverse Effect.

     

      (s)  Set forth on Schedule 4.01(s) hereto is a complete and accurate list
of all Existing Debt (other than Surviving Debt), showing as of the date hereof
the obligor and the principal amount outstanding thereunder.

     

      (t)  Set forth on Schedule 4.01(t) hereto is a complete and accurate list
of all Surviving Debt, showing as of the date hereof the obligor and the
principal amount outstanding thereunder, the maturity date thereof and the
amortization schedule therefor.

     

      (u)  Set forth on Schedule 4.01(u) hereto is a complete and accurate list
of all Liens of each U.S. Loan Party on the property or assets located in the
United States of any such Loan

<PAGE>  48

 

Party or any of its U.S. Subsidiaries , showing as of the date hereof the
lienholder thereof, the principal amount of the obligations secured thereby and
the property or assets of such Loan Party or such Subsidiary subject thereto.

     

      (v)  Set forth on Schedule 4.01(v) hereto is a complete and accurate list
of all real property owned by any Loan Party or any of its Subsidiaries, showing
as of the date hereof the street address, county or other relevant jurisdiction,
state, record owner and replacement value thereof. Each Loan Party or such
Subsidiary has good, marketable and insurable fee simple title to such real
property, free and clear of all Liens, other than Liens created or permitted by
the Loan Documents.

     

      (w)  Set forth on Schedule 4.01(w) hereto is a complete and accurate list
of all leases of real property under which any Loan Party or any of its
Subsidiaries is the lessee, showing as of the date hereof the street address,
city or other relevant jurisdiction, state, lessor, lessee, expiration date and
annual rental cost thereof. Each such lease is the legal, valid and binding
obligation of the lessor thereof, enforceable in accordance with its terms.

     

      (x)  Set forth on Schedule 4.01(x) hereto is a complete and accurate list
of all Investments held by any Loan Party or any of its Subsidiaries on the date
hereof, showing as of the date hereof the amount, obligor or issuer and
maturity, if any, thereof.

     

      (y)  Set forth on Schedule 4.01(y) hereto is a complete and accurate list
of all U.S. patents, trademarks, trade names, service marks and copyrights, and
all applications therefor and licenses thereof, of each U.S. Loan Party or any
of its U.S. Subsidiaries, showing as of the date hereof, if registered, the
jurisdiction in which registered, the registration number, the date of
registration and the expiration date.

     

      (z)  Set forth on Schedule 4.01(z) hereto is a complete and accurate list
of all Material Contracts of each Loan Party and its Subsidiaries, showing as of
the date hereof the parties, subject matter and term thereof. Each such Material
Contract has been duly authorized, executed and delivered by all parties
thereto, has not been amended or otherwise modified, is in full force and effect
and is binding upon and enforceable against all parties thereto in accordance
with its terms, and there exists no default under any Material Contract by any
party thereto.

     

      (aa)    (i)    No ERISA Event has occurred or is reasonably expected to
occur with respect to any Plan.

         

      (ii)    Schedule B (Actuarial Information) to the most recent annual
report (Form 5500 Series) for each Plan, copies of which have been filed with
the Internal Revenue Service and furnished to the Lender Parties, is complete
and accurate in all material respects and fairly presents the funding status of
such Plan, and since the date of such Schedule B there has been no material
adverse change in such funding status.

         

      (iii)    Neither any Loan Party nor any ERISA Affiliate has incurred or is
reasonably expected to incur any material Withdrawal Liability to any
Multiemployer Plan.

         

      (iv)    Neither any Loan Party nor any ERISA Affiliate has been notified
by the sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or has been terminated, within the meaning of Title IV of ERISA,
and no such Multiemployer

<PAGE>  49

   

Plan is reasonably expected to be in reorganization or to be terminated, within
the meaning of Title IV of ERISA.

     

      (bb)    The Obligations of the Borrower under this Agreement constitute
"Senior Debt" and "Designated Senior Debt" under and for all purposes of the
Senior Subordinated Indenture.

ARTICLE V

COVENANTS OF THE LOAN PARTIES

      SECTION 5.01.  Affirmative Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, each Loan Party will:

      (a)  Compliance with Laws, Etc. Comply, and cause each of its Subsidiaries
to comply, in all material respects, with all applicable laws, rules,
regulations and orders, such compliance to include, without limitation,
compliance with ERISA and the Racketeer Influenced and Corrupt Organizations
Chapter of the Organized Crime Control Act of 1970, as amended, except to the
extent that any non-compliance, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect.

     

      (b)  Payment of Taxes, Etc. Pay and discharge, and cause each of its
Subsidiaries to pay and discharge, before the same shall become delinquent,
(i) all material taxes, assessments and governmental charges or levies imposed
upon it or upon its property and (ii) all lawful claims that, if unpaid, might
by law become a Lien upon its property; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to pay or discharge any
such tax, assessment, charge, levy or claim that is being contested in good
faith and by appropriate proceedings and as to which adequate reserves in
accordance with GAAP are being maintained, unless and until any Lien resulting
therefrom attaches to its property and becomes enforceable against its other
creditors.

     

      (c)  Compliance with Environmental Laws. Comply, and cause each of its
Subsidiaries and all lessees and other Persons operating or occupying its
properties to comply, in all material respects, with all applicable
Environmental Laws and Environmental Permits; obtain and renew, and cause each
of its Subsidiaries to obtain and renew, all Environmental Permits necessary for
its operations and properties; and conduct, and cause each of its Subsidiaries
to conduct, any investigation, study, sampling and testing, and undertake any
cleanup, removal, remedial or other action necessary to remove and clean up all
Hazardous Materials from any of its properties, in accordance with the
requirements of all Environmental Laws; provided, however, that neither the
Borrower nor any of its Subsidiaries shall be required to undertake any such
cleanup, removal, remedial or other action to the extent that its obligation to
do so is being contested in good faith and by proper proceedings and appropriate
reserves are being maintained with respect to such circumstances.

     

      (d)  Maintenance of Insurance. Maintain, and cause each of its
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations in such amounts and covering such risks as is usually
carried by companies engaged in similar businesses and owning similar properties
in the same general areas in which any Loan Party or any of its Subsidiaries
operates.

<PAGE>  50

 

      (e)  Preservation of Corporate Existence, Etc. Preserve and maintain, and
cause each of its Subsidiaries to preserve and maintain, its existence, legal
structure, legal name, rights (charter and statutory), permits, licenses,
approvals, privileges and franchises; provided, however, that the Borrower may
consummate the Acquisition and any other merger or consolidation expressly
permitted under Section 5.02(d) or liquidate or dissolve any Subsidiary that has
no assets or has sold, disposed of or otherwise disposed of all of its assets to
a Loan Party.

     

      (f)  Visitation Rights. At any reasonable time and from time to time, upon
reasonable notice, permit any of the Agents or any of the Lender Parties, or any
agents or representatives thereof, to examine and make copies of and abstracts
from the records and books of account of, and visit the properties of, the
Borrower and any of its Subsidiaries, and to discuss the affairs, finances and
accounts of the Borrower and any of its Subsidiaries with any of their officers
or directors and with their independent certified public accountants, which
shall be at the expense of the Borrower only if an Event of Default has occurred
and is continuing.

     

      (g)  Keeping of Books. Keep, and cause each of its Subsidiaries to keep,
proper books of record and account, in which full and correct entries shall be
made of all financial transactions and the assets and business of the Borrower
and each such Subsidiary in accordance with generally accepted accounting
principles in effect from time to time.

     

      (h)  Maintenance of Properties, Etc. Maintain and preserve, and cause each
of its Subsidiaries to maintain and preserve, all of its properties that are
used or useful in the conduct of its business in good working order and
condition, ordinary wear and tear excepted.

     

      (i)  Transactions with Affiliates. Conduct, and cause each of its
Subsidiaries to conduct, all transactions otherwise permitted under the Loan
Documents with any of their Affiliates on terms that are fair and reasonable and
no less favorable to the Borrower or such Subsidiary than it would obtain in a
comparable arm's-length transaction with a Person not an Affiliate.

     

      (j)  Covenant to Guarantee Obligations and Give Security. Upon (x) the
request of the Collateral Agent following the occurrence and during the
continuance of an Event of Default, (y) the formation or acquisition of any new
direct or indirect Subsidiaries by any Loan Party or (z) the acquisition of any
property (other than real property except as provided by clause (x)) by any Loan
Party, and such property, in the judgment of the Collateral Agent, shall not
already be subject to a perfected first priority security interest in favor of
the Collateral Agent for the benefit of the Secured Parties (except as otherwise
expressly permitted under the Loan Documents), then in each case at the
Borrower's expense:

   

 

      (i)    in connection with the formation or acquisition of a Subsidiary
that is not (x) a CFC or (y) a Subsidiary that is held directly or indirectly by
a CFC, within 30 days after such formation or acquisition, cause each such
Subsidiary, and cause each direct and indirect parent of such Subsidiary (if it
has not already done so), to duly execute and deliver to the Collateral Agent a
guaranty or guaranty supplement, in form and substance satisfactory to the
Collateral Agent, guaranteeing the other Loan Parties' obligations under the
Loan Documents,

         

      (ii)    within 5 Business Days after (A) such request furnish to the
Collateral Agent a description of the personal properties of the Loan Parties
and their respective Subsidiaries in detail satisfactory to the Collateral Agent
and (B) such formation or acquisition, furnish to the Collateral Agent a
description of the real and personal

<PAGE>  51

   

properties of such Subsidiary or the real and personal properties so acquired,
in each case in detail satisfactory to the Collateral Agent,

         

      (iii)    within 30 days after (A) such request or acquisition of property
by any Loan Party, duly execute and deliver, and cause each Loan Party to duly
execute and deliver, to the Collateral Agent such additional mortgages, pledges,
assignments, security agreement supplements, intellectual property security
agreement supplements and other security agreements as specified by, and in form
and substance satisfactory to the Collateral Agent, securing payment of all the
Obligations of such Loan Party under the Loan Documents and constituting Liens
on all such properties and (B) such formation or acquisition of any new
Subsidiary, duly execute and deliver and cause each Subsidiary to duly execute
and deliver to the Collateral Agent mortgages, pledges, assignments, security
agreement supplements, intellectual property security agreement supplements and
other security agreements as specified by, and in form and substance
satisfactory to the Collateral Agent, securing payment of all of the obligations
of such Subsidiary under the Loan Documents; provided that (1) the stock of any
Subsidiary held directly or indirectly by a CFC shall not be pledged, (2) if
such new property is Equity Interests in a CFC, only 65% of such Equity
Interests shall be pledged in favor of the Secured Parties, and (3) mortgages on
real estate shall only be required under the circumstances of clause (x) above,

         

      (iv)    within 30 days after such request, formation or acquisition, take,
and cause each Loan Party and each newly acquired or newly formed Subsidiary
(other than any Subsidiary that is a CFC or a Subsidiary that is held directly
or indirectly by a CFC) to take, whatever action (including, without limitation,
the recording of mortgages, the filing of Uniform Commercial Code financing
statements, the giving of notices and the endorsement of notices on title
documents) may be necessary or advisable in the opinion of the Collateral Agent
to vest in the Collateral Agent (or in any representative of the Collateral
Agent designated by it) valid and subsisting Liens on the properties purported
to be subject to the mortgages (to the extent required), pledges, assignments,
security agreement supplements, intellectual property security agreement
supplements and security agreements delivered pursuant to this Section 5.01(j),
enforceable against all third parties in accordance with their terms,

         

      (v)    within 30 days after such request, formation or acquisition,
deliver to the Collateral Agent, upon the request of the Collateral Agent in its
sole discretion, a signed copy of a favorable opinion, addressed to the
Collateral Agent and the other Secured Parties, of counsel for the Loan Parties
acceptable to the Collateral Agent as to (1) the matters contained in
clauses (i), (iii) and (iv) above, (2) such guaranties, guaranty supplements,
mortgages (to the extent required), pledges, assignments, security agreement
supplements, intellectual property security agreement supplements and security
agreements being legal, valid and binding obligations of each Loan Party party
thereto enforceable in accordance with their terms, as to the matters contained
in clause (iv) above, (3) such recordings, filings, notices, endorsements and
other actions being sufficient to create valid perfected Liens on such
properties, and (4) such other matters as the Collateral Agent may reasonably
request,

         

      (vi)    if at any time the Collateral Agent shall have required mortgages
to be delivered with respect to real property pursuant to clause (iii) above,
then as promptly as practicable after such request, formation or acquisition,
deliver, upon the request of the Collateral Agent in its sole discretion, to the
Collateral Agent with respect to each parcel

<PAGE>  52

   

of real property owned or held by each Loan Party and each newly acquired or
newly formed Subsidiary (other than any Subsidiary that is a CFC or a Subsidiary
that is held directly or indirectly by a CFC) title reports, surveys and
engineering, soils and other reports, and environmental assessment reports, each
in scope, form and substance satisfactory to the Collateral Agent, provided,
however, that to the extent that any Loan Party or any of its Subsidiaries shall
have otherwise received any of the foregoing items with respect to such real
property, such items shall, promptly after the receipt thereof, be delivered to
the Collateral Agent, and

         

      (vii)    at any time and from time to time, promptly execute and deliver,
and cause to execute and deliver, each Loan Party and each newly acquired or
newly formed Subsidiary (other than any Subsidiary that is a CFC or a Subsidiary
that is held directly or indirectly by a CFC) any and all further instruments
and documents and take, and cause each Loan Party and each newly acquired or
newly formed Subsidiary (other than any Subsidiary that is a CFC or a Subsidiary
that is held directly or indirectly by a CFC) to take, all such other action as
the Collateral Agent may deem reasonably necessary or desirable in obtaining the
full benefits of, or in perfecting and preserving the Liens of, such guaranties,
mortgages (to the extent required), pledges, assignments, security agreement
supplements, intellectual property security agreement supplements and security
agreements.

     

      (k)  Further Assurances.  (i)  Promptly upon request by any Agent, or any
Lender Party through the Administrative Agent, correct, and cause each of its
Subsidiaries promptly to correct, any material defect or error that may be
discovered in any Loan Document or in the execution, acknowledgment, filing or
recordation thereof, and

   

      (ii)    Promptly upon request by any Agent, or any Lender Party through
the Administrative Agent, do, execute, acknowledge, deliver, record, re-record,
file, re-file, register and re-register any and all such further acts, deeds,
conveyances, pledge agreements, mortgages (to the extent required), deeds of
trust (to the extent required), trust deeds (to the extent required),
assignments, financing statements and continuations thereof, termination
statements, notices of assignment, transfers, certificates, assurances and other
instruments as any Agent, or any Lender Party through the Administrative Agent,
may reasonably require from time to time in order to (A) carry out more
effectively the purposes of the Loan Documents, (B) to the fullest extent
permitted by applicable law, subject any Loan Party's or any of its
Subsidiaries' properties, assets, rights or interests to the Liens now or
hereafter intended to be covered by any of the Collateral Documents, (C) perfect
and maintain the validity, effectiveness and priority of any of the Collateral
Documents and any of the Liens intended to be created thereunder and (D) assure,
convey, grant, assign, transfer, preserve, protect and confirm more effectively
unto the Secured Parties the rights granted or now or hereafter intended to be
granted to the Secured Parties under any Loan Document or under any other
instrument executed in connection with any Loan Document to which any Loan Party
or any of its Subsidiaries is or is to be a party, and cause each of its
Subsidiaries to do so.

   

      (l)  Performance of Acquisition Documents. Perform and observe, and cause
each of its Subsidiaries to perform and observe, all of the terms and provisions
of each Acquisition Document to be performed or observed by it, maintain each
such Acquisition Document in full force and effect, enforce such Acquisition
Document in accordance with its terms, take all such action to such end as may
be from time to time reasonably requested by the Administrative Agent and, upon
request of the Administrative Agent, make to each other party to each such
Acquisition

<PAGE>  53

 

Document such demands and requests for information and reports or for action as
any Loan Party or any of its Subsidiaries is entitled to make under such
Acquisition Document.

     

      (m)  Compliance with Terms of Leaseholds. Make all payments and otherwise
perform all obligations in respect of all leases of real property to which the
Borrower or any of its Subsidiaries is a party, keep such leases in full force
and effect and not allow such leases to lapse or be terminated or any rights to
renew such leases to be forfeited or cancelled, notify the Administrative Agent
of any default by any party with respect to such leases and cooperate with the
Administrative Agent in all respects to cure any such default, and cause each of
its Subsidiaries to do so, except, in any case, where the failure to do so,
either individually or in the aggregate, could not be reasonably likely to have
a Material Adverse Effect.

     

      (n)  Cash Concentration Accounts. Within three months of the date hereof,
maintain, and cause each of its Subsidiaries to maintain, main cash
concentration accounts with a Lender Party.

   

      (o)  Performance of Material Contracts. Perform and observe all the terms
and provisions of each Material Contract to be performed or observed by it,
maintain each such Material Contract in full force and effect, enforce each such
Material Contract in accordance with its terms, take all such action to such end
as may be from time to time requested by the Administrative Agent and, upon
request of the Administrative Agent, make to each other party to each such
Material Contract such demands and requests for information and reports or for
action as any Loan Party or any of its Subsidiaries is entitled to make under
such Material Contract, and cause each of its Subsidiaries to do so, except, in
any case, where the failure to do so, either individually or in the aggregate,
could not be reasonably likely to have a Material Adverse Effect.

      SECTION 5.02.  Negative Covenants. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Borrower will not, at any time:

      (a)  Liens, Etc. Create, incur, assume or suffer to exist, or permit any
of its Subsidiaries to create, incur, assume or suffer to exist, any Lien on or
with respect to any of its properties of any character (including, without
limitation, accounts) whether now owned or hereafter acquired, or sign or file
or suffer to exist, or permit any of its Subsidiaries to sign or file or suffer
to exist, under the Uniform Commercial Code of any jurisdiction, a financing
statement that names the Borrower or any of its Subsidiaries as debtor, or sign
or suffer to exist, or permit any of its Subsidiaries to sign or suffer to
exist, any security agreement authorizing any secured party thereunder to file
such financing statement, or assign, or permit any of its Subsidiaries to
assign, any accounts or other right to receive income, except:

   

 

      (i)    Liens created under the Loan Documents;

         

      (ii)    Permitted Liens;

         

      (iii)    Liens existing on the date hereof and described on
Schedule 4.01(u) hereto and, with respect to any Liens described on Schedule
4.01(u) that secure Surviving Debt, any extensions, renewals or replacements of
such Liens in connection with refinancing or replacement of Surviving Debt
permitted under Section 5.02(b)(iii)(D) provided that no such Lien shall extend
to or cover any additional property;

<PAGE>  54

   

      (iv)    purchase money Liens upon or in real property or equipment
acquired or held by the Borrower or any of its Subsidiaries in the ordinary
course of business to secure the purchase price of such property or equipment or
to secure Debt incurred solely for the purpose of financing the acquisition,
construction or improvement of any such property or equipment to be subject to
such Liens, or Liens existing on any such property or equipment at the time of
acquisition (other than any such Liens created in contemplation of such
acquisition that do not secure the purchase price), or extensions, renewals or
replacements of any of the foregoing for the same or a lesser amount; provided,
however, that no such Lien shall extend to or cover any property other than the
property or equipment (and, to the extent segregated and identifiable, the
proceeds thereof) being acquired, constructed or improved, and no such
extension, renewal or replacement shall extend to or cover any property not
theretofore subject to the Lien being extended, renewed or replaced; and
provided further that the aggregate principal amount of the Debt secured by
Liens permitted by this clause (iv) shall not exceed the amount permitted under
Section 5.02(b)(iii)(B) at any time outstanding;

         

      (v)    Liens arising in connection with Capitalized Leases of the Borrower
permitted under Section 5.02(b)(iii)(C); provided that no such Lien shall extend
to or cover any Collateral or assets other than the assets subject to such
Capitalized Leases;

         

      (vi)    Liens on the assets of any Person that becomes a Subsidiary of the
Borrower securing Debt permitted under Section 5.02 (b)(iii)(E) (other than
Liens incurred solely in contemplation of such Person becoming a Subsidiary of
the Borrower); and

         

      (vii)    other Liens securing Debt of the Borrower outstanding in an
aggregate principal amount not to exceed $3,000,000; provided that no such Lien
shall extend to or cover any Collateral or may be granted when any Default shall
have occurred and be continuing.

     

      (b)  Debt. Create, incur, assume or suffer to exist, or permit any of its
Subsidiaries to create, incur, assume or suffer to exist, any Debt, except:

         

      (i)    in the case of the Borrower,

           

      (A)    Debt in respect of Hedge Agreements designed to hedge against
fluctuations in interest rates or foreign exchange rates, and not for
speculative purposes, incurred in the ordinary course of business and consistent
with prudent business practice,

             

      (B)    Debt owed to a wholly owned Subsidiary of the Borrower, which Debt
(x) shall constitute Pledged Debt (unless owed to a Subsidiary that is not, or
is not required to be, a Subsidiary Guarantor), (y) shall be on subordinated
terms acceptable to the Administrative Agent and (z) shall be evidenced by
promissory notes in form and substance satisfactory to the Administrative Agent
and such promissory notes shall be pledged as security for the Obligations of
the holder thereof under the Loan Documents to which such holder is a party and
delivered to the Collateral Agent pursuant to the terms of the Security
Agreement,

             

      (C)    Debt in respect of the Senior Subordinated Notes, in an aggregate
principal amount not to exceed $175,000,000 or, if the Senior

<PAGE>  55

     

Subordinated Notes are not issued, Debt in respect of the Bridge Loans in an
aggregate principal amount not to exceed $85,000,000, and

             

      (D)    Debt in respect of the Senior Notes, in an aggregate principal
amount not to exceed $100,000,000.

         

      (ii)    in the case of any Subsidiary of the Borrower, Debt owed to the
Borrower or to a wholly owned Subsidiary of the Borrower, provided that, in each
case, such Debt (x) shall constitute Pledged Debt (unless owed to a Subsidiary
that is not, or is not required to be, a Subsidiary Guarantor), (y) shall be on
terms acceptable to the Administrative Agent and (z) shall be evidenced by
promissory notes in form and substance satisfactory to the Administrative Agent
and such promissory notes shall be pledged as security for the Obligations of
the holder thereof under the Loan Documents to which such holder is a party and
delivered to the Collateral Agent pursuant to the terms of the Security
Agreement; and

         

      (iii)    in the case of the Borrower and its Subsidiaries,

             

      (A)    Debt under the Loan Documents (which, in the case of Secured Hedge
Agreements, should be consistent with the terms of Section 5.02(b)(i)(A)),

             

      (B)    Debt secured by Liens permitted by Section 5.02(a)(iv) not to
exceed in the aggregate $15,000,000 at any time outstanding,

             

      (C)    Capitalized Leases not to exceed in the aggregate $15,000,000 at
any time outstanding,

             

      (D)    the Surviving Debt, and any Debt extending the maturity of, or
refunding or refinancing, in whole or in part, any Surviving Debt and any Debt
in respect of the Senior Subordinated Notes or the Senior Notes, provided that
the terms of any such extending, refunding or refinancing Debt, and of any
agreement entered into and of any instrument issued in connection therewith, are
not otherwise prohibited by the Loan Documents, provided further that the
principal amount of such Surviving Debt or Debt in respect of the Senior
Subordinated Notes or the Senior Notes shall not be increased above the
principal amount thereof outstanding immediately prior to such extension,
refunding or refinancing, and the direct and contingent obligors therefor shall
not be changed, as a result of or in connection with such extension, refunding
or refinancing, provided still further that the terms relating to principal
amount, amortization, maturity, collateral (if any) and subordination (if any),
and other material terms taken as a whole, of any such extending, refunding or
refinancing Debt, and of any agreement entered into and of any instrument issued
in connection therewith, are no less favorable in any material respect to the
Loan Parties or the Lender Parties than the terms of any agreement or instrument
governing the Debt being extended, refunded or refinanced and the interest rate
applicable to any such extending, refunding or refinancing Debt does not exceed
the then applicable market interest rate,

             

      (E)    Debt of any Person that becomes a Subsidiary of the Borrower after
the date hereof in accordance with the terms of Section 5.02(f) which Debt does
not exceed $5,000,000 in the aggregate and is existing at the time such

<PAGE>  56

     

Person becomes a Subsidiary of the Borrower (other than Debt incurred solely in
contemplation of such Person becoming a Subsidiary of the Borrower),

             

      (F)    Contingent Obligations in respect of Debt or other obligations of a
Loan Party, and

             

      (G)    Debt of the Borrower not otherwise permitted under this Section
5.02(b) in an aggregate principal amount not to exceed $15,000,000 at any time
outstanding and to be incurred only so long as no Default has occurred and is
continuing.

         

      (c)  Change in Nature of Business. Make, or permit any of its Subsidiaries
to make, any material change in the nature of its business as carried on at the
date hereof.

     

      (d)  Mergers, Etc. Merge into or consolidate with any Person or permit any
Person to merge into it, or permit any of its Subsidiaries to do so, except
that:

         

      (i)    the Borrower may consummate the Acquisition;

       

      (ii)    any Subsidiary of the Borrower may merge into or consolidate with
any other Subsidiary of the Borrower, provided that, in the case of any such
merger or consolidation, the Person formed by such merger or consolidation shall
be a wholly owned Subsidiary of the Borrower, provided further that, in the case
of any such merger or consolidation to which a Subsidiary Guarantor is a party,
the Person formed by such merger or consolidation shall be a Subsidiary
Guarantor;

         

      (iii)    in connection with any sale or other disposition permitted under
Section 5.02(e)(v), any Subsidiary of the Borrower may merge into or consolidate
with any other Person or permit any other Person to merge into or consolidate
with it;

         

      (iv)    any merger of a Subsidiary of the Borrower, pursuant to which the
survivor is a Subsidiary Guarantor, in order to consummate an Investment
expressly permitted in Section 5.03(f)(viii) or (ix);

         

      (v)    any merger of a Subsidiary Guarantor into the Borrower so long as
the survivor is the Borrower;

       

provided, however,

that in each case, immediately before and after giving effect thereto, no
Default shall have occurred and be continuing.      

