exv10w1



 





Exhibit 10.1




 

 






NOTE PURCHASE AGREEMENT




by and between




HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED,




THE PURCHASERS NAMED HEREIN,




and, for limited purposes,




KOHLBERG KRAVIS ROBERTS & CO. L.P.




October 22, 2007




 

 






 









 












TABLE OF CONTENTS




	 	 	 	 	 	 	 	 	 
	1.	 	Definitions	 	 	1	 
	 
	 	 	 	 	 	 	 	 
	2.	 	Authorization, Purchase and Sale of Notes	 	 	5	 
	 
	 	2.1	 	Authorization, Purchase and Sale	 	 	6	 
	 
	 	2.2	 	Closing	 	 	6	 
	 
	 	 	 	 	 	 	 	 
	3.	 	Representations and Warranties of the Company	 	 	6	 
	 
	 	3.1	 	Organization and Power	 	 	6	 
	 
	 	3.2	 	Capitalization	 	 	6	 
	 
	 	3.3	 	Authorization	 	 	7	 
	 
	 	3.4	 	Valid Issuance	 	 	8	 
	 
	 	3.5	 	No Conflict	 	 	8	 
	 
	 	3.6	 	Consents	 	 	9	 
	 
	 	3.7	 	SEC Reports; Financial Statements	 	 	9	 
	 
	 	3.8	 	Absence of Litigation	 	 	10	 
	 
	 	3.9	 	Compliance with Law	 	 	10	 
	 
	 	3.10	 	Intellectual Property	 	 	10	 
	 
	 	3.11	 	Employee Benefits	 	 	11	 
	 
	 	3.12	 	Taxes	 	 	11	 
	 
	 	3.13	 	NYSE	 	 	11	 
	 
	 	3.14	 	Company Not an “Investment Company”	 	 	11	 
	 
	 	3.15	 	General Solicitation; No Integration	 	 	11	 
	 
	 	 	 	 	 	 	 	 
	4.	 	Representations and Warranties of Each Purchaser	 	 	12	 
	 
	 	4.1	 	Organization	 	 	12	 
	 
	 	4.2	 	Authorization	 	 	12	 
	 
	 	4.3	 	No Conflict	 	 	12	 
	 
	 	4.4	 	Consents	 	 	13	 
	 
	 	4.5	 	Absence of Litigation	 	 	13	 
	 
	 	4.6	 	Purchasers’ Financing	 	 	13	 
	 
	 	4.7	 	Brokers	 	 	13	 
	 
	 	4.8	 	Purchase Entirely for Own Account	 	 	13	 
	 
	 	4.9	 	Investor Status	 	 	14	 
	 
	 	4.10	 	Securities Not Registered	 	 	14	 
	 
	 	 	 	 	 	 	 	 
	5.	 	Covenants	 	 	14	 
	 
	 	5.1	 	HSR Approval	 	 	14	 
	 
	 	5.2	 	Shares Issuable Upon Conversion	 	 	14	 
	 
	 	5.3	 	PORTAL and CUSIPs	 	 	15	 
	 
	 	5.4	 	Further Assurances	 	 	15	 
	 
	 	5.5	 	Board of Directors Matters	 	 	16	 
	 
	 	5.6	 	Standstill	 	 	17	 
	 
	 	5.7	 	Use of Proceeds	 	 	19	 
	 
	 	 	 	 	 	 	 	 
	6.	 	Conditions Precedent	 	 	20	 






 









 






	 	 	 	 	 	 	 	 	 
	 
	 	6.1	 	Conditions to the Obligation of the Purchasers to Consummate the Closing	 	 	20	 
	 
	 	6.2	 	Conditions to the Obligation of the Company to Consummate the Closing	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	7.	 	Transfer of the Securities	 	 	21	 
	 
	 	7.1	 	Transfer Restrictions	 	 	21	 
	 
	 	 	 	 	 	 	 	 
	8.	 	Termination	 	 	23	 
	 
	 	8.1	 	Conditions of Termination	 	 	23	 
	 
	 	8.2	 	Effect of Termination	 	 	24	 
	 
	 	 	 	 	 	 	 	 
	9.	 	Miscellaneous Provisions	 	 	24	 
	 
	 	9.1	 	Public Statements or Releases	 	 	24	 
	 
	 	9.2	 	Interpretation	 	 	24	 
	 
	 	9.3	 	Notices	 	 	24	 
	 
	 	9.4	 	Severability	 	 	26	 
	 
	 	9.5	 	Governing Law	 	 	26	 
	 
	 	9.6	 	Waiver	 	 	27	 
	 
	 	9.7	 	Expenses; Indemnification	 	 	27	 
	 
	 	9.8	 	Assignment	 	 	28	 
	 
	 	9.9	 	Confidential Information	 	 	28	 
	 
	 	9.10	 	Third Parties	 	 	29	 
	 
	 	9.11	 	Counterparts	 	 	29	 
	 
	 	9.12	 	Entire Agreement; Amendments	 	 	29	 
	 
	 	9.13	 	Survival	 	 	29	 






	 	 	 
	Exhibits
	 	 
	 
	 	 
	Exhibit A
	 	Purchasers
	Exhibit B
	 	Form of Indenture (including Form of Notes)
	Exhibit C
	 	Form of Registration Rights Agreement
	Exhibit D
	 	Form of Legal Opinion






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INDEX OF DEFINED TERMS









	 	 	 	 	 
	Affiliate
	 	 	1	 
	Affiliated Entity
	 	 	1	 
	Agreement
	 	 	1	 
	Bank Purchaser
	 	 	1	 
	Bank Purchaser Transfer Event
	 	 	2	 
	Beneficial Ownership
	 	 	2	 
	Beneficially Own
	 	 	2	 
	Beneficially Owned
	 	 	2	 
	Benefit Plan
	 	 	2	 
	Benefit Plans
	 	 	2	 
	Board Designee
	 	 	16	 
	Board Observer
	 	 	17	 
	Board of Directors
	 	 	2	 
	Call Option
	 	 	7	 
	Capitalization Date
	 	 	7	 
	Closing
	 	 	6	 
	Closing Date
	 	 	6	 
	Code
	 	 	2	 
	Common Stock
	 	 	1	 
	Company
	 	 	1	 
	Confidential Information
	 	 	28	 
	Confidentiality Agreement
	 	 	29	 
	Control
	 	 	2	 
	controlled by
	 	 	2	 
	controlling
	 	 	2	 
	Designee Termination Date
	 	 	17	 
	ERISA
	 	 	2	 
	Exchange Act
	 	 	2	 
	Financial Statements
	 	 	10	 
	GAAP
	 	 	10	 
	Governmental Entity
	 	 	2	 
	GSCP
	 	 	2	 
	HSR Act
	 	 	3	 
	Indemnified Persons
	 	 	27	 
	Indenture
	 	 	1	 
	Intellectual Property
	 	 	11	 
	KKR
	 	 	1	 
	KKR Purchaser
	 	 	3	 
	Law
	 	 	9	 
	Lien
	 	 	9	 
	Loss
	 	 	27	 














	 	 	 	 	 
	Losses
	 	 	27	 
	Material Adverse Effect
	 	 	3	 
	Merger Agreement
	 	 	4	 
	Non-Investor Affiliates
	 	 	20	 
	Notes
	 	 	1	 
	NYSE
	 	 	11	 
	Own
	 	 	4	 
	Permitted Transfer
	 	 	22	 
	Person
	 	 	4	 
	PIA Funds
	 	 	4	 
	Policy Termination Date
	 	 	4	 
	Preferred Stock
	 	 	7	 
	Purchaser
	 	 	1	 
	Purchaser Adverse Effect
	 	 	13	 
	Purchasers
	 	 	1	 
	Registration Rights Agreement
	 	 	21	 
	Representatives
	 	 	28	 
	Restricted Period
	 	 	22	 
	Sarbanes-Oxley Act
	 	 	10	 
	SEC
	 	 	9	 
	SEC Reports
	 	 	9	 
	Securities
	 	 	4	 
	Securities Act
	 	 	4	 
	Security Agreements
	 	 	4	 
	Significant Subsidiary
	 	 	4	 
	Sponsor
	 	 	1	 
	Sponsor Purchasers
	 	 	5	 
	Sponsors
	 	 	1	 
	Standstill Termination Date
	 	 	5	 
	Subsidiary
	 	 	5	 
	Swap Agreements
	 	 	5	 
	Tax Returns
	 	 	5	 
	Taxes
	 	 	5	 
	Termination and Settlement Agreement
	 	 	5	 
	Third Party
	 	 	19	 
	Transaction Agreements
	 	 	6	 
	Transfer
	 	 	22	 
	Transfer Instruction
	 	 	23	 
	Trustee
	 	 	6	 
	under common control with
	 	 	2	 
	Voting Stock
	 	 	6	 












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NOTE PURCHASE AGREEMENT




     NOTE PURCHASE AGREEMENT (this “Agreement”), dated as of October 22, 2007, by and among HARMAN
INTERNATIONAL INDUSTRIES, INCORPORATED, a Delaware corporation (the “Company”), the PURCHASERS
NAMED IN EXHIBIT A attached hereto (each, a “Purchaser” and collectively, the “Purchasers”) and, solely for purposes of Article 1, Sections 4.6, 5.5, 5.6 and 7.1 and Article 9 hereof,
KOHLBERG KRAVIS ROBERTS & CO. L.P. (“KKR”) (each of KKR and GSCP (as defined below) may be
hereinafter referred to as, a “Sponsor” and KKR and GSCP may be hereinafter referred to
collectively, “Sponsors”).



     WHEREAS, the Company has authorized the issuance of up to $400 million aggregate principal
amount of its 1.25% Convertible Senior Notes due 2012 (the “Notes”) to be issued in accordance
with the terms and conditions of the Indenture for the Notes substantially in the form attached
hereto as Exhibit B (the “Indenture”), which Notes shall be convertible in part into
authorized but unissued shares of common stock, $0.01 par value per share, of the Company (the
“Common Stock”);



     WHEREAS, the Company desires to issue and sell to the Purchasers pursuant to this Agreement,
and each Purchaser, severally, desires to purchase from the Company the aggregate principal amount
of Notes as is set forth opposite its name in Exhibit A hereto;



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



     1. Definitions. As used in this Agreement, the following terms shall have the
following respective meanings:



     “Affiliate” shall mean, with respect to any Person, any other Person directly or indirectly
controlling, controlled by or under direct or indirect common control with such Person, provided,
that (i) with respect to KKR, each Affiliated Entity of KKR, each KKR Purchaser and each Affiliate
of an Affiliated Entity or a KKR Purchaser shall be deemed (except as specifically provided in
Section 5.6(f) and Section 7.1(c) hereof) to be an Affiliate of KKR; and (ii) with respect to GSCP,
each Affiliated Entity of GSCP and each Affiliate of an Affiliated Entity of GSCP shall be deemed
(except as specifically provided in Section 5.6(f)) to be an Affiliate of GSCP.



     “Affiliated Entity” shall mean with respect to a Sponsor, any investment fund or holding
company formed for investment purposes that is primarily managed, advised or serviced by such
Sponsor or by an Affiliate of such Sponsor.



     “Bank Purchasers” means, collectively, Citibank, N.A. and HSBC USA, Inc. (each, individually,
a “Bank Purchaser”).



     “Bank Purchaser Transfer Event” shall mean, with respect to any Bank Purchaser, (i) an
exercise of such Bank Purchaser’s rights under Section 6 of the Security Agreement between such
Bank Purchaser and the KKR Purchaser, (ii) the occurrence of any Early Settlement Date pursuant to
Section 5(b) of the Swap Agreement between such Bank Purchaser and the KKR



 









 







Purchaser or (iii) the occurrence of the Scheduled Termination Date under such Swap Agreement.



