cix10k12312009_exh109.htm


    
      


      


      
        

        

      

      


      


      CREDIT
AGREEMENT

      


      dated as
of December 23, 2005

      


      by and
among

      


      COMPX
INTERNATIONAL INC.

      as
Borrower,

      


      the
Lenders referred to herein,

      as
Lenders,

      


      and

      


      WACHOVIA
BANK, NATIONAL ASSOCIATION,

      as
Administrative Agent

      


      


      WACHOVIA
SECURITIES, INC.,

      as Sole
Lead Arranger and Sole Book Manager

       

      
 

      


      


      
        

        

      

    

     

     

    
       

       

      


      
        
          
            
               
 

              


              WINSTON
1636051v7

            

             


          

          
             


            
              

            

          

          
             


          

        

      

      


      TABLE OF
CONTENTS

      


      Page                 


      
        
          	
                  ARTICLE
      I  DEFINITIONS

                	
                  1

                
	
                  SECTION
      1.1                              Definitions

                	
                  1

                
	
                  SECTION
      1.2                              General

                	
                  19

                
	
                  SECTION
      1.3                              Effectiveness
      of Euro Provisions

                	
                  19

                
	
                  SECTION
      1.4                              Other
      Definitions and Provisions

                	
                  19

                
	 
      	 
      
	
                  ARTICLE
      II  REVOLVING CREDIT FACILITY

                	
                  19

                
	
                  SECTION
      2.1                              Revolving
      Credit Loans

                	
                  19

                
	
                  SECTION
      2.2                              Alternative
      Currency Loans

                	
                  20

                
	
                  SECTION
      2.3                              Swingline
      Loans

                	
                  22

                
	
                  SECTION
      2.4                              Procedure
      for Advances of Revolving Credit Loans, Alternative   Currency
      Loans and Swingline Loans

                	
                  24

                
	
                  SECTION
      2.5                              Repayment
      of Loans

                	
                  26

                
	
                  SECTION
      2.6                              Notes

                	
                  28

                
	
                  SECTION
      2.7                              Permanent
      Reduction of the Aggregate Commitment and the   Alternative
      Currency Commitment

                	
                  28

                
	
                  SECTION
      2.8                              Termination
      of Credit Facility

                	
                  29

                
	 
      	 
      
	
                  ARTICLE
      III  LETTER OF CREDIT FACILITY

                	
                  29

                
	
                  SECTION
      3.1                              L/C
      Commitment

                	
                  29

                
	
                  SECTION
      3.2                              Procedure
      for Issuance of Letters of Credit

                	
                  30

                
	
                  SECTION
      3.3                              Commissions
      and Other Charges

                	
                  30

                
	
                  SECTION
      3.4                              L/C
      Participations

                	
                  31

                
	
                  SECTION
      3.5                              Reimbursement
      Obligation of the Borrower

                	
                  32

                
	
                  SECTION
      3.6                              Obligations
      Absolute

                	
                  32

                
	
                  SECTION
      3.7                              Effect
      of Application

                	
                  33

                
	 
      	 
      
	
                  ARTICLE
      IV  GENERAL LOAN PROVISIONS

                	
                  33

                
	
                  SECTION
      4.1                              Interest

                	
                  33

                
	
                  SECTION
      4.2                              Notice
      and Manner of Conversion or Continuation of Loans

                	
                  36

                
	
                  SECTION
      4.3                              Fees

                	
                  37

                
	
                  SECTION
      4.4                              Manner
      of Payment

                	
                  38

                
	
                  SECTION
      4.5                              Crediting
      of Payments and Proceeds

                	
                  39

                
	
                  SECTION
      4.6                              Adjustments

                	
                  39

                
	
                  SECTION
      4.7                              Nature
      of Obligations of Lenders Regarding Extensions of Credit; Assumption by
      the Administrative Agent

                	
                  39

                
	
                  SECTION
      4.8.                             Redenomination
      of Alternative Currency Loans

                	
                  40

                
	
                  SECTION
      4.9.                             Regulatory
      Limitation

                	
                  41

                
	