      (e)  Sales, Etc., of Assets. Sell, lease, transfer or otherwise dispose
of, or permit any of its Subsidiaries to sell, lease, transfer or otherwise
dispose of, any assets, or grant any option or other right to purchase, lease or
otherwise acquire any assets, except:

         

      (i)    sales of Inventory in the ordinary course of its business and the
granting of any option or other right to purchase, lease or otherwise acquire
Inventory in the ordinary course of its business;

         

      (ii)    in a transaction authorized by Section 5.02(d)(ii);

<PAGE>  57

   

      (iii)    sales, transfers or other dispositions of assets among the
Borrower and Subsidiary Guarantors or among a Subsidiary Guarantor and other
Subsidiary Guarantors;

         

      (iv)    so long as no Default has occurred is continuing, the sale of the
stock or assets of W.A. Whitney Co., W.A. Whitney Italia Co. or Excellon
Automation Co. and their respective direct and indirect Subsidiaries for fair
market value;

         

      (v)    the sale of any asset by the Borrower or any Subsidiary (other than
a bulk sale of Inventory and a sale of Receivables other than delinquent
accounts for collection purposes only) so long as (A) no Default has occurred
and is continuing, (B) the purchase price paid to the Borrower or such
Subsidiary for such asset shall be no less than the fair market value of such
asset at the time of such sale, (C) the purchase price for such asset shall be
paid to the Borrower or such Subsidiary shall consist of at least 75% cash
(other than in connection with asset sales involving aggregate Investments not
exceeding $5,000,000 in the aggregate at any time) and (D) the aggregate
purchase price paid to the Borrower and all of its Subsidiaries for such asset
and all other assets sold by the Borrower and its Subsidiaries during the same
Fiscal Year pursuant to this clause (v) shall not exceed $20,000,000;

         

      (vi)    sales, transfers and dispositions of assets by any Subsidiary
Guarantor to any Subsidiary that is not a Subsidiary Guarantor (A) if the terms
of such sale, transfer or disposition, and consideration therefor, are on an
arm's-length basis , would be fair and reasonable for non-Affiliated
transactions and are for 100% cash or (B) to the extent permitted by Section
5.02(f); and

         

      (vii)    so long as no Default shall occur and be continuing, the grant of
any option or other right to purchase any asset in a transaction that would be
permitted under the provisions of clause (iv) or (v) above;

       

      (f)  Investments in Other Persons. Make or hold, or permit any of its
Subsidiaries to make or hold, any Investment in any Person, except:

         

      (i)    (A) equity Investments by the Borrower and its Subsidiaries in
their Subsidiaries outstanding on the date hereof, (B) additional equity
Investments in Loan Parties and equity Investments in newly-formed, wholly-owned
Subsidiaries that become Subsidiary Guarantors upon formation thereof, (C)
additional equity Investments in wholly owned Subsidiaries that are not Loan
Parties in an aggregate amount invested from the date hereof not to exceed
$5,000,000 and (D) equity Investments by Subsidiaries that are not Subsidiary
Guarantors in newly-formed, wholly-owned Subsidiaries;

         

      (ii)    loans and advances to employees in the ordinary course of the
business of the Borrower and its Subsidiaries as presently conducted in an
aggregate principal amount not to exceed $1,000,000 at any time outstanding;

         

      (iii)    Investments by the Borrower and its Subsidiaries in Cash
Equivalents;

         

      (iv)    Investments existing on the date hereof and described on
Schedule 4.01(x) hereto;

           

<PAGE>  58

   

      (v)    Investments by the Borrower in Hedge Agreements permitted under
Section 5.02(b);

         

      (vi)    Investments consisting of intercompany Debt permitted under
Section 5.02(b);

         

      (vii)    Contingent Obligations permitted under Section 5.02(b)(iii)(F);

         

      (viii)    the purchase or other acquisition of all of the Equity Interests
in, or all or substantially all of the property and assets of, any Person that,
upon the consummation thereof, will be wholly owned directly by the Borrower or
one or more of its wholly owned Subsidiaries (including, without limitation, as
a result of a merger or consolidation); provided that, with respect to each
purchase or other acquisition made pursuant to this clause (viii):

           

      (A)    any such newly created or acquired Subsidiary shall comply with the
requirements of Section 5.01(j);

             

      (B)    the lines of business of the Person to be (or the property and
assets of which are to be) so purchased or otherwise acquired shall be
substantially the same lines of business as one or more of the principal
businesses of the Borrower and its Subsidiaries in the ordinary course;

             

      (C)    such purchase or other acquisition shall not include or result in
any contingent liabilities that could reasonably be expected to be material to
the business, financial condition, operations or prospects of the Borrower and
its Subsidiaries, taken as a whole (as determined in good faith by the board of
directors (or the persons performing similar functions) of the Borrower or such
Subsidiary if the board of directors is otherwise approving such transaction
and, in each other case, by a Responsible Officer);

             

      (D)    the total cash and noncash consideration (including, without
limitation, the fair market value of all Equity Interests issued or transferred
to the sellers thereof, all indemnities, earnouts and other contingent payment
obligations to, and the aggregate amounts paid or to be paid under noncompete,
consulting and other affiliated agreements with, the sellers thereof, all
write-downs of property and assets and reserves for liabilities with respect
thereto and all assumptions of debt, liabilities and other obligations in
connection therewith) paid by or on behalf of the Borrower and its Subsidiaries
for any such purchase or other acquisition, when aggregated with the total cash
and noncash consideration paid by or on behalf of the Borrower and its
Subsidiaries for all other purchases and other acquisitions made by the Borrower
and its Subsidiaries pursuant to this clause (viii), shall not exceed
$75,000,000 for any acquisition or series of related acquisitions and shall not
exceed $125,000,000 in any twelve-month period; provided that, in any event, no
such Investment may be made pursuant to this clause (viii) unless, after giving
effect to the consummation of such acquisition, (x) at least $20,000,000 is
available to be drawn under the Revolving Credit Facility after consummation of
the Acquisition and (y) the Leverage Ratio is at least 0.25:1.00 lower that the
maximum Leverage Ratio permissible at the end of the next Fiscal Quarter in
accordance with Section 5.04(a);

<PAGE>  59

     

      (E)    (1) immediately before and immediately after giving pro forma
effect to any such purchase or other acquisition, no Default shall have occurred
and be continuing and (2) immediately after giving effect to such purchase or
other acquisition, the Borrower and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in Section 5.04 and the
Administrative Agent shall have received reasonable projections demonstrating
pro forma compliance with such covenants through the scheduled Termination Date,
such compliance to be determined on the basis of the financial information most
recently delivered to the Administrative Agent pursuant to Section 5.04 as
though such purchase or other acquisition had been consummated as of the first
day of the fiscal period covered thereby; and

             

      (F)    the Borrower shall have delivered to the Administrative Agent, on
behalf of the Lender Parties, at least five Business Days prior to the date on
which any such purchase or other acquisition is to be consummated, a certificate
of a Responsible Officer, in form and substance reasonably satisfactory to the
Administrative Agent, certifying that all of the requirements set forth in this
clause (vii) have been satisfied or will be satisfied on or prior to the
consummation of such purchase or other acquisition; and

         

      (ix)    Investments by the Borrower and its Subsidiaries not otherwise
permitted under this Section 5.02(f) in an aggregate amount not to exceed
$5,000,000 at any time outstanding; provided that, with respect to each
Investment made pursuant to this clause (ix):

           

      (A)    such Investment shall not include or result in any contingent
liabilities that could reasonably be expected to be material to the business,
financial condition, operations or prospects of the Borrower and its
Subsidiaries, taken as a whole (as determined in good faith by the board of
directors (or persons performing similar functions) of the Borrower or such
Subsidiary if the board of directors is otherwise approving such transaction
and, in each other case, by a Responsible Officer);

             

      (B)    such Investment shall be in property and assets which are part of,
or in lines of business which are, substantially the same lines of business as
one or more of the principal businesses of the Borrower and its Subsidiaries in
the ordinary course;

             

      (C)    any determination of the amount of such Investment shall include
all cash and noncash consideration (including, without limitation, the fair
market value of all Equity Interests issued or transferred to the sellers
thereof, all indemnities, earnouts and other contingent payment obligations to,
and the aggregate amounts paid or to be paid under noncompete, consulting and
other affiliated agreements with, the sellers thereof, all write-downs of
property and assets and reserves for liabilities with respect thereto and all
assumptions of debt, liabilities and other obligations in connection therewith)
paid by or on behalf of the Borrower and its Subsidiaries in connection with
such Investment; and

             

      (D)    (1) immediately before and immediately after giving pro forma
effect to any such purchase or other acquisition, no Default shall have occurred
and be continuing and (2) immediately after giving effect to such purchase or

<PAGE>  60

     

other acquisition, the Borrower and its Subsidiaries shall be in pro forma
compliance with all of the covenants set forth in Section 5.04, such compliance
to be determined on the basis of the financial information most recently
delivered to the Administrative Agent pursuant to Section 5.04 as though such
Investment had been consummated as of the first day of the fiscal period covered
thereby.

           

      (x)    The Borrower may equitize (A) up to $24,000,000 of the principal
amount owed to it by Esterline Technologies Denmark ApS under the demand
promissory note dated October 30, 2012, (B) up to Pounds 44,000,000 of the
principal amount owed to it by Angelchance Limited under the demand promissory
note dated the date hereof, and (C) up to Pounds 950,000 of the principal amount
owed to it by Angelchance Limited under the demand promissory note dated the
date hereof, each referred to in Schedule 4.01(x) hereto.

   

      (g)  Restricted Payments. Declare or pay any dividends, purchase, redeem,
retire, defease or otherwise acquire for value any of its Equity Interests now
or hereafter outstanding, return any capital to its stockholders, partners or
members (or the equivalent Persons thereof) as such, make any distribution of
assets, Equity Interests, obligations or securities to its stockholders,
partners or members (or the equivalent Persons thereof) as such, or permit any
of its Subsidiaries to do any of the foregoing, or permit any of its
Subsidiaries to purchase, redeem, retire, defease or otherwise acquire for value
any Equity Interests in the Borrower or to issue or sell any Equity Interests
therein, except dividends payable to the Borrower.

   

      (h)  Amendments of Constitutive Documents. Amend, or permit any of its
Subsidiaries to amend, its certificate of incorporation or bylaws or other
constitutive or governing documents other than amendments that could not be
reasonably expected to have a Material Adverse Effect or adversely affect the
rights and interests of the Lender Parties.

     

      (i)  Accounting Changes. Make or permit, or permit any of its Subsidiaries
to make or permit, any change in (i) accounting policies or reporting practices,
except as required by generally accepted accounting principles, or (ii) Fiscal
Year.

     

      (j)  Prepayments, Etc., of Debt. Prepay, redeem, purchase, defease or
otherwise satisfy prior to the scheduled maturity thereof in any manner, or make
any payment in violation of any subordination terms of, any Debt, except (i) the
prepayment of the Advances in accordance with the terms of this Agreement, (ii)
prepayments of any senior secured or senior unsecured Debt), and (ii) regularly
scheduled or required repayments or redemptions of Debt permitted under Section
5.02(b), or amend, modify or change in any manner any term or condition of or
relating to the Senior Notes, any Surviving Debt, the Senior Subordinated
Indenture or, if the Bridge Loans are issued, the Bridge Loan Documentation in
any manner that would (A) increase the interest rate or change (to earlier
dates) the dates upon which principal and interest are due thereon; (B) alter
the redemption, prepayment or subordination provisions thereof; (C) alter the
covenants or events of default in a manner that would make such provisions more
onerous or restrictive to the Borrower or any such Subsidiary; or (D) otherwise
increase the obligations of the Borrower or any Subsidiary thereunder, or permit
any of its Subsidiaries to do any of the foregoing, other than to prepay any
Debt payable to the Borrower or a Subsidiary Guarantor.

     

      (k)  Amendment, Etc., of Acquisition Documents. Cancel or terminate any
Acquisition Document or consent to or accept any cancellation or termination
thereof, amend, modify or change in any manner any term or condition of any
Acquisition Document or give any consent, waiver or approval thereunder, waive
any default under or any breach of any term or condition of

<PAGE>  61

 

any Acquisition Document, agree in any manner to any other amendment,
modification or change of any term or condition of any Acquisition Document or
take any other action in connection with any Acquisition Document that would
materially impair the value of the interest or rights of any Loan Party
thereunder or that would impair the rights or interests of any Agent or any
Lender Party, or permit any of its Subsidiaries to do any of the foregoing.

     

      (l)  Negative Pledge. Enter into or suffer to exist, or permit any of its
Subsidiaries to enter into or suffer to exist, any agreement prohibiting or
conditioning the creation or assumption of any Lien upon any of its property or
assets except (i) in favor of the Secured Parties, (ii) in connection with
(A) any Debt incurred under the Senior Subordinated Indenture, the Bridge Loan
Documentation or the Senior Notes (or any refinancing thereof permitted under
Section 5.02(b)(iii)(D)), (B) any Surviving Debt as in effect on the Effective
Date (or any refinancing thereof permitted under Section 5.02(b)(iii)(D)),
(C) any purchase money Debt permitted by Section 5.02(b)(iii)(B) solely to the
extent that the agreement or instrument governing such Debt prohibits a Lien on
the property acquired with the proceeds of such Debt, (D) any Capitalized Lease
permitted by Section 5.02(b)(iii)(C) solely to the extent that such Capitalized
Lease prohibits a Lien on the property subject thereto, or (E) any Debt
outstanding on the date any Subsidiary of the Borrower becomes such a Subsidiary
(so long as such agreement was not entered into solely in contemplation of such
Subsidiary becoming a Subsidiary of the Borrower), (iii) agreements relating to
prohibitions on easements, rights of way or other encumbrances on title to real
property and (iv) customary provisions in leases in the ordinary course of
business.

     

      (m)  Partnerships, Etc. Become a general partner in any general or limited
partnership or joint venture, or permit any of its Subsidiaries to do so.

     

      (n)  Speculative Transactions. Engage, or permit any of its Subsidiaries
to engage, in any transaction involving commodity options or futures contracts
or any similar speculative transactions.

     

      (o)  Formation of Subsidiaries. Organize or invest, or permit any of its
Subsidiaries to organize or invest, in any new Subsidiary except as permitted
under Section 5.02(f)(i), (viii) or (ix).

     

      (p)  Payment Restrictions Affecting Subsidiaries. Directly or indirectly,
enter into or suffer to exist, or permit any of its Subsidiaries to enter into
or suffer to exist, any agreement or arrangement limiting the ability of any of
its Subsidiaries to declare or pay dividends or other distributions in respect
of its Equity Interests or repay or prepay any Debt owed to, make loans or
advances to, or otherwise transfer assets to or invest in, the Borrower or any
Subsidiary of the Borrower (whether through a covenant restricting dividends,
loans, asset transfers or investments, a financial covenant or otherwise),
except (i) the Senior Subordinated Indenture, (ii) the Loan Documents, (iii) any
agreement or instrument evidencing Surviving Debt and (iv) any agreement in
effect at the time such Subsidiary becomes a Subsidiary of the Borrower, so long
as such agreement was not entered into solely in contemplation of such Person
becoming a Subsidiary of the Borrower.

     

      (q)  Amendment, Etc., of Material Contracts. Cancel or terminate any
Material Contract or consent to or accept any cancellation or termination
thereof, amend or otherwise modify any Material Contract or give any consent,
waiver or approval thereunder, waive any default under or breach of any Material
Contract, agree in any manner to any other amendment, modification or change of
any term or condition of any Material Contract or take any other action in
connection with any Material Contract that would impair the value of the
interest or rights of any Loan Party

<PAGE>  62

 

thereunder or that would impair the interest or rights of any Agent or any
Lender Party, or permit any of its Subsidiaries to do any of the foregoing,
unless, so long as no Event of Default has occurred and is continuing, such
cancellation, termination, consent, acceptance, amendment, modification, waiver,
approval, agreement or action could not reasonably be expected to result in a
Material Adverse Effect.

   

      SECTION 5.03.  Reporting Requirements. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Borrower will furnish to the Agents and the Lender
Parties:

      (a)  Default Notice. As soon as possible and in any event within three
Business Days after the occurrence of each Default or any event, development or
occurrence reasonably likely to have a Material Adverse Effect continuing on the
date of such statement, a statement of the Chief Financial Officer setting forth
details of such Default or such event, development or occurrence and the action
that the Borrower has taken and proposes to take with respect thereto.

     

      (b)  Annual Financials. As soon as available and in any event within 90
days after the end of each Fiscal Year, a copy of the annual audit report for
such year for the Borrower and its Subsidiaries, including therein a
Consolidated balance sheet of the Borrower and its Subsidiaries as of the end of
such Fiscal Year and a Consolidated statement of income and a Consolidated
statement of cash flows of the Borrower and its Subsidiaries for such Fiscal
Year, in each case accompanied by an opinion acceptable to the Required Lenders
of Ernst & Young or other independent public accountants of recognized standing
acceptable to the Required Lenders, together with (i) a certificate of such
accounting firm to the Lender Parties stating that in the course of the regular
audit of the business of the Borrower and its Subsidiaries, which audit was
conducted by such accounting firm in accordance with generally accepted auditing
standards, such accounting firm has obtained no knowledge that a Default has
occurred and is continuing, or if, in the opinion of such accounting firm, a
Default has occurred and is continuing, a statement as to the nature thereof,
(ii) a schedule in form satisfactory to the Administrative Agent of the
computations used by such accountants in determining, as of the end of such
Fiscal Year, compliance with the covenants contained in Section 5.04, provided
that in the event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of reconciliation
conforming such financial statements to GAAP and (iii) a certificate of the
Chief Financial Officer stating that no Default has occurred and is continuing
or, if a Default has occurred and is continuing, a statement as to the nature
thereof and the action that the Borrower has taken and proposes to take with
respect thereto.

     

      (c)  Quarterly Financials. As soon as available and in any event within 45
days after the end of each of the first three quarters of each Fiscal Year,
Consolidated and consolidating balance sheets of the Borrower and its
Subsidiaries as of the end of such quarter and Consolidated and consolidating
statements of income and a Consolidated statement of cash flows of the Borrower
and its Subsidiaries for the period commencing at the end of the previous Fiscal
Quarter and ending with the end of such Fiscal Quarter and Consolidated and
consolidating statements of income and a Consolidated statement of cash flows of
the Borrower and its Subsidiaries for the period commencing at the end of the
previous Fiscal Year and ending with the end of such quarter, setting forth in
each case in comparative form the corresponding figures for the corresponding
date or period of the preceding Fiscal Year, all in reasonable detail and duly
certified (subject to normal year-end audit adjustments) by the Chief Financial
Officer as having been prepared in accordance with GAAP, together with (i) a
certificate of said officer stating that

<PAGE>  63

 

no Default has occurred and is continuing or, if a Default has occurred and is
continuing, a statement as to the nature thereof and the action that the
Borrower has taken and proposes to take with respect thereto and (ii) a schedule
in form satisfactory to the Administrative Agent of the computations used by the
Borrower in determining compliance with the covenants contained in Section 5.04,
provided that in the event of any change in GAAP used in the preparation of such
financial statements, the Borrower shall also provide, if necessary for the
determination of compliance with Section 5.04, a statement of reconciliation
conforming such financial statements to GAAP.

   

      (d)  Annual Forecasts. As soon as available and in any event no later than
10 days after each December meeting of the Borrower's Board of Directors,
forecasts prepared by management of the Borrower, in form approved by the
Borrower's Board of Directors, of balance sheets, income statements and cash
flow statements on an annual basis for the Fiscal Year following such Fiscal
Year.

     

      (e)  Litigation. Promptly after the commencement thereof, notice of all
actions, suits, investigations, litigation and proceedings before any
Governmental Authority affecting any Loan Party or any of its Subsidiaries of
the type described in Section 4.01(f).

     

      (f)  Securities Reports. Promptly after the sending or filing thereof,
copies of all proxy statements, financial statements and reports that any Loan
Party or any of its Subsidiaries sends to its stockholders, and copies of all
regular, periodic and special reports, and all registration statements, that any
Loan Party or any of its Subsidiaries files with the Securities and Exchange
Commission or any governmental authority that may be substituted therefor, or
with any national securities exchange.

     

      (g)  Creditor Reports. Promptly after the furnishing thereof, copies of
any statement or report furnished to any holder of Debt securities of any Loan
Party or of any of its Subsidiaries pursuant to the terms of any indenture, loan
or credit or similar agreement and not otherwise required to be furnished to the
Lender Parties pursuant to any other clause of this Section 5.03.

     

      (h)  Agreement Notices. Promptly upon receipt thereof, copies of all
notices, requests and other documents received by any Loan Party or any of its
Subsidiaries under or pursuant to any Acquisition Document or Material Contract
or instrument, indenture, loan or credit or similar agreement regarding or
related to any breach or default by any party thereto or any other event that
could materially impair the value of the interests or the rights of any Loan
Party or otherwise have a Material Adverse Effect and copies of any amendment,
modification or waiver of any provision of any Acquisition Document or Material
Contract or instrument, indenture, loan or credit or similar agreement and, from
time to time upon request by the Administrative Agent, such information and
reports regarding the Acquisition Documents, the Material Contracts and such
instruments, indentures and loan and credit and similar agreements as the
Administrative Agent may reasonably request.

     

      (i)  Revenue Agent Reports. Within 10 days after receipt, copies of all
Revenue Agent Reports (Internal Revenue Service Form 886), or other written
proposals of the Internal Revenue Service, that propose, determine or otherwise
set forth positive adjustments to the Federal income tax liability of the
affiliated group (within the meaning of Section 1504(a)(1) of the Internal
Revenue Code) of which the Borrower is a member aggregating $1,000,000 or more.

<PAGE>  64

 

      (j)  Notice as to Certain Tax Matters. Promptly after any such
determination, notice of the Borrower's determination to take any action
inconsistent with the last two sentences of Section 8.10.

     

      (k)  Environmental Conditions. Promptly after the assertion or occurrence
thereof, notice of any Environmental Action against or of any noncompliance by
any Loan Party or any of its Subsidiaries with any Environmental Law or
Environmental Permit that could reasonably be expected to have a Material
Adverse Effect.

     

      (l)  Insurance. As soon as available and in any event within 30 days after
the end of each Fiscal Year, a certificate evidencing the insurance coverage
(specifying type, amount and carrier) in effect for each Loan Party and its
Subsidiaries and containing such additional information as any Agent, or any
Lender Party through the Administrative Agent, may reasonably specify.

     

      (m)  Other Information. Such other information respecting the business,
condition (financial or otherwise), operations, performance, properties or
prospects of any Loan Party or any of its Subsidiaries as any Agent, or any
Lender Party through the Administrative Agent, may from time to time reasonably
request.

     

      (n)  ERISA.  (i)  ERISA Events and ERISA Reports.  (A) Promptly and in any
event within 10 days after any Loan Party or any ERISA Affiliate knows or has
reason to know that any ERISA Event has occurred, a statement of the Chief
Financial Officer of the Borrower describing such ERISA Event and the action, if
any, that such Loan Party or such ERISA Affiliate has taken and proposes to take
with respect thereto and (B) on the date any records, documents or other
information must be furnished to the PBGC with respect to any Plan pursuant to
Section 4010 of ERISA, a copy of such records, documents and information.

     

      (ii)    Plan Terminations. Promptly and in any event within three Business
Days after receipt thereof by any Loan Party or any ERISA Affiliate, copies of
each notice from the PBGC stating its intention to terminate any Plan or to have
a trustee appointed to administer any Plan.

     

      (iii)    Plan Annual Reports. Promptly and in any event within 30 days
after the filing thereof with the Internal Revenue Service, copies of each
Schedule B (Actuarial Information) to the annual report (Form 5500 Series) with
respect to each Plan.

     

      (iv)    Multiemployer Plan Notices. Promptly and in any event within ten
Business Days after receipt thereof by any Loan Party or any ERISA Affiliate
from the sponsor of a Multiemployer Plan, copies of each notice concerning
(A) the imposition of Withdrawal Liability by any such Multiemployer Plan,
(B) the reorganization or termination, within the meaning of Title IV of ERISA,
of any such Multiemployer Plan or (C) the amount of liability incurred, or that
may be incurred, by such Loan Party or any ERISA Affiliate in connection with
any event described in clause (A) or (B).

      SECTION 5.04.  Financial Covenants.  So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding or any Lender Party shall have any
Commitment hereunder, the Borrower will:

      (a)  Maximum Leverage Ratio. Maintain for each Measurement Period ending
on the last day of a Fiscal Quarter that falls during the periods set forth
below a maximum Leverage Ratio of not more than the amount set forth below
during each such period set forth below:

<PAGE>  65

Period

Leverage Ratio

June 11, 2003 to last day of the first
Fiscal Quarter ending in 2004

3.25:1.00

The first day of the second Fiscal
Quarter ending in 2004 to the last day of
the third Fiscal Quarter ending in 2005

3.00:1.00

The first day of the fourth Fiscal Quarter
ending in 2005 to June 30, 2008

2.75:1.00

      (b)  Fixed Charge Coverage Ratio. Maintain for each Measurement Period
ending on the last day of a Fiscal Quarter that falls during the periods set
forth below a Fixed Charge Coverage Ratio of not less than the amount set forth
below for each such period set forth below:

Period

Fixed Charge Coverage Ratio

June 11, 2003 to last day of the third
Fiscal Quarter ending in 2004

1.05:1.00

The first day of the fourth Fiscal Quarter
ending in 2004 to the last day of the
third Fiscal Quarter ending in 2005

1.15:1.00

The first day of the fourth Fiscal Quarter
ending in 2005 to the last day of the
third Fiscal Quarter ending in 2006

1.20:1.00

The first day of the fourth Fiscal Quarter
ending in 2006 to the last day of the
third Fiscal Quarter ending in 2007

1.25:1.00

The first day of the fourth Fiscal Quarter
ending in 2007 to June 30, 2008

1.30:1.00

      (c)  Total Debt to Capitalization Ratio. Maintain a Total Debt to
Capitalization Ratio of not more than 0.60:1.0, as measured on the last day of
each Fiscal Quarter.

<PAGE>  66

 

(d)  Minimum Net Worth. Maintain an excess of Consolidated total assets over
Consolidated total liabilities, in each case, of the Borrower and its
Subsidiaries of not less than $325,000,000 plus 50% of Consolidated Net Income
commencing with the Fiscal Quarter beginning May 1, 2003 plus 75% of the net
proceeds from any issuance of Equity Interests by the Borrower, as measured on
the last day of each Fiscal Quarter.

ARTICLE VI

EVENTS OF DEFAULT

      SECTION 6.01.  Events of Default. If any of the following events ("Events
of Default") shall occur and be continuing:

      (a)  (i) the Borrower shall fail to pay any principal of any Advance when
the same shall become due and payable or (ii) the Borrower shall fail to pay any
interest on any Advance, or any Loan Party shall fail to make any other payment
under any Loan Document, in each case under this clause (ii) within 3 Business
Days after the same shall become due and payable; or

     

      (b)  any representation or warranty made by any Loan Party (or any of its
officers) under or in connection with any Loan Document shall prove to have been
incorrect in any material respect when made; or

     

      (c)  the Borrower shall fail to perform or observe any term, covenant or
agreement contained in Section 2.14, 5.01(e), (f), (i) or (j), 5.02, 5.03 or
5.04; or

     

      (d)  any Loan Party shall fail to perform or observe any other term,
covenant or agreement contained in any Loan Document on its part to be performed
or observed if such failure shall remain unremedied for 30 days after the
earlier of the date on which (i) a Responsible Officer of the Borrower becomes
aware of such failure or (ii) written notice thereof shall have been given to
the Borrower by any Agent or any Lender Party; or

     

      (e)  any Loan Party or any of its Subsidiaries shall fail to pay any
principal of, premium or interest on or any other amount payable in respect of
any Debt of such Loan Party or such Subsidiary (as the case may be) that is
outstanding in a principal amount (or, in the case of any Hedge Agreement, an
Agreement Value) of at least $5,000,000 either individually or in the aggregate
for all such Loan Parties and Subsidiaries (but excluding Debt outstanding
hereunder), when the same becomes due and payable (whether by scheduled
maturity, required prepayment, acceleration, demand or otherwise), and such
failure shall continue after the applicable grace period, if any, specified in
the agreement or instrument relating to such Debt; or any other event shall
occur or condition shall exist under any agreement or instrument relating to any
such Debt and shall continue after the applicable grace period, if any,
specified in such agreement or instrument, if the effect of such event or
condition is to accelerate, or to permit the acceleration of, the maturity of
such Debt or otherwise to cause, or to permit the holder thereof to cause, such
Debt to mature; or any such Debt shall be declared to be due and payable or
required to be prepaid or redeemed (other than by a regularly scheduled required
prepayment or redemption), purchased or defeased, or an offer to prepay, redeem,
purchase or defease such Debt shall be required to be made, in each case prior
to the stated maturity thereof; or

<PAGE>  67

 

      (f)  any Loan Party or any of its Subsidiaries shall generally not pay its
debts as such debts become due, or shall admit in writing its inability to pay
its debts generally, or shall make a general assignment for the benefit of
creditors; or any proceeding shall be instituted by or against any Loan Party or
any of its Subsidiaries seeking to adjudicate it a bankrupt or insolvent, or
seeking liquidation, winding up, reorganization, arrangement, adjustment,
protection, relief, or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors, or seeking the
entry of an order for relief or the appointment of a receiver, trustee or other
similar official for it or for any substantial part of its property and, in the
case of any such proceeding instituted against it (but not instituted by it)
that is being diligently contested by it in good faith, either such proceeding
shall remain undismissed or unstayed for a period of 30 days or any of the
actions sought in such proceeding (including, without limitation, the entry of
an order for relief against, or the appointment of a receiver, trustee,
custodian or other similar official for, it or any substantial part of its
property) shall occur; or any Loan Party or any of its Subsidiaries shall take
any corporate action to authorize any of the actions set forth above in this
subsection (f); or

     

      (g)  any judgments or orders, either individually or in the aggregate, for
the payment of money in excess of $5,000,000 shall be rendered against any Loan
Party or any of its Subsidiaries and either (i) enforcement proceedings shall
have been commenced and not stayed or discontinued by any creditor upon such
judgment or order or (ii) there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; provided, however, that any
such judgment or order shall not give rise to an Event of Default under this
Section 6.01(g) if and for so long as (A) the amount of such judgment or order
is covered by a valid and binding policy of insurance between the defendant and
the insurer, which shall be rated at least "A" by A.M. Best Company, covering
full payment thereof and (B) such insurer has been notified, and has not
disputed the claim made for payment, of the amount of such judgment or order; or

     

      (h)  any non-monetary judgment or order shall be rendered against any Loan
Party or any of its Subsidiaries that could be reasonably likely to have a
Material Adverse Effect, and there shall be any period of 10 consecutive days
during which a stay of enforcement of such judgment or order, by reason of a
pending appeal or otherwise, shall not be in effect; or

     

      (i)  any provision of any Loan Document after delivery thereof pursuant to
Section 3.01 or 5.01(j) shall for any reason cease to be valid and binding on or
enforceable against any Loan Party party to it, or any such Loan Party shall so
state in writing; or

     

      (j)  any Collateral Document or financing statement after delivery thereof
pursuant to Section 3.01 or 5.01(j) shall for any reason (other than any failure
to act on the part of the Collateral Agent to the extent an action by the
Collateral Agent would be required to perfect a security interest) cease to
create a valid and perfected first priority lien (except to the extent any liens
permitted under Section 5.02(a)(ii) would be superior by application of law) on
and security interest in the Collateral purported to be covered thereby; or

     

      (k)  any ERISA Event shall have occurred with respect to a Plan and the
sum (determined as of the date of occurrence of such ERISA Event) of the
Insufficiency of such Plan and the Insufficiency of any and all other Plans with
respect to which an ERISA Event shall have occurred and then exist (or the
liability of the Loan Parties and the ERISA Affiliates related to such ERISA
Event) exceeds $2,500,000 unless any other agreement or instrument governing
Material Debt sets forth a lower amount, then such amount; or

<PAGE>  68

 

      (l)  any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that it has incurred Withdrawal Liability to
such Multiemployer Plan in an amount that, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Loan Parties and the
ERISA Affiliates as Withdrawal Liability (determined as of the date of such
notification), exceeds $2,500,000 unless any other agreement or instrument
governing Material Debt sets forth a lower amount, then such lower amount or
requires payments exceeding $500,000 per annum, unless any other agreement or
instrument governing Material Debt sets forth a lower amount, then such lower
amount; or

     

      (m)  any Loan Party or any ERISA Affiliate shall have been notified by the
sponsor of a Multiemployer Plan that such Multiemployer Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
and as a result of such reorganization or termination the aggregate annual
contributions of the Loan Parties and the ERISA Affiliates to all Multiemployer
Plans that are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the plan
years of such Multiemployer Plans immediately preceding the plan year in which
such reorganization or termination occurs by an amount exceeding $2,500,000
unless any other agreement or instrument governing Material Debt sets forth a
lower amount, then such lower amount; or

     

      (n)  any default under, or an "Event of Default" as defined in, the Senior
Subordinated Indenture shall have occurred and be continuing under Senior
Subordinated Indenture; or

   

      (o)  a Change of Control shall occur;

then, and in any such event, the Administrative Agent (i) shall at the request,
or may with the consent, of the Required Lenders, by notice to the Borrower,
declare all or any portion of the Commitments of each Lender Party and the
obligation of each Lender Party to make Advances (other than Letter of Credit
Advances by the Issuing Bank or a Revolving Credit Lender pursuant to
Section 2.03(c) and Swing Line Advances by a Revolving Credit Lender pursuant to
Section 2.02(b)) and of the Issuing Bank to issue Letters of Credit to be
terminated, whereupon the same shall forthwith terminate, and (ii) shall at the
request, or may with the consent, of the Required Lenders, by notice to the
Borrower, declare all or any portion of the Notes, all interest thereon and all
other amounts payable under this Agreement and the other Loan Documents (other
than Secured Hedge Agreements unless the applicable Hedge Bank otherwise agrees)
to be forthwith due and payable, whereupon all or such portion, as applicable,
of the Notes, all such interest and all such amounts shall become and be
forthwith due and payable, without presentment, demand, protest or further
notice of any kind, all of which are hereby expressly waived by the Borrower;
provided, however, that in the event of an actual or deemed entry of an order
for relief with respect to the Borrower under the Federal Bankruptcy Code,
(x) the Commitments of each Lender Party and the obligation of each Lender Party
to make Advances (other than Letter of Credit Advances by the Issuing Bank or a
Revolving Credit Lender pursuant to Section 2.03(c) and Swing Line Advances by a
Revolving Credit Lender pursuant to Section 2.02(b)) and of the Issuing Bank to
issue Letters of Credit shall automatically be terminated and (y) the Notes, all
such interest and all such amounts shall automatically become and be due and
payable, without presentment, demand, protest or any notice of any kind, all of
which are hereby expressly waived by the Borrower.