     “Beneficially Own,” “Beneficially Owned,” or “Beneficial Ownership” shall have the meaning
set forth in Rule 13d-3 of the rules and regulations promulgated under the Exchange Act, except
that for purposes of this Agreement the words “within sixty days” in Rule 13d-3(d)(1)(i) shall not
apply, to the effect that a Person shall be deemed to be the beneficial owner of a security if that
Person has the right to acquire beneficial ownership of such security at any time.



     “Benefit Plan” or “Benefit Plans” shall mean employee benefit plans as defined in Section
3(3) of ERISA and all other employee benefit practices or arrangements, including any such
practices or arrangements providing severance pay, sick leave, vacation pay, salary continuation
for disability, retirement benefits, deferred compensation, bonus pay, incentive pay, stock options
or other stock-based compensation, hospitalization insurance, medical insurance, life insurance,
scholarships or tuition reimbursements, maintained by the Company or any of its Subsidiaries or to
which the Company or any of its Subsidiaries is obligated to contribute for employees or former
employees.



     “Board of Directors” means the Board of Directors of the Company.



     “Code” means the Internal Revenue Code of 1986, as amended.



     “Control” (including the terms “controlling” “controlled by” and “under common control with”) with respect to any Person means the possession, directly or indirectly, of the power to direct
or cause the direction of the management policies of such Person, whether through the ownership of
voting securities, by contract or otherwise.



     “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.



     “Exchange Act” means the Securities Exchange Act of 1934, as amended, and all of the rules
and regulations promulgated thereunder.



     “Governmental Entity” means any United States or foreign governmental or regulatory agency,
commission, court, body, entity or authority.



     “GSCP means, collectively, GS Capital Partners VI Fund, L.P., GS Capital Partners VI
Parallel, L.P., GS Capital Partners VI Offshore Fund, L.P. and GS Capital Partners VI Gmbh & Co.
KG.



     “HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended.



     “KKR Purchaser” means KKR I-H Limited.



     “Material Adverse Effect” means any fact, circumstance, event, change, effect or occurrence
that, individually or in the aggregate with all other facts, circumstances, events, changes,
effects, or occurrences, (1) has or would be reasonably expected to have a material



 -  2 - 









 







adverse effect on or with respect to the business, results of operation or financial condition
of the Company and its Subsidiaries taken as a whole, or (2) that prevents or materially delays or
materially impairs the ability of the Company to consummate the transactions contemplated by the
Transaction Agreements, provided, however, that a Material Adverse Effect shall not include facts,
circumstances, events, changes, effects or occurrences (i) generally affecting the consumer or
professional audio, automotive audio, information, entertainment or infotainment industries, or the
economy or the financial, credit or securities markets, in the United States or other countries in
which the Company or its Subsidiaries operate, including effects on such industries, economy or
markets resulting from any regulatory and political conditions or developments in general, or any
outbreak or escalation of hostilities, declared or undeclared acts of war or terrorism (other than
any of the foregoing that causes any damage or destruction to or renders physically unusable or
inaccessible any facility or property of the Company or any of its Subsidiaries); (ii) reflecting
or resulting from changes in Law or GAAP (or authoritative interpretations thereof); (iii) to the
extent resulting from the determination of KHI Parent Inc. and KHI Merger Sub Inc. that they were
not obligated to proceed with the merger under the Merger Agreement or any of the facts or
circumstances underlying that decision, including any lawsuit related thereto (including the
pending putative class action in the Federal District Court in the District of Columbia) or any
loss or threatened loss of or adverse change or threatened adverse change in, in each case
resulting therefrom, the relationship of the Company or its Subsidiaries with its customers,
suppliers, employees, shareholders or others; (iv) resulting from actions of the Company or any of
its Subsidiaries which a Sponsor or any of their Controlled Affiliates has expressly requested or
to which a Sponsor or any of their Controlled Affiliates has expressly consented; (v) to the extent
resulting from the announcement of the termination of the Merger Agreement, the purchase of the
Notes pursuant to this Agreement, or the proposal thereof, or this Agreement or the Termination and
Settlement Agreement and the transactions contemplated hereby or thereby, including any lawsuit
related thereto or any loss or threatened loss of or adverse change or threatened adverse change,
in each case resulting therefrom, in the relationship of the Company or its Subsidiaries with its
customers, suppliers, employees or others; (vi) resulting from changes in the market price or
trading volume of the Company’s securities or from the failure of the Company to meet internal or
public projections, forecasts or estimates provided that the exceptions in this clause (vi) are
strictly limited to any such change or failure in and of itself and shall not prevent or otherwise
affect a determination that any fact, circumstance, event, change, effect or occurrence underlying
such change or such failure has resulted in, or contributed to, a Material Adverse Effect; or (vii)
resulting from the suspension of trading in securities generally on the NYSE; except to the extent
that, with respect to clauses (i) and (ii), the impact of such fact, circumstance, event, change,
effect or occurrence is disproportionately adverse to the Company and its Subsidiaries, taken as a
whole.



     “Merger Agreement” means that certain Agreement and Plan of Merger, dated as of April 26,
2007, by and among KHI Parent Inc., KHI Merger Sub Inc. and the Company.



     “Own” in the context of Notes shall mean (i) the right to control the voting or direction of
the voting of such Notes and (ii) bearing all or substantially all economic risk of loss or
appreciation (less a fixed or floating interest rate return) in the value of, and any profit (less
a fixed or floating interest rate return) derived from a transaction in, such Notes.



 -  3 - 









 





     “Person” means an individual, partnership, corporation, limited liability company, business
trust, joint stock company, trust, unincorporated association, joint venture or any other entity or
organization.



     “PIA Funds” means any fund or holding company formed for the purposes of making private
equity investments and managed by the principal investment area of Goldman, Sachs & Co. (excluding
any investment fund or holding company primarily in the business of acquiring mezzanine
securities).



     “Policy Termination Date” means the first to occur of:



          (a) if a Designee Termination Date occurs as a result of the events described in clause (v) of
the definition of Designee Termination Date, the date that is three months following the occurrence
of such Designee Termination Date; and




          (b) if a Designee Termination Date occurs a result of anything other than the events described
in clause (v) of the definition of Designee Termination Date, the later of (i) the date that is
three months following such Designee Termination Date or (ii) the date of the resignation (other
than the conditional resignation required pursuant to Section 5.5(a) hereof), retirement or removal
of the Board Designee (or Board Observer, as the case may be) from the Board of Directors.




     “Securities” shall mean the Notes and the Common Stock or other securities issuable upon
conversion of the Notes.



     “Securities Act” shall mean the Securities Act of 1933, as amended, and all of the rules and
regulations promulgated thereunder.



     “Security Agreement” means each Security Agreement contemplated to be entered into between
the KKR Purchaser and each Bank Purchaser in connection with the transactions contemplated hereby,
as may be amended from time to time (all such agreements are collectively referred to as “Security
Agreements”).



     “Significant Subsidiary” has the meaning set forth in Rule 1-02(w) of Regulation S-X
promulgated by the SEC (provided that for purposes of this definition, the references to “10%” in
the definition of “significant subsidiary” in such Rule 1-02(w) shall be deemed to be references to
“5%”).



     “Sponsor Purchasers” shall mean the KKR Purchaser and GSCP and, in each case, their
Affiliates that acquire Beneficial Ownership of Securities in a Permitted Transfer.



     “Standstill Termination Date” means the date that is the earlier of (x) the date that is the
fifth anniversary of the Closing Date, and (y) with respect to each Sponsor, the date that is three
months following the date at which such Sponsor and its Affiliates cease to hold any Securities;
provided, however, with respect to KKR and its Affiliates, if the Standstill Termination Date would
otherwise occur and on such date there is a Board Designee or Board Observer on the Board of
Directors, the Standstill Termination Date shall be the date that is three months following the
date of the resignation (other than the conditional resignation required pursuant to



 -  4 - 









 







Section 5.5(a) hereof), retirement or removal of the Board Designee (or Board
Observer, as the case may be) from the Board of Directors; provided, further, with respect to GSCP,
for purposes of this definition Affiliates of GSCP will include only the PIA Funds and their
Affiliates that acquire Beneficial Ownership of Securities in a Permitted Transfer.



     “Subsidiary” when used with respect to any party means any corporation or other organization,
whether incorporated or unincorporated, at least a majority of the securities or other interests of
which having by their terms ordinary voting power to elect a majority of the Board of Directors or
others performing similar functions with respect to such corporation or other organization is
directly or indirectly owned or controlled by such party or by any one or more of its Subsidiaries,
or by such party and one or more of its Subsidiaries.



     “Swap Agreement” means each letter agreement of even date herewith referencing “Convertible
Note Total Return Swap Transaction” between the KKR Purchaser and each Bank Purchaser, as may be
amended from time to time (all such agreements are collectively referred to as “Swap Agreements”).



     “Tax Returns” shall mean returns, reports, information statements and other documentation
(including any additional or supporting material) filed or maintained, or required to be filed or
maintained, in connection with the calculation, determination, assessment or collection of any Tax
and shall include any amended returns required as a result of examination adjustments made by the
Internal Revenue Service or other Tax authority.



     “Taxes” shall mean any and all federal, state, local, foreign and other taxes, levies, fees,
imposts, duties and charges of whatever kind (including any interest, penalties or additions to the
tax imposed in connection therewith or with respect thereto), whether or not imposed on the
Company, including, without limitation, taxes imposed on, or measured by, income, franchise,
profits or gross receipts, and also ad valorem, value added, sales, use, service, real or personal
property, capital stock, license, payroll, withholding, employment, social security, workers’
compensation, unemployment compensation, utility, severance, production, excise, stamp, occupation,
premium, windfall profits, transfer and gains taxes and customs duties.



     “Termination and Settlement Agreement ” means the Termination and Settlement Agreement, dated
as of the date hereof, by and among Harman International Industries, Incorporated, KHI Parent Inc.,
KHI Merger Sub Inc., KKR 2006 Fund, L.P., Kohlberg Kravis Roberts & Co. L.P. and GS Capital
Partners VI Fund, L.P., GS Capital Partners VI Parallel, L.P., GS Capital Partners VI GmbH & Co.
KG, and GS Capital Partners VI Offshore Fund, L.P.



     “Transaction Agreements” shall mean this Agreement, the Registration Rights Agreement, the
Indenture and the Notes.



     “Trustee” shall have the meaning ascribed thereto in the Indenture.



     “Voting Stock” means securities of any class or kind ordinarily having the power to vote
generally for the election of directors, managers or other voting members of the governing body of
the Company or any successor thereto.



     2. Authorization, Purchase and Sale of Notes.



 -  5 - 









 





          2.1 Authorization, Purchase and Sale. The Company has authorized (i) the initial sale
and issuance to the Purchasers of the Notes and (ii) the issuance of up to 4,629,640 shares of
Common Stock to be issued upon the conversion of the Notes. Subject to and upon the terms and
conditions set forth in this Agreement, at the Closing, the Company shall issue and sell to each
Purchaser, and each Purchaser, severally, shall purchase from the Company the aggregate principal
amount of Notes set forth opposite the name of such Purchaser under the heading “Principal Amount
of Notes to be Purchased” on Exhibit A hereto, at a purchase price equal to the principal
amount of Notes purchased.




          2.2 Closing. Subject to the satisfaction or waiver of the conditions set forth in
Section 6 of this Agreement, the closing of the purchase and sale of the Notes (the “Closing”)
shall take place at the offices of Simpson Thacher & Bartlett LLP, 425 Lexington Avenue, New York,
New York on October 23, 2007 (the “Closing Date”). At the Closing, the aggregate principal amount
of the Notes shall be reflected in one or more global notes representing the Notes and held by The
Depository Trust Corporation or its nominee (or a custodian on its behalf) or if such global notes
are not available as of the Closing, the Company shall deliver to each Purchaser one or more
Note(s) in the aggregate principal amount as set forth opposite such Purchaser’s name on
Exhibit A, in each case against payment to the Company of the purchase price therefor by
wire transfer to the Company of immediately available funds to an account to be designated by the
Company.