                  SECTION
      4.10                            Changed
      Circumstances

                	
                  41

                
	
                  SECTION
      4.11                            Indemnity

                	
                  44

                
	
                  SECTION
      4.12                            Capital
      Requirements

                	
                  44

                
	
                  SECTION
      4.13                            Taxes

                	
                  45

                
	
                  SECTION
      4.14.                           Other
      Consequential Changes

                	
                  46

                
	
                  SECTION
      4.15.                           Replacement
      of Lenders

                	
                  47

                
	
                  SECTION
      4.16.                           Security

                	
                  47

                
	 
      	 
      
	
                  ARTICLE
      V  CLOSING; CONDITIONS OF CLOSING AND BORROWING

                	
                  48

                
	
                  SECTION
      5.1                              Closing

                	
                  48

                
	
                  SECTION
      5.2                              Conditions
      to Closing and Initial Extensions of Credit

                	
                  48

                
	
                  SECTION
      5.3                              Conditions
      to All Extensions of Credit

                	
                  51

                
	 
      	 
      
	
                  ARTICLE
      VI  REPRESENTATIONS AND WARRANTIES OF THE
    BORROWER

                	
                  52

                
	
                  SECTION
      6.1                              Representations
      and Warranties

                	
                  52

                
	
                  SECTION
      6.2                              Survival
      of Representations and Warranties, Etc

                	
                  57

                
	 
      	 
      
	
                  ARTICLE
      VII  FINANCIAL INFORMATION AND NOTICES

                	
                  57

                
	
                  SECTION
      7.1                              Financial
      Statements and Projections

                	
                  57

                
	
                  SECTION
      7.2                              Officer’s
      Compliance Certificate

                	
                  58

                
	
                  SECTION
      7.3                              Other
      Reports

                	
                  58

                
	
                  SECTION
      7.4                              Notices

                	
                  58

                
	
                  SECTION
      7.5                              Accuracy
      of Information

                	
                  58

                
	 
      	 
      
	
                  ARTICLE
      VIII  AFFIRMATIVE COVENANTS

                	
                  58

                
	
                  SECTION
      8.1                              Preservation
      of Corporate Existence and Related Matters

                	
                  59

                
	
                  SECTION
      8.2                              Maintenance
      of Property

                	
                  59

                
	
                  SECTION
      8.3                              Insurance

                	
                  59

                
	
                  SECTION
      8.4                              Accounting
      Methods and Financial Records

                	
                  59

                
	
                  SECTION
      8.5                              Payment
      and Performance of Obligations

                	
                  59

                
	
                  SECTION
      8.6                              Compliance
      With Laws and Approvals

                	
                  59

                
	
                  SECTION
      8.7                              ERISA

                	
                  59

                
	
                  SECTION
      8.8                              Compliance
      With Agreements

                	
                  60

                
	
                  SECTION
      8.9                              Visits
      and Inspections

                	
                  60

                
	
                  SECTION
      8.10                            Additional
      Subsidiaries and Additional Collateral

                	
                  60

                
	
                  SECTION
      8.11                            Use
      of Proceeds

                	
                  60

                
	
                  SECTION
      8.12                             Burdensome
      Provisions

                	
                  61

                
	
                  SECTION
      8.13                             Titles
      to Properties

                	
                  61

                
	
                  SECTION
      8.14                             Senior
      Debt Status

                	
                  61

                
	
                  SECTION
      8.15                             Further
      Assurances

                	
                  61

                
	 
      	 
      
	
                  ARTICLE
      IX  FINANCIAL COVENANTS

                	
                  61

                
	
                  SECTION
      9.1                              Leverage
      Ratio

                	
                  61

                
	
                  SECTION
      9.2                              Consolidated
      Net Worth

                	
                  61

                
	
                  SECTION
      9.3                              Interest
      Coverage Ratio

                	
                  61

                
	
                  SECTION
      9.4                              Capital
      Expenditures

                	
                  62

                
	 
      	 
      
	
                  ARTICLE
      X  NEGATIVE COVENANTS

                	
                  62

                
	
                  SECTION
      10.1                              Limitations
      on Debt

                	
                  62

                
	