      SECTION 6.02.  Actions in Respect of the Letters of Credit upon Default.
If any Event of Default shall have occurred and be continuing, the
Administrative Agent may, or shall at the request of the Required Lenders,
irrespective of whether it is taking any of the actions described in
Section 6.01 or otherwise, make demand upon the Borrower to, and forthwith upon
such demand the Borrower will, pay to the Collateral Agent on behalf of the
Lender Parties in same day funds at the Collateral Agent's office designated in
such demand, for deposit in the Deposit Account, an amount equal to the
aggregate

<PAGE>  69

Available Amount of all Letters of Credit then outstanding. If at any time the
Administrative Agent or the Collateral Agent determines that any funds held in
the Deposit Account are subject to any right or claim of any Person other than
the Agents and the Lender Parties or that the total amount of such funds is less
than the aggregate Available Amount of all Letters of Credit, the Borrower will,
forthwith upon demand by the Administrative Agent or the Collateral Agent, pay
to the Collateral Agent, as additional funds to be deposited and held in the
Deposit Account, an amount equal to the excess of (a) such aggregate Available
Amount over (b) the total amount of funds, if any, then held in the Deposit
Account that the Administrative Agent or the Collateral Agent, as the case may
be, determines to be free and clear of any such right and claim. Upon the
drawing of any Letter of Credit for which funds are on deposit in the Deposit
Account, such funds shall be applied to reimburse the Issuing Bank or Revolving
Credit Lenders, as applicable, to the extent permitted by applicable law.

ARTICLE VII

THE AGENTS

      SECTION 7.01.  Authorization and Action. Each Lender Party (in its
capacities as a Lender, the Swing Line Bank (if applicable), the Issuing Bank
(if applicable) and on behalf of itself and its Affiliates as potential Hedge
Banks) hereby appoints and authorizes each Agent to take such action as agent on
its behalf and to exercise such powers and discretion under this Agreement and
the other Loan Documents as are delegated to such Agent by the terms hereof and
thereof, together with such powers and discretion as are reasonably incidental
thereto. As to any matters not expressly provided for by the Loan Documents
(including, without limitation, enforcement or collection of the Notes), no
Agent shall be required to exercise any discretion or take any action, but shall
be required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required Lenders
(or, if required hereby, all Lenders), and such instructions shall be binding
upon all Lender Parties and all holders of Notes; provided, however, that no
Agent shall be required to take any action that exposes such Agent to personal
liability or that is contrary to this Agreement or applicable law. Each Agent
agrees to give to each Lender Party prompt notice of each notice given to it by
the Borrower pursuant to the terms of this Agreement.

      SECTION 7.02.  Agents' Reliance, Etc. Neither any Agent nor any of their
respective directors, officers, agents or employees shall be liable for any
action taken or omitted to be taken by it or them under or in connection with
the Loan Documents, except for its or their own gross negligence or willful
misconduct. Without limitation of the generality of the foregoing, each Agent:
(a) may treat the payee of any Note as the holder thereof until, in the case of
the Administrative Agent, the Administrative Agent receives and accepts an
Assignment and Acceptance entered into by the Lender that is the payee of such
Note, as assignor, and an Eligible Assignee, as assignee, or, in the case of any
other Agent, such Agent has received notice from the Administrative Agent that
it has received and accepted such Assignment and Acceptance, in each case as
provided in Section 8.07; (b) may consult with legal counsel (including counsel
for any Loan Party), independent public accountants and other experts selected
by it and shall not be liable for any action taken or omitted to be taken in
good faith by it in accordance with the advice of such counsel, accountants or
experts; (c) makes no warranty or representation to any Lender Party and shall
not be responsible to any Lender Party for any statements, warranties or
representations (whether written or oral) made in or in connection with the Loan
Documents; (d) shall not have any duty to ascertain or to inquire as to the
performance, observance or satisfaction of any of the terms, covenants or
conditions of any Loan Document on the part of any Loan Party or the existence
at any time of any Default under the Loan Documents or to inspect the property
(including the books and records) of any Loan Party; (e) shall not be
responsible to any Lender Party for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of, or the perfection or
priority of any lien or security

<PAGE>  70

interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
and (f) shall incur no liability under or in respect of any Loan Document by
acting upon any notice, consent, certificate or other instrument or writing
(which may be by telegram, telecopy or telex) believed by it to be genuine and
signed or sent by the proper party or parties.

      SECTION 7.03.  Wachovia and Affiliates. With respect to its Commitments,
the Advances made by it and the Notes issued to it, if any, Wachovia shall have
the same rights and powers under the Loan Documents as any other Lender Party
and may exercise the same as though it were not an Agent; and the term "Lender
Party" or "Lender Parties" shall, unless otherwise expressly indicated, include
Wachovia in its individual capacity. Wachovia and its affiliates may accept
deposits from, lend money to, act as trustee under indentures of, accept
investment banking engagements from and generally engage in any kind of business
with, any Loan Party, any of its Subsidiaries and any Person that may do
business with or own securities of any Loan Party or any such Subsidiary, all as
if Wachovia was not an Agent and without any duty to account therefor to the
Lender Parties. No Agent shall have any duty to disclose any information
obtained or received by it or any of its Affiliates relating to any Loan Party
or any of its Subsidiaries to the extent such information was obtained or
received in any capacity other than as such Agent.

      SECTION 7.04.  Lender Party Credit Decision. Each Lender Party
acknowledges that it has, independently and without reliance upon any Agent or
any other Lender Party and based on the financial statements referred to in
Section 4.01 and such other documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Lender Party also acknowledges that it will, independently and
without reliance upon any Agent or any other Lender Party and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement.

      SECTION 7.05.  Indemnification.  (a)  Each Lender Party severally agrees
to indemnify each Agent (to the extent not reimbursed by the Borrower) from and
against such Lender Party's ratable share (determined as provided below) of any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements of any kind or nature
whatsoever that may be imposed on, incurred by, or asserted against such Agent
in any way relating to or arising out of the Loan Documents or any action taken
or omitted by such Agent under the Loan Documents (collectively, the
"Indemnified Costs"); provided, however, that no Lender Party shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from such
Agent's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limitation
of the foregoing, each Lender Party agrees to reimburse each Agent promptly upon
demand for its ratable share of any costs and expenses (including, without
limitation, fees and expenses of counsel) payable by the Borrower under Section
8.04, to the extent that such Agent is not promptly reimbursed for such costs
and expenses by the Borrower. In the case of any investigation, litigation or
proceeding giving rise to any Indemnified Costs, this Section 7.05 applies
whether any such investigation, litigation or proceeding is brought by any
Lender Party or any other Person.

      (b)  Each Lender Party severally agrees to indemnify the Issuing Bank (to
the extent not reimbursed by the Borrower) from and against such Lender Party's
ratable share (determined as provided below) of any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements of any kind or nature whatsoever that may be imposed
on, incurred by, or asserted against the Issuing Bank in any way relating to or
arising out of the Loan Documents or any action taken or omitted by the Issuing
Bank under the Loan Documents; provided, however, that no Lender Party shall be
liable for any portion of such liabilities, obligations, losses, damages,
penalties,

<PAGE>  71

actions, judgments, suits, costs, expenses or disbursements resulting from the
Issuing Bank's gross negligence or willful misconduct as found in a final,
non-appealable judgment by a court of competent jurisdiction. Without limitation
of the foregoing, each Lender Party agrees to reimburse the Issuing Bank
promptly upon demand for its ratable share of any costs and expenses (including,
without limitation, fees and expenses of counsel) payable by the Borrower under
Section 8.04, to the extent that the Issuing Bank is not promptly reimbursed for
such costs and expenses by the Borrower.

      (c)  For purposes of this Section 7.05, the Lender Parties' respective
ratable shares of any amount shall be determined, at any time, according to the
sum of (i) the aggregate principal amount of the Advances outstanding at such
time and owing to the respective Lender Parties, (ii) their respective Pro Rata
Shares of the aggregate Available Amount of all Letters of Credit outstanding at
such time and (iii) the aggregate unused portions of their respective Revolving
Credit Commitments at such time; provided that the aggregate principal amount of
Swing Line Advances owing to the Swing Line Bank and of Letter of Credit
Advances owing to the Issuing Bank shall be considered to be owed to the
Revolving Credit Lenders ratably in accordance with their respective Revolving
Credit Commitments. The failure of any Lender Party to reimburse any Agent or
the Issuing Bank, as the case may be, promptly upon demand for its ratable share
of any amount required to be paid by the Lender Parties to such Agent or the
Issuing Bank, as the case may be, as provided herein shall not relieve any other
Lender Party of its obligation hereunder to reimburse such Agent or the Issuing
Bank, as the case may be, for its ratable share of such amount, but no Lender
Party shall be responsible for the failure of any other Lender Party to
reimburse such Agent or the Issuing Bank, as the case may be, for such other
Lender Party's ratable share of such amount. Without prejudice to the survival
of any other agreement of any Lender Party hereunder, the agreement and
obligations of each Lender Party contained in this Section 7.05 shall survive
the payment in full of principal, interest and all other amounts payable
hereunder and under the other Loan Documents.

      SECTION 7.06.  Successor Agents. Any Agent may resign at any time by
giving written notice thereof to the Lender Parties and the Borrower and may be
removed at any time with or without cause by the Required Lenders; provided,
however, that any removal of the Administrative Agent will not be effective
until it has also been replaced as Collateral Agent, Swing Line Bank and Issuing
Bank and released from all of its obligations in respect thereof. Upon any such
resignation or removal, the Required Lenders shall have the right to appoint a
successor Agent. If no successor Agent shall have been so appointed by the
Required Lenders, and shall have accepted such appointment, within 30 days after
the retiring Agent's giving of notice of resignation or the Required Lenders'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Lender Parties, appoint a successor Agent, which shall be a commercial bank
organized under the laws of the United States or of any State thereof and having
a combined capital and surplus of at least $250,000,000. Upon the acceptance of
any appointment as Agent hereunder by a successor Agent and, in the case of a
successor Collateral Agent, upon the execution and filing or recording of such
financing statements, or amendments thereto, and such other instruments or
notices, as may be necessary or desirable, or as the Required Lenders may
request, in order to continue the perfection of the Liens granted or purported
to be granted by the Collateral Documents, such successor Agent shall succeed to
and become vested with all the rights, powers, discretion, privileges and duties
of the retiring Agent, and the retiring Agent shall be discharged from its
duties and obligations under the Loan Documents. If within 45 days after written
notice is given of the retiring Agent's resignation or removal under this
Section 7.06 no successor Agent shall have been appointed and shall have
accepted such appointment, then on such 45th day (a) the retiring Agent's
resignation or removal shall become effective, (b) the retiring Agent shall
thereupon be discharged from its duties and obligations under the Loan Documents
and (c) the Required Lenders shall thereafter perform all duties of the retiring
Agent under the Loan Documents until such time, if any, as the Required Lenders
appoint a successor Agent as provided above. After any retiring Agent's
resignation or removal hereunder as Agent

<PAGE>  72

shall have become effective, the provisions of this Article VII shall inure to
its benefit as to any actions taken or omitted to be taken by it while it was
Agent under this Agreement.

      SECTION 7.07.  Bookrunner/ Co-Arranger, Co-Arranger, Syndication Agent and
Documentation Agent Have No Liability. It is understood and agreed that none of
the Bookrunner/ Co-Arranger, the Co-Arranger, the Syndication Agent or the
Documentation Agent have any duties, responsibilities or liabilities under this
Agreement whatsoever.

ARTICLE VIII

MISCELLANEOUS

      SECTION 8.01.  Amendments, Etc. No amendment or waiver of any provision of
this Agreement or the Notes or any other Loan Document (other than Secured Hedge
Agreements), nor consent to any departure by the Borrower or any other Loan
Party therefrom, shall in any event be effective unless the same shall be in
writing and signed by the Required Lenders (or by the Administrative Agent on
their behalf upon its receipt of the consent thereof) and the Borrower or the
applicable Loan Party, as the case may be, and acknowledged by the
Administrative Agent, and then such waiver or consent shall be effective only in
the specific instance and for the specific purpose for which given; provided,
however, that no such amendment, waiver or consent shall:

 

      (a)  waive any of the conditions, in the case of the Initial Extension of
Credit, specified in Section 3.02, without the written consent of each Lender
(other than any Lender that is, at such time, a Defaulting Lender);

     

      (b)  extend or increase the Commitment of any Lender (or reinstate any
Commitment terminated pursuant to Article VI) without the written consent of
such Lender;

     

      (c)  postpone any date scheduled for any payment of principal or interest
under Section 2.04 or 2.07, or any date fixed by the Administrative Agent for
the payment of fees or other amounts due to the Lenders (or any of them)
hereunder or under any other Loan Document, without the written consent of each
Lender directly affected thereby;

     

      (d)  reduce the principal of, or the rate of interest specified herein on,
any Advance or L/C Disbursement, or (subject to clause (v) of the second proviso
to this Section 8.01) any fees or other amounts payable hereunder or under any
other Loan Document, or change the manner of computation of any financial ratio
(including any change in any applicable defined term) used in determining the
Applicable Margin that would result in a reduction of any interest rate on any
Loan or any fee payable hereunder without the written consent of each Lender
directly affected thereby; provided, however, that only the consent of the
Required Lenders shall be necessary (i) to amend the definition of "Default
Rate" or to waive any obligation of the Borrower to pay interest at the Default
Rate or (ii) to amend any financial covenant hereunder (or any defined term used
therein) even if the effect of such amendment would be to reduce the rate of
interest on any Advance or L/C Disbursement or to reduce any fee payable
hereunder;

     

      (e)  change the order of application of any prepayment of Loans between
the Facilities from the application thereof set forth in the applicable
provisions of Section 2.06(a) and (b) respectively, in any manner that
materially and adversely affects the Lenders under such Facilities;

<PAGE>  73

 

      (f)  change any provision of this Section 8.01 without the written consent
of each Lender, or change (i) the definition of "Required Lenders" without the
written consent of each Lender or (ii) any other provision hereof specifying the
number or percentage of Lenders required to amend, waive or otherwise modify any
rights hereunder or make any determination or grant any consent hereunder,
without the written consent of each Lender;

     

      (g)  release all or substantially all of the Collateral in any transaction
or series of related transactions, without the written consent of each Lender;
or

     

      (h)  release all or substantially all of the Subsidiary Guarantors from
the Subsidiary Guaranty, without the written consent of each Lender;

and, provided further, that (i) no amendment, waiver or consent shall, unless in
writing and signed by the Issuing Bank, in addition to the Lenders required
above, affect the rights or duties of the Issuing Bank under this Agreement or
any Letter of Credit Application relating to any Letter of Credit issued or to
be issued by it; (ii) no amendment, waiver or consent shall, unless in writing
and signed by the Administrative Agent in addition to the Lenders required
above, affect the rights or duties of, or any fees or other amounts payable to,
the Administrative Agent under this Agreement or any other Loan Document; (iii)
no amendment, waiver or consent shall, unless in writing and signed by the Swing
Line Bank in addition to the Lenders required above, affect the rights or duties
of the Swing Line Bank under this Agreement; (iv) Section 8.07(k) may not be
amended, waived or otherwise modified without the consent of each Granting
Lender all or any part of whose Advances are being funded by an SPC at the time
of such amendment, waiver or other modification; and (v) the Fee Letter may be
amended, or rights or privileges thereunder waived, in a writing executed only
by the parties thereto. Notwithstanding anything to the contrary herein, no
Defaulting Lender shall have any right to approve or disapprove any amendment,
waiver or consent hereunder, except that the Commitment of such Lender may not
be increased or extended without the consent of such Lender.

      SECTION 8.02.  Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including fax or e-mail communication) and
mailed, e-mailed, faxed or delivered, if to the Borrower, at its address at
10800 NE 8th Street, Suite 600, Bellevue, Washington 98004, Attention: Chief
Financial Officer; if to any Initial Lender Party, at its Domestic Lending
Office specified opposite its name on Schedule I hereto; if to any other Lender
Party, at its Domestic Lending Office specified in the Assignment and Acceptance
pursuant to which it became a Lender Party; if to the Administrative Agent or
the Collateral Agent, at its address at 201 South College Street, Charlotte
Plaza 8th Floor, Charlotte, North Carolina 28288, Attention: Agency Services;
or, as to any party, at such other address as shall be designated by such party
in a written notice to the other parties. All such notices and other
communications shall, when mailed, e-mailed or faxed, be effective when
deposited in the mails or transmitted by fax or e-mail, except that notices and
communications to any Agent pursuant to Article II, III or VII shall not be
effective until received by such Agent. Delivery by fax of an executed
counterpart of a signature page to any amendment or waiver of any provision of
this Agreement or the Notes or of any Exhibit hereto to be executed and
delivered hereunder shall be effective as delivery of an original executed
counterpart thereof. Electronic mail and Internet and intranet websites may be
used by the Administrative Agent and/or the Agents to distribute communications,
such as financial statements and other information as provided in Section 5.03,
and to distribute Loan Documents for execution by the parties thereto, and the
Administrative Agent and the Agents shall not be responsible for any losses,
costs, expenses and liabilities that may arise by reason of the use thereof,
except for their own gross negligence or willful misconduct. The Administrative
Agent and the Lenders shall be entitled to rely and act upon any notices
(including telephonic notices) purportedly given by or on behalf of the Borrower
even if (a) such notices were not made in a manner specified herein, were
incomplete or were not preceded or followed by any form of notice specified
herein, or (b) the terms thereof, as understood by the recipient,

<PAGE>  74

varied from any confirmation thereof. The Borrower shall indemnify each Agent
and each Lender from all losses, costs, expenses and liabilities resulting from
the reliance by such Person on each notice purportedly given by or on behalf of
the Borrower in accordance with this Agreement, other than, with respect to any
Agent or Lender, the losses, costs, expenses and liabilities that result from
the gross negligence or willful misconduct of such Agent or Lender. All
telephonic notices to and other communications with the Administrative Agent may
be recorded by the Administrative Agent, and each of the parties hereto hereby
consents to such recording.

      SECTION 8.03.  No Waiver; Remedies; Entire Agreement. No failure on the
part of any Lender Party or any Agent to exercise, and no delay in exercising,
any right hereunder or under any Note or any other Loan Document shall operate
as a waiver thereof; nor shall any single or partial exercise of any such right
preclude any other or further exercise thereof or the exercise of any other
right. The remedies herein provided are cumulative and not exclusive of any
remedies provided by law. This Agreement and the other Loan Documents constitute
the entire agreement of the parties with respect hereto.

      SECTION 8.04.  Costs and Expenses.  (a)  The Borrower agrees to pay on
demand (i) all costs and expenses of each Agent in connection with the
preparation, execution, delivery, administration, modification and amendment of,
or any consent or waiver under, the Loan Documents (including, without
limitation, (A) all due diligence, collateral review, arrangement, syndication,
transportation, computer, duplication, appraisal, audit, insurance, consultant,
search, filing and recording fees and expenses and (B) the reasonable fees and
expenses of counsel for each Agent with respect thereto, with respect to
advising such Agent as to its rights and responsibilities, or the perfection,
protection, interpretation or preservation of rights or interests, under the
Loan Documents, with respect to negotiations with any Loan Party or with other
creditors of any Loan Party or any of its Subsidiaries arising out of any
Default or any events or circumstances that may give rise to a Default and with
respect to presenting claims in or otherwise participating in or monitoring any
bankruptcy, insolvency or other similar proceeding involving creditors' rights
generally and any proceeding ancillary thereto) and (ii) all costs and expenses
of each Agent and each Lender Party in connection with the enforcement of the
Loan Documents, whether in any action, suit or litigation, or any bankruptcy,
insolvency or other similar proceeding affecting creditors' rights generally
(including, without limitation, the reasonable fees and expenses of counsel for
the Administrative Agent and each Lender Party with respect thereto). The
Borrower further agrees to pay any stamp or other taxes that may be payable in
connection with the execution or delivery of any Loan Document.

      (b)  The Borrower agrees to indemnify, defend and save and hold harmless
each Agent, each Lender Party and each of their Affiliates and their respective
officers, directors, employees, agents and advisors (each, an "Indemnified
Party") from and against, and shall pay on demand, any and all claims, damages,
losses, liabilities and expenses (including, without limitation, reasonable fees
and expenses of counsel) that may be incurred by or asserted or awarded against
any Indemnified Party, in each case arising out of or in connection with or by
reason of (including, without limitation, in connection with any investigation,
litigation or proceeding or preparation of a defense in connection therewith)
(i) the Facilities, the actual or proposed use of the proceeds of the Advances
or the Letters of Credit, the Loan Documents or any of the transactions
contemplated thereby, including, without limitation, any acquisition or proposed
acquisition (including, without limitation, the Acquisition) by the Borrower or
any of its Subsidiaries or Affiliates of all or any portion of the Equity
Interests in or Debt securities or substantially all of the assets of the
Company or any of its Subsidiaries or (ii) the actual or alleged presence of
Hazardous Materials on any property of any Loan Party or any of its Subsidiaries
or any Environmental Action relating in any way to any Loan Party or any of its
Subsidiaries, except to the extent such claim, damage, loss, liability or
expense is found in a final, non-appealable judgment by a court of competent
jurisdiction to have resulted from such Indemnified Party's gross negligence or
willful misconduct. In the

<PAGE>  75

case of an investigation, litigation or other proceeding to which the indemnity
in this Section 8.04(b) applies, such indemnity shall be effective whether or
not such investigation, litigation or proceeding is brought by any Loan Party,
its directors, shareholders or creditors or an Indemnified Party or any other
Person, whether or not any Indemnified Party is otherwise a party thereto and
whether or not the Acquisition or the transactions contemplated hereby are
consummated. The Borrower also agrees not to assert any claim against any Agent,
any Lender Party or any of their Affiliates, or any of their respective
officers, directors, employees, agents and advisors, on any theory of liability,
for special, indirect, consequential or punitive damages arising out of or
otherwise relating to the Facilities, the actual or proposed use of the proceeds
of the Advances or the Letters of Credit, the Loan Documents or any of the
transactions contemplated by the Loan Documents.

      (c)  If any payment of principal of, or Conversion of, any Eurodollar Rate
Advance is made by the Borrower to or for the account of a Lender Party other
than on the last day of the Interest Period for such Advance, as a result of a
payment or Conversion pursuant to Section 2.06, 2.09(b)(i) or 2.10(d),
acceleration of the maturity of the Notes pursuant to Section 6.01 or for any
other reason, or by an Eligible Assignee to a Lender Party other than on the
last day of the Interest Period for such Advance upon an assignment of rights
and obligations under this Agreement pursuant to Section 8.07 as a result of a
demand by the Borrower pursuant to Section 8.07(a), or if the Borrower fails to
make any payment or prepayment of an Advance for which a notice of prepayment
has been given or that is otherwise required to be made, whether pursuant to
Section 2.04, 2.06 or 6.01 or otherwise, the Borrower shall, upon demand by such
Lender Party (with a copy of such demand to the Administrative Agent), pay to
the Administrative Agent for the account of such Lender Party any amounts
required to compensate such Lender Party for any additional losses, costs or
expenses that it may reasonably incur as a result of such payment or Conversion
or such failure to pay or prepay, as the case may be, including, without
limitation, any loss (including loss of anticipated profits), cost or expense
incurred by reason of the liquidation or reemployment of deposits or other funds
acquired by any Lender Party to fund or maintain such Advance.

      (d)  If any Loan Party fails to pay when due any costs, expenses or other
amounts payable by it under any Loan Document, including, without limitation,
fees and expenses of counsel and indemnities, such amount may be paid on behalf
of such Loan Party by the Administrative Agent or any Lender Party, in its sole
discretion.

      (e)  Without prejudice to the survival of any other agreement of any Loan
Party hereunder or under any other Loan Document, the agreements and obligations
of the Borrower contained in Sections 2.10 and 2.12 and this Section 8.04 shall
survive the payment in full of principal, interest and all other amounts payable
hereunder and under any of the other Loan Documents.

      SECTION 8.05.  Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 to authorize the
Administrative Agent to declare the Notes due and payable pursuant to the
provisions of Section 6.01 or otherwise with the consent of the Required
Lenders, each Agent and each Lender Party and each of their respective
Affiliates is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and otherwise apply any and all
deposits (general or special, time or demand, provisional or final) at any time
held and other indebtedness at any time owing by such Agent, such Lender Party
or such Affiliate to or for the credit or the account of the Borrower against
any and all of the Obligations of the Borrower now or hereafter existing under
the Loan Documents, irrespective of whether such Agent or such Lender Party
shall have made any demand under this Agreement or such Note or Notes and
although such Obligations may be unmatured. Each Agent and each Lender Party
agrees promptly to notify the Borrower after any such set-off and application;
provided, however, that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Agent and each
Lender Party and their respective Affiliates under this

<PAGE>  76

Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

      SECTION 8.06.  Binding Effect. This Agreement shall become effective when
it shall have been executed by the Borrower and each Agent and the
Administrative Agent shall have been notified by each Initial Lender Party that
such Initial Lender Party has executed it and thereafter shall be binding upon
and inure to the benefit of the Borrower, each Agent and each Lender Party and
their respective successors and assigns, except that the Borrower shall not have
the right to assign its rights hereunder or any interest herein without the
prior written consent of the Lender Parties.

      SECTION 8.07.  Assignments and Participations.  (a)  Each Lender may and,
so long as no Default shall have occurred and be continuing, if demanded by the
Borrower (following a demand by such Lender pursuant to Section 2.10 or 2.12)
upon at least five Business Days' notice to such Lender and the Administrative
Agent will, assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement and the other Loan Documents
(including, without limitation, all or a portion of its Commitment or
Commitments, the Advances owing to it and the Note or Notes held by it);
provided, however, that (i) except in the case of an assignment to a Person
that, immediately prior to such assignment, was a Lender, an Affiliate of any
Lender or an Approved Fund of any Lender or an assignment of all of a Lender's
rights and obligations under this Agreement, the aggregate amount of the
Commitments being assigned to such Eligible Assignee pursuant to such assignment
(determined as of the date of the Assignment and Acceptance with respect to such
assignment) shall in no event be less than $1,000,000 (or, in each case, such
lesser amount as shall be approved by the Administrative Agent and, so long as
no Default shall have occurred and be continuing at the time of effectiveness of
such assignment, the Borrower) under each Facility for which a Commitment is
being assigned, (ii) each such assignment shall be to an Eligible Assignee and
(iii) the parties to each such assignment shall execute and deliver to the
Administrative Agent, for its acceptance and recording in the Register, an
Assignment and Acceptance, together with any Note or Notes subject to such
assignment and (except in the case of an assignment to a Person that,
immediately prior to such assignment, was an Affiliate or an Approved Fund of
the assigning Lender) a processing and recordation fee of $3,500.

      (b)  Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in such Assignment and Acceptance, (i) the
assignee thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been assigned to it pursuant to such Assignment and
Acceptance, have the rights and obligations of a Lender or the Issuing Bank, as
the case may be, hereunder and (ii) the Lender or the Issuing Bank assignor
thereunder shall, to the extent that rights and obligations hereunder have been
assigned by it pursuant to such Assignment and Acceptance, relinquish its rights
(other than its rights under Sections 2.10, 2.12 and 8.04 to the extent any
claim thereunder relates to an event arising prior to such assignment) and be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of the remaining portion of an assigning
Lender's or the Issuing Bank's rights and obligations under this Agreement, such
Lender or the Issuing Bank shall cease to be a party hereto).

      (c)  By executing and delivering an Assignment and Acceptance, each Lender
Party assignor thereunder and each assignee thereunder confirm to and agree with
each other and the other parties thereto and hereto as follows: (i) other than
as provided in such Assignment and Acceptance, such assigning Lender Party makes
no representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(ii) such assigning Lender Party makes no representation or warranty and assumes
no responsibility with respect to the

<PAGE>  77

financial condition of any Loan Party or the performance or observance by any
Loan Party of any of its obligations under any Loan Document or any other
instrument or document furnished pursuant thereto; (iii) such assignee confirms
that it has received a copy of this Agreement, together with copies of the
financial statements referred to in Section 4.01 and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (iv) such assignee will,
independently and without reliance upon any Agent, such assigning Lender Party
or any other Lender Party and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement; (v) such assignee confirms
that it is an Eligible Assignee; (vi) such assignee appoints and authorizes each
Agent to take such action as agent on its behalf and to exercise such powers and
discretion under the Loan Documents as are delegated to such Agent by the terms
hereof and thereof, together with such powers and discretion as are reasonably
incidental thereto; and (vii) such assignee agrees that it will perform in
accordance with their terms all of the obligations that by the terms of this
Agreement are required to be performed by it as a Lender or the Issuing Bank, as
the case may be.

      (d)  The Administrative Agent shall maintain at its address referred to in
Section 8.02 a copy of each Assignment and Acceptance delivered to and accepted
by it and a register for the recordation of the names and addresses of the
Lender Parties and the Commitment under each Facility of, and principal amount
of the Advances owing under each Facility to, each Lender Party from time to
time (the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Borrower, the Agents
and the Lender Parties may treat each Person whose name is recorded in the
Register as a Lender Party hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower or any Agent or any
Lender Party at any reasonable time and from time to time upon reasonable prior
notice.