     3. Representations and Warranties of the Company. Except as set forth in the SEC
Reports (as defined herein), the Company hereby represents and warrants to each of the Purchasers
as follows:



          3.1 Organization and Power.




               (a) Each of the Company and its Significant Subsidiaries is a legal entity duly organized,
validly existing and in good standing under the Laws of its respective jurisdiction of
organization. Each of the Company and its Significant Subsidiaries has all requisite corporate,
partnership or similar power and authority to own, lease and operate its properties and assets and
to carry on its business as presently conducted.



               (b) Each of the Company and its Subsidiaries is duly qualified to do business and is in good
standing as a foreign corporation (or other legal entity) in each jurisdiction where the ownership,
leasing or operation of its assets or properties or conduct of its business requires such
qualification, except where the failure to be so qualified or in good standing would not,
individually or in the aggregate, have a Material Adverse Effect. The organizational or governing
documents of the Company and each of its Significant Subsidiaries are in full force and effect.
Neither the Company nor any Significant Subsidiary is in violation of its organizational or
governing documents.



     3.2 Capitalization.



               (a) As of the date of this Agreement, the authorized shares of capital stock of the Company
consist of 200,000,000 shares of Common Stock and 5,000,000 shares of preferred stock, par value
$0.001 per share (“Preferred Stock”), 500,000 of which have been



 -  6 - 









 







designated as Series A Junior Participating Preferred Stock reserved for issuance in
connection with the rights issued under the Company’s Rights Agreement, dated as of December 13,
1999, as amended, by and between the Company and Mellon Investor Services LLC (formerly known as
ChaseMellon Shareholder Services, L.L.C.), as Rights Agent. As of the close of business on October
18, 2007 (the “Capitalization Date”), (i) 65,250,651 shares of Common Stock were issued and
outstanding, including 76,579 shares of restricted Common Stock outstanding pursuant to awards
granted under the Company’s Benefit Plans, (ii) 18,198,082 shares of Common Stock were held by the
Company in its treasury, (iii) (A) there were 2,967,068 shares of Common Stock underlying
outstanding options to acquire shares of Common Stock, such outstanding options having a weighted
average exercise price as of the Capitalization Date of $59.25, (B) there were 25,000 shares of
Common Stock underlying outstanding restricted stock units in respect of shares of Common Stock and
(C) 3,397,044 additional shares of Common Stock were reserved for issuance for future grants
pursuant to the Company’s Benefit Plans and (iv) no shares of Preferred Stock were issued or
outstanding. All outstanding shares of Common Stock, and all shares of Common Stock reserved for
issuance as noted in clause (iii) of the foregoing sentence, when issued in accordance with the
respective terms thereof, are or will be duly authorized, validly issued, fully paid and
non-assessable and free of pre-emptive or similar rights. Since the Capitalization Date through
the date hereof, (i) the Company has only issued options or other rights to acquire Common Stock in
the ordinary course of business consistent with past practice or pursuant to the Call Option and
(ii) the only shares of capital stock issued by the Company were pursuant to outstanding options
and other rights to purchase Common Stock. No Subsidiary of the Company owns any Common Stock.



               (b) As of the date of this Agreement, except as set forth in Section 3.2(a), except for
certain option arrangements that may be entered into in connection with the transactions
contemplated hereby (the “Call Option”), and except pursuant to the Company’s Benefit Plans, there
are no existing options, warrants, calls, preemptive (or similar) rights, subscriptions or other
rights, agreements or commitments obligating the Company to issue, transfer or sell, or cause to be
issued, transferred or sold, any capital stock of the Company or any securities convertible into or
exchangeable for such capital stock, and there are no outstanding contractual obligations of the
Company to repurchase, redeem or otherwise acquire any of its shares of capital stock.



               (c) Except as set forth in the Transaction Agreements and the Call Option, the Company has not
granted to any Person the right to require the Company to register Common Stock on or after the
date of this Agreement.



          3.3 Authorization. The Company has all requisite corporate power to enter into the
Transaction Agreements and to carry out and perform its obligations under the terms of the
Transaction Agreements. All corporate action on the part of the Company, its officers, directors
and stockholders necessary for the authorization of the Securities, the authorization, execution,
delivery and performance of the Transaction Agreements and the consummation of the transactions
contemplated herein has been taken. The execution, delivery and performance of the Transaction
Agreements by the Company, the issuance of the Common Stock upon conversion of the Notes in
accordance with their terms and the consummation of the other transactions contemplated herein do
not require any approval of the Company’s stockholders. Assuming this Agreement constitutes the
legal and binding agreement of the Purchasers, this



 -  7 - 









 







Agreement constitutes a legal, valid and binding obligation of the Company, enforceable
against the Company in accordance with its terms, except as such enforceability may be limited by
bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or fraudulent conveyance
and similar laws relating to or affecting creditors generally or by general equity principles
(regardless of whether such enforceability is considered in a proceeding in equity or at law) and
an implied covenant of good faith and fair dealing. Upon their respective execution by the Company
and the other parties thereto and assuming that they constitute legal and binding agreements of the
other parties thereto, each of the Registration Rights Agreement and the Indenture will constitute
a legal, valid and binding obligation of the Company, enforceable against the Company in accordance
with its terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium, fraudulent transfer or fraudulent conveyance and similar laws relating
to or affecting creditors generally or by general equity principles, an implied covenant of good
faith and fair dealing or, with respect to the Registration Rights Agreement, provisions (A)
relating to indemnification, contribution or exculpation that may be violative of the public policy
underlying any Law or (B) that impose payment obligations at a rate or in an amount that a court
determines in the circumstances under applicable Law to be commercially unreasonable or a penalty
or a forfeiture (regardless of whether such enforceability is considered in a proceeding in equity
or at law).



          3.4 Valid Issuance. The Notes being purchased by the Purchasers hereunder will, upon
issuance pursuant to the terms hereof and the terms of the Indenture and upon payment therefor, be
valid and legally binding obligations of the Company, enforceable in accordance with their terms
and the terms of the Indenture, except as such enforceability may be limited by bankruptcy,
insolvency, reorganization, moratorium, fraudulent transfer or fraudulent conveyance and similar
laws relating to or affecting creditors generally or by general equity principles (regardless of
whether such enforceability is considered in a proceeding in equity or at law) and an implied
covenant of good faith and fair dealing. At or prior to the Closing, the Company will have
available for issuance the Common Stock initially issuable upon conversion of the Notes without
giving effect to any anti-dilution provisions contained in the Indenture. The Common Stock to be
issued upon conversion of the Notes has been duly authorized, and upon conversion of the Notes and
issuance all such Common Stock will be validly issued, fully paid and nonassessable. Subject to
the accuracy of the representations made by the Purchasers in Section 4 hereof, the Notes will be
issued to the Purchasers in compliance with applicable exemptions from (i) the registration and
prospectus delivery requirements of the Securities Act and (ii) the registration and qualification
requirements of all applicable securities laws of the states of the United States. Except for a
Form 8-K not timely filed as previously disclosed to KKR, the Company would be a Well-Known
Seasoned Issuer (as defined in the Registration Rights Agreement) as of the date hereof and would
be eligible to file as of the date hereof a registration statement on Form S-3 under the Securities
Act.



          3.5 No Conflict. The execution, delivery and performance of the Transaction
Agreements by the Company, the issuance of the Common Stock upon conversion of the Notes in
accordance with their terms and the consummation of the other transactions contemplated hereby will
not (i) conflict with or result in any violation of any provision of the certificate of
incorporation or by-laws of the Company, (ii) except for the Merger Agreement, which is being
terminated concurrently with the execution hereof, result in any breach or violation of, or default
(with or without notice or lapse of time, or both) under, require consent under, or give rise to a



 -  8 - 









 







right of termination, cancellation, modification or acceleration of any obligation or to the
loss of any benefit under any loan, guarantee of indebtedness or credit agreement, note, bond,
mortgage, indenture, lease, agreement, contract, purchase or sale order, instrument, permit,
concession, franchise, right or license binding upon the Company or any of its Subsidiaries or
result in the creation of any liens, claims, mortgages, encumbrances, pledges, security interests,
equities or charges of any kind (each, a “Lien”) upon any of the properties, assets or rights of
the Company or any of its Subsidiaries, or (iii) conflict with or violate any applicable federal,
state, local or foreign or provincial law, statute, code, ordinance, rule, regulation, judgment,
order, injunction, decree or agency requirement of or undertaking to or agreement with any
Governmental Entity, including common law (collectively, “Laws” and each, a “Law”), other than, in
the case of clauses (ii) and (iii), as would not, individually or in the aggregate, have a Material
Adverse Effect.



          3.6 Consents. All consents, approvals, orders and authorizations required on the part
of the Company or its Subsidiaries in connection with the execution, delivery or performance of
this Agreement and the Notes and the issuance of the Common Stock upon conversion of the Notes in
accordance with their terms have been obtained or made, other than (i) the expiration or
termination of any applicable waiting periods under the HSR Act or any foreign antitrust
requirements in connection with the issuance of Common Stock upon conversion of the Notes, (ii)
those to be obtained, in connection with the registration of Securities under the Registration
Rights Agreement, under the applicable requirements of the Securities Act and Exchange Act and any
related filings and approvals under applicable state securities laws, and (iii) such consents,
approvals, orders and authorizations the failure of which to make or obtain would not reasonably be
expected to have a Material Adverse Effect.



          3.7 SEC Reports; Financial Statements.



               (a) Except for a Form 8-K as previously disclosed to KKR, the Company has timely filed all
forms, documents, statements and reports required to be filed by it with the Securities and
Exchange Commission (the “SEC”) since July 1, 2005 (the forms, documents, statements and reports
filed with the SEC since July 1, 2005, including any amendments thereto, the “SEC Reports”). As
of their respective dates, or, if amended or superseded by a subsequent filing made prior to the
date hereof, as of the date of the last such amendment or superseding filing prior to the date
hereof, the SEC Reports complied in all material respects with the requirements of the Securities
Act, the Exchange Act and the Sarbanes-Oxley Act of 2002 (the “Sarbanes-Oxley Act”), as the case
may be, and the applicable rules and regulations promulgated thereunder. As of the time of filing
with the SEC, none of the SEC Reports so filed contained any untrue statement of a material fact or
omitted to state any material fact required to be stated therein or necessary in order to make the
statements therein, in the light of the circumstances under which they were made, not misleading,
except to the extent that the information in such SEC Report has been amended or superseded by a
later SEC Report filed prior to the date hereof. No Subsidiary of the Company is subject to
individual periodic reporting requirements of the Exchange Act.



               (b) The financial statements (including all related notes and schedules) of the Company and
its Subsidiaries included in the SEC Reports (collectively, the “Financial Statements”) complied
as to form in all material respects with the published rules and



 -  9 - 









 







regulations of the SEC with respect thereto, fairly present in all material respects the
consolidated financial position of the Company and its Subsidiaries as of the dates indicated, and
the results of their operations and their cash flows for the periods therein specified, all in
accordance with United States generally accepted accounting principles applied on a consistent
basis (“GAAP”) throughout the periods therein specified (except as otherwise noted therein, and in
the case of quarterly financial statements except for the absence of footnote disclosure and
subject, in the case of interim periods, to normal year-end adjustments).