                  SECTION
      10.2                              Limitations
      on Liens

                	
                  63

                
	
                  SECTION
      10.3                              Limitations
      on Loans, Advances, Investments and Acquisitions

                	
                  64

                
	
                  SECTION
      10.4                              Limitations
      on Mergers and Liquidation

                	
                  66

                
	
                  SECTION
      10.5                              Limitations
      on Sale of Assets

                	
                  67

                
	
                  SECTION
      10.6                              Limitations
      on Dividends and Distributions

                	
                  68

                
	
                  SECTION
      10.7                              Limitations
      on Exchange and Issuance of Capital Stock

                	
                  68

                
	
                  SECTION
      10.8                              Transactions
      with Affiliates

                	
                  68

                
	
                  SECTION
      10.9                              Certain
      Accounting Changes; Organizational Documents

                	
                  69

                
	
                  SECTION
      10.10                            Amendments;
      Payments and Prepayments of Subordinated Debt

                	
                  69

                
	
                  SECTION
      10.11                            Restrictive
      Agreements

                	
                  69

                
	
                  SECTION
      10.12                            Nature
      of Business

                	
                  69

                
	
                  SECTION
      10.13                            Impairment
      of Security Interests

                	
                  69

                
	
                  SECTION
      10.14                            Subsidiaries

                	
                  69

                
	 
      	 
      
	
                  ARTICLE
      XI  DEFAULT AND REMEDIES

                	
                  70

                
	
                  SECTION
      11.1                             Events
      of Default

                	
                  70

                
	
                  SECTION
      11.2                             Remedies

                	
                  72

                
	
                  SECTION
      11.3                             Rights
      and Remedies Cumulative; Non-Waiver; etc

                	
                  73

                
	
                  SECTION
      11.4                             Judgment
      Currency

                	
                  73

                
	 
      	 
      
	
                  ARTICLE
      XII  THE ADMINISTRATIVE AGENT

                	
                  74

                
	
                  SECTION
      12.1                             Appointment

                	
                  74

                
	
                  SECTION
      12.2                             Delegation
      of Duties

                	
                  74

                
	
                  SECTION
      12.3                             Exculpatory
      Provisions

                	
                  74

                
	
                  SECTION
      12.4                             Reliance
      by the Administrative Agent

                	
                  75

                
	
                  SECTION
      12.5                             Notice
      of Default

                	
                  75

                
	
                  SECTION
      12.6                             Non-Reliance
      on the Administrative Agent and Other Lenders

                	
                  75

                
	
                  SECTION
      12.7                             Indemnification

                	
                  76

                
	
                  SECTION
      12.8                             The
      Administrative Agent in Its Individual Capacity

                	
                  76

                
	
                  SECTION
      12.9                             Resignation
      of the Administrative Agent; Successor Administrative
Agent

                	
                  77

                
	
                  SECTION
      12.10                           Administrative
      Agent May File Proofs of Claim

                	
                  77

                
	 
      	 
      
	
                  ARTICLE
      XIII  MISCELLANEOUS

                	
                  78

                
	
                  SECTION
      13.1                             Notices

                	
                  78

                
	
                  SECTION
      13.2                             Expenses;
      Indemnity

                	
                  79

                
	
                  SECTION
      13.3                             Set-off

                	
                  80

                
	
                  SECTION
      13.4                             Governing
      Law

                	
                  80

                
	
                  SECTION
      13.5                             Jurisdiction
      and Venue

                	
                  80

                
	
                  SECTION
      13.6                             Binding
      Arbitration; Waiver of Jury Trial

                	
                  81

                
	
                  SECTION
      13.7                             Reversal
      of Payments

                	
                  82

                
	
                  SECTION
      13.8                             Injunctive
      Relief; Punitive Damages

                	
                  82

                
	
                  SECTION
      13.9                             Accounting
      Matters

                	
                  82

                
	
                  SECTION
      13.10                           Successors
      and Assigns; Participations

                	
                  83

                
	
                  SECTION
      13.11                          Amendments,
      Waivers and Consents

                	
                  86

                
	