      (e)  Upon its receipt of an Assignment and Acceptance executed by an
assigning Lender Party and an assignee, together with any Note or Notes subject
to such assignment, the Administrative Agent shall, if such Assignment and
Acceptance has been completed and is in substantially the form of Exhibit C
hereto, (i) accept such Assignment and Acceptance, (ii) record the information
contained therein in the Register and (iii) give prompt notice thereof to the
Borrower and each other Agent. In the case of any assignment by a Lender, within
five Business Days after its receipt of such notice, the Borrower, at its own
expense, shall execute and deliver to the Administrative Agent in exchange for
the surrendered Note or Notes a new Note to the order of such Eligible Assignee
in an amount equal to the Commitment assumed by it under each Facility pursuant
to such Assignment and Acceptance and, if any assigning Lender has retained a
Commitment hereunder under such Facility, a new Note to the order of such
assigning Lender in an amount equal to the Commitment retained by it hereunder.
Such new Note or Notes shall be in an aggregate principal amount equal to the
aggregate principal amount of such surrendered Note or Notes, shall be dated the
effective date of such Assignment and Acceptance and shall otherwise be in
substantially the form of Exhibit A-1 or A-2 hereto, as the case may be.

      (f)  The Issuing Bank may assign to an Eligible Assignee all of its rights
and obligations under the undrawn portion of its Letter of Credit Commitment at
any time; provided, however, that (i) each such assignment shall be to an
Eligible Assignee and (ii) the parties to each such assignment shall execute and
deliver to the Administrative Agent, for its acceptance and recording in the
Register, an Assignment and Acceptance, together with a processing and
recordation fee of $3,500.

      (g)  Each Lender Party may sell participations to one or more Persons
(other than any Loan Party or any of its Affiliates) in or to all or a portion
of its rights and obligations under this Agreement (including, without
limitation, all or a portion of its Commitments, the Advances owing to it and
the Note or Notes (if any) held by it); provided, however, that (i) such Lender
Party's obligations under this Agreement (including, without limitation, its
Commitments) shall remain unchanged, (ii) such

<PAGE>  78

Lender Party shall remain solely responsible to the other parties hereto for the
performance of such obligations, (iii) such Lender Party shall remain the holder
of any such Note for all purposes of this Agreement, (iv) the Borrower, the
Agents and the other Lender Parties shall continue to deal solely and directly
with such Lender Party in connection with such Lender Party's rights and
obligations under this Agreement and (v) no participant under any such
participation shall have any right to approve any amendment or waiver of any
provision of any Loan Document, or any consent to any departure by any Loan
Party therefrom, except to the extent that such amendment, waiver or consent
would reduce the principal of, or interest on, the Notes or any fees or other
amounts payable hereunder, in each case to the extent subject to such
participation, postpone any date fixed for any payment of principal of, or
interest on, the Notes or any fees or other amounts payable hereunder, in each
case to the extent subject to such participation, or release all or
substantially all of the Collateral.

      (h)  Any Lender Party may, in connection with any assignment or
participation or proposed assignment or participation pursuant to this Section
8.07, disclose to the assignee or participant or proposed assignee or
participant any information relating to the Borrower furnished to such Lender
Party by or on behalf of the Borrower; provided, however, that, prior to any
such disclosure, the assignee or participant or proposed assignee or participant
shall agree to preserve the confidentiality of any Confidential Information
received by it from such Lender Party.

      (i)  Notwithstanding any other provision set forth in this Agreement, any
Lender Party may at any time create a security interest in all or any portion of
its rights under this Agreement and the other Loan Documents (including, without
limitation, the Advances owing to it and the Note or Notes held by it) in favor
of any Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System.

      (j)  Notwithstanding anything to the contrary contained herein, any Lender
that is a fund that invests in bank loans may create a security interest in all
or any portion of the Advances owing to it and the Note or Notes held by it to
the trustee for holders of obligations owed, or securities issued, by such fund
as security for such obligations or securities, provided, that unless and until
such trustee actually becomes a Lender in compliance with the other provisions
of this Section 8.07, (i) no such pledge shall release the pledging Lender from
any of its obligations under the Loan Documents and (ii) such trustee shall not
be entitled to exercise any of the rights of a Lender under the Loan Documents
even though such trustee may have acquired ownership rights with respect to the
pledged interest through foreclosure or otherwise.

      SECTION 8.08.  Execution in Counterparts. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed shall be deemed to be an original
and all of which taken together shall constitute one and the same agreement.
Delivery by fax of an executed counterpart of a signature page to this Agreement
shall be effective as delivery of an original executed counterpart of this
Agreement.

      SECTION 8.09.  No Liability of the Issuing Bank. The Borrower assumes all
risks of the acts or omissions of any beneficiary or transferee of any Letter of
Credit with respect to its use of such Letter of Credit. Neither the Issuing
Bank nor any of its officers or directors shall be liable or responsible for:
(a) the use that may be made of any Letter of Credit or any acts or omissions of
any beneficiary or transferee in connection therewith; (b) the validity,
sufficiency or genuineness of documents, or of any endorsement thereon, even if
such documents should prove to be in any or all respects invalid, insufficient,
fraudulent or forged; (c) payment by the Issuing Bank against presentation of
documents that do not comply with the terms of a Letter of Credit, including
failure of any documents to bear any reference or adequate reference to the
Letter of Credit; or (d) any other circumstances whatsoever in making or failing
to make payment under any Letter of Credit, except that the Borrower shall have
a

<PAGE>  79

claim against the Issuing Bank, and the Issuing Bank shall be liable to the
Borrower, to the extent of any direct, but not consequential, damages suffered
by the Borrower that the Borrower proves were caused by (i) the Issuing Bank's
willful misconduct or gross negligence as determined in a final, non-appealable
judgment by a court of competent jurisdiction in determining whether documents
presented under any Letter of Credit comply with the terms of the Letter of
Credit or (ii) the Issuing Bank's willful failure to make lawful payment under a
Letter of Credit after the presentation to it of a draft and certificates
strictly complying with the terms and conditions of the Letter of Credit. In
furtherance and not in limitation of the foregoing, the Issuing Bank may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary.

      SECTION 8.10.  Confidentiality. Neither any Agent nor any Lender Party
shall disclose any Confidential Information to any Person without the consent of
the Borrower, other than (a) to such Agent's or such Lender Party's Affiliates
and their officers, directors, employees, agents and advisors and to actual or
prospective Eligible Assignees and participants, and then only on a confidential
basis, (b) as required by any law, rule or regulation or judicial process,
(c) as requested or required by any state, Federal or foreign authority or
examiner (including the National Association of Insurance Commissioners or any
similar organization or quasi-regulatory authority) regulating such Lender
Party, (d) to any rating agency when required by it, provided that, prior to any
such disclosure, such rating agency shall undertake to preserve the
confidentiality of any Confidential Information relating to the Loan Parties
received by it from such Lender Party, (e) in connection with any litigation or
proceeding to which such Agent or such Lender Party or any of its Affiliates may
be a party or (f) in connection with the exercise of any right or remedy under
this Agreement or any other Loan Document; provided, that, any Agent and any
Lender Party (and each employee, representative or other agent of such Agent or
such Lender Party, as applicable) may disclose to any and all Persons, without
limitation of any kind, the "tax treatment" and "tax structure" (in each case,
within the meaning of Treasury Regulation Section 1.6011-4) of the Acquisition
and the transactions contemplated hereby and all materials of any kind
(including opinions or other tax analyses) that are provided to the Agent or
such Lender Party relating to such tax treatment and tax structure, except that,
with respect to any document or similar item that in either case contains
information concerning the tax treatment or tax structure of the transaction as
well as other information, this proviso shall only apply to such portions of the
document or similar item that relate to the tax treatment or tax structure of
the Acquisition and the transactions contemplated hereby. The Borrower does not
intend to treat the Advances and related transactions as being a "reportable
transaction" (within the meaning of Treasury Regulation Section 1.6011-4). Each
Loan Party acknowledges that one or more of the Lender Parties may treat the
Advances as part of a transaction that is subject to Treasury Regulation Section
1.6011-4 or Section 301.6112-1, and the Administrative Agent and such Lender
Party or Lender Parties, as applicable, may file such IRS forms or maintain such
lists and other records as they may determine is required by such Treasury
Regulations.

      SECTION 8.11.  Release of Collateral. Upon the sale, lease, transfer or
other disposition of any item of Collateral of any Loan Party (including,
without limitation, as a result of the sale, in accordance with the terms of the
Loan Documents, of a Subsidiary Guarantor that owns such Collateral) in
accordance with the terms of the Loan Documents, the Collateral Agent will, at
the Borrower's expense, execute and deliver to such Loan Party such documents as
such Loan Party may reasonably request to evidence the release of such item of
Collateral from the assignment and security interest granted under the
Collateral Documents in accordance with the terms of the Loan Documents and, if
applicable, the release of such Subsidiary Guarantor from its obligations under
the Subsidiary Guaranty.

      SECTION 8.12.  Jurisdiction, Etc.  (a)  EACH OF THE PARTIES HERETO HEREBY
IRREVOCABLY AND UNCONDITIONALLY SUBMITS, FOR ITSELF AND ITS PROPERTY, TO THE
NONEXCLUSIVE JURISDICTION OF ANY NEW YORK STATE COURT OR FEDERAL COURT OF THE
UNITED STATES OF AMERICA SITTING IN

<PAGE>  80

NEW YORK CITY, AND ANY APPELLATE COURT FROM ANY THEREOF, IN ANY ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY, OR FOR RECOGNITION OR ENFORCEMENT OF ANY
JUDGMENT, AND EACH OF THE PARTIES HERETO HEREBY IRREVOCABLY AND UNCONDITIONALLY
AGREES THAT ALL CLAIMS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH NEW YORK STATE COURT OR, TO THE FULLEST EXTENT
PERMITTED BY LAW, IN SUCH FEDERAL COURT. EACH OF THE PARTIES HERETO AGREES THAT
A FINAL JUDGMENT IN ANY SUCH ACTION OR PROCEEDING SHALL BE CONCLUSIVE AND MAY BE
ENFORCED IN OTHER JURISDICTIONS BY SUIT ON THE JUDGMENT OR IN ANY OTHER MANNER
PROVIDED BY LAW. NOTHING IN THIS AGREEMENT SHALL AFFECT ANY RIGHT THAT ANY PARTY
MAY OTHERWISE HAVE TO BRING ANY ACTION OR PROCEEDING RELATING TO THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS IN THE COURTS OF ANY JURISDICTION.

      (b)  EACH OF THE PARTIES HERETO IRREVOCABLY AND UNCONDITIONALLY WAIVES, TO
THE FULLEST EXTENT IT MAY LEGALLY AND EFFECTIVELY DO SO, ANY OBJECTION THAT IT
MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT, ACTION OR
PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN
DOCUMENTS TO WHICH IT IS A PARTY IN ANY NEW YORK STATE OR FEDERAL COURT. EACH OF
THE PARTIES HERETO HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY
LAW, THE DEFENSE OF AN INCONVENIENT FORUM TO THE MAINTENANCE OF SUCH ACTION OR
PROCEEDING IN ANY SUCH COURT.

      SECTION 8.13.  GOVERNING LAW. THIS AGREEMENT AND THE NOTES SHALL BE
GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
NEW YORK.

      SECTION 8.14.  WAIVER OF JURY TRIAL. EACH OF THE BORROWER, THE AGENTS AND
THE LENDER PARTIES IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY IN ANY ACTION,
PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR OTHERWISE)
ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES, THE
LETTERS OF CREDIT OR THE ACTIONS OF ANY AGENT OR ANY LENDER PARTY IN THE
NEGOTIATION, ADMINISTRATION, PERFORMANCE OR ENFORCEMENT THEREOF.

<PAGE>  

      IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.

 

ESTERLINE TECHNOLOGIES CORPORATION

     

By

/s/ Robert D. George

   

Name: Robert D. George

   

Title: Vice President, Chief Financial Officer, Secretary and Treasurer

       

WACHOVIA BANK, NATIONAL ASSOCIATION,

   

as Administrative Agent

       

By

/s/ Jeffrey M. Foley

   

Name: Jeffrey M. Foley

   

Title: Vice President

       

WACHOVIA BANK, NATIONAL ASSOCIATION,

   

as Collateral Agent

       

By

/s/ Jeffrey M. Foley

   

Name: Jeffrey M. Foley

   

Title: Vice President

       

THE BANK OF NEW YORK,

   

as Syndication Agent

       

By

/s/ Elizabeth T. Ying

   

Name: Elizabeth T. Ying

   

Title: Vice President

       

KEYBANK NATIONAL ASSOCIATION,

   

as Documentation Agent

       

By

/s/ Cheryl L. Ebner

   

Name: Cheryl L. Ebner

   

Title: Senior Vice President

       

WACHOVIA SECURITIES, LLC,

   

as Bookrunner/ Co-Arranger

       

By

/s/ Jeffrey M. Foley

   

Name: Jeffrey M. Foley

   

Title: Vice President

<PAGE>  2

 

Initial Lenders

       

WACHOVIA BANK, NATIONAL ASSOCIATION,

   

as Initial Lender, Issuing Bank and Swing Line Bank

       

By

/s/ Jeffrey M. Foley

   

Name: Jeffrey M. Foley

   

Title: Vice President

       

THE BANK OF NEW YORK

       

By

/s/ Elizabeth T. Ying

   

Name: Elizabeth T. Ying

   

Title: Vice President

       

KEY BANK NATIONAL ASSOCIATION

       

By

/s/ Cheryl L. Ebner

   

Name: Cheryl L. Ebner

   

Title: Senior Vice President

       

U.S. BANK NATIONAL ASSOCIATION

       

By

/s/ James R. Farmer

   

Name: James R. Farmer

   

Title: Vice President

       

WELLS FARGO BANK, N.A.

       

By

/s/ Russ Carson

   

Name: Russ Carson

   

Title: AVP / Relationship Manager

<PAGE>  

SCHEDULE I

COMMITMENTS AND APPLICABLE LENDING OFFICES

Name of Initial Lender

Revolving
Credit
Commitment

Swing
Line
Commitment

Letter of
Credit
Commitment

Lending
Office

Wachovia Bank, National Association

$14,000,000

$5,000,000

$35,000,000

See Section 8.02

The Bank of New York

$13,000,000

-

-

One Wall St., 22nd Floor
New York, NY 10005
Attn.: Dawn Hertling
tel.: (212) 635-6742

KeyBank National Association

$11,000,000

-

-

127 Public Square
Cleveland, Ohio 44114
Attn.: Kathy A. Koenig
tel.: (216) 689-4228
fax.: (216) 689-4981

U.S. Bank National Association

$11,000,000

-

-

1420 Fifth Avenue, 10th Floor
PD-WAT11C
Seattle, Washington 98101
Attn.: Gail Fortun
tel.: (206) 587-5212
fax.: (206) 344-3741

Wells Fargo Bank, N.A.

$11,000,000

-

-

999 Third Avenue, 11th Floor
Seattle, Washington 98104
Attn.: Russ Carson
tel.: (206) 292-3207
fax.: (206) 343-6626

TOTAL

$60,000,000

$5,000,000

$35,000,000

 

<PAGE>  

SCHEDULE II

FINANCIAL COVENANT ITEMS

(in $000s)

                     

Quarterly Results

                     

EBITDA

2Q 2002

3Q 2002

4Q 2002

1Q 2003

2Q 2003

 

--------------------------------------------------------------------------------

Esterline

15,187

14,764

18,157

15,571

14,290

Burke

1,790

0

0

0

0

BAE

1,693

3,236

2,010

0

0

Weston

1,930

1,929

1,929

1,929

1,930

 

--------------------------------------------------------------------------------

Total PF EBITDA

20,600

19,929

22,096

17,500

16,220

           

Interest Expense

4,846

4,846

4,846

4,846

4,846

Taxes

1,904

1,904

1,904

1,904

1,904

Capital Expenditures

4,025

4,025

4,025

4,025

4,025

           

Curr Mat. LTD

0

0

30,000

30,000

30,000

Principal Payments

0

0

0

0

0

<PAGE>  

SCHEDULE III

SUBSIDIARY GUARANTORS

1.  Advanced Input Devices, Inc.

 

2.  Amtech Automated Manufacturing Technology

 

3.  Angus Electronics Co.

 

4.  Armtec Countermeasures Co.

 

5.  Armtec Defense Products Co.

 

6.  Auxitrol Co.

 

7.  Boyar-Schultz Corporation

 

8.  BVR Technologies Co.

 

9.  Equipment Sales Co.

 

10. Excellon Automation Co.

 

11. Excellon U.K.

 

12. Fluid Regulators Corporation

 

13. H.A. Sales Co.

 

14. Hytek Finishes Co.

 

15. Janco Corporation

 

16. Kirkhill-TA Co.

 

17. Korry Electronics Co.

 

18. Mason Electric Co.

 

19. MC Tech Co.

 

20. McTaws Corporation

 

21. Memtron Technologies Co.

 

22. Norwich Aero Products, Inc.

 

23. Pressure Systems, Inc.

 

24. Pressure Systems International, Inc.

 

25. SureSeal Corporation

 

26. Surftech Finishes Co.

 

27. W.A. Whitney Co.

<PAGE>

EXHIBIT A-1

FORM OF
REVOLVING
CREDIT NOTE

REVOLVING CREDIT NOTE

$________

      FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to __________________ or registered assigns (the "Lender"), in accordance
with the provisions of the Agreement (as hereinafter defined), the principal
amount of each Revolving Credit Advance from time to time made by the Lender to
the Borrower under that certain Credit Agreement, dated as of June 11 2003 (as
amended, restated, extended, supplemented or otherwise modified in writing from
time to time, the "Agreement"; the terms defined therein being used herein as
therein defined), among the Borrower, the Lenders and agents from time to time
party thereto, Wachovia Bank, National Association, as Administrative Agent,
Swing Line Bank and Issuing Bank.

      The Borrower promises to pay interest on the unpaid principal amount of
each Revolving Credit Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. All payments of principal and interest shall be made to the
Administrative Agent for the account of the Lender in Dollars in immediately
available funds at the Administrative Agent's Account. If any amount is not paid
in full when due hereunder, such unpaid amount shall bear interest, to be paid
upon demand, from the due date thereof until the date of actual payment (and
before as well as after judgment) computed at the per annum rate set forth in
the Agreement.

      This Revolving Credit Note is one of the Revolving Credit Notes referred
to in the Agreement, is entitled to the benefits thereof and may be prepaid in
whole or in part subject to the terms and conditions provided therein. This
Revolving Credit Note is also entitled to the benefits of the Subsidiary
Guaranty and is secured by the Collateral. Upon the occurrence and continuation
of one or more of the Events of Default specified in the Agreement, all amounts
then remaining unpaid on this Revolving Credit Note shall become, or may be
declared to be, immediately due and payable all as provided in the Agreement.
Revolving Credit Advances and Swing Line Advances made by the Lender shall be
evidenced by one or more Advance accounts or records maintained by the Lender in
the ordinary course of business. The Lender may also attach schedules to this
Revolving Credit Note and endorse thereon the date, amount and maturity of its
Revolving Credit Advances and Swing Line Advances and payments with respect
thereto.

      The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Revolving Credit Note.

<PAGE>  A-1-1

      THIS REVOLVING CREDIT NOTE SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

 

ESTERLINE TECHNOLOGIES CORPORATION

     

By:

____________________________________

   

Name:

   

Title:

<PAGE>  A-1-2

ADVANCES AND PAYMENTS WITH RESPECT THERETO

Date

 

Type of
Advance
Made

 

Amount of
Advance
Made

 

End of
Interest
Period

 

Amount of
Principal or
Interest Paid
This Date

 

Outstanding
Principal
Balance This
Date

 

Notation
Made By

--------------------------------------------------------------------------------

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

<PAGE>  A-1-3

EXHIBIT A-2

FORM OF
SWING LINE
NOTE

FORM OF SWING LINE NOTE

_______________

      FOR VALUE RECEIVED, the undersigned (the "Borrower"), hereby promises to
pay to Wachovia Bank, National Association ("Wachovia"), or registered assigns
(the "Lender"), in accordance with the provisions of the Agreement (as
hereinafter defined), the principal amount of each Swing Line Advance from time
to time made by the Lender to the Borrower under that certain Credit Agreement,
dated as of June 11, 2003 (as amended, restated, extended, supplemented or
otherwise modified in writing from time to time, the "Agreement"; the terms
defined therein being used herein as therein defined), among the Borrower, the
Lenders and agents from time to time party thereto, Wachovia, as Administrative
Agent, Swing Line Lender and Issuing Bank.

      The Borrower promises to pay interest on the unpaid principal amount of
each Swing Line Advance from the date of such Advance until such principal
amount is paid in full, at such interest rates and at such times as provided in
the Agreement. If any amount is not paid in full when due hereunder, such unpaid
amount shall bear interest, to be paid upon demand, from the due date thereof
until the date of actual payment (and before as well as after judgment) computed
at the per annum rate set forth in the Agreement.

      This Swing Line Note is the Swing Line Note referred to in the Agreement,
is entitled to the benefits thereof and may be prepaid in whole or in part
subject to the terms and conditions provided therein. This Swing Line Note is
also entitled to the benefits of the Subsidiary Guaranty and is secured by the
Collateral. Upon the occurrence and continuation of one or more of the Events of
Default specified in the Agreement, all amounts then remaining unpaid on this
Swing Line Note shall become, or may be declared to be, immediately due and
payable all as provided in the Agreement. Swing Line Advances made by the Lender
shall be evidenced by one or more Advance accounts or records maintained by the
Lender in the ordinary course of business. The Lender may also attach schedules
to this Swing Line Note and endorse thereon the date, amount and maturity of its
Swing Line Advances and payments with respect thereto.

      The Borrower, for itself, its successors and assigns, hereby waives
diligence, presentment, protest and demand and notice of protest, demand,
dishonor and non-payment of this Swing Line Note.

<PAGE>  A-2-1

      THIS SWING LINE NOTE SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE LAWS OF THE STATE OF NEW YORK.

 

ESTERLINE TECHNOLOGIES CORPORATION

     

By:

____________________________________

   

Name:

   

Title:

<PAGE>  A-2-2

ADVANCES AND PAYMENTS WITH RESPECT THERETO

Date

 

Type of
Advance
Made

 

Amount of
Advance
Made

 

End of
Interest
Period

 

Amount of
Principal or
Interest Paid
This Date

 

Outstanding
Principal
Balance This
Date

 

Notation
Made By

--------------------------------------------------------------------------------

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

                         

______

 

________

 

________

 

______

 

__________

 

___________

 

_______

<PAGE>  A-2-3

EXHIBIT B

FORM OF
NOTICE OF BORROWING

Wachovia Bank, National Association,
    as Administrative Agent
    under the Credit Agreement
    referred to below

201 South College Street
Charlotte Plaza, 8th Floor
Charlotte, North Carolina 28288-0737

[Date]

      Attention: _______________

Ladies and Gentlemen:

      The undersigned, Esterline Technologies Corporation, refers to the Credit
Agreement dated as of June 11, 2003 (as amended, amended and restated,
supplemented or otherwise modified from time to time, the "Credit Agreement";
the terms defined therein being used herein as therein defined), among the
undersigned, the Lender Parties party thereto, Wachovia Bank, National
Association, as Collateral Agent and as Administrative Agent for the Lender
Parties, and hereby gives you notice, irrevocably, pursuant to Section 2.02 of
the Credit Agreement that the undersigned hereby requests a Borrowing under the
Credit Agreement, and in that connection sets forth below the information
relating to such Borrowing (the "Proposed Borrowing") as required by
Section 2.02(a) of the Credit Agreement:

 

      (i)    The Business Day of the Proposed Borrowing is _________ __, ____.

       

      (ii)     The Facility under which the Proposed Borrowing is requested is
the _______________ Facility.

       

      (iii)    The Type of Advances comprising the Proposed Borrowing is [Base
Rate Advances] [Eurodollar Rate Advances].

       

      (iv)    The aggregate amount of the Proposed Borrowing is $__________.

       

      (v)    [The initial Interest Period for each Eurodollar Rate Advance made
as part of the Proposed Borrowing is __________ month[s].]

      The undersigned hereby certifies that the following statements are true on
the date hereof, and will be true on the date of the Proposed Borrowing:

      (A)    The representations and warranties contained in each Loan Document
are correct in all material respects on and as of the date of the Proposed
Borrowing, before and after giving effect to the Proposed Borrowing and to the
application of the proceeds therefrom, as though made on and as of such date,
other than any such representations or warranties that, by their express terms,
refer to a specific date other than the date of the Proposed Borrowing, in which
case, as of such specific date.

<PAGE>  B-1

      (B)    No Default has occurred and is continuing, or would result from
such Proposed Borrowing or from the application of the proceeds therefrom.

      Delivery of an executed counterpart of this Notice of Borrowing by fax
shall be effective as delivery of an original executed counterpart of this
Notice of Borrowing.

 

Very truly yours,

     

ESTERLINE TECHNOLOGIES CORPORATION

     

By:

____________________________________

   

Name:

   

Title:

<PAGE>  B-2

EXHIBIT C

FORM OF
ASSIGNMENT AND ACCEPTANCE

      Reference is made to the Credit Agreement dated as of June 11, 2003 (as
amended, amended and restated, supplemented or otherwise modified from time to
time, the "Credit Agreement"; the terms defined therein, unless otherwise
defined herein, being used herein as therein defined) among Esterline
Technologies Corporation, a Delaware corporation (the "Borrower"), the Lender
Parties party thereto, Wachovia Bank, National Association, as Collateral Agent
and as Administrative Agent for the Lender Parties.

      Each "Assignor" referred to on Schedule 1 hereto (each, an "Assignor") and
each "Assignee" referred to on Schedule 1 hereto (each, an "Assignee") agrees
severally with respect to all information relating to it and its assignment
hereunder and on Schedule 1 hereto as follows:

 

      (1)    Such Assignor hereby sells and assigns, without recourse except as
to the representations and warranties made by it herein, to such Assignee, and
such Assignee hereby purchases and assumes from such Assignor, an interest in
and to such Assignor's rights and obligations under the Credit Agreement as of
the date hereof equal to the percentage interest specified on Schedule 1 hereto
of all outstanding rights and obligations under the Credit Agreement. After
giving effect to such sale and assignment, such Assignee's Commitments and the
amount of the Advances owing to such Assignee will be as set forth on Schedule 1
hereto.

     

      (2)    Such Assignor (i) represents and warrants that its name set forth
on Schedule 1 hereto is its legal name, that it is the legal and beneficial
owner of the interest or interests being assigned by it hereunder and that such
interest or interests are free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with any Loan
Document or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of, or the perfection or priority of any lien or security
interest created or purported to be created under or in connection with, any
Loan Document or any other instrument or document furnished pursuant thereto;
(iii) makes no representation or warranty and assumes no responsibility with
respect to the financial condition of any Loan Party or the performance or
observance by any Loan Party of any of its obligations under any Loan Document
or any other instrument or document furnished pursuant thereto; and
(iv) attaches the Note or Notes held by such Assignor and requests that the
Administrative Agent exchange such Note or Notes for a new Note or Notes payable
to the order of such Assignee in an amount equal to the Commitments assumed by
such Assignee pursuant hereto or new Notes payable to the order of such Assignee
in an amount equal to the Commitments assumed by such Assignee pursuant hereto
and such Assignor in an amount equal to the Commitments retained by such
Assignor under the Credit Agreement, respectively, as specified on Schedule 1
hereto.

     

      (3)    Such Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.01 thereof and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment and Acceptance; (ii) agrees that it will, independently and
without reliance upon any Agent, any Assignor or any other Lender Party and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking action
under the Credit Agreement; (iii) represents and warrants that its name set
forth on Schedule 1 hereto is its legal name; (iv) confirms that it is an
Eligible Assignee; (v) appoints and authorizes each Agent to take such action as
agent on its behalf and to exercise such powers and discretion under the Loan

<PAGE>  C-1

 

Documents as are delegated to such Agent by the terms thereof, together with
such powers and discretion as are reasonably incidental thereto; (vi) agrees
that it will perform in accordance with their terms all of the obligations that
by the terms of the Credit Agreement are required to be performed by it as a
Lender Party; and (vii) attaches any U.S. Internal Revenue Service forms
required under Section 2.12 of the Credit Agreement.

     

      (4)    Following the execution of this Assignment and Acceptance, it will
be delivered to the Administrative Agent for acceptance and recording by the
Administrative Agent. The effective date for this Assignment and Acceptance (the
"Effective Date") shall be the date of acceptance hereof by the Administrative
Agent, unless otherwise specified on Schedule 1 hereto.

     

      (5)    Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, (i) such Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender Party thereunder and (ii) such Assignor
shall, to the extent provided in this Assignment and Acceptance, relinquish its
rights and be released from its obligations under the Credit Agreement (other
than its rights and obligations under the Loan Documents that are specified
under the terms of such Loan Documents to survive the payment in full of the
Obligations of the Advance Parties under the Loan Documents to the extent any
claim thereunder relates to an event arising prior to the Effective Date of this
Assignment and Acceptance) and, if this Assignment and Acceptance covers all of
the remaining portion of the rights and obligations of such Assignor under the
Credit Agreement, such Assignor shall cease to be a party thereto.

     

      (6)    Upon such acceptance and recording by the Administrative Agent,
from and after the Effective Date, the Administrative Agent shall make all
payments under the Credit Agreement and the Notes in respect of the interest
assigned hereby (including, without limitation, all payments of principal,
interest and commitment fees with respect thereto) to such Assignee. Such
Assignor and such Assignee shall make all appropriate adjustments in payments
under the Credit Agreement and the Notes for periods prior to the Effective Date
directly between themselves.

     

      (7)    This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of New York.

     

      (8)    This Assignment and Acceptance may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of Schedule 1 to this Assignment and Acceptance by fax shall be
effective as delivery of an original executed counterpart of this Assignment and
Acceptance.

<PAGE>  C-2

      IN WITNESS WHEREOF, each Assignor and each Assignee have caused Schedule 1
to this Assignment and Acceptance to be executed by their officers thereunto
duly authorized as of the date specified thereon.