               (c) Except (i) as reflected or reserved against in the Company’s consolidated balance
sheet as
of June 30, 2007 (or the notes thereto) included in the SEC Reports filed prior to the date hereof,
(ii) for liabilities and obligations incurred in the ordinary course of business consistent with
past practice since June 30, 2007, (iii) liabilities of any nature, whether or not accrued,
contingent or otherwise related to or arising from the negotiation, execution and performance of
the Merger Agreement, the Termination and Settlement Agreement, this Agreement and the transactions
contemplated hereby and thereby, (iv) liabilities of a nature not required by GAAP to be set forth
on a consolidated balance sheet of the Company and its Subsidiaries or the notes thereto pursuant
to any Contract or similar arrangement binding on the Company or any of its Subsidiaries, neither
the Company nor any Subsidiary of the Company has any liabilities or obligations of any nature,
whether or not accrued, contingent or otherwise and whether due or to become due, that would,
individually or in the aggregate, have a Material Adverse Effect.



          3.8 Absence of Litigation. Except as previously disclosed to KKR, there are no
(i) investigations or proceedings pending or, to the knowledge of the Company, threatened by any
Governmental Entity with respect to the Company or any of its Subsidiaries or any of their
properties or assets, (ii) actions, suits, arbitrations, claims or proceedings pending or, to the
knowledge of the Company, threatened against or affecting the Company or any of its Subsidiaries,
or any of their respective properties or assets, at Law or in equity, or (iii) orders, judgments or
decrees of any Governmental Entity against the Company or any of its Subsidiaries, which, in the
case of clauses (i) or (ii), individually or in the aggregate, would be reasonably expected to have
a Material Adverse Effect, provided, however, that the Company makes no representation or warranty
with respect to pending or threatened litigation relating to the negotiation, execution and
performance of the Merger Agreement, the Termination and Settlement Agreement, this Agreement and
the transactions contemplated hereby and thereby.



          3.9 Compliance with Law. The Company and each of its Subsidiaries is in compliance
with and is not in default under or in violation of any Laws, except where such non-compliance,
default or violation would not, individually or in the aggregate, have a Material Adverse Effect.



          3.10 Intellectual Property. Except as would not, individually or in the aggregate,
have a Material Adverse Effect, either the Company or a Subsidiary of the Company owns, or is
licensed or otherwise possesses adequate rights to use, all material trademarks, trade names,
service marks, service names, mark registrations, logos, assumed names, domain names, registered
and unregistered copyrights, software, patents or other intellectual property, and all applications
and registrations used in their respective businesses as currently conducted (collectively, the
“Intellectual Property”), free and clear of all Liens. Except as would not,



 -  10 - 









 







individually or in the aggregate, have a Material Adverse Effect, (i) there are no pending or,
to the knowledge of the Company, threatened in writing claims by any person alleging infringement
by the Company or any of its Subsidiaries for their use of the Intellectual Property of the Company
or any of its Subsidiaries; (ii) the conduct of the business of the Company and its Subsidiaries
does not infringe or violate any intellectual property rights of any Person; (iii) to the knowledge
of the Company, no Person is infringing any Intellectual Property of the Company or any of its
Subsidiaries; (iv) the Company takes reasonable actions to protect its Intellectual Property, its
ownership of proprietary Intellectual Property and the security of its software, systems and
networks; and (v) the patents and registered Intellectual Property owned by the Company and its
Subsidiaries is valid and enforceable.



          3.11 Employee Benefits. Except as would not result in a Material Adverse Effect and
except for claims, pending, threatened or otherwise relating to the negotiation, execution and
performance of the Merger Agreement, the Termination and Settlement Agreement, this Agreement and
the transactions contemplated hereby or thereby, each Benefit Plan has been established and
administered in accordance with its terms and in compliance with the applicable provisions of
ERISA, the Code and other applicable laws, rules and regulations. Neither the Company nor any of
its Subsidiaries is subject to a dispute, strike or work stoppage except as would not, individually
or in the aggregate, have a Material Adverse Effect.



          3.12 Taxes. The Company and each of its Subsidiaries have filed all Tax Returns
required to have been filed (or extensions have been duly obtained) and have paid all Taxes
required to have been paid by any of them, except with respect to matters contested in good faith
through appropriate proceedings and for which adequate reserves have been established on the
financial statements of the Company and its Subsidiaries in accordance with GAAP, except where
failure to file such Tax Returns or pay such Taxes would not, individually or in the aggregate,
reasonably be expected to have a Material Adverse Effect.



          3.13 NYSE. Shares of the Common Stock are registered pursuant to Section 12(b) of the
Exchange Act and are listed on the New York Stock Exchange (“NYSE”), and the Company has no action
pending to terminate the registration of the Common Stock under the Exchange Act or delist the
Common Stock from NYSE, nor has the Company received any notification that the SEC or the NYSE is
currently contemplating terminating such registration or listing.



          3.14 Company Not an “Investment Company”. The Company has been advised of the rules
and requirements under the Investment Company Act of 1940, as amended. The Company is not, and
immediately after receipt of payment for the Notes will not be, an “investment company” within the
meaning of, and required to be registered under, the Investment Company Act of 1940, as amended.



          3.15 General Solicitation; No Integration. Neither the Company nor any other Person
authorized by the Company to act on its behalf has engaged in a general solicitation or general
advertising (within the meaning of Regulation D of the Securities Act) of investors with respect to
offers or sales of the Notes. The Company has not, directly or indirectly, sold, offered for sale,
solicited offers to buy or otherwise negotiated in respect of, any security (as defined in



 -  11 - 









 







the Securities Act) which, to its knowledge, is or will be integrated with the Notes sold
pursuant to this Agreement.



     4. Representations and Warranties of Each Purchaser. KKR with regard to the KKR
Purchaser and each Purchaser, severally for itself and not jointly with the other Purchasers,
represents and warrants to the Company as follows:



          4.1 Organization. Such Purchaser is a legal entity duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization and has the requisite
power and authority to own, lease and operate its properties and assets and to carry on its
business as presently conducted.



          4.2 Authorization. Such Purchaser has all requisite corporate or similar power to enter
into this Agreement and the other Transaction Agreements to which it will be a party and to carry
out and perform its obligations hereunder and thereunder. All corporate, member or partnership
action on the part of such Purchaser or its stockholders, members or partners necessary for the
authorization, execution, delivery and performance of this Agreement and the other Transaction
Agreements to which it will be a party and the consummation of the other transactions contemplated
herein has been taken. Assuming this Agreement constitutes the legal and binding agreement of the
Company, this Agreement constitutes a legal, valid and binding obligation of such Purchaser,
enforceable against such Purchaser in accordance with its terms, except as such enforceability may
be limited by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or fraudulent
conveyance and similar laws relating to or affecting creditors generally or by general equity
principles (regardless of whether such enforceability is considered in a proceeding in equity or at
law) and an implied covenant of good faith and fair dealing. Upon their respective execution by
such Purchaser and the other parties thereto and assuming that they constitute legal and binding
agreements of the Company, each of the other Transaction Agreements to which such Purchaser will be
a party will constitute a legal, valid and binding obligation of such Purchaser, enforceable
against such Purchaser in accordance with its terms, except as such enforceability may be limited
by bankruptcy, insolvency, reorganization, moratorium, fraudulent transfer or fraudulent conveyance
and similar laws relating to or affecting creditors generally or by general equity principles, an
implied covenant of good faith and fair dealing or, with respect to the Registration Rights
Agreement, provisions (A) relating to indemnification, contribution or exculpation that may be
violative of the public policy underlying any Law or (B) that impose payment obligations at a rate
or in an amount that a court determines in the circumstances under applicable Law to be
commercially unreasonable or a penalty or a forfeiture (regardless of whether such enforceability
is considered in a proceeding in equity or at law).



          4.3 No Conflict. The execution, delivery and performance of the Transaction
Agreements by such Purchaser, the issuance of the Common Stock upon conversion of the Notes in
accordance with their terms and the consummation of the other transactions contemplated hereby will
not (i) conflict with or result in any violation of any provision of the certificate of
incorporation or by-laws or other equivalent organizational document, in each case as amended, of
such Purchaser, (ii) result in any breach or violation of, or default (with or without notice or
lapse of time, or both) under, require consent under, or give rise to a right of termination,
cancellation, modification or acceleration of any obligation or to the loss of any benefit under



 -  12 - 









 







any loan, guarantee of indebtedness or credit agreement, note, bond, mortgage, indenture,
lease, agreement, contract, purchase or sale order, instrument, permit, concession, franchise,
right or license binding upon such Purchase or result in the creation of any Lien upon any of the
properties, assets or rights of such Purchaser, or (iii) conflict with or violate any applicable
Laws, other than, in the case of clauses (ii) and (iii), as would not, individually or in the
aggregate, be reasonably expected to materially delay or hinder the ability of such Purchaser to
perform its obligations under the Transaction Agreements (a “Purchaser Adverse Effect”).



          4.4 Consents. All consents, approvals, orders and authorizations required on the part
of such Purchaser in connection with the execution, delivery or performance of this Agreement and
the Notes, the issuance of the Common Stock upon conversion of the Notes in accordance with their
terms and the consummation of the other transactions contemplated herein have been obtained or
made, other than (i) the expiration or termination of the applicable waiting period under the HSR
Act or any foreign antitrust requirements in connection with the issuance of Common Stock upon
conversion of the Notes, (ii) those to be obtained, in connection with the registration of
Securities under the Registration Rights Agreement, under the applicable requirements of the
Securities Act and Exchange Act and any related filings and approvals under applicable state
securities laws, and (ii) such consents, approvals, orders and authorizations the failure of which
to make or obtain, individually or in the aggregate, would not reasonably be expected to have a
Purchaser Adverse Effect.



          4.5 Absence of Litigation. Except as previously disclosed to the Company and that may
result from the announcement of the transactions contemplated by the Transaction Agreements or the
proposal thereof, there are no suits, claims, actions, proceedings, arbitrations, mediations or
investigations pending or, to the knowledge of such Purchaser, threatened against such Purchaser
that would, individually or in the aggregate, reasonably be expected to have a Purchaser Adverse
Effect. Neither such Purchaser nor any of its Subsidiaries nor any of their respective properties
is or are subject to any order, writ, judgment, injunction, decree or award that would,
individually or in the aggregate, have a Purchaser Adverse Effect.



          4.6 Purchasers’ Financing. At the Closing, such Purchaser will have all funds
necessary to pay to the Company the purchase price for the Notes being purchased by such Purchaser
hereby in immediately available funds.



          4.7 Brokers. Such Purchaser has not retained, utilized or been represented by any
broker or finder in connection with the transactions contemplated by this Agreement whose fees the
Company would be required to pay (other than pursuant to the reimbursement of expenses provisions
of Section 9.7 hereof).



          4.8 Purchase Entirely for Own Account. Such Purchaser is acquiring the Securities for
its own account, except as contemplated by the Swap Agreements and the Security Agreements, and not
with a view to, or for sale in connection with, any distribution of the Securities in violation of
the Securities Act. Except as contemplated by the Swap Agreements and the Security Agreements,
such Purchaser has no present agreement, undertaking, arrangement, obligation or commitment
providing for the disposition of the Securities.



 -  13 - 









 





          4.9 Investor Status. Such Purchaser certifies and represents to the Company that such
Purchaser is an “accredited investor” as defined in Rule 501 of Regulation D promulgated under the
Securities Act. Such Purchaser’s financial condition is such that it is able to bear the risk of
holding the Notes for an indefinite period of time and the risk of loss of its entire investment.
Such Purchaser has been afforded the opportunity to ask questions of and receive answers from the
management of the Company concerning this investment (except in the case of the Bank Purchasers who
are purchasing the Notes to be purchased by them hereunder for the account of and at the request of
the KKR Purchaser and for the purpose of entering into the transactions contemplated by the Swap
Agreements and the Security Agreements) and has sufficient knowledge and experience in investing in
companies similar to the Company so as to be able to evaluate the risks and merits of its
investment in the Company.