                  SECTION
      13.12                          Performance
      of Duties

                	
                  87

                
	
                  SECTION
      13.13                          All
      Powers Coupled with Interest

                	
                  87

                
	
                  SECTION
      13.14                          Survival
      of Indemnities

                	
                  87

                
	
                  SECTION
      13.15                         Titles
      and Captions

                	
                  87

                
	
                  SECTION
      13.16                         Severability
      of Provisions

                	
                  87

                
	
                  SECTION
      13.17                         Counterparts

                	
                  88

                
	
                  SECTION
      13.18                         Term
      of Agreement

                	
                  88

                
	
                  SECTION
      13.19                         Advice
      of Counsel

                	
                  88

                
	
                  SECTION
      13.20                         No
      Strict Construction

                	
                  88

                
	
                  SECTION
      13.21                         Inconsistencies
      with Other Documents; Independent Effect of Covenants

                	
                  88

                
	
                  SECTION
      13.22                         Continuity
      of Contract

                	
                  88

                
	
                  SECTION
      13.23                         Release
      of Collateral

                	
                  89

                


        

        




       

      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

      


      EXHIBITS AND
SCHEDULES

      


      EXHIBITS

      


      

        
          	
                   
      

                	
                  Exhibit
      A-1

                	
                  -

                	
                  Form
      of Revolving Credit Note

                


        

        
          	
                   
      

                	
                  Exhibit
      A-2

                	
                  -

                	
                  Form
      of Swingline Note

                


        

        
          	
                   
      

                	
                  Exhibit
      A-3

                	
                  -

                	
                  Form
      of Alternative Currency Note

                


        

        
          	
                   
      

                	
                  Exhibit
      B

                	
                  -

                	
                  Form
      of Notice of Borrowing

                


        

        
          	
                   
      

                	
                  Exhibit
      C

                	
                  -

                	
                  Form
      of Notice of Account Designation

                


        

        
          	
                   
      

                	
                  Exhibit
      D

                	
                  -

                	
                  Form
      of Notice of Prepayment

                


        

        
          	
                   
      

                	
                  Exhibit
      E

                	
                  -

                	
                  Form
      of Notice of
Conversion/Continuation

                


        

        
          	
                   
      

                	
                  Exhibit
      F

                	
                  -

                	
                  Form
      of Officer’s Compliance Certificate

                


        

        
          	
                   
      

                	
                  Exhibit
      G

                	
                  -

                	
                  Form
      of Assignment and Acceptance

                


        

        
          	
                   
      

                	
                  Exhibit
      H

                	
                  -

                	
                  Form
      of Subsidiary Guaranty Agreement

                


        

        
          	
                   
      

                	
                  Exhibit
      I

                	
                  -

                	
                  Form
      of Collateral Agreement

                


        

        
          	
                   
      

                	
                  Exhibit
      J

                	
                  -

                	
                  Form
      of Joinder Agreement

                


        

      

      


      SCHEDULES

       

      
        
          	
                   
      

                	
                  Schedule
      1.1(a)

                	
                  -

                	
                  Lenders
      and Commitments

                


        

        
          	
                   
      

                	
                  Schedule
      1.1(b)

                	
                  -

                	
                  Mandatory
      Cost Rate

                


        

        
          	
                   
      

                	
                  Schedule
      1.1(c)

                	
                  -

                	
                  Existing
      Bond Documentation

                


        

        
          	
                   
      

                	
                  Schedule
      6.1(a)

                	
                  -

                	
                  Jurisdictions
      of Organization and Qualification

                


        

        
          	
                   
      

                	
                  Schedule
      6.1(b)

                	
                  -

                	
                  Subsidiaries
      and Capitalization

                


        

        
          	
                   
      

                	
                  Schedule
      6.1(i)

                	
                  -

                	
                  ERISA
      Plans

                


        

        
          	
                   
      

                	
                  Schedule
      6.1(l)

                	
                  -

                	
                  Labor
      and Collective Bargaining
Agreements

                


        

        
          	
                   
      

                	
                  Schedule
      6.1(q)

                	
                  -

                	
                  Debt
      and Guaranty Obligations

                