<PAGE>  C-3

SCHEDULE 1
TO
ASSIGNMENT AND ACCEPTANCE

ASSIGNORS:

         

Revolving Credit Facility

         

      Percentage interest assigned

%

%

%

%

%

      Revolving Credit Commitment assigned

$

$

$

$

$

      Aggregate outstanding principal amount of
          Revolving Credit Advances assigned

$

$

$

$

$

      Principal amount of Revolving Credit Note
          payable to Assignor

$

$

$

$

$

Letter of Credit Facility

         

      Letter of Credit Commitment assigned

$

$

$

$

$

      Letter of Credit Commitment retained

$

$

$

$

$

 

 

ASSIGNEES:

         

Revolving Credit Facility

         

      Percentage interest assumed

%

%

%

%

%

      Revolving Credit Commitment assumed

$

$

$

$

$

      Aggregate outstanding principal amount of
          Revolving Credit Advances assumed

$

$

$

$

$

      Principal amount of Revolving Credit Note
          payable to Assignee

$

$

$

$

$

Letter of Credit Facility

         

      Letter of Credit Commitment assumed

$

$

$

$

$

<PAGE>  C-4

Effective Date (if other than date of acceptance by Administrative Agent):

7

_________ __, ____

Assignors

 

_________________________, as Assignor

 

[Type or print legal name of Assignor]

     

By

____________________________________________

   

Title:

     

Dated:  _________ __, ____

     

_________________________, as Assignor

 

[Type or print legal name of Assignor]

     

By

____________________________________________

   

Title:

     

Dated:  _________ __, ____

________________________

7

This date should be no earlier than five Business Days after the delivery of
this Assignment and Acceptance to the Administrative Agent.

<PAGE>  C-5

Assignees

 

_________________________, as Assignee

 

[Type or print legal name of Assignee]

     

By

____________________________________________

   

Title:

     

Dated:  _________ __, ____

     

Domestic Lending Office:

     

Eurodollar Lending Office:

     

_________________________, as Assignee

 

[Type or print legal name of Assigee]

     

By

____________________________________________

   

Title:

     

Dated:  _________ __, ____

     

Domestic Lending Office:

     

Eurodollar Lending Office:

<PAGE>  C-6

Accepted this ____

 

day of ___________, ____

     

WACHOVIA BANK, NATIONAL ASSOCIATION,
  as Administrative Agent

     

By

____________________________________________

   

Title:

     

[Approved this ____ day
of _____________, ____

     

[ESTERLINE TECHNOLOGIES CORPORATION]

     

By

____________________________________________

   

Title: ] 1

 

________________________

1

If no Event of Default has occurred, the approval of the Borrower shall be
required.

<PAGE>  C-7

EXHIBIT D

FORM OF SECURITY AGREEMENT

SECURITY AGREEMENT

Dated June 11, 2003

From

ESTERLINE TECHNOLOGIES CORPORATION

And

THE OTHER PERSONS LISTED ON THE SIGNATURE PAGES HEREOF

as Grantors

to

Wachovia Bank, National Association

as Collateral Agent

<PAGE>  i

T A B L E  O F  C O N T E N T S

Section

 

Page

     

Section 1.

Grant of Security

2

     

Section 2.

Security for Obligations

6

     

Section 3.

Grantors Remain Liable

6

     

Section 4.

Delivery and Control of Security Collateral

6

     

Section 5.

Maintaining the Account Collateral

7

     

Section 6.

Maintaining Electronic Chattel Paper, Transferable Records and Giving Notice of
Commercial Tort Claims

8

     

Section 7.

Representations and Warranties

8

     

Section 8.

Further Assurances

13

     

Section 9.

As to Equipment and Inventory

14

     

Section 10.

Insurance

14

     

Section 11.

Post-Closing Changes; Bailees; Collections on Assigned Agreements, Receivables
and Related Contracts

15

     

Section 12.

As to Intellectual Property Collateral

17

     

Section 13.

Voting Rights; Dividends; Etc.

19

     

Section 14.

As to the Assigned Agreements

20

     

Section 15.

Payments Under the Assigned Agreements

20

<PAGE>  ii

Section 16.

Transfers and Other Liens; Additional Shares

21

     

Section 17.

Collateral Agent Appointed Attorney-in-Fact

21

     

Section 18.

Collateral Agent May Perform

21

     

Section 19.

The Collateral Agent's Duties

22

     

Section 20.

Remedies

22

     

Section 21.

Indemnity and Expenses

24

     

Section 22.

Amendments; Waivers; Additional Grantors; Etc.

24

     

Section 23.

Notices, Etc.

25

     

Section 24.

Continuing Security Interest; Assignments under the Credit Agreement

25

     

Section 25.

Release; Termination

26

     

Section 26.

Execution in Counterparts

26

     

Section 27.

Governing Law

26

     

Schedule I

-

Location, Chief Executive Office, Place Where Agreements Are Maintained, Type Of
Organization, Jurisdiction Of Organization And Organizational Identification
Number

Schedule II

-

Pledged Equity and Pledged Debt

Schedule III

-

Locations of Equipment and Inventory

Schedule IV

-

Changes in Name, Location, Etc.

Schedule V

-

Patents, Trademarks and Trade Names, Copyrights and IP Agreements

Schedule VI

-

Account Collateral

Exhibits

         

Exhibit A

-

Form of Security Agreement Supplement

Exhibit B

-

Form of Consent and Agreement

Exhibit C

-

Form of Intellectual Property Security Agreement

Exhibit D

-

Form of IP Security Agreement Supplement

<PAGE>  

SECURITY AGREEMENT

      SECURITY AGREEMENT dated June 11, 2003, made by ESTERLINE TECHNOLOGIES
CORPORATION, a Delaware corporation (the "Borrower"), the other Persons listed
on the signature pages hereof and the Additional Grantors (as defined in
Section 22 hereto) (the Borrower, the Persons so listed and the Additional
Grantors being, collectively, the "Grantors"), to Wachovia Bank, National
Association, as collateral agent (in such capacity, together with any successor
collateral agent appointed pursuant to Article VII of the Credit Agreement (as
hereinafter defined), the "Collateral Agent") for the Secured Parties (as
defined in the Credit Agreement).

      PRELIMINARY STATEMENTS.

      (1)  The Borrower has entered into a Credit Agreement dated as of
June 11, 2003, (said Agreement, as it may hereafter be amended, amended and
restated, supplemented or otherwise modified from time to time, being the
"Credit Agreement") with the Lender Parties and the Agents (each, as defined
therein).

      (2)  Pursuant to the Credit Agreement, the Grantors are entering into this
Agreement in order to grant to the Collateral Agent for the ratable benefit of
the Secured Parties a security interest in the Collateral (as hereinafter
defined).

      (3)  Each Grantor is the owner of the shares of stock or other Equity
Interests (the "Initial Pledged Equity") set forth opposite such Grantor's name
on and as otherwise described in Part I of Schedule II hereto and issued by the
Persons named therein and of the indebtedness (the "Initial Pledged Debt") set
forth opposite such Grantor's name on and as otherwise described in Part II of
Schedule II hereto and issued by the obligors named therein.

      (4)  The Borrower and other Grantors have opened deposit accounts (the
"Deposit Accounts") with banks, in the name of the Borrower or such Grantor, as
applicable, and subject to the terms of this Agreement, as described in
Schedule VI hereto.

      (5)  It is a condition precedent to the making of Advances and the
issuance of Letters of Credit by the Lender Parties under the Credit Agreement
and the entry into Secured Hedge Agreements by the Hedge Banks from time to time
that the Grantors shall have granted the assignment and security interest and
made the pledge and assignment contemplated by this Agreement.

      (6)  Each Grantor will derive substantial direct and indirect benefit from
the transactions contemplated by the Loan Documents.

      (7)  Terms defined in the Credit Agreement and not otherwise defined in
this Agreement are used in this Agreement as defined in the Credit Agreement.
Further, unless otherwise defined in this Agreement or in the Credit Agreement,
terms defined in Article 8 or 9 of the UCC (as defined below) and/or in the
Federal Book Entry Regulations (as defined below) are used in this Agreement as
such terms are defined in such Article 8 or 9 and/or the Federal Book Entry
Regulations. "UCC" means the Uniform Commercial Code as in effect, from time to
time, in

<PAGE>  2

the State of New York; provided that, if perfection or the effect of perfection
or non-perfection or the priority of any security interest in any Collateral is
governed by the Uniform Commercial Code as in effect in a jurisdiction other
than the State of New York, "UCC" means the Uniform Commercial Code as in effect
from time to time in such other jurisdiction for purposes of the provisions
hereof relating to such perfection, effect of perfection or non-perfection or
priority. The term "Federal Book Entry Regulations" means (a) the federal
regulations contained in Subpart B ("Treasury/Reserve Automated Debt Entry
System (TRADES)") governing book-entry securities consisting of U.S. Treasury
bonds, notes and bills and Subpart D ("Additional Provisions") of 31 C.F.R. Part
357, 31 C.F.R. Section 357.2, Section 357.10 through Section 357.14 and
Section 357.41 through Section 357.44 and (b) to the extent substantially
similar to the federal regulations referred to in clause (a) above (as in effect
from time to time), the federal regulations governing other book-entry
securities.

      NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender Parties to make Advances and issue Letters of Credit under the Credit
Agreement and to induce the Hedge Banks to enter into Secured Hedge Agreements
from time to time, each Grantor hereby agrees with the Collateral Agent for the
ratable benefit of the Secured Parties as follows:

      Section 1.     Grant of Security. Each Grantor hereby grants to the
Collateral Agent, for the ratable benefit of the Secured Parties, a security
interest in, such Grantor's right, title and interest in and to the following,
in each case, as to each type of property described below, whether now owned or
hereafter acquired by such Grantor, wherever located, and whether now or
hereafter existing or arising (collectively, the "Collateral"):

 

      (a)  all equipment in all of its forms, including, without limitation, all
machinery, tools, motor vehicles, vessels, aircraft, furniture and fixtures, and
all parts thereof and all accessions thereto and all software related thereto,
including, without limitation, software that is embedded in and is part of the
equipment (any and all such property being the "Equipment");

     

      (b)  all inventory in all of its forms, including, without limitation,
(i) all raw materials, work in process, finished goods and materials used or
consumed in the manufacture, production, preparation or shipping thereof,
(ii) goods in which such Grantor has an interest in mass or a joint or other
interest or right of any kind (including, without limitation, goods in which
such Grantor has an interest or right as consignee) and (iii) goods that are
returned to or repossessed or stopped in transit by such Grantor, and all
accessions thereto and products thereof and documents therefor, and all software
related thereto, including, without limitation, software that is embedded in and
is part of the inventory (any and all such property being the "Inventory");

     

      (c)  all accounts (including, without limitation, health-care-insurance
receivables), chattel paper (including, without limitation, tangible chattel
paper and electronic chattel paper), instruments (including, without limitation,
promissory notes), deposit accounts, letter-of-credit rights, general
intangibles (including, without limitation, payment intangibles) and other
obligations of any kind, whether or not arising out of or in connection with the
sale or lease of goods or the rendering of services and whether or not earned by
performance, and all rights now or hereafter existing in and to all supporting
obligations and in and to all security agreements, mortgages, Liens, leases,
letters of credit

<PAGE>  3

 

and other contracts securing or otherwise relating to the foregoing property
(any and all of such accounts, chattel paper, instruments, deposit accounts,
letter-of-credit rights, general intangibles and other obligations, to the
extent not referred to in clause (d), (e) or (f) below, being the "Receivables",
and any and all such supporting obligations, security agreements, mortgages,
Liens, leases, letters of credit and other contracts being the "Related
Contracts");

     

      (d)  the following (the "Security Collateral"):

       

      (i)    the Initial Pledged Equity and the certificates, if any,
representing the Initial Pledged Equity, and all dividends, distributions,
return of capital, cash, instruments and other property from time to time
received, receivable or otherwise distributed in respect of or in exchange for
any or all of the Initial Pledged Equity and all subscription warrants, rights
or options issued thereon or with respect thereto;

         

      (ii)    the Initial Pledged Debt and the instruments, if any, evidencing
the Initial Pledged Debt, and all interest, cash, instruments and other property
from time to time received, receivable or otherwise distributed in respect of or
in exchange for any or all of the Initial Pledged Debt;

         

      (iii)    all additional shares of stock and other Equity Interests from
time to time acquired by such Grantor in any manner (such shares and other
Equity Interests, together with the Initial Pledged Equity, being the "Pledged
Equity"), and the certificates, if any, representing such additional shares or
other Equity Interests, and all dividends, distributions, return of capital,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such shares
or other Equity Interests and all subscription warrants, rights or options
issued thereon or with respect thereto;

         

      (iv)    all additional indebtedness from time to time owed to such Grantor
by any obligor of the Initial Pledged Debt or any successor entity (such
indebtedness, together with the Initial Pledged Debt, being the "Pledged Debt")
and the instruments, if any, evidencing such indebtedness, and all interest,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
indebtedness;

         

      (v)    all investment property (including, without limitation, all
(A) securities, whether certificated or uncertificated, (B) security
entitlements, (C) securities accounts, (D) commodity contracts and (E) commodity
accounts) in which such Grantor has now, or acquires from time to time
hereafter, any right, title or interest in any manner, and the certificates or
instruments, if any, representing or evidencing such investment property, and
all dividends, distributions, return of capital, interest, distributions, value,
cash, instruments and other property from time to time received, receivable or
otherwise distributed in respect of or in exchange for any or all of such
investment property and all subscription warrants, rights or options issued
thereon or with respect thereto;

<PAGE>  4

 

      (e)  each of the Material Contracts to which such Grantor is now or may
hereafter become a party, in each case as such agreements may be amended,
amended and restated, supplemented or otherwise modified from time to time
(collectively, the "Assigned Agreements"), including, without limitation,
(i) all rights of such Grantor to receive moneys due and to become due under or
pursuant to the Assigned Agreements, (ii) all rights of such Grantor to receive
proceeds of any insurance, indemnity, warranty or guaranty with respect to the
Assigned Agreements, (iii) claims of such Grantor for damages arising out of or
for breach of or default under the Assigned Agreements and (iv) the right of
such Grantor to terminate the Assigned Agreements, to perform thereunder and to
compel performance and otherwise exercise all remedies thereunder (all such
Collateral being the "Agreement Collateral");

       

      (f)  the following (collectively, the "Account Collateral"):

         

      (i)    the Deposit Accounts and any cash concentration accounts and all
funds and financial assets from time to time credited thereto (including,
without limitation, all Cash Equivalents), all interest, dividends,
distributions, cash, instruments and other property from time to time received,
receivable or otherwise distributed in respect of or in exchange for any or all
of such funds and financial assets, and all certificates and instruments, if
any, from time to time representing or evidencing the Deposit Accounts;

         

      (ii)    all promissory notes, certificates of deposit, deposit accounts,
checks and other instruments from time to time delivered to or otherwise
possessed by the Collateral Agent for or on behalf of such Grantor, including,
without limitation, those delivered or possessed in substitution for or in
addition to any or all of the then existing Account Collateral; and

         

      (iii)    all interest, dividends, distributions, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Account
Collateral; and

       

      (g)  the following (collectively, the "Intellectual Property Collateral"):

         

      (i)    all patents, patent applications, utility models and statutory
invention registrations, all inventions claimed or disclosed therein and all
improvements thereto ("Patents");

         

      (ii)    all trademarks, service marks, domain names, trade dress, logos,
designs, slogans, trade names, business names, corporate names and other source
identifiers, whether registered or unregistered (provided that no security
interest shall be granted in United States intent-to-use trademark applications
to the extent that, and solely during the period in which, the grant of a
security interest therein would impair the validity or enforceability of such
intent-to-use trademark applications under applicable federal law), together, in
each case, with the goodwill symbolized thereby ("Trademarks");

<PAGE>  5

   

      (iii)    all copyrights, including, without limitation, copyrights in
Computer Software (as hereinafter defined), internet web sites and the content
thereof, whether registered or unregistered ("Copyrights");

         

      (iv)    all commercially licensed computer software, programs and
databases (including, without limitation, source code, object code and all
related applications and data files), firmware and documentation and materials
relating thereto, together with any and all maintenance rights, service rights,
programming rights, hosting rights, test rights, improvement rights, renewal
rights and indemnification rights and any substitutions, replacements,
improvements, error corrections, updates and new versions of any of the
foregoing ("Computer Software");

         

      (v)    all confidential and proprietary information, including, without
limitation, know-how, trade secrets, manufacturing and production processes and
techniques, inventions, research and development information, databases and
data, including, without limitation, technical data, financial, marketing and
business data, pricing and cost information, business and marketing plans and
customer and supplier lists and information (collectively, "Trade Secrets"), and
all other intellectual, industrial and intangible property of any type,
including, without limitation, industrial designs and mask works;

         

      (vi)    all registrations and applications for registration for any of the
foregoing, including, without limitation, those registrations and applications
for registration set forth in Schedule V hereto (as such Schedule V may be
supplemented from time to time by supplements to this Agreement, each such
supplement being substantially in the form of Exhibit D hereto (an "IP Security
Agreement Supplement") executed by such Grantor to the Collateral Agent from
time to time), together with all reissues, divisions, continuations,
continuations-in-part, extensions, renewals and reexaminations thereof;

         

      (vii)    all tangible embodiments of the foregoing, all rights in the
foregoing provided by international treaties or conventions, all rights
corresponding thereto throughout the world and all other rights of any kind
whatsoever of such Grantor accruing thereunder or pertaining thereto;

         

      (viii)    all agreements, permits, consents, orders and franchises
relating to the license, development, use or disclosure of any of the foregoing
to which such Grantor, now or hereafter, is a party or a beneficiary, including,
without limitation, the agreements set forth in Schedule V hereto ("IP
Agreements"); and

         

      (ix)    any and all claims for damages and injunctive relief for past,
present and future infringement, dilution, misappropriation, violation, misuse
or breach with respect to any of the foregoing, with the right, but not the
obligation, to sue for and collect, or otherwise recover, such damages;

<PAGE>  6

 

      (h)  all books and records (including, without limitation, customer lists,
credit files, printouts and other computer output materials and records) of such
Grantor pertaining to any of the Collateral; and

       

      (i)  all proceeds of, collateral for, income, royalties and other payments
now or hereafter due and payable with respect to, and supporting obligations
relating to, any and all of the Collateral (including, without limitation,
proceeds, collateral and supporting obligations that constitute property of the
types described in clauses (a) through (h) of this Section 1 and this
clause (i)) and, to the extent not otherwise included, all (A) payments under
insurance (whether or not the Collateral Agent is the loss payee thereof), or
any indemnity, warranty or guaranty, payable by reason of loss or damage to or
otherwise with respect to any of the foregoing Collateral, (B) tort claims,
including, without limitation, all commercial tort claims and (C) cash;
provided, however, that the provisions of this Section 1 shall, in the case of
the pledge of capital stock or other Equity Interests of any non-U.S.
Subsidiary, be limited to 65% of the capital stock or other Equity Interests, as
the case may be, of each (direct or indirect) non-U.S. Subsidiary of the
Borrower that is a "controlled foreign corporation" under Section 957 of the
U.S. Internal Revenue Code.ommodi

      Notwithstanding anything to the contrary contained herein, the Collateral
shall not include any item of personal property, tangible or intangible, to the
extent the grant by any Grantor of a security interest pursuant to this Security
Agreement in its right, title and interest in such item of property is
prohibited by contractual provisions entered into by the Grantor in the ordinary
course of business and existing on the date hereof.

      Section 2.     Security for Obligations. This Agreement secures, in the
case of each Grantor, the payment of all Obligations of such Grantor now or
hereafter existing under the Loan Documents, whether direct or indirect,
absolute or contingent, and whether for principal, reimbursement obligations,
interest, fees, premiums, penalties, indemnifications, contract causes of
action, costs, expenses or otherwise (all such Obligations being the "Secured
Obligations").

      Section 3.    Grantors Remain Liable. Anything herein to the contrary
notwithstanding, (a) each Grantor shall remain liable under the contracts and
agreements included in such Grantor's Collateral to the extent set forth therein
to perform all of its duties and obligations thereunder to the same extent as if
this Agreement had not been executed, (b) the exercise by the Collateral Agent
of any of the rights hereunder shall not release any Grantor from any of its
duties or obligations under the contracts and agreements included in the
Collateral, and (c) no Secured Party shall have any obligation or liability
under the contracts and agreements included in the Collateral by reason of this
Agreement or any other Loan Document, nor shall any Secured Party be obligated
to perform any of the obligations or duties of any Grantor thereunder or to take
any action to collect or enforce any claim for payment assigned hereunder.

      Section 4.    Delivery and Control of Security Collateral. (a)  All
certificates or instruments representing or evidencing Security Collateral shall
be delivered to and held by or on behalf of the Collateral Agent pursuant hereto
and shall be in suitable form for transfer by delivery, or shall be accompanied
by duly executed endorsements, instruments of transfer or assignment in blank,
all in form and substance satisfactory to the Collateral Agent. The Collateral
Agent shall have the right, at any time in its discretion and without notice to
any Grantor, to transfer to or to

<PAGE>  7

register in the name of the Collateral Agent or any of its nominees any or all
of the Security Collateral, subject only to the revocable rights specified in
Section 13(a). In addition, the Collateral Agent shall have the right at any
time to exchange certificates or instruments representing or evidencing Security
Collateral for certificates or instruments of smaller or larger denominations.

 

      (b)  With respect to any Security Collateral in which any Grantor has any
right, title or interest and that constitutes an uncertificated security, such
Grantor will cause the issuer thereof either (i) to register the Collateral
Agent as the registered owner of such security or (ii) to agree in an
authenticated record with such Grantor and the Collateral Agent that such issuer
will comply with instructions with respect to such security originated by the
Collateral Agent without further consent of such Grantor, such authenticated
record to be in form and substance satisfactory to the Collateral Agent. With
respect to any Security Collateral in which any Grantor has any right, title or
interest and that is not an uncertificated security, upon the request of the
Collateral Agent upon the occurrence and during the continuance of an Event of
Default, such Grantor will notify each such issuer of Pledged Equity that such
Pledged Equity is subject to the security interest granted hereunder.

       

      (c)  Upon the request of the Collateral Agent, such Grantor will notify
each such issuer of Pledged Debt that such Pledged Debt is subject to the
security interest granted hereunder.

      Section 5.    Maintaining the Account Collateral. So long as any Advance
or any other Obligation of any Loan Party under any Loan Document shall remain
unpaid, any Letter of Credit shall be outstanding, any Secured Hedge Agreement
shall be in effect or any Lender Party shall have any Commitment:

 

      (a)  Each Grantor agrees that if it adds any bank that maintains a deposit
account for such Grantor or open any new deposit account not described in
Schedule VI hereto, it shall on a quarterly basis update such Schedule VI to
include such additional banks or deposit accounts.

       

      (b)  The Collateral Agent may, at any time and without notice to, or
consent from, the Grantor, transfer, or direct the transfer of, funds from the
Account Collateral to satisfy the Grantor's obligations under the Loan Documents
if an Event of Default shall have occurred and be continuing.

<PAGE>  8

      Section 6.    Maintaining Electronic Chattel Paper, Transferable Records
and Giving Notice of Commercial Tort Claims. So long as any Advance or any other
Obligation of any Loan Party under any Loan Document shall remain unpaid, any
Letter of Credit shall be outstanding, any Secured Hedge Agreement shall be in
effect or any Lender Party shall have any Commitment:

 

      (a)  Each Grantor will maintain all (i) electronic chattel paper so that
the Collateral Agent has control of the electronic chattel paper in the manner
specified in Section 9-105 of the UCC and (ii) all transferable records so that
the Collateral Agent has control of the transferable records in the manner
specified in Section 16 of the Uniform Electronic Transactions Act, as in effect
in the jurisdiction governing such transferable record ("UETA" ); and

       

      (b)  Each Grantor will immediately give notice to the Collateral Agent of
any commercial tort claim that may arise in the future and will immediately
execute or otherwise authenticate a supplement to this Agreement, and otherwise
take all necessary action, to subject such commercial tort claim to the first
priority security interest created under this Agreement.

      Section 7.    Representations and Warranties. Each Grantor represents and
warrants as follows:

 

      (a)  Such Grantor's exact legal name, as defined in Section 9-503(a) of
the UCC, is correctly set forth in Schedule I hereto. Within the past 5 years,
such Grantor has only the trade names, domain names and marks listed on
Schedule V hereto. Such Grantor is located (within the meaning of Section 9-307
of the UCC) and has its chief executive office and the office in which it
maintains the original copies of each Assigned Agreement and Related Contract to
which such Grantor is a party and all originals of all chattel paper that
evidence Receivables of such Grantor, in the state or jurisdiction set forth in
Schedule I hereto. The information set forth in Schedule I hereto with respect
to such Grantor is true and accurate in all respects. Such Grantor has not
within the past five years changed its name, location, chief executive office,
place where it maintains its agreements, type of organization, jurisdiction of
organization or organizational identification number from those set forth in
Schedule I hereto except as disclosed in Schedule IV hereto.

       

      (b)  All of the Equipment and Inventory of such Grantor are located at the
places specified therefor in Schedule III hereto, as such Schedule III may be
amended from time to time pursuant to Section 9(a). Within the 5 years preceding
the execution of this Agreement, such Grantor has not previously changed the
location of its Equipment and Inventory except as set forth in Schedule IV
hereto. All Security Collateral consisting of certificated securities and
instruments have been delivered to the Collateral Agent. None of the Receivables
or Agreement Collateral is evidenced by a promissory note or other instrument
that has not been delivered to the Collateral Agent.

       

     (c)  Such Grantor is the legal and beneficial owner of, or has valid rights
of a lessee or a licensee with power to transfer (other than with respect to any
lease or license to which such Grantor is a party that by its terms such Grantor
may not assign or otherwise

<PAGE>  9

 

transfer), the Collateral of such Grantor free and clear of any Lien, claim,
option or right of others, except for the security interest created under this
Agreement or any liens permitted under Section 5.02(a)(ii) of the Credit
Agreement. No effective financing statement or other instrument similar in
effect covering all or any part of such Collateral or listing such Grantor or
any trade name of such Grantor as debtor is on file in any recording office,
except such as may have been filed in favor of the Collateral Agent relating to
the Loan Documents or as otherwise permitted under the Credit Agreement.

       

      (d)  Such Grantor has exclusive possession and control of the Equipment
and Inventory other than Inventory stored at any leased premises or warehouse
for which a landlord's or warehouseman's agreement, in form and substance
satisfactory to the Collateral Agent, is in effect and which leased premises or
warehouse is so indicated by an asterisk on Schedule III hereto, as such
Schedule III may be amended from time to time pursuant to Section 9(a). In the
case of Equipment and Inventory located on leased premises or in warehouses, no
lessor or warehouseman of any premises or warehouse upon or in which such
Equipment or Inventory is located has (i) issued any warehouse receipt or other
receipt in the nature of a warehouse receipt in respect of any Equipment or
Inventory, (ii) issued any document for any of such Grantor's Equipment or
Inventory, (iii) received notification of any secured party's interest (other
than the security interest granted hereunder) in such Grantor's Equipment or
Inventory or (iv) any Lien, claim or charge (based on contract, statute or
otherwise) on such Equipment and Inventory.

       

      (e)  The Pledged Equity pledged by such Grantor hereunder has been duly
authorized and validly issued and is fully paid and non-assessable. With respect
to the Pledged Equity that is an uncertificated security, such Grantor has
caused the issuer thereof either (i) to register the Collateral Agent as the
registered owner of such security or (ii) to agree in an authenticated record
with such Grantor and the Collateral Agent that such issuer will comply with
instructions with respect to such security originated by the Collateral Agent
without further consent of such Grantor. If such Grantor is an issuer of Pledged
Equity, such Grantor confirms that it has received notice of such security
interest. The Pledged Debt pledged by such Grantor hereunder has been duly
authorized, authenticated or issued and delivered, is the legal, valid and
binding obligation of the issuers thereof, is evidenced by one or more
promissory notes (which notes have been delivered to the Collateral Agent).

       

      (f)  The Initial Pledged Equity pledged by such Grantor constitutes the
percentage of the issued and outstanding Equity Interests of the issuers thereof
indicated on Schedule II hereto. The Initial Pledged Debt constitutes all of the
outstanding indebtedness owed to such Grantor by the issuers thereof and is
outstanding in the principal amount indicated on Schedule II hereto.

       

      (g)  All of the investment property owned by such Grantor is listed on
Schedule II hereto.

       

      (h)  If an Event of Default shall have occurred and be continuing and to
the extent requested by the Collateral Agent, each Grantor will use commercially
reasonable efforts to obtain from each party (other than a Grantor) that is a
party to any Assigned Agreement

<PAGE>  10

 

executed and delivered, in substantially the form of the Consent and Agreement
attached hereto as Exhibit B (or otherwise in form and substance reasonably
satisfactory to the Collateral Agent), consent to the assignment of the
applicable Agreement Collateral pursuant hereto.

       

      (i)  Such Grantor has no deposit accounts, other than the Account
Collateral listed on Schedule VI hereto, as such Schedule VI may be amended from
time to time pursuant to Section 5(a).

       

      (j)  All filings and other actions (including, without limitation, actions
necessary to perfect the Collateral Agent's security interest with respect to
Collateral evidenced by a certificate of ownership) necessary to perfect the
security interest in the Collateral of such Grantor created under this Agreement
have been duly made or taken and are in full force and effect, other than the
entering into of deposit account control agreements in accordance with Section
9-312(b)(1) and (2) of the UCC, and this Agreement creates in favor of the
Collateral Agent for the benefit of the Secured Parties a valid and, together
with such filings and other actions, perfected first priority security interest
in the Collateral of such Grantor to the extent such security interest can be
perfected in the United States (except to the extent deposit account control
agreements have not been entered into and for liens permitted under Section
5.02(a)(ii) of the Credit Agreement), securing the payment of the Secured
Obligations.

       

      (k)  No authorization or approval or other action by, and no notice to or
filing with, any governmental authority or regulatory body or any other third
party is required for (i) the grant by such Grantor of the security interest
granted hereunder or for the execution, delivery or performance of this
Agreement by such Grantor, (ii) the perfection or maintenance of the security
interest created hereunder (including the first priority nature of such security
interest), except with respect to any Foreign Collateral, any action to be taken
outside the United States, and for the entering into of deposit account control
agreements in accordance with Section 9-312(b)(1) and (2) of the UCC, the filing
of financing and continuation statements under the UCC, which financing
statements have been duly filed and are in full force and effect, the
recordation of the Intellectual Property Security Agreements referred to in
Section 12(f) with the U.S. Patent and Trademark Office and the U.S. Copyright
Office, which Agreements have been duly recorded and are in full force and
effect, and the actions described in Section 4 with respect to Security
Collateral, which actions have been taken and are in full force and effect, or
(iii) the exercise by the Collateral Agent of its voting or other rights
provided for in this Agreement or the remedies in respect of the Collateral
pursuant to this Agreement, except as may be required in connection with the
disposition of any portion of the Security Collateral by laws affecting the
offering and sale of securities generally.