          4.10 Securities Not Registered. Such Purchaser understands that the Securities have
not been registered under the Securities Act, by reason of their issuance by the Company in a
transaction exempt from the registration requirements of the Securities Act, and that the
Securities must continue to be held by such Purchaser unless a subsequent disposition thereof is
registered under the Securities Act or is exempt from such registration. Such Purchaser
understands that the exemptions from registration afforded by Rule 144 (the provisions of which are
known to it) promulgated under the Securities Act depend on the satisfaction of various conditions,
and that, if applicable, Rule 144 may afford the basis for sales only in limited amounts.



     5. Covenants.



          5.1 HSR Approval. The Company and the Sponsor Purchasers acknowledge that one or more
filings under the HSR Act may be necessary in connection with the issuance of shares of Common
Stock upon conversion of the Notes. The Sponsor Purchasers shall be solely responsible for
determining whether any filings under the HSR Act or any foreign antitrust requirements may be
necessary in connection with any conversion of Notes held by them and will promptly notify the
Company if any such filing is required. To the extent required, the Company will cooperate with
the applicable Sponsor Purchaser(s) in making any required filings under the HSR Act or any foreign
antitrust requirements in connection with the issuance of shares of Common Stock upon conversion of
Notes held by such Sponsor Purchaser(s) and the Company and the applicable Sponsor Purchaser(s)
shall share equally in the payment of the filing fees associated with any such filings. For the
avoidance of doubt, any delivery of shares of Common Stock upon conversion of the Notes shall be
subject to the terms and conditions of the Indenture, including all such terms relating to
compliance with the HSR Act or any foreign antitrust requirements.



          5.2 Shares Issuable Upon Conversion. The Company will at all times have and keep
available for issuance such number of shares of Common Stock as shall be sufficient to permit the
conversion of the Notes into Common Stock as provided for in the Notes and Indenture, including as
may be adjusted for share splits, combinations or other similar transactions as of the date of
determination. The Company will cause any Common Stock issued upon conversion of the Notes to be
listed with NYSE or such other stock exchange or quotation system on which the Common Stock may
then be listed by the Company.



 -  14 - 









 





          5.3 PORTAL and CUSIPs. The Company will use its reasonable best efforts to (a) permit
the Notes to be designated PORTAL securities in accordance with the rules and regulations adopted
by the NASD relating to the PORTAL Market as of the Closing or as promptly as practicable
thereafter and (b) obtain all necessary Committee on Uniform Securities Identification Procedures
numbers (CUSIP numbers) for the Notes required for creating a market in Notes traded pursuant to
Rule 144A under the Securities Act or which are not “restricted securities” for purposes of Rule
144 under the Securities Act. Each Purchaser will provide all reasonable assistance and
cooperation as may be requested by the Company to effectuate the intent and purposes of this
Section 5.3. The Company will use its reasonable best efforts to cause all Notes Beneficially
Owned by the Purchasers to be issued (at the Closing and, failing that, as promptly as practicable
thereafter) as an interest in the IAI Global Note (as defined in the Indenture); provided, however,
that to the extent permitted by the Depositary Trust Corporation and the registrar for the Notes,
such ownership interest may be transferred into the Restricted Global Note (as defined in the
Indenture).



          5.4 Further Assurances.



               (a) Each party agrees to cooperate with each other and their respective officers, employees,
attorneys, accountants and other agents, and, generally, do such other reasonable acts and things
in good faith as may be necessary to effectuate the intents and purposes of this Agreement, subject
to the terms and conditions hereof and compliance with applicable Law, including taking reasonable
action to facilitate the filing of any document or the taking of reasonable action to assist the
other parties hereto in complying with the terms hereof.



               (b) Between the date hereof and the earlier of the Closing Date and the date of the
termination of this Agreement in accordance with its terms, except as contemplated by Section 5.7
hereof, the Company shall not, and shall not permit any of its Subsidiaries to, without the prior
written consent of the Sponsors, which consent may not be unreasonably withheld: (i) adjust, split,
combine, reclassify, redeem, repurchase or otherwise acquire any capital stock or other equity
interests or rights or otherwise amend the terms of its capital stock or other equity interests or
rights; (ii) make, declare or pay any dividend (other than the normal quarterly dividend consistent
with past practice), or make any other distribution on, or directly or indirectly redeem, purchase
or otherwise acquire or encumber, any shares of its capital stock or other equity interests or any
securities or obligations convertible (whether currently convertible or convertible only after the
passage of time or the occurrence of certain events) into or exchangeable for any shares of its
capital stock or other equity interests, except in connection with exercises or similar
transactions pursuant to the exercise of stock options or settlement of other awards or obligations
outstanding as of the date hereof (or permitted hereunder to be granted after the date hereof); or
(iii) issue or sell any additional shares of capital stock or other equity interests, any
securities convertible into, or any rights, warrants or options to acquire, any such shares of
capital stock or other equity interests, except pursuant to the exercise of stock options or
settlement of other awards outstanding as of the date hereof (or permitted hereunder to be granted
after the date hereof) and in accordance with the terms of such instruments or as required under
any Benefit Plan and except for the issuance of restricted stock, restricted stock units or options
to purchase shares of Common Stock under the Company’s 2002 Stock Option and Incentive Plan with
respect to an aggregate of 175,000 shares of Common Stock in connection with all such issuances of
such equity-based awards.



 -  15 - 









 





          5.5 Board of Directors Matters.



               (a) KKR shall have the right to nominate, pursuant to the terms and subject to the conditions
of this Section 5.5, one nominee to the Company’s Board of Directors (the “Board Designee”) for
consideration by the Board of Directors (and the Nominating and Governance Committee of the Board
of Directors), such consideration to include whether such nominee (i) is qualified and suitable to
serve as a member of the Board of Directors under all applicable corporate governance policies or
guidelines of the Company and the Board of Directors and applicable legal, regulatory and stock
market requirements and (ii) meets the independence requirements with respect to the NYSE Listed
Company Manual or any successor thereto; provided that nothing contained herein shall require the
Board of Directors to appoint such Board Designee to the Board of Directors. As of the date
hereof, KKR has designated Brian Carroll as a nominee for the Board Designee, and the Company
hereby acknowledges that said Board Designee meets the requirements set forth in clauses (i) and
(ii) in the previous sentence of this Section 5.5(a). KKR will take all necessary action to cause
any nominee for Board Designee to make himself or herself reasonably available for interviews, to
consent to such reference and background checks or other investigations and to provide such
information (including information necessary to determine the nominee’s independence status under
various requirements and institutional investor guidelines as well as information necessary to
determine any disclosure obligations of the Company) as the Board of Directors or its Nominating
and Governance Committee may reasonably request. Provided that the Board Designee is then
acceptable to the Board of Directors (including the Nominating and Governance Committee of the
Board of Directors) in its good faith discretion, the Company’s Nominating and Governance Committee
shall consider, consistent with its charter, the nomination of the Board Designee for election or
re-election, as the case may be, as a director so long as the KKR Purchaser and its Affiliates,
collectively, then Own at least $200 million principal amount of the Notes. It shall be a
condition to the nomination for election or re-election of any Board Designee that such Board
Designee tender a conditional resignation letter prior to his or her nomination for election or
re-election to the Board of Directors providing such Board Designee’s irrevocable offer of
resignation from the Board of Directors effective upon the Designee Termination Date.



               (b) The Board Designee (or Board Observer) shall be subject to the policies and requirements
of the Company and its Board of Directors, including the Corporate Governance Guidelines of the
Board of Directors, the Company’s Code of Ethics for Senior Executive and Financial Officers and
Directors and the Code of Business Conduct for Employees in a manner consistent with the
application of such policies and requirements to other members of the Board of Directors. To the
same extent it indemnifies and provides insurance for the members of the Board of Directors
pursuant to its organizational documents, applicable Law or otherwise, the Company shall indemnify
the Board Designee (or Board Observer) and provide the Board Designee (or Board Observer) with
director and officer insurance.



               (c) All obligations of the Company pursuant to this Section 5.5 (other than paragraph
(b) of
this Section 5.5) shall terminate upon the first to occur of: (i) such time as the KKR Purchaser
and its Affiliates, collectively, do not Own at least $200 million principal amount of the Notes,
(ii) the Company sells all or substantially all of its assets, (iii) any Person or “group” (as such
term is used in Section 13 of the Exchange Act), directly or indirectly, obtains Beneficial
Ownership of 50% or more of the total outstanding voting power of the Voting Stock,



 -  16 - 









 





               (iv) the Company participates in any merger, consolidation or similar transaction unless
immediately following the consummation of such transaction the stockholders of the Company
immediately prior to the consummation of such transaction continue to hold (in substantially the
same proportion as their ownership of the Company’s voting stock immediately prior to the
transaction) more than 50% of all of the outstanding common stock or other securities entitled to
vote for the election of directors of the surviving or resulting entity in such transaction, (v)
KKR irrevocably waives and terminates all of its rights under this Section 5.5 (other than
paragraph (b) of this Section 5.5), (vi) the Board Designee is removed from the Board of Directors
for cause by the stockholders of the Company or (vii) the Company delivers written notice that KKR
or the KKR Purchaser has breached the terms of Section 5.6 or Section 7.1 in any material respect
and the KKR Purchaser does not cure any such breach within 10 days of such notice; provided that no
cure period shall apply if such breach is of a nature which cannot be cured. The date of
termination pursuant to this clause (c) of the obligations of the Company pursuant to this Section
5.5 is sometimes referred to herein as the “Designee Termination Date”.



               (d) Notwithstanding anything else contained in this Agreement to the contrary, if at any time
following November 15, 2007 but prior to the Designee Termination Date, the Board Designee is not a
member of the Board of Directors for any reason, the Board Designee shall instead be an observer at
meetings of the Company’s Board of Directors (“Board Observer”). The Board Observer shall
be entitled to attend all meetings of the Board of Directors and shall be furnished with all the
information that members of the Board of Directors are furnished with respect to each meeting of
the Board of Directors.



          5.6 Standstill.



               (a) Each Sponsor agrees that, until the Standstill Termination Date, without the prior consent
of the Board of Directors (excluding any Board Designee), such Sponsor shall not and such Sponsor
shall cause each of its Affiliates not to, directly or indirectly:



                    (i) acquire or Beneficially Own Voting Stock or authorize or make
any offer to acquire Voting
Stock, if the effect of such acquisition or offer (if consummated) would be to increase the
percentage of the Voting Stock represented by all shares of Voting Stock Beneficially Owned by such
Sponsor and its Affiliates to more than 1% of the Voting Stock outstanding (not including any
Common Stock received by a Purchaser upon conversion of any Note);



                    (ii) authorize, commence, encourage, support or endorse any
tender offer or exchange offer for
shares of Voting Stock;



                    (iii) make, or in any way participate, directly or indirectly, in
any “solicitation” of
“proxies” to vote (as such terms are used in the rules of the SEC), or seek to advise or influence
any Person with respect to the voting of any Voting Stock;



                    (iv) publicly announce or submit to the Company a proposal or
offer concerning (with or
without conditions) any extraordinary transaction involving the Company or any successor thereto,
any Subsidiary or division thereof, or any of their securities or assets;



 -  17 - 









 





                    (v) form, join or in any way participate in a “group”
as defined in Section 13(d)(3) of the
Exchange Act, for the purpose of acquiring, holding, voting or disposing of any securities of the
Company (provided that nothing herein shall prohibit the Purchasers and their Affiliates from
coordinating, among themselves and transferees, disposition of Securities held by them);



                    (vi) take any action that could reasonably be expected to require
the Company or any successor
thereto to make a public announcement regarding the possibility of any of the events described in
clauses (i) through (v) above;



                    (vii) enter into any arrangements with any third party concerning
any of the foregoing; or



                    (viii) request the Company or any of its Representatives,
directly or indirectly, to amend or
waive any provision of this Section 5.6.