        

        
          	
                   
      

                	
                  Schedule
      6.1(r)

                	
                  -

                	
                  Litigation

                


        

        
          	
                   
      

                	
                  Schedule
      10.2

                	
                  -

                	
                  Existing
      Liens

                


        

        
          	
                   
      

                	
                  Schedule
      10.3

                	
                  -

                	
                  Existing
      Loans, Advances and Investments

                


        

        
          	
                   
      

                	
                  Schedule
      10.8

                	
                  -

                	
                  Transactions
      with Affiliates

                


        




      


      
        
          
             


          

          
             


            
              

            

          

          
             


          

        

      

    

     

    CREDIT
AGREEMENT

    


    


    CREDIT
AGREEMENT, dated as of the 23rd day of December, 2005 by and among COMPX
INTERNATIONAL INC., a corporation organized under the laws of Delaware (the
“Borrower”),
the lenders who are or may become a party to this Agreement, as Lenders (the
“Lenders”), and
WACHOVIA BANK, NATIONAL ASSOCIATION, a national banking association, as
Administrative Agent for the Lenders (the “Administrative
Agent”).

     

    STATEMENT OF
PURPOSE

    


    The
Lenders have extended certain credit facilities to the Borrower pursuant to the
Credit Agreement dated as of January 22, 2003, by and among the Borrower, the
Lenders and the Administrative Agent (as amended by (i) the First Amendment to
Credit Agreement dated  as of October 20, 2003, (ii) the Second
Amendment to Credit Agreement, Waiver and Release of European Investment
Collateral dated January 7, 2005, and (iii) the Third Amendment to Credit
Agreement dated October 31, 2005, collectively the “Existing Credit
Agreement”).

     

    The
Borrower has requested, and the Lenders have agreed, to terminate and replace
the existing credit facilities provided under the Existing Credit Agreement,
with the credit facilities extended to the Borrower on the terms and conditions
of this Agreement.

     

    NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, such parties hereby agree
as follows:

     

    ARTICLE
I

    


    DEFINITIONS

    


    SECTION
1.1                                           Definitions.  The
following terms when used in this Agreement shall have the meanings assigned to
them below:

     

    “Administrative Agent”
means Wachovia in its capacity as Administrative Agent hereunder, and any
successor thereto appointed pursuant to Section 12.9.

     

    “Administrative Agent’s
Correspondent” means Wachovia Bank, National Association, London Branch,
or any other financial institution designated by the Administrative Agent to act
as its correspondent hereunder with respect to the distribution and payment of
Alternative Currency Loans.

     

    “Administrative Agent’s
Office” means the office of the Administrative Agent specified in or
determined in accordance with the provisions of Section 13.1(c).

     

    “Affiliate” means,
with respect to any Person, any other Person (other than a Subsidiary of the
Borrower) which directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such first
Person or any of its Subsidiaries.  The term “control” means
(a) the power to vote ten percent (10%) or more of the securities or other
equity interests of a Person having ordinary voting power, or (b) the
possession, directly or indirectly, of any other power to direct or cause the
direction of the management and policies of a Person, whether through ownership
of voting securities, by contract or otherwise.

     

    “Aggregate Commitment”
means the aggregate amount of the Lenders’ Commitments hereunder, as such amount
may be increased, reduced or otherwise modified at any time or from time to time
pursuant to the terms hereof.  On the Closing Date, the Aggregate
Commitment shall be Fifty Million Dollars ($50,000,000).

     

    “Agreement” means this
Credit Agreement, as amended, restated, supplemented or otherwise modified from
time to time.

     

    “Alternative Currency”
means (i) the euro, (ii) the Canadian Dollar and (iii) with the prior written
consent of the Administrative Agent and the Lenders, any other lawful currency
(other than Dollars) which is freely transferable and convertible into Dollars
in the United States currency market and freely available to all of the Lenders
in the London interbank deposit market.