       

      (l)  As to itself and its Intellectual Property Collateral:

         

      (i)    Except as, individually or in the aggregate, could reasonably be
expected to have a Material Adverse Effect, the operation of such Grantor's
business as currently conducted or as contemplated to be conducted and the use
of the Intellectual Property Collateral in connection therewith do not conflict
with,

<PAGE>  11

   

infringe, misappropriate, dilute, misuse or otherwise violate the intellectual
property rights of any third party.

         

      (ii)    Such Grantor is the exclusive owner of all right, title and
interest in and to the Intellectual Property Collateral, and is entitled to use
all Intellectual Property Collateral subject only to the terms of the IP
Agreements.

         

      (iii)    The Intellectual Property Collateral set forth on Schedule V
hereto includes all of the U.S. patents, patent applications, domain names,
trademark registrations and applications, copyright registrations and
applications and IP Agreements owned by such Grantor.

         

      (iv)    The Intellectual Property Collateral is subsisting and has not
been adjudged invalid or unenforceable in whole or part, and to the best of such
Grantor's knowledge, is valid and enforceable. Such Grantor is not aware of any
uses of any item of Intellectual Property Collateral that could be expected to
lead to such item becoming invalid or unenforceable.

         

      (v)    Such Grantor has made or performed all filings, recordings and
other acts and has paid all required fees and taxes to maintain and protect its
interest in each and every item of Intellectual Property Collateral material to
the conduct of the business of the Borrower and its Subsidiaries, taken as a
whole, in full force and effect throughout the world, and to protect and
maintain its interest therein including, without limitation, recordations of any
of its interests in the Patents and Trademarks with the U.S. Patent and
Trademark Office and in corresponding national and international patent offices,
and recordation of any of its interests in the Copyrights with the U.S.
Copyright Office and in corresponding national and international copyright
offices. Such Grantor has used proper statutory notice in connection with its
use of each patent, trademark and copyright in such Intellectual Property
Collateral.

         

      (vi)    No claim, action, suit, investigation, litigation or proceeding,
which could be reasonably likely to have a Material Adverse Effect, has been
asserted or is pending or threatened against such Grantor (i) based upon or
challenging or seeking to deny or restrict the Grantor's rights in or use of any
of the Intellectual Property Collateral, (ii) alleging that the Grantor's rights
in or use of the Intellectual Property Collateral or that any services provided
by, processes used by, or products manufactured or sold by, such Grantor
infringe, misappropriate, dilute, misuse or otherwise violate any patent,
trademark, copyright or any other proprietary right of any third party, or (iii)
alleging that the Intellectual Property Collateral is being licensed or
sublicensed in violation or contravention of the terms of any license or other
agreement. No Person is engaging in any activity that infringes,
misappropriates, dilutes, misuses or otherwise violates the Intellectual
Property Collateral material to the business of the Borrower and its
Subsidiaries, taken as a whole, or the Grantor's rights in or use thereof.
Except as set forth on Schedule V hereto, such Grantor has not granted any
license, release, covenant not to sue, non-assertion assurance, or other

<PAGE>  12

   

right to any Person with respect to any part of the Intellectual Property
Collateral material to the business of the Borrower and its Subsidiaries, taken
as a whole. The consummation of the transactions contemplated by the Transaction
Documents will not result in the termination or impairment of any of the
Intellectual Property Collateral.

         

      (vii)    With respect to each IP Agreement material to the conduct of the
business of the Borrower and its Subsidiaries, taken as a whole: (A) such IP
Agreement is valid and binding and in full force and effect and represents the
entire agreement between the respective parties thereto with respect to the
subject matter thereof; (B) such IP Agreement will not cease to be valid and
binding and in full force and effect on terms identical to those currently in
effect as a result of the rights and interest granted herein, nor will the grant
of such rights and interest constitute a breach or default under such IP
Agreement or otherwise give any party thereto a right to terminate such IP
Agreement; (C) such Grantor has not received any notice of termination or
cancellation under such IP Agreement; (D) such Grantor has not received any
notice of a breach or default under such IP Agreement, which breach or default
has not been cured; (E) such Grantor has not granted to any other third party
any rights, adverse or otherwise, under such IP Agreement; and (F) neither such
Grantor nor any other party to such IP Agreement is in breach or default thereof
in any material respect, and no event has occurred that, with notice or lapse of
time or both, would constitute such a breach or default or permit termination,
modification or acceleration under such IP Agreement.

         

      (viii)    To the best of such Grantor's knowledge, (A) none of the Trade
Secrets of such Grantor has been used, divulged, disclosed or appropriated to
the detriment of such Grantor for the benefit of any other Person other than
such Grantor; (B) no employee, independent contractor or agent of such Grantor
has misappropriated any trade secrets of any other Person in the course of the
performance of his or her duties as an employee, independent contractor or agent
of such Grantor that could be reasonably likely to have a Material Adverse
Effect; and (C) no employee, independent contractor or agent of such Grantor is
in default or breach of any term of any employment agreement, non-disclosure
agreement, assignment of inventions agreement or similar agreement or contract
relating in any way to the protection, ownership, development, use or transfer
of such Grantor's Intellectual Property Collateral, the violation or breach of
which could be reasonably likely to have a Material Adverse Effect.

         

      (ix)    No Grantor or Intellectual Property Collateral is subject to any
outstanding consent, settlement, decree, order, injunction, judgment or ruling
restricting the use of any Intellectual Property Collateral material to the
conduct of the business of the Borrower and its Subsidiaries, taken as a whole,
or that would impair the validity or enforceability of such Intellectual
Property Collateral.

       

      (m)  The Grantor has no commercial tort claims (as defined in Section
9-102(13) of the UCC).

<PAGE>  13

      Section 8.    Further Assurances. (a) Each Grantor agrees that from time
to time, at the expense of such Grantor, such Grantor will promptly execute and
deliver, or otherwise authenticate, all further instruments and documents, and
take all further action that may be necessary or desirable, or that the
Collateral Agent may reasonably request, in order to perfect and protect any
pledge or security interest granted or purported to be granted by such Grantor
hereunder or to enable the Collateral Agent to exercise and enforce its rights
and remedies hereunder with respect to any Collateral of such Grantor. Without
limiting the generality of the foregoing, each Grantor will promptly with
respect to Collateral of such Grantor: (i) if an Event of Default shall have
occurred and be continuing, mark conspicuously each document included in
Inventory, each chattel paper included in Receivables, each Related Contract,
each Assigned Agreement and, at the reasonable request of the Collateral Agent,
each of its records pertaining to such Collateral with a legend, in form and
substance satisfactory to the Collateral Agent, indicating that such document,
chattel paper, Related Contract, Assigned Agreement or Collateral is subject to
the security interest granted hereby; (ii) if any such Collateral shall be
evidenced by a promissory note or other instrument, deliver and pledge to the
Collateral Agent hereunder such note or instrument duly indorsed and accompanied
by duly executed instruments of transfer or assignment, all in form and
substance satisfactory to the Collateral Agent; (iii) execute or authenticate
and file such financing statements, or amendments thereto, and such other
instruments or notices, as may be necessary or desirable, or as the Collateral
Agent may request, in order to perfect and preserve the security interest
granted or purported to be granted by such Grantor hereunder; (iv) deliver and
pledge to the Collateral Agent for benefit of the Secured Parties certificates
representing Security Collateral that constitutes certificated securities,
accompanied by undated stock or bond powers executed in blank; (v) take all
action necessary to ensure that the Collateral Agent has control of Collateral
consisting of deposit accounts, electronic chattel paper, investment property,
letter-of-credit rights and transferable records as provided in Sections 9-104,
9-105, 9-106 and 9-107 of the UCC and in Section 16 of UETA; (vi) at the request
of the Collateral Agent, take all action to ensure that the Collateral Agent's
security interest is noted on any certificate of ownership related to any
Collateral evidenced by a certificate of ownership; (vii) at the request of the
Collateral Agent, cause the Collateral Agent to be the beneficiary under all
letters of credit that constitute Collateral, with the exclusive right to make
all draws under such letters of credit, and with all rights of a transferee
under Section 5-114(e) of the UCC; and (viii) deliver to the Collateral Agent
evidence that all other action that the Collateral Agent may deem reasonably
necessary or desirable in order to perfect and protect the security interest
created by such Grantor under this Agreement has been taken. From time to time
upon request by the Collateral Agent, each Grantor will, at such Grantor's
expense, cause to be delivered to the Collateral Agent, for the benefit of the
Secured Parties, an opinion of counsel, from outside counsel reasonably
satisfactory to the Collateral Agent, as to such matters relating to the
transactions contemplated hereby as the Collateral Agent may reasonably request.

 

      (b)  Each Grantor hereby authorizes the Collateral Agent to file one or
more financing or continuation statements, and amendments thereto, including,
without limitation, one or more financing statements indicating that such
financing statements cover all assets or all personal property (or words of
similar effect) of such Grantor, in each case without the signature of such
Grantor, and regardless of whether any particular asset described in such
financing statements falls within the scope of the UCC or the granting clause of
this Agreement. A photocopy or other reproduction of this Agreement or any
financing statement covering the Collateral or any part thereof shall be
sufficient as a

<PAGE>  14

 

financing statement where permitted by law. Each Grantor ratifies its
authorization for the Collateral Agent to have filed such financing statements,
continuation statements or amendments filed prior to the date hereof.

       

      (c)  Each Grantor will furnish to the Collateral Agent from time to time
statements and schedules further identifying and describing the Collateral of
such Grantor and such other reports in connection with such Collateral as the
Collateral Agent may reasonably request, all in reasonable detail.

       

      (d)  Upon the occurrence and during the continuance of any Event of
Default, the Borrower will furnish to the Collateral Agent, upon the request of
the Collateral Agent, an opinion of counsel, from outside counsel reasonably
satisfactory to the Collateral Agent, to the effect that all financing or
continuation statements have been filed, and all other action has been taken
(including, without limitation, action necessary to (i) give the Collateral
Agent control over the Collateral as provided in Sections 9-104, 9-105, 9-106
and 9-107 of the UCC and Section 16 of UETA and (ii) cause the security interest
in any Collateral evidenced by a certificate of ownership to be noted on such
certificate of ownership) to perfect continuously from the date hereof the
security interest granted hereunder.

      Section 9.    As to Equipment and Inventory. (a) Each Grantor will keep
the Equipment and Inventory of such Grantor (other than Inventory sold in the
ordinary course of business) at the places therefor specified in Section 7(b)
or, upon 30 days' prior written notice to the Collateral Agent, at such other
places designated by the Grantor in such notice. Upon the giving of such notice,
Schedule III shall be automatically amended to add any new locations specified
in the notice.

 

      (b)  Each Grantor will cause the Equipment of such Grantor to be
maintained and preserved in the same condition, repair and working order as when
new, ordinary wear and tear excepted, and in accordance with any manufacturer's
manual, and will forthwith, or in the case of any loss or damage to any of such
Equipment as soon as practicable after the occurrence thereof, make or cause to
be made all repairs, replacements and other improvements in connection therewith
that are necessary or desirable to such end. Each Grantor will promptly furnish
to the Collateral Agent a statement respecting any loss or damage exceeding
$1,000,000 to any of the Equipment or Inventory of such Grantor.

       

      (c)  Each Grantor will pay promptly when due all property and other taxes,
assessments and governmental charges or levies imposed upon, and all claims
(including, without limitation, claims for labor, materials and supplies)
against, the Equipment and Inventory of such Grantor, except to the extent
payment thereof is not required by Section 5.01(b) of the Credit Agreement.

      Section 10.    Insurance. (a) Each Grantor will, at its own expense,
maintain insurance with respect to the Equipment and Inventory of such Grantor
in such amounts, against such risks, in such form and with such insurers, as
shall be reasonably satisfactory to the Collateral Agent from time to time. Each
policy of each Grantor for liability insurance shall provide for all losses to
be paid on behalf of the Collateral Agent and such Grantor as their interests
may appear, and each policy for property damage insurance shall provide for all
losses (except for losses of less

<PAGE>  15

than $2,500,000 per occurrence) to be paid directly to the Collateral Agent.
Each such policy shall in addition (i) name such Grantor and the Collateral
Agent as insured parties thereunder (without any representation or warranty by
or obligation upon the Collateral Agent) as their interests may appear,
(ii) contain the agreement by the insurer that any loss thereunder shall be
payable to the Collateral Agent notwithstanding any action, inaction or breach
of representation or warranty by such Grantor, (iii) provide that there shall be
no recourse against the Collateral Agent for payment of premiums or other
amounts with respect thereto and (iv) provide that at least 10 days' prior
written notice of cancellation or of lapse shall be given to the Collateral
Agent by the insurer. Each Grantor will, if so requested by the Collateral
Agent, deliver to the Collateral Agent original or duplicate policies of such
insurance and, as often as the Collateral Agent may reasonably request, a report
of a reputable insurance broker with respect to such insurance. Further, each
Grantor will, at the request of the Collateral Agent, duly execute and deliver
instruments of assignment of such insurance policies to comply with the
requirements of Section 9 and cause the insurers to acknowledge notice of such
assignment.

 

      (b)  Reimbursement under any liability insurance maintained by any Grantor
pursuant to this Section 10 may be paid directly to the Person who shall have
incurred liability covered by such insurance. In case of any loss involving
damage to Equipment or Inventory when subsection (c) of this Section 10 is not
applicable, the applicable Grantor will make or cause to be made the necessary
repairs to or replacements of such Equipment or Inventory, and any proceeds of
insurance properly received by or released to such Grantor shall be used by such
Grantor, except as otherwise required hereunder or by the Credit Agreement, to
pay or as reimbursement for the costs of such repairs or replacements.

       

      (c)  So long as no Event of Default shall have occurred and be continuing,
all insurance payments received by the Collateral Agent in connection with any
loss, damage or destruction of any Inventory or Equipment will be released by
the Collateral Agent to the applicable Grantor for the repair, replacement or
restoration thereof, subject to such terms and conditions with respect to the
release thereof as the Collateral Agent may reasonably require. Upon the
occurrence and during the continuance of any Event of Default and the actual or
constructive total loss (in excess of $1,000,000 per occurrence) of any
Equipment or Inventory, all insurance payments in respect of such Equipment or
Inventory shall be paid to the Collateral Agent and shall, in the Collateral
Agent's sole discretion, (i) be released to the applicable Grantor to be applied
as set forth in the first sentence of this subsection (c) or (ii) be held as
additional Collateral hereunder or applied as specified in Section 20(b).

      Section 11.    Post-Closing Changes; Bailees; Collections on Assigned
Agreements, Receivables and Related Contracts. (a) No Grantor will change its
name, type of organization, jurisdiction of organization, organizational
identification number or location from those set forth in Section 7(a) of this
Agreement without first giving at least 30 days' prior written notice to the
Collateral Agent and taking all action required by the Collateral Agent for the
purpose of perfecting or protecting the security interest granted by this
Agreement. No Grantor will change the location of the Equipment and Inventory or
the place where it keeps the originals of all chattel paper that evidence
Receivables of such Grantor from the locations therefor specified in Sections
7(a) and 7(b) without first giving the Collateral Agent 30 days' prior written
notice of such change.

<PAGE>  16

Other than liens permitted under Section 5.02(a) of the Credit Agreement, no
Grantor will become bound by a security agreement authenticated by another
Person (determined as provided in Section 9-203(d) of the UCC) without giving
the Collateral Agent 30 days' prior written notice thereof and taking all action
required by the Collateral Agent to ensure that the perfection and first
priority nature of the Collateral Agent's security interest in the Collateral
will be maintained. Each Grantor will hold and preserve its records relating to
the Collateral, including, without limitation, the Assigned Agreements and
Related Contracts, and will permit representatives of the Collateral Agent at
any time during normal business hours to inspect and make abstracts from such
records and other documents. If the Grantor does not have an organizational
identification number and later obtains one, it will forthwith notify the
Collateral Agent of such organizational identification number.

 

      (b)  If any Collateral of any Grantor is at any time in the possession or
control of a warehouseman, bailee or agent, or if the Collateral Agent so
requests such Grantor will (i) notify such warehouseman, bailee or agent of the
security interest created hereunder, (ii) instruct such warehouseman, bailee or
agent to hold all such Collateral solely for the Collateral Agent's account
subject only to the Collateral Agent's instructions (which shall permit such
Collateral to be removed by such Grantor in the ordinary course of business
until the Collateral Agent notifies such warehouseman, bailee or agent that an
Event of Default has occurred and is continuing), (iii) use commercially
reasonable efforts, to cause such warehouseman, bailee or agent to authenticate
a record acknowledging that it holds possession of such Collateral for the
Collateral Agent's benefit and shall act solely on the instructions of the
Collateral Agent without the further consent of the Grantor or any other Person,
and (iv) make such authenticated record available to the Collateral Agent.

       

      (c)  Except as otherwise provided in this subsection (c), each Grantor
will continue to collect, at its own expense, all amounts due or to become due
such Grantor under the Assigned Agreements, Receivables and Related Contracts.
In connection with such collections, such Grantor may take (and, at the
Collateral Agent's direction, will take) such action as such Grantor or the
Collateral Agent may deem necessary or advisable to enforce collection of the
Assigned Agreements, Receivables and Related Contracts; provided, however, that
the Collateral Agent shall have the right, if an Event of Default shall have
occurred and be continuing, upon written notice to such Grantor of its intention
to do so, to notify each Person obligated at any time to make any payment to
such Grantor for any reason (an "Obligor") under any Assigned Agreements,
Receivables and Related Contracts of the assignment of such Assigned Agreements,
Receivables and Related Contracts to the Collateral Agent and to direct such
Obligors to make payment of all amounts due or to become due to such Grantor
thereunder directly to the Collateral Agent and, upon such notification and at
the expense of such Grantor, to enforce collection of any such Assigned
Agreements, Receivables and Related Contracts, to adjust, settle or compromise
the amount or payment thereof, in the same manner and to the same extent as such
Grantor might have done, and to otherwise exercise all rights with respect to
such Assigned Agreements, Receivables and Related Contracts, including, without
limitation, those set forth set forth in Section 9-607 of the UCC. After receipt
by any Grantor of the notice from the Collateral Agent referred to in the
proviso to the preceding sentence, (i) all amounts and proceeds (including,
without limitation, instruments) received by such Grantor in respect of the
Assigned Agreements, Receivables and Related Contracts of such

<PAGE>  17

 

Grantor shall be received in trust for the benefit of the Collateral Agent
hereunder, shall be segregated from other funds of such Grantor and shall be
forthwith paid over to the Collateral Agent in the same form as so received
(with any necessary indorsement) to be deposited as directed by the Collateral
Agent and either (A) released to such Grantor, or at its order or, at the
request of such Grantor, to the Administrative Agent to be applied to its
Obligations under the Loan Documents so long as no Event of Default shall have
occurred and be continuing or (B) if any Event of Default shall have occurred
and be continuing, applied as provided in Section 20(b) and (ii) such Grantor
will not adjust, settle or compromise the amount or payment of any Receivable or
amount due on any Assigned Agreement or Related Contract, release wholly or
partly any Obligor thereof, or allow any credit or discount thereon. No Grantor
will permit or consent to the subordination of its right to payment under any of
the Assigned Agreements, Receivables and Related Contracts to any other
indebtedness or obligations of the Obligor thereof.

      Section 12.    As to Intellectual Property Collateral. (a) With respect to
each item of its Intellectual Property Collateral material to the conduct of the
business of the Borrower and its Subsidiaries, taken as a whole, each Grantor
agrees to take, at its expense, all necessary steps, including, without
limitation, in the U.S. Patent and Trademark Office, the U.S. Copyright Office
and any other governmental authority, to (i) maintain the validity and
enforceability of such Intellectual Property Collateral and maintain such
Intellectual Property Collateral in full force and effect, and (ii) pursue the
registration and maintenance of each patent, trademark, or copyright
registration or application, now or hereafter included in such Intellectual
Property Collateral of such Grantor, including, without limitation, the payment
of required fees and taxes, the filing of responses to office actions issued by
the U.S. Patent and Trademark Office, the U.S. Copyright Office or other
governmental authorities, the filing of applications for renewal or extension,
the filing of affidavits under Sections 8 and 15 of the U.S. Trademark Act, the
filing of divisional, continuation, continuation-in-part, reissue and renewal
applications or extensions, the payment of maintenance fees and the
participation in interference, reexamination, opposition, cancellation,
infringement and misappropriation proceedings. No Grantor shall, without the
written consent of the Collateral Agent, discontinue use of or otherwise abandon
any Intellectual Property Collateral, or abandon any right to file an
application for patent, trademark, or copyright, unless such Grantor shall have
previously determined that such use or the pursuit or maintenance of such
Intellectual Property Collateral is no longer desirable in the conduct of such
Grantor's business and that the loss thereof would not be reasonably likely to
have a Material Adverse Effect, in which case, such Grantor will give prompt
notice of any such abandonment to the Collateral Agent.

 

      (b)  Each Grantor agrees promptly to notify the Collateral Agent if such
Grantor becomes aware (i) that any item of the Intellectual Property Collateral
material to the conduct of the business of the Borrower and its Subsidiaries,
taken as a whole, may have become abandoned, placed in the public domain,
invalid or unenforceable, or of any adverse determination or development
regarding such Grantor's ownership of any of the Intellectual Property
Collateral or its right to register the same or to keep and maintain and enforce
the same, or (ii) of any adverse determination or the institution of any
proceeding (including, without limitation, the institution of any proceeding in
the U.S. Patent and Trademark Office or any court) regarding any item of the
Intellectual Property Collateral.

<PAGE>  18

 

      (c)  In the event that any Grantor becomes aware that any item of the
Intellectual Property Collateral material to the conduct of the business of the
Borrower and its Subsidiaries, taken as a whole, is being infringed or
misappropriated by a third party, such Grantor shall promptly notify the
Collateral Agent and shall take such actions, at its expense, as such Grantor or
the Collateral Agent deems reasonable and appropriate under the circumstances to
protect or enforce such Intellectual Property Collateral, including, without
limitation, suing for infringement or misappropriation and for an injunction
against such infringement or misappropriation.

       

      (d)  Each Grantor shall use proper statutory notice in connection with its
use of each item of its Intellectual Property Collateral. No Grantor shall do or
permit any act or knowingly omit to do any act whereby any of its material
Intellectual Property Collateral may lapse or become invalid or unenforceable or
placed in the public domain. No Grantor shall, without written consent of the
Collateral Agent, discontinue use of or otherwise abandon any material
Intellectual Property Collateral, or abandon any right to file an application
for patent, trademark or copyright, unless such Grantor shall have previously
determined that such use or the pursuit or maintenance of such Intellectual
Property Collateral is no longer desirable in the conduct of such Grantor's
business and that the loss thereof would not be reasonably likely to have a
Material Adverse Effect, in which case, such Grantor will give prompt notice of
any such abandonment to the Collateral Agent.

       

      (e)  Each Grantor shall take all steps which it or the Collateral Agent
deems reasonable and appropriate under the circumstances to preserve and protect
each item of its Intellectual Property Collateral material to the conduct of the
business of the Borrower and its Subsidiaries, taken as a whole, including,
without limitation, maintaining the quality of any and all products or services
used or provided in connection with any of the Trademarks, consistent with the
quality of the products and services as of the date hereof, and taking all steps
necessary to ensure that all licensed users of any of the Trademarks use such
consistent standards of quality.

       

      (f)  With respect to its U.S. Intellectual Property Collateral, each
Grantor agrees to execute or otherwise authenticate an agreement, in
substantially the form set forth in Exhibit C hereto or otherwise in form and
substance satisfactory to the Collateral Agent (an "Intellectual Property
Security Agreement"), for recording the security interest granted hereunder to
the Collateral Agent in such Intellectual Property Collateral with the U.S.
Patent and Trademark Office, the U.S. Copyright Office and any other
governmental authorities necessary to perfect the security interest hereunder in
such Intellectual Property Collateral.

       

      (g)  Each Grantor agrees that should it obtain an ownership interest in
any item of the type set forth in Section 1(g) that is not on the date hereof a
part of the Intellectual Property Collateral ("After-Acquired Intellectual
Property") (i) the provisions of this Agreement shall automatically apply
thereto, and (ii) any such After-Acquired Intellectual Property and, in the case
of trademarks, the goodwill symbolized thereby, shall automatically become part
of the Intellectual Property Collateral subject to the terms and conditions of
this Agreement with respect thereto. At the end of each fiscal quarter of the
Borrower, each Grantor shall give prompt written notice to the Collateral Agent
identifying

<PAGE>  19

 

the After-Acquired Intellectual Property, and such Grantor shall execute and
deliver to the Collateral Agent with such written notice, or otherwise
authenticate, an IP Security Agreement Supplement covering such After-Acquired
Intellectual Property which IP Security Agreement Supplement shall be recorded
with the U.S. Patent and Trademark Office, the U.S. Copyright Office and any
other governmental authorities necessary to perfect the security interest
hereunder in such After-Acquired Intellectual Property.

      Section 13.    Voting Rights; Dividends; Etc. (a) So long as no Default
under Section 6.01(a) or (f) of the Credit Agreement or Event of Default shall
have occurred and be continuing:

   

      (i)    Each Grantor shall be entitled to exercise any and all voting and
other consensual rights pertaining to the Security Collateral of such Grantor or
any part thereof for any purpose; provided however, that such Grantor will not
exercise or refrain from exercising any such right if such action would have a
material adverse effect on the value of the Security Collateral or any part
thereof.

         

      (ii)    Each Grantor shall be entitled to receive and retain any and all
dividends, interest and other distributions paid in respect of the Security
Collateral of such Grantor if and to the extent that the payment thereof is not
otherwise prohibited by the terms of the Loan Documents; provided, however, that
any and all

             

      (A)    dividends, interest and other distributions paid or payable other
than in cash in respect of, and instruments and other property received,
receivable or otherwise distributed in respect of, or in exchange for, any
Security Collateral,

             

      (B)    dividends and other distributions paid or payable in cash in
respect of any Security Collateral in connection with a partial or total
liquidation or dissolution or in connection with a reduction of capital, capital
surplus or paid-in-surplus and

             

      (C)    cash paid, payable or otherwise distributed in respect of principal
of, or in redemption of, or in exchange for, any Security Collateral

         

shall be, and shall be forthwith delivered to the Collateral Agent to hold as,
Security Collateral and shall, if received by such Grantor, be received in trust
for the benefit of the Collateral Agent, be segregated from the other property
or funds of such Grantor and be forthwith delivered to the Collateral Agent as
Security Collateral in the same form as so received (with any necessary
indorsement).

         

      (iii)    The Collateral Agent will execute and deliver (or cause to be
executed and delivered) to each Grantor all such proxies and other instruments
as such Grantor may reasonably request for the purpose of enabling such Grantor
to exercise the voting and other rights that it is entitled to exercise pursuant
to paragraph (i) above and to receive the dividends or interest payments that it
is authorized to receive and retain pursuant to paragraph (ii) above.

<PAGE>  20

 

      (b)  Upon the occurrence and during the continuance of a Default under
Section 6.01(a) or (f) of the Credit Agreement or an Event of Default:

         

      (i)    All rights of each Grantor (x) to exercise or refrain from
exercising the voting and other consensual rights that it would otherwise be
entitled to exercise pursuant to Section 15(a)(i) shall, upon notice to such
Grantor by the Collateral Agent, cease and (y) to receive the dividends,
interest and other distributions that it would otherwise be authorized to
receive and retain pursuant to Section 13(a)(ii) shall automatically cease, and
all such rights shall thereupon become vested in the Collateral Agent, which
shall thereupon have the sole right to exercise or refrain from exercising such
voting and other consensual rights and to receive and hold as Security
Collateral such dividends, interest and other distributions.

         

      (ii)    All dividends, interest and other distributions that are received
by any Grantor contrary to the provisions of paragraph (i) of this Section 13(b)
shall be received in trust for the benefit of the Collateral Agent, shall be
segregated from other funds of such Grantor and shall be forthwith paid over to
the Collateral Agent as Security Collateral in the same form as so received
(with any necessary indorsement).

         

      (iii)    The Collateral Agent shall be authorized to send to each
Securities Intermediary as defined in and under any Security Control Agreement a
Notice of Exclusive Control as defined in and under such Security Control
Agreement.

      Section 14.    As to the Assigned Agreements. (a) Each Grantor will at its
expense, if an Event of Default shall have occurred and be continuing, furnish
to the Collateral Agent promptly upon receipt thereof copies of all notices,
requests and other documents received by such Grantor under or pursuant to the
Assigned Agreements to which it is a party, and from time to time (A) furnish to
the Collateral Agent such information and reports regarding the Assigned
Agreements and such other Collateral of such Grantor as the Collateral Agent may
reasonably request and (B) upon request of the Collateral Agent make to each
other party to any Assigned Agreement to which it is a party such demands and
requests for information and reports or for action as such Grantor is entitled
to make thereunder.

 

      (b)  Each Grantor hereby consents on its behalf and on behalf of its
Subsidiaries to the assignment and pledge to the Collateral Agent for benefit of
the Secured Parties of each Assigned Agreement to which it is a party by any
other Grantor hereunder.

      Section 15.    Payments Under the Assigned Agreements. (a) In addition to
the other provisions of this Agreement, if an Event of Default shall have
occurred and be continuing, each Grantor agrees, and that, if requested by the
Collateral Agent, it shall instruct each other party to each Assigned Agreement
to which it is a party, that all payments due or to become due under or in
connection with such Assigned Agreement will be made as directed by the
Collateral Agent.

 

      (b)  All moneys received or collected pursuant to subsection (a) above
shall be (i) released to the applicable Grantor, or at its order or, at the
request of such Grantor, to

<PAGE>  21

 

the Administrative Agent to be applied to its Obligations under the Loan
Documents so long as no Default under Section 6.01(a) or (f) of the Credit
Agreement or Event of Default shall have occurred and be continuing or (ii) if
any Default under Section 6.01(a) or (f) of the Credit Agreement or Event of
Default shall have occurred and be continuing, applied as provided in Section
20(b).