               (b) The restrictions set forth in Section 5.6(a) will not apply as to a Sponsor and its
Affiliates if any of the following occurs (provided that if any event described in this Section
5.6(b) occurs and, during the twelve-month period following such event, none of the transactions
described in clauses (ii), (iii) or (iv) of the definition of Designee Termination Date has
occurred, then the restrictions set forth in Section 5.6(a) will thereafter resume and continue to
apply to KKR if a Board Designee is then serving as a member of the Board of Directors, provided,
further, at the time of any such resumption of the restrictions set forth in Section 5.6(a), if the
number of shares of Voting Stock then Beneficially Owned by KKR and its Affiliates exceeds 1% of
the Voting Stock outstanding (not including any Common Stock received by a Purchaser upon
conversion of any Notes), neither KKR nor any of its Affiliates shall be required to dispose of any
shares of Voting Stock Beneficially Owned by them but, in such event, neither KKR nor any of its
Affiliates may then acquire Beneficial Ownership of additional Voting Stock (other than Common
Stock received by a Purchaser upon conversion of any Notes) unless the Beneficial Ownership
percentage of KKR and its Affiliates would, following such acquisition, be an amount below 1% of
the Voting Stock then outstanding (not including any Common Stock received by a Purchaser upon
conversion of any Notes)):



                    (i) a third party who is not an Affiliate of such Sponsor (a
“Third Party”) acquires
beneficial ownership of 50% of the outstanding Voting Stock; or



                    (ii) the Company enters into an agreement pursuant to which a
Third Party would acquire all or
substantially all of the stock or assets of the Company or the Company would be merged or
consolidated with another Person, unless immediately following the consummation of such transaction
the stockholders of the Company immediately prior to the consummation of such transaction would
continue to hold (in substantially the same proportion as their ownership of the Company’s voting
stock immediately prior to the transaction) more than 50% of all of the outstanding common stock or
other securities entitled to vote for the election of directors of the surviving or resulting
entity in such transaction or any direct or indirect parent thereof.



 -  18 - 









 





                    (c) Nothing in clause (ii) or clause (v) of
Section 5.6(a) shall be construed to prohibit the
Board Designee, in good faith and in the performance of his or her duties as a member of the Board
of Directors, or the Board Observer, in each case, from confidentially discussing a proposal made
by the Company or a Third Party concerning any extraordinary transaction involving the Company or
any successor thereto, any Subsidiary or division thereof, or any of their securities or assets,
with the Board of Directors and representatives of the Company and its advisors who are involved in
the evaluation or execution of any such proposal on behalf of the Company.



                    (d) Notwithstanding Section 5.6(a), upon an increase in the
Beneficial Ownership percentage of
a Sponsor and its Affiliates to an amount in excess of 1% of the Voting Stock outstanding (not
including any Common Stock received by a Purchaser upon conversion of any Notes) resulting solely
from a repurchase or redemption of Voting Stock by the Company or any similar transaction that
reduces the number of outstanding shares of Voting Stock of the Company, neither such Sponsor nor
any of its Affiliates shall be required to dispose of any Securities Beneficially Owned by them;
provided, however, that in such event, neither such Sponsor nor any of its Affiliates may acquire
Beneficial Ownership of additional Voting Stock (other than Common Stock received by a Purchaser
upon conversion of any Notes) unless the Beneficial Ownership percentage of such Sponsor and its
Affiliates would, following such acquisition, be an amount below 1% of the Voting Stock then
outstanding (not including any Common Stock received by a Purchaser upon conversion of any Notes).



                    (e) Each Sponsor agrees that, until the Standstill Termination
Date, such Sponsor shall
promptly notify the Company of any new acquisition or disposition, or entry into any agreement or
arrangement which could reasonably be expected to result in any new acquisition or disposition, of
Beneficial Ownership of Voting Stock or Securities by such Sponsor or any of its Affiliates,
including the material details thereof.



                    (f) Notwithstanding anything to the contrary provided elsewhere
herein, (i) Affiliates of a
Sponsor that are not engaged in the private equity business (“Non-Investor Affiliates”) shall not
be considered “Affiliates” of such Sponsor for purposes of this Section 5.6 if any actions taken by
them are not taken under the direction of such Sponsor or any of its Affiliates (other than
Non-Investor Affiliates) or any officer or general partner of such Sponsor or any of its Affiliates
(other than Non-Investor Affiliates) and if Confidential Information is not made available to such
Non-Investor Affiliates or their Representatives, and (ii) (A) none of the provisions of this
Section 5.6 of this Agreement shall in any way limit the activities of Goldman, Sachs & Co. and its
Affiliates (other than the PIA Funds), and (B) Goldman, Sachs & Co. and its Affiliates (other than
the PIA Funds) may engage in any brokerage, investment advisory, financial advisory, anti-raid
advisory, merger advisory, financing, asset management, trading, market making, arbitrage,
investment activity and other similar activities with respect to the Company.



          5.7 Use of Proceeds. The Company shall use the proceeds from the sale of the Notes to
the Purchasers pursuant to this Agreement solely for the purpose of (i) repurchasing shares of
Common Stock; (ii) implementing the Call Option; and (iii) the payment of expenses pursuant to the
terms of this Agreement.



 -  19 - 









 





     6. Conditions Precedent.



          6.1 Conditions to the Obligation of the Purchasers to Consummate the Closing. The
several obligations of each Purchaser to consummate the transactions to be consummated at the
Closing, and to purchase and pay for the Notes being purchased by it at the Closing pursuant to
this Agreement, are subject to the satisfaction of the following conditions precedent (provided
that if the KKR Purchaser does not consummate the transactions contemplated by the Swap Agreements
as of the Closing, it shall be deemed to have assumed all of the obligations of each Bank Purchaser
hereunder and each Bank Purchaser shall be deemed to have assigned all of its rights hereunder to
the KKR Purchaser and shall be released from all obligations hereunder without payment of penalty
to the Company):



               (a) The representations and warranties of the Company contained herein shall be true and
correct on and as of the Closing Date with the same force and effect as though made on and as of
the Closing Date (it being understood and agreed by each Purchaser that for purposes of this
Section 6.1(a), in the case of any representation and warranty of the Company contained herein (i)
which is not hereinabove qualified by application thereto of a materiality standard, such
representation and warranty need be true and correct only to the extent that failure to be true and
correct would have a Material Adverse Effect or (ii) which is made as of a specific date, such
representation and warranty need be true and correct only as of such specific date).



               (b) The Company shall have performed in all material respects all obligations and conditions
herein required to be performed or observed by the Company on or prior to the Closing Date.



               (c) Each Purchaser shall have received a certificate, dated the Closing Date, signed by the
Chief Executive Officer or the Chief Financial Officer of the Company, certifying on behalf of the
Company that the conditions specified in the foregoing Sections 6.1(a) and (b) have been fulfilled.



               (d) The purchase of and payment for the Notes by each Purchaser shall not be prohibited or
enjoined by any law or governmental or court order or regulation.



               (e) The Company and the Trustee shall have executed and delivered the Indenture.



               (f) The Company shall have executed and delivered the Registration Rights Agreement in the
form attached hereto as Exhibit C (the “Registration Rights Agreement”).



               (g) The Purchasers shall have received from counsel to the Company, an opinion substantially
in the form attached hereto as Exhibit D.



               (h) The Termination and Settlement Agreement shall be in full force and effect.



 -  20 - 









 





          6.2 Conditions to the Obligation of the Company to Consummate the Closing. The
obligation of the Company to consummate the transactions to be consummated at the Closing, and to
issue and sell to each Purchaser the Notes to be purchased by it at the Closing pursuant to this
Agreement, is subject to the satisfaction of the following conditions precedent:



               (a) The representations and warranties contained herein of each Purchaser shall be true and
correct on and as of the Closing Date, with the same force and effect as though made on and as of
the Closing Date (it being understood and agreed by the Company that, in the case of any
representation and warranty of a Purchaser contained herein which is not hereinabove qualified by
application thereto of a materiality standard, such representation and warranty need be true and
correct only in all material respects).



               (b) Each Purchaser shall have performed in all material respects all obligations and
conditions herein required to be performed or observed by such Purchaser on or prior to the Closing
Date.



               (c) The Company shall have received a certificate, dated the Closing Date, on behalf of each
Purchaser, signed by an officer thereof, certifying on behalf of each Purchaser that the conditions
specified in the foregoing Sections 6.2(a) and (b) have been fulfilled.



               (d) The purchase of and payment for the Notes by each Purchaser shall not be prohibited or
enjoined by any law or governmental or court order or regulation.



               (e) The Trustee shall have executed and delivered the Indenture.



               (f) Each Purchaser shall have executed and delivered the Registration Rights Agreement.



               (g) The Termination and Settlement Agreement shall be in full force and effect.



     7. Transfer of the Securities.



          7.1 Transfer Restrictions.



               (a) No Sponsor Purchaser shall sell, assign, pledge, loan, hedge, transfer or otherwise
dispose or encumber (collectively, “Transfer”) any of the Securities during the period commencing
on the Closing Date and ending twelve months following the Closing Date (such one-year period, the
“Restricted Period”), except for Transfers to an Affiliated Entity, in each case that delivers a
written instrument to the Company in form and substance reasonably satisfactory to the Company
confirming that the transferee is subject to the obligations of this Agreement (including the
obligations contained in this Section 7) as if it were the Sponsor Purchaser effecting the Transfer
(it being acknowledged and understood that no such Transfer by a Sponsor Purchaser shall relieve
such Sponsor Purchaser from its obligations or liabilities pursuant to this Agreement) (a
“Permitted Transfer”) and except for the pledge of the Notes pursuant to the Security Agreements
and any Transfer pursuant to the exercise by a



 -  21 - 









 







Secured Party (as defined in the Security Agreements) of its rights pursuant to the terms of
Section 6 of the Security Agreements.



               (b) Following the Restricted Period, no Sponsor Purchaser may Transfer any of the Securities
except (1) pursuant to and in compliance with a Sponsor Supported Distribution (as defined in the
Registration Rights Agreement), or (2) as to KKR Purchaser, at a time when trades in the Company’s
securities are permitted pursuant to Section 7.1(c) below with respect to such KKR Purchaser and in
any event for all Sponsor Purchasers only pursuant to (i) a Transfer to the Company, (ii) a
Permitted Transfer, (iii) a Transfer to a transferee that is not a Sponsor or an Affiliate of a
Sponsor (excluding Goldman, Sachs & Co. or any of its Affiliates acting in their capacity as an
underwriter, dealer or broker), pursuant to an effective registration statement under the
Securities Act, (iv) a Transfer to a “qualified institutional buyer” that is not a Sponsor or an
Affiliate of a Sponsor (excluding Goldman, Sachs & Co. or any of its Affiliates acting in their
capacity as an underwriter, dealer or broker) pursuant to Rule 144A under the Securities Act or a
Transfer that is otherwise exempt from registration under the Securities Act, or (v) a Transfer to
a transferee that is not a Sponsor or an Affiliate of a Sponsor (excluding Goldman, Sachs & Co. or
any of its Affiliates acting in their capacity as an underwriter, dealer or broker) pursuant to
Rule 144 under the Securities Act or pursuant to Regulation S under the Securities Act and (in the
case of (v) only), if requested by the Company, upon delivery by such Sponsor Purchaser of an
opinion of counsel reasonably satisfactory to the Company to the effect that the proposed transfer
is exempt from registration under the Securities Act and applicable state securities laws. The
Company shall not register any Transfer of the Securities in violation of this Section 7.1. The
Company may, and may instruct any transfer agent for the Company to, place such stop transfer
orders as may be required on the transfer books of the Company in order to ensure compliance with
the provisions of this Section 7.1.