      Section 16.    Transfers and Other Liens; Additional Shares. (a) Each
Grantor agrees that it will not (i) sell, assign or otherwise dispose of, or
grant any option with respect to, any of the Collateral, other than sales,
assignments and other dispositions of Collateral, and options relating to
Collateral, permitted under the terms of the Credit Agreement, or (ii) create or
suffer to exist any Lien upon or with respect to any of the Collateral of such
Grantor except for the pledge, assignment and security interest created under
this Agreement or as otherwise expressly permitted under the Credit Agreement.

 

      (b)  Each Grantor agrees that it will (i) cause each issuer of the Pledged
Equity pledged by such Grantor not to issue any Equity Interests or other
securities in addition to or in substitution for the Pledged Equity issued by
such issuer, except to such Grantor, and (ii) pledge hereunder, immediately upon
its acquisition (directly or indirectly) thereof, any and all additional Equity
Interests or other securities.

      Section 17.    Collateral Agent Appointed Attorney-in-Fact. Each Grantor
hereby irrevocably appoints the Collateral Agent such Grantor's
attorney-in-fact, with full authority in the place and stead of such Grantor and
in the name of such Grantor or otherwise, from time to time, upon the occurrence
and during the continuance of a an Event of Default in the Collateral Agent's
discretion, to take any action and to execute any instrument that the Collateral
Agent may deem necessary or advisable to accomplish the purposes of this
Agreement, including, without limitation:

 

      (a)  to obtain and adjust insurance required to be paid to the Collateral
Agent pursuant to Section 10,

         

      (b)  to ask for, demand, collect, sue for, recover, compromise, receive
and give acquittance and receipts for moneys due and to become due under or in
respect of any of the Collateral,

         

      (c)  to receive, indorse and collect any drafts or other instruments,
documents and chattel paper, in connection with clause (a) or (b) above, and

         

      (d)  to file any claims or take any action or institute any proceedings
that the Collateral Agent may deem necessary or desirable for the collection of
any of the Collateral or otherwise to enforce compliance with the terms and
conditions of any Assigned Agreement or the rights of the Collateral Agent with
respect to any of the Collateral.

      Section 18.    Collateral Agent May Perform. If any Grantor fails to
perform any agreement contained herein, the Collateral Agent may, but without
any obligation to do so and without notice, itself perform, or cause performance
of, such agreement, and the expenses of the

<PAGE>  22

Collateral Agent incurred in connection therewith shall be payable by such
Grantor under Section 21.

      Section 19.    The Collateral Agent's Duties. (a) The powers conferred on
the Collateral Agent hereunder are solely to protect the Secured Parties'
interest in the Collateral and shall not impose any duty upon it to exercise any
such powers. Except for the safe custody of any Collateral in its possession and
the accounting for moneys actually received by it hereunder, the Collateral
Agent shall have no duty as to any Collateral, as to ascertaining or taking
action with respect to calls, conversions, exchanges, maturities, tenders or
other matters relative to any Collateral, whether or not any Secured Party has
or is deemed to have knowledge of such matters, or as to the taking of any
necessary steps to preserve rights against any parties or any other rights
pertaining to any Collateral. The Collateral Agent shall be deemed to have
exercised reasonable care in the custody and preservation of any Collateral in
its possession if such Collateral is accorded treatment substantially equal to
that which it accords its own property.

 

      (b)  Anything contained herein to the contrary notwithstanding, the
Collateral Agent may from time to time, when the Collateral Agent deems it to be
necessary, appoint one or more subagents (each a "Subagent") for the Collateral
Agent hereunder with respect to all or any part of the Collateral. In the event
that the Collateral Agent so appoints any Subagent with respect to any
Collateral, (i) the assignment and pledge of such Collateral and the security
interest granted in such Collateral by each Grantor hereunder shall be deemed
for purposes of this Security Agreement to have been made to such Subagent, in
addition to the Collateral Agent, for the ratable benefit of the Secured
Parties, as security for the Secured Obligations of such Grantor, (ii) such
Subagent shall automatically be vested, in addition to the Collateral Agent,
with all rights, powers, privileges, interests and remedies of the Collateral
Agent hereunder with respect to such Collateral, and (iii) the term "Collateral
Agent," when used herein in relation to any rights, powers, privileges,
interests and remedies of the Collateral Agent with respect to such Collateral,
shall include such Subagent; provided, however, that no such Subagent shall be
authorized to take any action with respect to any such Collateral unless and
except to the extent expressly authorized in writing by the Collateral Agent.

      Section 20.    Remedies. If any Event of Default shall have occurred and
be continuing:

 

      (a)  The Collateral Agent may exercise in respect of the Collateral, in
addition to other rights and remedies provided for herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the UCC
(whether or not the UCC applies to the affected Collateral) and also may:
(i) require each Grantor to, and each Grantor hereby agrees that it will at its
expense and upon request of the Collateral Agent forthwith, assemble all or part
of the Collateral as directed by the Collateral Agent and make it available to
the Collateral Agent at a place and time to be designated by the Collateral
Agent that is reasonably convenient to both parties; (ii) without notice except
as specified below, sell the Collateral or any part thereof in one or more
parcels at public or private sale, at any of the Collateral Agent's offices or
elsewhere, for cash, on credit or for future delivery, and upon such other terms
as the Collateral Agent may deem commercially reasonable; (iii) occupy any
premises owned or leased by any of the Grantors where the

<PAGE>  23

 

Collateral or any part thereof is assembled or located for a reasonable period
in order to effectuate its rights and remedies hereunder or under law, without
obligation to such Grantor in respect of such occupation; and (iv) exercise any
and all rights and remedies of any of the Grantors under or in connection with
the Collateral, or otherwise in respect of the Collateral, including, without
limitation, (A) any and all rights of such Grantor to demand or otherwise
require payment of any amount under, or performance of any provision of, the
Assigned Agreements, the Receivables, the Related Contracts and the other
Collateral, (B) withdraw, or cause or direct the withdrawal, of all funds with
respect to the Account Collateral and (C) exercise all other rights and remedies
with respect to the Assigned Agreements, the Receivables, the Related Contracts
and the other Collateral, including, without limitation, those set forth in
Section 9-607 of the UCC. Each Grantor agrees that, to the extent notice of sale
shall be required by law, at least ten days' notice to such Grantor of the time
and place of any public sale or the time after which any private sale is to be
made shall constitute reasonable notification. The Collateral Agent shall not be
obligated to make any sale of Collateral regardless of notice of sale having
been given. The Collateral Agent may adjourn any public or private sale from
time to time by announcement at the time and place fixed therefor, and such sale
may, without further notice, be made at the time and place to which it was so
adjourned.

           

      (i)    Any cash held by or on behalf of the Collateral Agent and all cash
proceeds received by or on behalf of the Collateral Agent in respect of any sale
of, collection from, or other realization upon all or any part of the Collateral
may, in the discretion of the Collateral Agent, be held by the Collateral Agent
as collateral for, and/or then or at any time thereafter applied (after payment
of any amounts payable to the Collateral Agent pursuant to Section 21) in whole
or in part by the Collateral Agent for the ratable benefit of the Secured
Parties against, all or any part of the Secured Obligations, as set forth in
Section 2.11(f) of the Credit Agreement.

         

Any surplus of such cash or cash proceeds held by or on the behalf of the
Collateral Agent and remaining after payment in full of all the Secured
Obligations shall be paid over to the applicable Grantor or to whomsoever may be
lawfully entitled to receive such surplus.

         

      (b)  All payments received by any Grantor under or in connection with any
Assigned Agreement or otherwise in respect of the Collateral shall be received
in trust for the benefit of the Collateral Agent, shall be segregated from other
funds of such Grantor and shall be forthwith paid over to the Collateral Agent
in the same form as so received (with any necessary indorsement).

         

      (c)  The Collateral Agent may, without notice to any Grantor except as
required by law and at any time or from time to time, charge, set-off and
otherwise apply all or any part of the Secured Obligations against any funds
held with respect to the Account Collateral or in any other deposit account.

         

      (d)  In the event of any sale or other disposition of any of the
Intellectual Property Collateral of any Grantor, the goodwill symbolized by any
Trademarks subject to such sale or other disposition shall be included therein,
and such Grantor shall supply to the

<PAGE>  24

 

Collateral Agent or its designee such Grantor's know-how and expertise, and
documents and things relating to any Intellectual Property Collateral subject to
such sale or other disposition, and such Grantor's customer lists and other
records and documents relating to such Intellectual Property Collateral and to
the manufacture, distribution, advertising and sale of products and services of
such Grantor.

         

      (e)  If the Collateral Agent shall determine to exercise its right to sell
all or any of the Security Collateral of any Grantor pursuant to this
Section 20, each Grantor agrees that, upon request of the Collateral Agent, such
Grantor will, at its own expense do or cause to be done all such acts and things
as may be necessary to make the sale of such Security Collateral or any part
thereof valid and binding and in compliance with applicable law.

         

      (f)  The Collateral Agent is authorized, in connection with any sale of
the Security Collateral pursuant to this Section 20, to deliver or otherwise
disclose to any prospective purchaser of the Security Collateral any other
information in its possession relating to such Security Collateral.

         

      (g)  Each Grantor acknowledges the impossibility of ascertaining the
amount of damages that would be suffered by the Secured Parties by reason of the
failure by such Grantor to perform any of the covenants contained in
subsection (f) above and, consequently, agrees that, if such Grantor shall fail
to perform any of such covenants, it will pay, as liquidated damages and not as
a penalty, an amount equal to the value of the Security Collateral on the date
the Collateral Agent shall demand compliance with subsection (f) above.

      Section 21.    Indemnity and Expenses. (a) Each Grantor agrees to
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party, in each
case arising out of or in connection with or resulting from this Agreement
(including, without limitation, enforcement of this Agreement), except to the
extent such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.

 

      (b)  Each Grantor will upon demand pay to the Collateral Agent the amount
of any and all reasonable expenses, including, without limitation, the
reasonable fees and expenses of its counsel and of any experts and agents, that
the Collateral Agent may incur in connection with (i) the administration of this
Agreement, (ii) the custody, preservation, use or operation of, or the sale of,
collection from or other realization upon, any of the Collateral of such
Grantor, (iii) the exercise or enforcement of any of the rights of the
Collateral Agent or the other Secured Parties hereunder or (iv) the failure by
such Grantor to perform or observe any of the provisions hereof.

      Section 22.    Amendments; Waivers; Additional Grantors; Etc. (a) No
amendment or waiver of any provision of this Agreement, and no consent to any
departure by any

<PAGE>  25

Grantor herefrom, shall in any event be effective unless the same shall be in
writing and signed by the Collateral Agent, and then such waiver or consent
shall be effective only in the specific instance and for the specific purpose
for which given. No failure on the part of the Collateral Agent or any other
Secured Party to exercise, and no delay in exercising any right hereunder, shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right preclude any other or further exercise thereof or the exercise of any
other right.

 

      (b)  Upon the execution and delivery, or authentication, by any Person of
a security agreement supplement in substantially the form of Exhibit A hereto
(each, a "Security Agreement Supplement"), (i) such Person shall be referred to
as an "Additional Grantor" and shall be and become a Grantor hereunder, and each
reference in this Agreement and the other Loan Documents to "Grantor" shall also
mean and be a reference to such Additional Grantor, and each reference in this
Agreement and the other Loan Documents to "Collateral" shall also mean and be a
reference to the Collateral of such Additional Grantor, and (ii) the
supplemental schedules I-VIII attached to each Security Agreement Supplement
shall be incorporated into and become a part of and supplement Schedules I-VIII,
respectively, hereto, and the Collateral Agent may attach such supplemental
schedules to such Schedules; and each reference to such Schedules shall mean and
be a reference to such Schedules as supplemented pursuant to each Security
Agreement Supplement.

      Section 23.    Notices, Etc. All notices and other communications provided
for hereunder shall be either (i) in writing (including telegraphic, telecopier
or telex communication) and mailed, telegraphed, telecopied, telexed or
otherwise delivered or (ii) by electronic mail (if electronic mail addresses are
designated as provided below) confirmed immediately in writing, in the case of
the Borrower or the Collateral Agent, addressed to it at its address specified
in the Credit Agreement and, in the case of each Grantor other than the
Borrower, addressed to it at its address set forth opposite such Grantor's name
on the signature pages hereto or on the signature page to the Security Agreement
Supplement pursuant to which it became a party hereto; or, as to any party, at
such other address as shall be designated by such party in a written notice to
the other parties. All such notices and other communications shall, when mailed,
telegraphed, telecopied, telexed, sent by electronic mail or otherwise, be
effective when deposited in the mails, delivered to the telegraph company,
telecopied, confirmed by telex answerback, sent by electronic mail and confirmed
in writing, or otherwise delivered (or confirmed by a signed receipt),
respectively, addressed as aforesaid; except that notices and other
communications to the Collateral Agent shall not be effective until received by
the Collateral Agent. Delivery by telecopier of an executed counterpart of any
amendment or waiver of any provision of this Agreement or of any Security
Agreement Supplement or Schedule hereto shall be effective as delivery of an
original executed counterpart thereof.

      Section 24.    Continuing Security Interest; Assignments under the Credit
Agreement. This Agreement shall create a continuing security interest in the
Collateral and shall (a) remain in full force and effect until the latest of
(i) the payment in full in cash of the Secured Obligations (other than
Obligations in respect of Hedge Agreements to the extent not due and payable or
in respect of contingent obligations as to which no claim has been asserted),
(ii) the Termination Date and (iii) the termination or expiration of all Letters
of Credit and all Secured Hedge Agreements, (b) be binding upon each Grantor,
its successors and assigns and (c) inure,

<PAGE>  26

together with the rights and remedies of the Collateral Agent hereunder, to the
benefit of the Secured Parties and their respective successors, transferees and
assigns. Without limiting the generality of the foregoing clause (c), any Lender
Party may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitment, the Advances owing to it and the Note or Notes,
if any, held by it) to any other Person, and such other Person shall thereupon
become vested with all the benefits in respect thereof granted to such Lender
Party herein or otherwise, in each case as provided in Section 8.07 of the
Credit Agreement.

      Section 25.    Release; Termination. (a) Upon any sale, lease, transfer or
other disposition of any item of Collateral of any Grantor in accordance with
the terms of the Loan Documents (other than sales of Inventory in the ordinary
course of business), the Collateral Agent will, at such Grantor's expense,
execute and deliver to such Grantor such documents as such Grantor shall
reasonably request to evidence the release of such item of Collateral from the
assignment and security interest granted hereby; provided, however, that (i) at
the time of such request and such release no Event of Default shall have
occurred and be continuing and (ii) such Grantor shall have delivered to the
Collateral Agent, at least ten Business Days prior to the date of the proposed
release, a written request for release describing the item of Collateral and the
terms of the sale, lease, transfer or other disposition in reasonable detail,
including, without limitation, the price thereof and any expenses in connection
therewith, together with a form of release for execution by the Collateral Agent
and a certificate of such Grantor to the effect that the transaction is in
compliance with the Loan Documents and as to such other matters as the
Collateral Agent may request.

 

      (b)  Upon the latest of (i) the payment in full in cash of the Secured
Obligations (other than Obligations in respect of Hedge Agreements to the extent
not due and payable or in respect of contingent obligations as to which no claim
has been asserted), (ii) the Termination Date and (iii) the termination or
expiration of all Letters of Credit and all Secured Hedge Agreements, the pledge
and security interest granted hereby shall terminate and all rights to the
Collateral shall revert to the applicable Grantor. Upon any such termination,
the Collateral Agent will, at the applicable Grantor's expense, execute and
deliver to such Grantor such documents as such Grantor shall reasonably request
to evidence such termination.

      Section 26.    Execution in Counterparts. This Agreement may be executed
in any number of counterparts, each of which when so executed shall be deemed to
be an original and all of which taken together shall constitute one and the same
agreement. Delivery of an executed counterpart of a signature page to this
Agreement by fax shall be effective as delivery of an original executed
counterpart of this Agreement.

      Section 27.    Governing Law. This Agreement shall be governed by, and
construed in accordance with, the laws of the State of New York.

<PAGE>  

      IN WITNESS WHEREOF, each Grantor has caused this Agreement to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

ESTERLINE TECHNOLOGIES CORPORATION

     

By

______________________________________

   

Name:  Robert D. George

   

Title:  Vice President, Chief Financial Officer,

   

          Secretary and Treasurer

       

Advanced Input Devices, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Armtec Defense Products Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Armtec Countermeasures Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Kirkhill-TA Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Korry Electronics Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

Mason Electric Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Auxitrol Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Boyar-Schultz Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

BVR Technologies Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Equipment Sales Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Fluid Regulators Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Hytek Finishes Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Chief

   

          Financial Officer

 

<PAGE>  

 

Janco Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

McTaws Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Memtron Technologies Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Surftech Finishes Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Excellon Automation Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Excellon U.K.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Amtech Automated Manufacturing
  Technology

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

W.A. Whitney Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

MC Tech Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

H.A. Sales Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Angus Electronics Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: President, Secretary and Treasurer

       

Pressure Systems, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Pressure Systems International, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Norwich Aero Products, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

Sureseal Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

EXECUTION COPY

 

EXHIBIT E

FORM OF SUBSIDIARY GUARANTY

SUBSIDIARY GUARANTY

Dated as of June 11, 2003

From

THE GUARANTORS NAMED HEREIN

and

THE ADDITIONAL GUARANTORS REFERRED TO HEREIN

as Guarantors

in favor of

THE SECURED PARTIES REFERRED TO IN
THE CREDIT AGREEMENT REFERRED TO HEREIN

<PAGE>

T A B L E  O F  C O N T E N T S

Section 1.

Guaranty; Limitation of Liability

1

     

Section 2.

Guaranty Absolute

2

     

Section 3.

Waivers and Acknowledgments

3

     

Section 4.

Subrogation

4

     

Section 5.

Payments Free and Clear of Taxes, Etc.

5

     

Section 6.

Representations and Warranties

7

     

Section 7.

Covenants

7

     

Section 8.

Amendments, Guaranty Supplements, Etc.

7

     

Section 9.

Notices, Etc.

8

     

Section 10.

No Waiver; Remedies

8

     

Section 11.

Right of Set-off

8

     

Section 12.

Indemnification

8

     

Section 13.

Subordination

9

     

Section 14.

Continuing Guaranty; Assignments under the Credit Agreement

10

     

Section 15.

Execution in Counterparts

10

     

Section 16.

Governing Law; Jurisdiction; Waiver of Jury Trial, Etc.

11

Exhibit A - Guaranty Supplement

<PAGE>  

SUBSIDIARY GUARANTY

      SUBSIDIARY GUARANTY dated as of June 11, 2003, made by the Persons listed
on the signature pages hereof under the caption "Subsidiary Guarantors" and the
Additional Guarantors (as defined in Section 8(b)) (such Persons so listed and
the Additional Guarantors being, collectively, the "Guarantors" and,
individually, each a "Guarantor") in favor of the Secured Parties (as defined in
the Credit Agreement referred to below).

      PRELIMINARY STATEMENT. Esterline Technologies Corporation, a Delaware
corporation (the "Borrower"), is party to a Credit Agreement dated as of June
11, 2003 (as amended, amended and restated, supplemented or otherwise modified
from time to time, the "Credit Agreement"; the capitalized terms defined therein
and not otherwise defined herein being used herein as therein defined) with
certain Lender Parties party thereto, Wachovia Bank, National Association, as
Administrative Agent and Collateral Agent for such Lender Parties. Each
Guarantor may receive, directly or indirectly, a portion of the proceeds of the
Advances under the Credit Agreement and will derive substantial direct and
indirect benefits from the transactions contemplated by the Credit Agreement. It
is a condition precedent to the making of Advances and the issuance of Letters
of Credit by the Lender Parties under the Credit Agreement and the entry by the
Hedge Banks into Secured Hedge Agreements from time to time that each Guarantor
shall have executed and delivered this Guaranty.

      NOW, THEREFORE, in consideration of the premises and in order to induce
the Lender Parties to make Advances and to issue Letters of Credit under the
Credit Agreement and the Hedge Banks to enter into Secured Hedge Agreements from
time to time, each Guarantor, jointly and severally with each other Guarantor,
hereby agrees as follows:

      Section 1.    Guaranty; Limitation of Liability. (a) Each Guarantor hereby
absolutely, unconditionally and irrevocably guarantees the punctual payment and
performance when due, whether at scheduled maturity or on any date of a required
prepayment or by acceleration, demand or otherwise, of all Obligations of each
other Loan Party now or hereafter existing under or in respect of the Loan
Documents (including, without limitation, any extensions, modifications,
substitutions, amendments or renewals of any or all of the foregoing
Obligations), whether direct or indirect, absolute or contingent, and whether
for principal, interest, premiums, fees, indemnities, contract causes of action,
costs, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses (including,
without limitation, fees and expenses of counsel) incurred by the Administrative
Agent or any other Secured Party in enforcing any rights under this Guaranty or
any other Loan Document. Without limiting the generality of the foregoing, each
Guarantor's liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by any other Loan Party to any Secured
Party under or in respect of the Loan Documents but for the fact that they are
unenforceable or not allowable due to the existence of a bankruptcy,
reorganization or similar proceeding involving such other Loan Party.

 

      (b)  Each Guarantor, and by its acceptance of this Guaranty, the
Administrative Agent and each other Secured Party, hereby confirms that it is
the intention of all such Persons that this Guaranty and the Obligations of each
Guarantor hereunder not constitute a fraudulent transfer or conveyance for
purposes of Bankruptcy Law (as hereinafter defined), the Uniform Fraudulent

<PAGE>  2

 

Conveyance Act, the Uniform Fraudulent Transfer Act or any similar foreign,
federal or state law to the extent applicable to this Guaranty and the
Obligations of each Guarantor hereunder. To effectuate the foregoing intention,
the Administrative Agent, the other Secured Parties and the Guarantors hereby
irrevocably agree that the Obligations of each Guarantor under this Guaranty at
any time shall be limited to the maximum amount as will result in the
Obligations of such Guarantor under this Guaranty not constituting a fraudulent
transfer or conveyance. For purposes hereof, "Bankruptcy Law" means any
proceeding of the type referred to in Section 6.01(f) of the Credit Agreement or
Title 11, U.S. Code, or any similar foreign, federal or state law for the relief
of debtors.

         

      (c)  Each Guarantor hereby unconditionally and irrevocably agrees that in
the event any payment shall be required to be made to any Secured Party under
this Guaranty or any other guaranty, such Guarantor will contribute, to the
maximum extent permitted by law, such amounts to each other Guarantor and each
other guarantor so as to maximize the aggregate amount paid to the Secured
Parties under or in respect of the Loan Documents.

      Section 2.    Guaranty Absolute. Each Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of the
Loan Documents, regardless of any law, regulation or order now or hereafter in
effect in any jurisdiction affecting any of such terms or the rights of any
Secured Party with respect thereto. The Obligations of each Guarantor under or
in respect of this Guaranty are independent of the Guaranteed Obligations or any
other Obligations of any other Loan Party under or in respect of the Loan
Documents, and a separate action or actions may be brought and prosecuted
against each Guarantor to enforce this Guaranty, irrespective of whether any
action is brought against the Borrower or any other Loan Party or whether the
Borrower or any other Loan Party is joined in any such action or actions. The
liability of each Guarantor under this Guaranty shall be irrevocable, absolute
and unconditional irrespective of, and each Guarantor hereby irrevocably waives
any defenses it may now have or hereafter acquire in any way relating to, any or
all of the following:

 

      (a)  any lack of validity or enforceability of any Loan Document or any
agreement or instrument relating thereto;

         

      (b)  any change in the time, manner or place of payment of, or in any
other term of, all or any of the Guaranteed Obligations or any other Obligations
of any other Loan Party under or in respect of the Loan Documents, or any other
amendment or waiver of or any consent to departure from any Loan Document,
including, without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to any Loan Party or any of
its Subsidiaries or otherwise;

         

      (c)  any taking, exchange, release or non-perfection of any Collateral or
any other collateral, or any taking, release or amendment or waiver of, or
consent to departure from, any other guaranty, for all or any of the Guaranteed
Obligations;

         

      (d)  any manner of application of Collateral or any other collateral, or
proceeds thereof, to all or any of the Guaranteed Obligations, or any manner of
sale or other disposition of any Collateral or any other collateral for all or
any of the Guaranteed Obligations or any other

<PAGE>  3

 

Obligations of any Loan Party under the Loan Documents or any other assets of
any Loan Party or any of its Subsidiaries;

         

      (e)  any change, restructuring or termination of the corporate structure
or existence of any Loan Party or any of its Subsidiaries;

         

      (f)  any failure of any Secured Party to disclose to any Loan Party any
information relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party now or
hereafter known to such Secured Party (each Guarantor waiving any duty on the
part of the Secured Parties to disclose such information);

         

      (g)  the failure of any other Person to execute or deliver this Guaranty,
any Guaranty Supplement (as hereinafter defined) or any other guaranty or
agreement or the release or reduction of liability of any Guarantor or other
guarantor or surety with respect to the Guaranteed Obligations; or

         

      (h)  any other circumstance (including, without limitation, any statute of
limitations) or any existence of or reliance on any representation by any
Secured Party that might otherwise constitute a defense available to, or a
discharge of, any Loan Party or any other guarantor or surety.

This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Guaranteed Obligations is rescinded
or must otherwise be returned by any Secured Party or any other Person upon the
insolvency, bankruptcy or reorganization of the Borrower or any other Loan Party
or otherwise, all as though such payment had not been made.

      Section 3.    Waivers and Acknowledgments. (a) Each Guarantor hereby
unconditionally and irrevocably waives promptness, diligence, notice of
acceptance, presentment, demand for performance, notice of nonperformance,
default, acceleration, protest or dishonor and any other notice with respect to
any of the Guaranteed Obligations and this Guaranty and any requirement that any
Secured Party protect, secure, perfect or insure any Lien or any property
subject thereto or exhaust any right or take any action against any Loan Party
or any other Person or any Collateral.

 

      (b)  Each Guarantor hereby unconditionally and irrevocably waives any
right to revoke this Guaranty and acknowledges that this Guaranty is continuing
in nature and applies to all Guaranteed Obligations, whether existing now or in
the future.

         

      (c)  Each Guarantor hereby unconditionally and irrevocably waives (i) any
defense arising by reason of any claim or defense based upon an election of
remedies by any Secured Party that in any manner impairs, reduces, releases or
otherwise adversely affects the subrogation, reimbursement, exoneration,
contribution or indemnification rights of such Guarantor or other rights of such
Guarantor to proceed against any of the other Loan Parties, any other guarantor
or any other Person or any Collateral and (ii) any defense based on any right of
set-off or counterclaim against or in respect of the Obligations of such
Guarantor hereunder.

<PAGE>  4

 

      (d)  Each Guarantor acknowledges that the Collateral Agent may, without
notice to or demand upon such Guarantor and without affecting the liability of
such Guarantor under this Guaranty, foreclose under any mortgage by nonjudicial
sale, and each Guarantor hereby waives any defense to the recovery by the
Collateral Agent and the other Secured Parties against such Guarantor of any
deficiency after such nonjudicial sale and any defense or benefits that may be
afforded by applicable law.

         

      (e)  Each Guarantor hereby unconditionally and irrevocably waives any duty
on the part of any Secured Party to disclose to such Guarantor any matter, fact
or thing relating to the business, condition (financial or otherwise),
operations, performance, properties or prospects of any other Loan Party or any
of its Subsidiaries now or hereafter known by such Secured Party.

         

      (f)  Each Guarantor acknowledges that it will receive substantial direct
and indirect benefits from the financing arrangements contemplated by the Loan
Documents and that the waivers set forth in Section 2 and this Section 3 are
knowingly made in contemplation of such benefits.

      Section 4.    Subrogation. Each Guarantor hereby unconditionally and
irrevocably agrees not to exercise any rights that it may now have or hereafter
acquire against the Borrower, any other Loan Party or any other insider
guarantor that arise from the existence, payment, performance or enforcement of
such Guarantor's Obligations under or in respect of this Guaranty or any other
Loan Document, including, without limitation, any right of subrogation,
reimbursement, exoneration, contribution or indemnification and any right to
participate in any claim or remedy of any Secured Party against the Borrower,
any other Loan Party or any other insider guarantor or any Collateral, whether
or not such claim, remedy or right arises in equity or under contract, statute
or common law, including, without limitation, the right to take or receive from
the Borrower, any other Loan Party or any other insider guarantor, directly or
indirectly, in cash or other property or by set-off or in any other manner,
payment or security on account of such claim, remedy or right, unless and until
all of the Guaranteed Obligations and all other amounts payable under this
Guaranty shall have been paid in full in cash (other than Guaranteed Obligations
in respect of Hedge Agreements to the extent not due and payable or in respect
of contingent obligations as to which no claim has been asserted), all Letters
of Credit and all Secured Hedge Agreements shall have expired or been terminated
and the Commitments shall have expired or been terminated. If any amount shall
be paid to any Guarantor in violation of the immediately preceding sentence at
any time prior to the latest of (a) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty,
(b) the Termination Date and (c) the latest date of expiration or termination of
all Letters of Credit and all Secured Hedge Agreements, such amount shall be
received and held in trust for the benefit of the Secured Parties, shall be
segregated from other property and funds of such Guarantor and shall forthwith
be paid or delivered to the Administrative Agent in the same form as so received
(with any necessary endorsement or assignment) to be credited and applied to the
Guaranteed Obligations and all other amounts payable under this Guaranty,
whether matured or unmatured, in accordance with the terms of the Loan
Documents, or to be held as Collateral for any Guaranteed Obligations or other
amounts payable under this Guaranty thereafter arising. If (i) any Guarantor
shall make payment to any Secured Party of all or any part of the Guaranteed
Obligations, (ii) all of the Guaranteed Obligations and all other amounts
payable under this Guaranty shall have been paid in full in cash, (iii) the
Termination Date shall have occurred and (iv) all Letters of Credit and all
Secured Hedge

<PAGE>  5

Agreements shall have expired or been terminated, the Secured Parties will, at
such Guarantor's request and expense, execute and deliver to such Guarantor
appropriate documents, without recourse and without representation or warranty,
necessary to evidence the transfer by subrogation to such Guarantor of an
interest in the Guaranteed Obligations resulting from such payment made by such
Guarantor pursuant to this Guaranty.

      Section 5.    Payments Free and Clear of Taxes, Etc. (a) Any and all
payments made by any Guarantor under or in respect of this Guaranty or any other
Loan Document shall be made, in accordance with Section 2.11 of the Credit
Agreement, free and clear of and without deduction for any and all present or
future Taxes. If any Guarantor shall be required by law to deduct any Taxes from
or in respect of any sum payable under or in respect of this Guaranty or any
other Loan Document to any Secured Party, (i) the sum payable by such Guarantor
shall be increased as may be necessary so that after such Guarantor and the
Administrative Agent have made all required deductions (including deductions
applicable to additional sums payable under this Section 5), such Secured Party
receives an amount equal to the sum it would have received had no such
deductions been made, (ii) such Guarantor shall make all such deductions and
(iii) such Guarantor shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law.

 

      (b)  In addition, each Guarantor agrees to pay any present or future Other
Taxes that arise from any payment made by or on behalf of such Guarantor under
or in respect of this Guaranty or any other Loan Document or from the execution,
delivery or registration of, performance under, or otherwise with respect to,
this Guaranty and the other Loan Documents.

         

      (c)  Each Guarantor will indemnify each Secured Party for and hold it
harmless against the full amount of Taxes and Other Taxes and for the full
amount of taxes of any kind imposed or asserted by any jurisdiction on amounts
payable under this Section 5, imposed on or paid by such Secured Party and any
liability (including penalties, additions to tax, interest and expenses) arising
therefrom or with respect thereto. This indemnification shall be made within 30
days from the date such Secured Party makes written demand therefor.

         

      (d)  Within 30 days after the date of any payment of Taxes by or on behalf
of any Guarantor, such Guarantor shall furnish to the Administrative Agent, at
its address referred to in Section 9, the original or a certified copy of a
receipt evidencing such payment. In the case of any payment hereunder by or on
behalf of any Guarantor through an account or branch outside the United States
or by or on behalf of such Guarantor by a payor that is not a United States
person, if such Guarantor determines that no Taxes are payable in respect
thereof, such Guarantor shall furnish, or shall cause such payor to furnish, to
the Administrative Agent, at such address, an opinion of counsel acceptable to
the Administrative Agent stating that such payment is exempt from Taxes. For
purposes of subsections (d) and (e) of this Section 5, the terms "United States"
and "United States person" shall have the meanings specified in Section 7701 of
the Internal Revenue Code.

         

      (e)  Upon the reasonable request in writing of any Guarantor, each Secured
Party organized under the laws of a jurisdiction outside the United States
shall, on or prior to the date of its execution and delivery of the Credit
Agreement in the case of each Initial Lender or Initial Issuing Bank, as the
case may be, and on or prior to the date of the Assignment and Acceptance or

<PAGE>  6

 

Secured Hedge Agreement pursuant to which it becomes a Secured Party in the case
of each other Secured Party, and from time to time thereafter as reasonably
requested in writing by any Guarantor (but only so long thereafter as such
Secured Party remains lawfully able to do so), provide each of the
Administrative Agent and such Guarantor with two original Internal Revenue
Service Forms W-8BEN or W-8EC1 or (in the case of a Secured Party that has
certified in writing to the Administrative Agent that it is not (i) a "bank" as
defined in Section 881(c)(3)(A) of the Internal Revenue Code, (ii) a 10-percent
shareholder (within the meaning of Section 871(h)(3)(B) of the Internal Revenue
Code) of the Borrower or (iii) a CFC related to the Borrower (within the meaning
of Section 864(d)(4) of the Internal Revenue Code), Internal Revenue Service
Form W-8BEN, as appropriate) any successor or other form prescribed by the
Internal Revenue Service, certifying that such Secured Party is exempt from or
entitled to a reduced rate of United States withholding tax on payments under
the Credit Agreement or the Notes or any other Loan Document or such other
Internal Revenue Service form as may be applicable to a Secured Party which will
entitle the Secured Party to an exemption from or a reduced rate of withholding
tax on payments pursuant to this Agreement or the Notes or any other Loan
Document. If the forms provided by a Secured Party at the time such Secured
Party first becomes a party to the Credit Agreement or the applicable Secured
Hedge Agreement indicate a United States interest withholding tax rate in excess
of zero, withholding tax at such rate shall be considered excluded from Taxes
unless and until such Secured Party provides the appropriate forms certifying
that a lesser rate applies, whereupon withholding tax at such lesser rate only
shall be considered excluded from Taxes for periods governed by such forms;
provided, however, that if, in the case of a Secured Party becoming a party to
the Credit Agreement, at the effective date of the Assignment and Acceptance
pursuant to which a Secured Party becomes a party to the Credit Agreement, the
Secured Party assignor was entitled to payments under subsection (a) of this
Section 5 in respect of United States withholding tax with respect to interest
paid at such date, then, to such extent, the term Taxes shall include (in
addition to withholding taxes that may be imposed in the future or other amounts
otherwise includable in Taxes) United States withholding tax, if any, applicable
with respect to the Secured Party assignee on such date. If any form or document
referred to in this subsection (e) and requested by any Guarantor pursuant to
this subsection (e) requires the disclosure of information, other than
information necessary to compute the tax payable and information required on the
date hereof by Internal Revenue Service Form W-8BEN or W-8ECI or the related
certificate described above, that the applicable Secured Party reasonably
considers to be confidential, such Secured Party shall give notice thereof to
the applicable Guarantor and shall not be obligated to include in such form or
document such confidential information.

         

      (f)  For any period with respect to which a Secured Party has failed to
provide any Guarantor following such Guarantor's request therefor pursuant to
subsection (e) above with the appropriate form described in subsection (e) above
(other than if such failure is due to a change in law occurring after the date
on which a form originally was required to be provided or if such form otherwise
is not required under subsection (e) above), such Secured Party shall not be
entitled to indemnification under subsection (a) or (c) of this Section 5 with
respect to Taxes imposed by the United States by reason of such failure;
provided, however, that should a Secured Party become subject to Taxes because
of its failure to deliver a form required hereunder, such Guarantor shall take
such steps as such Secured Party shall reasonably request to assist such Secured
Party to recover such Taxes.

<PAGE>  7

 

      (g)  Any Secured Party claiming any additional amounts payable pursuant to
this Section 5 agrees to use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction of its
Applicable Lending Office if the making of such a change would avoid the need
for, or reduce the amount of, any such additional amounts that may thereafter
accrue and would not, in the reasonable judgment of such Secured Party, be
otherwise disadvantageous to such Secured Party.

      Section 6.    Representations and Warranties. Each Guarantor hereby makes
each representation and warranty made in the Loan Documents by the Borrower with
respect to such Guarantor and each Guarantor hereby further represents and
warrants as follows:

 

      (a)  There are no conditions precedent to the effectiveness of this
Guaranty that have not been satisfied or waived.

         

      (b)  Such Guarantor has, independently and without reliance upon any
Secured Party and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Guaranty and each other Loan Document to which it is or is to be a party, and
such Guarantor has established adequate means of obtaining from each other Loan
Party on a continuing basis information pertaining to, and is now and on a
continuing basis will be completely familiar with, the business, condition
(financial or otherwise), operations, performance, properties and prospects of
such other Loan Party.

      Section 7.    Covenants. Each Guarantor covenants and agrees that, so long
as any part of the Guaranteed Obligations shall remain unpaid (other than
Guaranteed Obligations in respect of Hedge Agreements to the extent not due and
payable or in respect of contingent obligations as to which no claim has been
asserted), any Letter of Credit shall be outstanding, any Lender Party shall
have any Commitment or any Secured Hedge Agreement shall be in effect, such
Guarantor will perform and observe, and cause each of its Subsidiaries to
perform and observe, all of the terms, covenants and agreements set forth in the
Loan Documents on its or their part to be performed or observed or that the
Borrower has agreed to cause such Guarantor or such Subsidiaries to perform or
observe.

      Section 8.    Amendments, Guaranty Supplements, Etc. (a) Except as
otherwise provided in Section 8.01 of the Credit Agreement, no amendment or
waiver of any provision of this Guaranty and no consent to any departure by any
Guarantor therefrom shall in any event be effective unless the same shall be in
writing and signed by the Administrative Agent and the Required Lenders, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.

 

      (b)  Upon the execution and delivery by any Person of a guaranty
supplement in substantially the form of Exhibit A hereto (each, a "Guaranty
Supplement"), (i) such Person shall be referred to as an "Additional Guarantor"
and shall become and be a Guarantor hereunder, and each reference in this
Guaranty to a "Guarantor" shall also mean and be a reference to such Additional
Guarantor, and each reference in any other Loan Document to a "Subsidiary
Guarantor" shall also mean and be a reference to such Additional Guarantor, and
(ii) each reference herein to "this Guaranty", "hereunder", "hereof" or words of
like import referring to this Guaranty, and each reference in any other Loan
Document to the "Subsidiary Guaranty",

<PAGE>  8

 

"thereunder", "thereof" or words of like import referring to this Guaranty,
shall mean and be a reference to this Guaranty as supplemented by such Guaranty
Supplement.

      Section 9.    Notices, Etc. All notices and other communications provided
for hereunder shall be in writing (including telegraphic, telecopy or telex
communication) and mailed, telegraphed, telecopied, telexed or delivered to it,
if to any Guarantor, addressed to it in care of the Borrower at the Borrower's
address specified in Section 8.02 of the Credit Agreement, if to any Agent or
any Lender Party, at its address specified in Section 8.02 of the Credit
Agreement, if to any Hedge Bank, at its address specified in the Secured Hedge
Agreement to which it is a party, or, as to any party, at such other address as
shall be designated by such party in a written notice to each other party. All
such notices and other communications shall, when mailed, e-mailed or faxed, be
effective when deposited in the mails or transmitted by fax or e-mail. Delivery
by fax of an executed counterpart of a signature page to any amendment or waiver
of any provision of this Guaranty or of any Guaranty Supplement to be executed
and delivered hereunder shall be effective as delivery of an original executed
counterpart thereof.

      Section 10.    No Waiver; Remedies. No failure on the part of any Secured
Party to exercise, and no delay in exercising, any right hereunder shall operate
as a waiver thereof; nor shall any single or partial exercise of any right
hereunder preclude any other or further exercise thereof or the exercise of any
other right. The remedies herein provided are cumulative and not exclusive of
any remedies provided by law.

      Section 11.    Right of Set-off. Upon (a) the occurrence and during the
continuance of any Event of Default and (b) the making of the request or the
granting of the consent specified by Section 6.01 of the Credit Agreement to
authorize the Administrative Agent to declare the Notes due and payable pursuant
to the provisions of said Section 6.01, each Agent and each Lender Party and
each of their respective Affiliates is hereby authorized at any time and from
time to time, to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Agent, such
Lender Party or such Affiliate to or for the credit or the account of any
Guarantor against any and all of the Obligations of such Guarantor now or
hereafter existing under the Loan Documents, irrespective of whether such Agent
or such Lender Party shall have made any demand under this Guaranty or any other
Loan Document and although such Obligations may be unmatured. Each Agent and
each Lender Party agrees promptly to notify such Guarantor after any such
set-off and application; provided, however, that the failure to give such notice
shall not affect the validity of such set-off and application. The rights of
each Agent and each Lender Party and their respective Affiliates under this
Section are in addition to other rights and remedies (including, without
limitation, other rights of set-off) that such Agent, such Lender Party and
their respective Affiliates may have.

      Section 12.    Indemnification. (a) Without limitation on any other
Obligations of any Guarantor or remedies of the Secured Parties under this
Guaranty, each Guarantor shall, to the fullest extent permitted by law,
indemnify, defend and save and hold harmless each Secured Party and each of
their Affiliates and their respective officers, directors, employees, agents and
advisors (each, an "Indemnified Party") from and against, and shall pay on
demand, any and all claims, damages, losses, liabilities and expenses
(including, without limitation, reasonable fees and expenses of counsel) that
may be incurred by or asserted or awarded against any Indemnified Party

<PAGE>  9

in connection with or as a result of any failure of any Guaranteed Obligations
to be the legal, valid and binding obligations of any Loan Party enforceable
against such Loan Party in accordance with their terms, except to the extent
such claim, damage, loss, liability or expense is found in a final,
non-appealable judgment by a court of competent jurisdiction to have resulted
from such Indemnified Party's gross negligence or willful misconduct.

 

      (b)  Each Guarantor hereby also agrees that none of the Indemnified
Parties shall have any liability (whether direct or indirect, in contract, tort
or otherwise) to any of the Guarantors or any of their respective Affiliates or
any of their respective officers, directors, employees, agents and advisors, and
each Guarantor hereby agrees not to assert any claim against any Indemnified
Party on any theory of liability, for special, indirect, consequential or
punitive damages arising out of or otherwise relating to the Facilities, the
actual or proposed use of the proceeds of the Advances or the Letters of Credit,
the Loan Documents or any of the transactions contemplated by the Loan
Documents.

         

      (c)  Without prejudice to the survival of any of the other agreements of
any Guarantor under this Guaranty or any of the other Loan Documents, the
agreements and obligations of each Guarantor contained in Section 1(a) (with
respect to enforcement expenses), the last sentence of Section 2, Section 5 and
this Section 12 shall survive the payment in full of the Guaranteed Obligations
and all of the other amounts payable under this Guaranty.

      Section 13.    Subordination. Each Guarantor hereby subordinates any and
all debts, liabilities and other Obligations owed to such Guarantor by each
other Loan Party (the "Subordinated Obligations") to the Guaranteed Obligations
to the extent and in the manner hereinafter set forth in this Section 13:

 

      (a)  Prohibited Payments, Etc. Except during the continuance of a Default
(including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any other Loan Party), each Guarantor may receive
regularly scheduled payments from any other Loan Party on account of the
Subordinated Obligations. After the occurrence and during the continuance of any
Event of Default (including the commencement and continuation of any proceeding
under any Bankruptcy Law relating to any other Loan Party), however, unless the
Administrative Agent otherwise agrees, no Guarantor shall demand, accept or take
any action to collect any payment on account of the Subordinated Obligations.

         

      (b)  Prior Payment of Guaranteed Obligations. In any proceeding under any
Bankruptcy Law relating to any other Loan Party, each Guarantor agrees that the
Secured Parties shall be entitled to receive payment in full in cash of all
Guaranteed Obligations (including all interest and expenses accruing after the
commencement of a proceeding under any Bankruptcy Law, whether or not
constituting an allowed claim in such proceeding ("Post Petition Interest"))
before such Guarantor receives payment of any Subordinated Obligations.

         

      (c)  Turn-Over. After the occurrence and during the continuance of any
Default (including the commencement and continuation of any proceeding under any
Bankruptcy Law relating to any other Loan Party), each Guarantor shall, if the
Administrative Agent so requests, collect, enforce and receive payments on
account of the Subordinated Obligations as trustee for the Secured Parties and
deliver such payments to the Administrative Agent on account of the

<PAGE>  10

 

Guaranteed Obligations (including all Post Petition Interest), together with any
necessary endorsements or other instruments of transfer, but without reducing or
affecting in any manner the liability of such Guarantor under the other
provisions of this Guaranty.

         

      (d)  Administrative Agent Authorization. After the occurrence and during
the continuance of any Default (including the commencement and continuation of
any proceeding under any Bankruptcy Law relating to any other Loan Party), the
Administrative Agent is authorized and empowered (but without any obligation to
so do), in its discretion, (i) in the name of each Guarantor, to collect and
enforce, and to submit claims in respect of, Subordinated Obligations and to
apply any amounts received thereon to the Guaranteed Obligations (including any
and all Post Petition Interest), and (ii) to require each Guarantor (A) to
collect and enforce, and to submit claims in respect of, Subordinated
Obligations and (B) to pay any amounts received on such obligations to the
Administrative Agent for application to the Guaranteed Obligations (including
any and all Post Petition Interest).

      Section 14.    Continuing Guaranty; Assignments under the Credit
Agreement. This Guaranty is a continuing guaranty and shall (a) remain in full
force and effect until the latest of (i) the payment in full in cash of the
Guaranteed Obligations and all other amounts payable under this Guaranty (other
than Guaranteed Obligations in respect of Hedge Agreements to the extent not due
and payable or in respect of contingent obligations as to which no claim has
been asserted), (ii) the Termination Date and (iii) the latest date of
expiration or termination of all Letters of Credit (other than Letters of Credit
remaining outstanding after the Termination Date that have been fully cash
collateralized in accordance with Section 2.01(c) of the Credit Agreement) and
all Secured Hedge Agreements, (b) be binding upon the Guarantor, its successors
and assigns and (c) inure to the benefit of and be enforceable by the Secured
Parties and their successors, transferees and assigns. Without limiting the
generality of clause (c) of the immediately preceding sentence, any Secured
Party may assign or otherwise transfer all or any portion of its rights and
obligations under the Credit Agreement (including, without limitation, all or
any portion of its Commitments, the Advances owing to it and the Note or Notes
held by it) to any other Person, and such other Person shall thereupon become
vested with all the benefits in respect thereof granted to such Secured Party
herein or otherwise, in each case as and to the extent provided in Section 8.07
of the Credit Agreement. No Guarantor shall have the right to assign its rights
hereunder or any interest herein without the prior written consent of the
Secured Parties.

      Section 15.    Execution in Counterparts. This Guaranty and each
amendment, waiver and consent with respect hereto may be executed in any number
of counterparts and by different parties thereto in separate counterparts, each
of which when so executed shall be deemed to be an original and all of which
taken together shall constitute one and the same agreement. Delivery of an
executed counterpart of a signature page to this Guaranty by fax shall be
effective as delivery of an original executed counterpart of this Guaranty.

<PAGE>  11

      Section 16.    Governing Law; Jurisdiction; Waiver of Jury Trial, Etc. (a)
This Guaranty shall be governed by, and construed in accordance with, the laws
of the State of New York.

 

      (b)  Each Guarantor hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or federal court of the United States of America sitting in New York City,
and any appellate court from any thereof, in any action or proceeding arising
out of or relating to this Guaranty or any of the other Loan Documents to which
it is or is to be a party, or for recognition or enforcement of any judgment,
and each Guarantor hereby irrevocably and unconditionally agrees that all claims
in respect of any such action or proceeding may be heard and determined in any
such New York State court or, to the extent permitted by law, in such federal
court. Each Guarantor agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Guaranty or any other Loan Document shall affect any right that any party may
otherwise have to bring any action or proceeding relating to this Guaranty or
any other Loan Document in the courts of any jurisdiction.

         

      (c)  Each Guarantor irrevocably and unconditionally waives, to the fullest
extent it may legally and effectively do so, any objection that it may now or
hereafter have to the laying of venue of any suit, action or proceeding arising
out of or relating to this Guaranty or any of the other Loan Documents to which
it is or is to be a party in any New York State of federal court. Each Guarantor
irrevocably waives, to the fullest extent permitted by law, the defense of an
inconvenient forum to the maintenance of such suit, action or proceeding in any
such court.

         

      (d)  EACH GUARANTOR HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY JURY
IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT OR
OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE ADVANCES
OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

<PAGE>  

      IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to be duly
executed and delivered by its officer thereunto duly authorized as of the date
first above written.

 

Advanced Input Devices, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Armtec Defense Products Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Armtec Countermeasures Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Kirkhill-TA Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

Korry Electronics Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Mason Electric Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Auxitrol Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Boyar-Schultz Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

BVR Technologies Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Equipment Sales Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

Fluid Regulators Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Hytek Finishes Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Janco Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Chief
          Executive Officer

       

McTaws Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Memtron Technologies Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Surftech Finishes Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

Excellon Automation Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Excellon U.K.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Amtech Automated
  Manufacturing Technology

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

W.A. Whitney Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

MC Tech Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

H.A. Sales Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

 

Angus Electronics Co.

       

By

______________________________________

   

Name: Robert D. George

   

Title: President, Secretary and Treasurer

       

Pressure Systems, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Pressure Systems International, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Norwich Aero Products, Inc.

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

       

Sureseal Corporation

       

By

______________________________________

   

Name: Robert D. George

   

Title: Vice President, Secretary and Treasurer

<PAGE>  

Exhibit A
To The
Subsidiary Guaranty

FORM OF SUBSIDIARY GUARANTY SUPPLEMENT

_________ __, ____

Wachovia Bank, National Association, as Administrative Agent
301 South College Street
Charlotte, North Carolina 28288-0737

Attention: _________

Re:

Credit Agreement dated as of June 11, 2003 among Esterline Technologies
Corporation, a Delaware corporation (the "Borrower"), the Lender Parties party
to the Credit Agreement, Wachovia Bank, National Association, as Administrative
Agent and as Collateral Agent,

Ladies and Gentlemen:

      Reference is made to the above-captioned Credit Agreement and to the
Subsidiary Guaranty referred to therein (such Subsidiary Guaranty, as in effect
on the date hereof and as it may hereafter be amended, supplemented or otherwise
modified from time to time, together with this Guaranty Supplement, being the
"Subsidiary Guaranty"). The capitalized terms defined in the Subsidiary Guaranty
or in the Credit Agreement and not otherwise defined herein are used herein as
therein defined.

      Section 1.  Guaranty; Limitation of Liability.  (a)  The undersigned
hereby absolutely, unconditionally and irrevocably guarantees the punctual
payment and performance when due, whether at scheduled maturity or on any date
of a required prepayment or by acceleration, demand or otherwise, of all
Obligations of each other Loan Party now or hereafter existing under or in
respect of the Loan Documents (including, without limitation, any extensions,
modifications, substitutions, amendments or renewals of any or all of the
foregoing Obligations), whether direct or indirect, absolute or contingent, and
whether for principal, interest, premiums, fees, indemnities, contract causes of
action, costs, expenses or otherwise (such Obligations being the "Guaranteed
Obligations"), and agrees to pay any and all reasonable expenses (including,
without limitation, fees and expenses of counsel) incurred by the Administrative
Agent or any other Secured Party in enforcing any rights under this Guaranty
Supplement, the Subsidiary Guaranty or any other Loan Document. Without limiting
the generality of the foregoing, the undersigned's liability shall extend to all
amounts that constitute part of the Guaranteed Obligations and would be owed by
any other Loan Party to any Secured Party under or in respect of the Loan
Documents but for the fact that they are unenforceable or

<PAGE>  2

not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving such other Loan Party.

 

      (b)    The undersigned, and by its acceptance of this Guaranty Supplement,
the Administrative Agent and each other Secured Party, hereby confirms that it
is the intention of all such Persons that this Guaranty Supplement, the
Subsidiary Guaranty and the Obligations of the undersigned hereunder and
thereunder not constitute a fraudulent transfer or conveyance for purposes of
Bankruptcy Law, the Uniform Fraudulent Conveyance Act, the Uniform Fraudulent
Transfer Act or any similar foreign, federal or state law to the extent
applicable to this Guaranty Supplement, the Subsidiary Guaranty and the
Obligations of the undersigned hereunder and thereunder. To effectuate the
foregoing intention, the Administrative Agent, the other Secured Parties and the
undersigned hereby irrevocably agree that the Obligations of the undersigned
under this Guaranty Supplement and the Subsidiary Guaranty at any time shall be
limited to the maximum amount as will result in the Obligations of the
undersigned under this Guaranty Supplement and the Subsidiary Guaranty not
constituting a fraudulent transfer or conveyance.

         

      (c)    The undersigned hereby unconditionally and irrevocably agrees that
in the event any payment shall be required to be made to any Secured Party under
this Guaranty Supplement, the Subsidiary Guaranty or any other guaranty, the
undersigned will contribute, to the maximum extent permitted by applicable law,
such amounts to each other Guarantor and each other guarantor so as to maximize
the aggregate amount paid to the Secured Parties under or in respect of the Loan
Documents.

      Section 2.  Obligations Under the Guaranty.  The undersigned hereby
agrees, as of the date first above written, to be bound as a Guarantor by all of
the terms and conditions of the Subsidiary Guaranty to the same extent as each
of the other Guarantors thereunder. The undersigned further agrees, as of the
date first above written, that each reference in the Subsidiary Guaranty to an
"Additional Guarantor" or a "Guarantor" shall also mean and be a reference to
the undersigned, and each reference in any other Loan Document to a "Subsidiary
Guarantor" or a "Loan Party" shall also mean and be a reference to the
undersigned.

      Section 3.  Representations and Warranties.  The undersigned hereby makes
each representation and warranty set forth in Section 6 of the Subsidiary
Guaranty to the same extent as each other Guarantor.

      Section 4.  Delivery by Fax. Delivery of an executed counterpart of a
signature page to this Guaranty Supplement by fax shall be effective as delivery
of an original executed counterpart of this Guaranty Supplement.

      Section 5.  Governing Law; Jurisdiction; Waiver of Jury Trial,
Etc.  (a)  This Guaranty Supplement shall be governed by, and construed in
accordance with, the laws of the State of New York.

<PAGE>  3

 

      (b)    The undersigned hereby irrevocably and unconditionally submits, for
itself and its property, to the nonexclusive jurisdiction of any New York State
court or any federal court of the United States of America sitting in New York
City, and any appellate court from any thereof, in any action or proceeding
arising out of or relating to this Guaranty Supplement, the Subsidiary Guaranty
or any of the other Loan Documents to which it is or is to be a party, or for
recognition or enforcement of any judgment, and the undersigned hereby
irrevocably and unconditionally agrees that all claims in respect of any such
action or proceeding may be heard and determined in any such New York State
court or, to the extent permitted by law, in such federal court. The undersigned
agrees that a final judgment in any such action or proceeding shall be
conclusive and may be enforced in other jurisdictions by suit on the judgment or
in any other manner provided by law. Nothing in this Guaranty Supplement or the
Subsidiary Guaranty or any other Loan Document shall affect any right that any
party may otherwise have to bring any action or proceeding relating to this
Guaranty Supplement, the Subsidiary Guaranty or any of the other Loan Documents
to which it is or is to be a party in the courts of any other jurisdiction.

         

      (c)    The undersigned irrevocably and unconditionally waives, to the
fullest extent it may legally and effectively do so, any objection that it may
now or hereafter have to the laying of venue of any suit, action or proceeding
arising out of or relating to this Guaranty Supplement, the Subsidiary Guaranty
or any of the other Loan Documents to which it is or is to be a party in any
New York State or federal court. The undersigned hereby irrevocably waives, to
the fullest extent permitted by law, the defense of an inconvenient forum to the
maintenance of such suit, action or proceeding in any such court.

         

      (d)    THE UNDERSIGNED HEREBY IRREVOCABLY WAIVES ALL RIGHT TO TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM (WHETHER BASED ON CONTRACT, TORT
OR OTHERWISE) ARISING OUT OF OR RELATING TO ANY OF THE LOAN DOCUMENTS, THE
ADVANCES OR THE ACTIONS OF ANY SECURED PARTY IN THE NEGOTIATION, ADMINISTRATION,
PERFORMANCE OR ENFORCEMENT THEREOF.

     

Very truly yours,

     

[NAME OF ADDITIONAL GUARANTOR]

     

By

_________________________________

   

Title:

EXHIBIT F

FORM OF SOLVENCY CERTIFICATE

SOLVENCY CERTIFICATE

      I, ________, the [Chief Financial Officer][Treasurer] of [NAME OF LOAN
PARTY], a [Delaware] [corporation] [limited liability company] (the "Company"),
hereby certify that I am the [Chief Financial Officer][Treasurer] of the Company
and that I am familiar with its properties, businesses, assets, finances and
operations and I am duly authorized to execute this certificate on behalf of the
Company pursuant to Section 3.01(a)(xi) of the Credit Agreement dated as of June
11, 2003 (the "Credit Agreement"; the terms defined therein, unless otherwise
defined herein, being used herein as therein defined) among Esterline
Technologies Corporation, as Borrower, the Lender Parties named therein and
Wachovia Bank, National Association, as Administrative Agent and Collateral
Agent for the Lender Parties.

      I further certify that I am generally familiar with the properties,
business and assets of the Company and its Subsidiaries and have carefully
reviewed the Loan Documents and the contents of this Certificate and, in
connection herewith, have reviewed such other documentation and information and
have made such investigation and inquiries as I have deemed necessary and
prudent therefor.

      I understand that the Agents and the Lender Parties are relying on the
truth and accuracy of this Certificate in connection with the transactions
contemplated by the Loan Documents.

      I do hereby further certify that:

 

      1.    On the date hereof, before and after giving effect to the
transactions contemplated by the Credit Agreement and the other Loan Documents,
the fair value of the property of the Company is greater than the total amount
of liabilities, including, without limitation, contingent, liabilities of the
Company;

         

      2.    On the date hereof, before and after giving effect to the
transactions contemplated by the Credit Agreement and the other Loan Documents,
the present fair saleable value of the assets of the Company is not less than
the amount that will be required to pay the probable liability of the Company on
its debts as they become absolute and matured;

         

      3.    The Company does not intend to and does not believe that it will
incur debts or liabilities that will be beyond its ability to pay such debts and
liabilities as they mature; and

         

      4.    On the date hereof, before and after giving effect to the
transactions contemplated by the Credit Agreement and the other Loan Documents,
the Company is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which its property would constitute
unreasonably small capital;

      provided, that, for the purposes of clauses 1, 2 and 3 above, liabilities
shall not include long-term intercompany debt. The amount of contingent
liabilities at any time shall be

<PAGE>  1

computed as the amount that, in the light of all the facts and circumstances
existing at such time, represents the amount that can be reasonably be expected
to become an actual or matured liability.

      Delivery of an executed counterpart of a signature page to this
Certificate by fax shall be effective as delivery of a manually executed
counterpart of this Certificate.

      The Administrative Agent and Lender Parties, by accepting this
Certificate, acknowledge that the undersigned officer of the Company shall have
no personal liability with respect to any matter contained in this Certificate.

[REST OF PAGE INTENTIONALLY LEFT BLANK]

<PAGE>  2

      IN WITNESS WHEREOF, the undersigned has caused this Certificate to be
executed on this __ day of June, 2003.

 

By

___________________________________

   

Name:

   

Title: [Chief Financial Officer][Treasurer]

<PAGE>  3