               (c) Each of KKR and KKR Purchaser agrees that, until the Policy Termination Date and except as
otherwise permitted pursuant to a Sponsor Supported Distribution (as defined in the Registration
Rights Agreement) pursuant to the Registration Rights Agreement, it and its Affiliates will be
subject to all trading and hedging restrictions to which any affiliate of any Board Designee (or
Board Observer) is or would be subject, including the requirements of Section 16(c) of the Exchange
Act and the Company’s insider trading policy applicable to non-employee directors; provided that
KKR and its Affiliates shall not be required to comply with any restriction on trading of
securities of the Company which is added to any policy of the Company by amendment or adoption
after the date hereof which would in its practical application discriminatorily affect only KKR and
its Affiliates and which is not reasonably supported by a rational legal or business purpose
unrelated to the KKR Purchaser’s investment in the Securities (except as may be required by legal
or regulatory requirements) other than discriminatory treatment of KKR and its Affiliates. KKR
shall cause its Affiliates to comply with the restrictions set forth in this Section 7.1(c) and
shall be responsible for any action or inaction by any of its Affiliates that is contrary to the
terms of this Section 7.1(c). KKR agrees that it and its Affiliates shall obtain pre-approval of
Transfers to the extent required under such policies. The Company will use commercially reasonable
efforts to respond as promptly as reasonably practicable to any request for pre-approval of
Transfers by KKR and its Affiliates. Notwithstanding anything to the contrary provided herein,
Non-Investor Affiliates shall not be considered “Affiliates” for purposes of this Section 7.1(c) if
any actions taken by them that



 -  22 - 









 







would otherwise be prohibited by this Section 7.1(c) are not taken under the direction of KKR
or any of its Affiliates (other than Non-Investor Affiliates) or any officer or general partner of
KKR or any of its Affiliates (other than Non-Investor Affiliates) and if Confidential Information
is not made available to such Non-Investor Affiliates or their Representatives.



               (d) The restrictions set forth in this Section 7.1 shall be in addition to the applicable
transfer restrictions or other requirements set forth in the Indenture and the Purchasers
acknowledge and agree to be bound thereby.



               (e) No Bank Purchaser shall Transfer any of the Securities except pursuant to a written
instruction by the KKR Purchaser (which shall include settlement elections under the Swap
Agreements) (a “Transfer Instruction”) or pursuant to a Bank Purchaser Transfer Event or to an
Affiliate of such Bank Purchaser. The KKR Purchaser shall not issue or deliver a Transfer
Instruction to a Bank Purchaser with respect to any Transfer that would, as to timing, manner of
sale or otherwise, not be permitted to be made by KKR or its Affiliates at such time pursuant to
this Section 7.1 and will promptly notify the Company of any delivery of a Transfer Instruction to
a Bank Purchaser and the terms thereof; provided that nothing in this Section 7.1 shall be deemed
to prohibit or restrict the delivery of Notes by any Bank Purchaser to an Affiliated Entity at any
time in accordance with Section 7.1(a) hereof and the terms of the Swap Agreements.



               (f) No Bank Purchaser shall knowingly permit any Transfer of ownership of interests in any
Securities held in or through a brokerage account with such Bank Purchaser in violation of the
restrictions set forth in this Section 7.1 or the Indenture; provided, however, that each Bank
Purchaser may rely on written assurances from the KKR Purchaser that any such Transfer is in
compliance with this Section 7.1 and the Indenture. Each of the Purchasers acknowledges and agrees
that each Bank Purchaser shall promptly provide to the Company all information known to it
concerning the ownership of interests in the IAI Global Note (as defined in the Indenture) held in
or through any such account by the Sponsor Purchasers (or held by a Bank Purchaser pursuant to the
terms of any of the Swap Agreements or the Security Agreements) as the Company may reasonably
request and shall promptly provide all material information known to it concerning any transfers
thereof promptly following the occurrence of any such transfer (including providing copies of any
written assurances referred to in the first sentence of this Section 7.1(f)). Each of the
Purchasers agrees that it will provide the Company with all information known to it concerning
Beneficial Ownership in Securities of such Purchaser for its account as the Company may reasonably
request and will provide the Company with all material information known to it concerning any
Transfers thereof promptly following the occurrence of any such Transfer.



     8. Termination.



          8.1 Conditions of Termination. Notwithstanding anything to the contrary contained
herein, this Agreement may be terminated at any time before the Closing (a) by mutual consent of
the Company and the Sponsor Purchasers or (b) by either the Company, on the one hand, or the
Sponsors, on the other hand, if the Closing shall not have occurred on or prior to 5:00 p.m., New
York time, on the tenth day following the date hereof and the party or parties



 -  23 - 









 







seeking to terminate this Agreement pursuant to this Section 8.1(b) shall not have breached in
any material respect its or their obligations under this Agreement.



          8.2 Effect of Termination. In the event of any termination pursuant to Section 8.1
hereof, this Agreement shall become null and void and have no effect, with no liability on the part
of the Company or the Purchasers, or their directors, officers, agents or stockholders, with
respect to this Agreement, except for liability for any willful breach of this Agreement.



     9. Miscellaneous Provisions.



          9.1 Public Statements or Releases. Promptly following the execution and delivery of
this Agreement, the Company and the Sponsors shall issue a joint press release announcing the
execution of this Agreement and the Termination and Settlement Agreement, which press release shall
be issued pursuant to the terms of such Termination and Settlement Agreement. Except for the
issuance of the press release referred to in the preceding sentence, neither the Company nor any
Purchaser shall make any public announcement with respect to the existence or terms of this
Agreement or the transactions provided for herein without the prior approval of the other parties,
which shall not be unreasonably withheld or delayed. Notwithstanding the foregoing, nothing in
this Section 9.1 shall prevent any party from making any public announcement it considers necessary
in order to satisfy its obligations under the law or under the rules of any national securities
exchange.



          9.2 Interpretation. The words “hereof,” “herein” and “hereunder” and words of similar
import when used in this Agreement will refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section and subsection references are to this Agreement
unless otherwise specified. The headings in this Agreement are included for convenience of
reference only and will not limit or otherwise affect the meaning or interpretation of this
Agreement. Whenever the words “include,” “includes” or “including” are used in this Agreement,
they will be deemed to be followed by the words “without limitation.” The phrases “the date of
this Agreement,” “the date hereof” and terms of similar import, unless the context otherwise
requires, will be deemed to refer to the date set forth in the first paragraph of this Agreement.
The meanings given to terms defined herein will be equally applicable to both the singular and
plural forms of such terms. All matters to be agreed to by any party hereto must be agreed to in
writing by such party unless otherwise indicated herein. References to agreements, policies,
standards, guidelines or instruments, or to statutes or regulations, are to such agreements,
policies, standards, guidelines or instruments, or statutes or regulations, as amended or
supplemented from time to time (or to successors thereto).



          9.3 Notices. Any notices or other communications required or permitted to be given
hereunder shall be in writing and shall be deemed to be given when delivered in person or by
private courier with receipt, if telefaxed when verbal or email confirmation from the recipient is
received, or three (3) days after being deposited in the United States mail, first-class,
registered or certified, return receipt requested, with postage paid and,




	 	(a)	 	if to the Company, addressed as follows:




Harman International Industries, Incorporated

1101 Pennsylvania Avenue N.W.




 -  24 - 









 







Suite 1010, Washington D.C. 20004

Attention: Chief Executive Officer

Facsimile: (202) 393-2442



with copies to:



Jones Day

222 East 41st Street

New York, NY 10017

Attention: Robert A. Profusek, Esq.

Facsimile: (212) 755-7306



and



Wachtell, Lipton, Rosen & Katz

51 West 52nd Street

New York, New York 10019-6150

Attention: Joshua R. Cammaker, Esq.

Facsimile: (212) 403-2000





	 	(b)	 	if to any Purchaser, addressed as set forth in Exhibit A for such Purchaser with a
copy to:




Simpson Thacher & Bartlett LLP

425 Lexington Ave.

New York, NY 10017

Attention: David J. Sorkin, Esq.

Facsimile: (212) 455-2502





	 	(c)	 	if to Sponsors, addressed as follows:




Kohlberg Kravis Roberts & Co. L.P.

9 West 57th Street

New York, NY 10019

Attention: Christopher Lee

Facsimile: (212) 750-0003



and



GS Capital Partners VI Fund, L.P.

GS Capital Partners VI Parallel, L.P.

GS Capital Partners VI Offshore Fund, L.P.

GS Capital Partners VI GmbH & Co. KG

85 Broad Street

New York, NY 10004

Attention: John Bowman

     Ben Adler

Facsimile: (212) 357-5505



with a copy to:



Simpson Thacher & Bartlett LLP




 -  25 - 









 







425 Lexington Ave.

New York, NY 10017

Attention: David J. Sorkin, Esq.

Facsimile: (212) 455-2502



Any Person may change the address to which notices and communications to it are to be addressed by
notification as provided for herein.




          9.4 Severability. If any part or provision of this Agreement is held unenforceable or
in conflict with the applicable laws or regulations of any jurisdiction, the invalid or
unenforceable part or provisions shall be replaced with a provision which accomplishes, to the
extent possible, the original business purpose of such part or provision in a valid and enforceable
manner, and the remainder of this Agreement shall remain binding upon the parties hereto.



          9.5 Governing Law.



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



               (b) The Company and each of the Purchasers hereby irrevocably and unconditionally:



                    (i) submits for itself and its property in any legal action or proceeding relating solely to
this Agreement or the transactions contemplated hereby, to the general jurisdiction of any state or
federal court sitting in the Borough of Manhattan of The City of New York;



                    (ii) consents that any such action or proceeding may be brought in such courts, and waives any
objection that it may now or hereafter have to the venue of any such action or proceeding in any
such court or that such action or proceeding was brought in an inconvenient court and agrees not to
plead or claim the same to the extent permitted by applicable law;



                    (iii) agrees that service of process in any such action or proceeding may be effected by
mailing a copy thereof by registered or certified mail (or any substantially similar form of mail),
postage prepaid, to the party, as the case may be, at its address set forth in Section 9.3 or at
such other address of which the other party shall have been notified pursuant thereto;



                    (iv) agrees that nothing herein shall affect the right to effect service of process in any
other manner permitted by law or shall limit the right to sue in any other jurisdiction for
recognition and enforcement of any judgment or if jurisdiction in the courts referenced in the
foregoing clause (i) are not available despite the intentions of the parties hereto;



                    (v) agrees that final judgment in any such suit, action or proceeding brought in such a court
may be enforced in the courts of any jurisdiction to which



 -  26 - 









 







such party is subject by a suit upon such judgment, provided that service of process is
effected upon such party in the manner specified herein or as otherwise permitted by Law;



                    (vi) agrees that to the extent that such party has or hereafter
may acquire any immunity from
jurisdiction of any court or from any legal process with respect to itself or its property, such
party hereby irrevocably waives such immunity in respect of its obligations under this Agreement,
to the extent permitted by law; and



                    (vii) irrevocably and unconditionally waives trial by jury in any
legal action or proceeding
in relation to this Agreement.



          9.6 Waiver. No waiver of any term, provision or condition of this Agreement, whether
by conduct or otherwise, in any one or more instances, shall be deemed to be, or be construed as, a
further or continuing waiver of any such term, provision or condition or as a waiver of any other
term, provision or condition of this Agreement.




          9.7 Expenses; Indemnification.




               (a) Each of the Company and the Purchasers shall be responsible for their own expenses
incurred in connection with the proposed investment by Sponsors and their Affiliates in the
Company.



               (b) The Company agrees to hold harmless and indemnify each Purchaser and such Purchaser’s
Affiliates and any officer, director, partner, employee or agent of such Purchaser or such
Purchaser’s Affiliates and any Person controlling such Purchaser or such Purchaser’s Affiliates
(collectively, the “Indemnified Persons”) from and against any and all losses, claims, damages,
liabilities and expenses (each a “Loss” and collectively, the “Losses”) whatsoever (including
reasonable expenses incurred in preparing or defending against any litigation or proceeding,
commenced or threatened, or any claims whatsoever whether or not resulting in any liability)
imposed on or incurred by any Indemnified Person, to the extent that such Loss results from any
claim or cause of action brought by or on behalf of a Company stockholder alleging that the
execution, delivery or performance of this Agreement or the Termination and Settlement Agreement
breaches the fiduciary duties of the Company’s directors, or that any Indemnified Person induced
any such breach of fiduciary duty or was an aider and abettor or conspirator or otherwise
responsible therefor; provided that the foregoing indemnity as to any Indemnified Person shall not
extend to any Loss resulting from or arising out of or which would not have occurred but for one or
more of the following: (i) any representation or warranty by such Indemnified Person in this
Agreement being incorrect in any material respect; (ii) the failure by such Indemnified Person to
perform or observe any agreement, covenant or condition in this Agreement or any of the Transaction
Agreements applicable to it (except to the extent such failure was caused directly by the failure
of the Company to perform any obligation under this Agreement or any of the Transaction
Agreements); or (iii) the willful misconduct or the gross negligence of such Indemnified Person (or
any of its Affiliates), other than any Loss arising out of or resulting from actions performed at
the request of, with the consent of, or in conformity with actions taken or omitted to be taken by,
the Company.



 -  27 - 









 





          9.8 Assignment. Except for the assumption of obligations of a transferee pursuant to
a Permitted Transfer or pursuant to the proviso contained in Section 6.1, none of the parties may
assign its rights or obligations under this Agreement or designate another person (i) to perform
all or part of its obligations under this Agreement or (ii) to have all or part of its rights and
benefits under this Agreement, in each case without the prior written consent of the (x) Company
and (y) Sponsors. In the event of any assignment in accordance with the terms of this Agreement,
the assignee shall specifically assume and be bound by the provisions of the Agreement by executing
a writing agreeing to be bound by and subject to the provisions of this Agreement and shall deliver
an executed counterpart signature page to this Agreement and, notwithstanding such assumption or
agreement to be bound hereby by an assignee, no such assignment shall relieve any party assigning
any interest hereunder from its obligations or liability pursuant to this Agreement.




          9.9 Confidential Information. The Purchasers acknowledge that they have been, and
from time to time hereafter, may be given, access to non-public, proprietary information with
respect to the Company (“Confidential Information”). For purposes hereof, for any Purchaser,
Confidential Information does not include, however, (i) information which is or becomes generally
available to the public in accordance with law other than as a result of a disclosure by the
Purchaser or its directors, managing members, officers, employees, agents, legal counsel, financial
advisors, accounting representatives or potential funding sources (“Representatives”) or its
Affiliates, subsidiaries or franchisees in violation of this Section 9.9 or any other
confidentiality agreement to which the Company is a party or beneficiary, (ii) is, or becomes,
available to the Purchasers on a non-confidential basis from a source other than the Company or any
of its Affiliates or any of its Representatives, provided, that such source was not known to the
Purchasers (after reasonable investigation) to be bound by a confidentiality agreement with, or any
other contractual, fiduciary or other legal obligation of confidentiality to, the Company or any of
its Subsidiaries or any of its representatives, (iii) is already in the Purchasers’ possession
(other than information furnished by or on behalf of the Company or directors, officers, employees,
representatives and/or agents of the Company, or (iv) is independently developed by the Purchasers
without violating any of the confidentiality terms herein. Each Purchaser agrees (i) except as
required by law (including any stock exchange rule or similar requirement) or legal process, to
keep all Confidential Information confidential and not to disclose or reveal any such Confidential
Information to any person other than those of its Representatives who need to know the Confidential
Information for the purpose of evaluating, monitoring or taking any other action with respect to
the investment by the Purchaser in the Notes (or the Common Stock into which the Notes are
convertible) and to cause those Representatives to observe the terms of this Section 9.9 and (ii)
not to use Confidential Information for any purpose other than in connection with evaluating,
monitoring or taking any other action with respect to the investment by the Purchaser in the Notes
(or the Common Stock into which the Notes are convertible). For the avoidance of doubt, all
information received by the Sponsors prior to the date hereof that is “Evaluation Material” under
the terms of that certain confidentiality agreement, dated as of February 9, 2007, by and between
KKR and the Company, as the same may be amended or modified from time to time, including pursuant
to the following sentence of this Section 9.9 (the “Confidentiality Agreement”), shall be deemed
Confidential Information for purposes of this Section 9.9. The Company and KKR hereby agree that
the Confidentiality Agreement is hereby amended to delete in its entirety numbered paragraph 7 of
such Confidentiality Agreement.




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          9.10 Third Parties. This Agreement does not create any rights, claims or benefits
inuring to any Person that is not a party hereto nor create or establish any third party
beneficiary hereto.




          9.11 Counterparts. This Agreement may be signed in any number of counterparts, each
of which shall be an original, but all of which together shall constitute one instrument.




          9.12 Entire Agreement; Amendments. This Agreement, the Registration Rights Agreement,
the Termination and Settlement Agreement and the Confidentiality Agreement, constitute the entire
agreement between the parties hereto respecting the subject matter hereof and supersedes all prior
agreements, negotiations, understandings, representations and statements respecting the subject
matter hereof, whether written or oral. No modification, alteration, waiver or change in any of
the terms of this Agreement shall be valid or binding upon the parties hereto unless made in
writing and duly executed by the parties hereto; provided that, notwithstanding the foregoing, this
Agreement may be amended from time to time without the consent of any other party to include a
transferee in a Permitted Transfer as a party and a signatory hereto pursuant to Article 7 of this
Agreement.




          9.13 Survival. The representations and warranties contained in this Agreement shall
terminate upon the first to occur of the Closing or the termination of this Agreement pursuant to
Section 8.1 hereof.




[Remainder of the Page Intentionally Left Blank]




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



	 	 	 	 	 
	 	HARMAN INTERNATIONAL INDUSTRIES, INCORPORATED

 	 
	 	By: 	 /s/ Sidney Harman	 
	 	 	Name: Sidney Harman	 	 
	 	 	Title: Executive Chairman	 	 
	 



[Signature Page-Note Purchase Agreement]




 









 








	 	 	 	 	 	 	 	 	 
	 	 	PURCHASERS:	 	 
	 	 	KKR I-H LIMITED	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Brian F. Carroll	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	Brian F. Carroll	 
	 	 	 	 	Title:	Director	 
	 
	 	 	 	 	 	 	 	 
	 	 	GS CAPITAL PARTNERS VI PARALLEL, L.P.	 	 
	 

	 	 	 	By:
	 	GS Advisors VI, L.L.C., its General
Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Katherine B. Enquist	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	Katherine B. Enquist	 
	 	 	 	 	Title:	Managing Director	 
	 
	 	 	 	 	 	 	 	 
	 	 	GS CAPITAL PARTNERS VI GMBH & CO. KG	 	 
	 

	 	 	 	By:
	 	GS Advisors VI, L.L.C., its Managing
Limited Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Katherine B. Enquist	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	Katherine B. Enquist	 
	 	 	 	 	Title:	Managing Director	 
	 
	 	 	 	 	 	 	 	 
	 	 	GS CAPITAL PARTNERS VI FUND, L.P.	 	 
	 

	 	 	 	By:
	 	GS Advisors VI, L.L.C., its General
Partner	 	 
	 
	 	 	 	 	 	 	 	 
	 

	 	By:	 	/s/ Katherine B. Enquist	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	Katherine B. Enquist	 
	 	 	 	 	Title:	Managing Director	 
	 
	 	 	 	 	 	 	 	 
	 	 	GS CAPITAL PARTNERS VI OFFSHORE FUND, L.P.	 	 
	 

	 	 	 	By:
	 	GS VI Offshore Advisors, L.L.C., its
General Partner	 	 
	 
	 

	 	By:	 	/s/ Katherine B. Enquist	 	 
	 	 	 	 	 	 	 
	 	 	 	 	Name:	Katherine B. Enquist	 
	 	 	 	 	Title:	Managing Director	 






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	 	CITIBANK, N.A.

 	 
	 	By:  	/s/
Herman Hirsch	 
	 	 	Name:  	Herman Hirsch	 
	 	 	Title:  	Authorized Representative	 
	 



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	 	HSBC USA, INC.

 	 
	 	By:  	/s/ Albert Yu	 
	 	 	Name:  	Albert Yu	 
	 	 	Title:  	Managing Director	 
	 



[Signature Page-Note Purchase Agreement]


 









 









	 	 	 	 	 	 	 
	 	 	KKR:	 	 
	 	 	SOLELY FOR PURPOSES OF ARTICLE 1, 

SECTIONS 4.6, 5.5, 5.6 AND 7.1 AND ARTICLE 9 HEREOF,	 	 
	 
	 	 	 	 	 	 
	 	 	KOHLBERG KRAVIS ROBERTS & CO. L.P.	 	 
	 	 	  By: KKR & Co LLC	 	 
	 
	 	 	 	 	 	 
	 

	 	By:	 	/s/ Brian F. Carroll	 	 
	 

	 	 	 	 	 	 
	 

	 	 	 	Name: Brian F. Carroll	 	 
	 

	 	 	 	Title: Member	 	 






[Signature Page-Note Purchase Agreement]




 









 





EXHIBIT A




Purchasers




	 	 	 	 	 
	 	 	Principal Amount	 
	Purchaser Name and Address	 	of Notes to be Purchased	 
	KKR I-H Limited
	 	$	171,428,000.00	 
	Kohlberg Kravis Roberts & Co. L.P.

9 West 57th Street 

New York, NY 10019

Attention: Christopher Lee 

Facsimile: (212) 750-0003
	 	 	 	 
	 
	 	 	 	 
	GS Capital Partners VI Fund, L.P.
	 	$	26,674,000.00	 
	85 Broad Street 

New York, NY 10004

Attention: John Bowman and Ben Adler

Facsimile: (212) 357-5505
	 	 	 	 
	 
	 	 	 	 
	GS Capital Partners VI Parallel, L.P.
	 	$	7,335,000.00	 
	85 Broad Street 

New York, NY 10004

Attention: John Bowman and Ben Adler 

Facsimile: (212) 357-5505
	 	 	 	 
	 
	 	 	 	 
	GS Capital Partners VI Offshore Fund, L.P.
	 	$	22,187,000.00	 
	85 Broad Street 

New York, NY 10004

Attention: John Bowman and Ben Adler 

Facsimile: (212) 357-5505
	 	 	 	 
	 
	 	 	 	 
	GS Capital Partners VI Gmbh & Co. KG
	 	$	948,000.00	 
	85 Broad Street 

New York, NY 10004

Attention: John Bowman and Ben Adler

Facsimile: (212) 357-5505
	 	 	 	 
	 
	 	 	 	 
	Citibank, N.A
	 	$	85,714,000.00	 
	333 West 34th Street, 2nd Floor 

New York, NY 10001

Attention: Confirmations Unit

Facsimile: (212) 615-8985
	 	 	 	 
	 
	 	 	 	 
	HSBC USA, Inc.
	 	$	85,714,000.00	 
	                    

                    

Attention:                     

Facsimile:                     
	 	 	 	 
	TOTAL
	 	$	400,000,000.00