     

    “Alternative Currency
Amount” means with respect to each Loan made or continued (or to be made
or continued) in an Alternative Currency, the amount of such Alternative
Currency which is equivalent to the principal amount in Dollars of such Loan at
the most favorable spot exchange rate (to the Borrower) determined by the
Administrative Agent to be available to it at approximately 11:00 a.m.
(Charlotte time) two (2) Business Days before such Loan is made or continued (or
to be made or continued).  When used with respect to any other sum
expressed in Dollars, “Alternative Currency Amount” shall mean the amount of
such Alternative Currency which is equivalent to the amount so expressed in
Dollars at the most favorable spot exchange rate (to the Borrower) determined by
the Administrative Agent to be available to it at the relevant
time.

     

    “Alternative Currency
Commitment” means the lesser of (i) Ten Million Dollars
($10,000,000) and (ii) the Aggregate Commitment, as such amount may be reduced
or modified at any time or from time to time pursuant to the terms
hereof.

     

    “Alternative Currency
Facility” means the alternative currency facility established pursuant to
Section 2.2.

     

    “Alternative Currency
Lender” means Wachovia, in its capacity as alternative currency lender
hereunder.

     

    “Alternative Currency
Loan” means any revolving credit loan denominated in an Alternative
Currency made by the Alternative Currency Lender to the Borrower pursuant to
Section 2.2, and all such Alternative Currency Loans collectively as the context
requires.

     

    “Alternative Currency
Note” means the Alternative Currency Note made by the Borrower payable to
the order of the Alternative Currency Lender, substantially in the form of Exhibit A-3 hereto,
evidencing the Alternative Currency Loans, and any amendments, supplements and
modifications thereto, any substitutes therefor and any replacements,
restatements, renewals or extensions thereof, in whole or in part.

     

    “Applicable Law” means
all applicable provisions of constitutions, laws, statutes, ordinances, rules,
treaties, regulations, permits, licenses, approvals, interpretations and orders
of courts or Governmental Authorities and all orders and decrees of all courts
and arbitrators.

     

    “Applicable Margin”
shall have the meaning assigned thereto in Section 4.1(c); provided, that with
respect to each LIBOR Rate Loan made in an Alternative Currency, the Applicable
Margin shall include the Mandatory Cost Rate, as determined pursuant to the
formula set forth on Schedule 1.1(b)
hereto.

     

    “Application” means an
application, in the form specified by the Issuing Lender from time to time,
requesting the Issuing Lender to issue a Letter of Credit.

     

    “Approved Fund” means
any Person (other than a natural Person), including, without limitation, any
special purpose entity, that is (or will be) engaged in making, purchasing,
holding or otherwise investing in commercial loans and similar extensions of
credit in the ordinary course of its business; provided, that with
respect to any assignment of any Commitment, such Approved Fund must be
administered by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or
an Affiliate of an entity that administers or manages a Lender.

     

    “Arbitration Rules”
shall have the meaning assigned thereto in Section 13.6(a).

     

    “Assignment and
Acceptance” shall have the meaning assigned thereto in
Section 13.10(b).

     

    “Available Commitment”
means, as to any Lender at any time, an amount equal to (a) such Lender’s
Commitment less
(b) such Lender’s Extensions of Credit.

     

    “Base Rate” means, at
any time, the higher of (a) the Prime Rate and (b) the Federal Funds Rate plus 1/2 of 1%; each
change in the Base Rate shall take effect simultaneously with the corresponding
change or changes in the Prime Rate or the Federal Funds Rate.

     

    “Base Rate Loan” means
any Loan bearing interest at a rate based upon the Base Rate as provided in
Section 4.1(a).

     

    “Benefited Lender”
shall have the meaning assigned thereto in Section 4.6.

     

    “Borrower” means CompX
International Inc., a corporation organized under the laws of Delaware, in its
capacity as borrower hereunder.

     

    “Business Day” means
(a) for all purposes other than as set forth in clause (b) below, any day (other
than a Saturday or Sunday) on which banks in Charlotte, North Carolina and New
York, New York, are open for the conduct of their domestic or international
commercial banking business, as applicable, and (b) with respect to all notices
and determinations in connection with, and payments of principal and interest
on, any LIBOR Rate Loan, any day (i) that is a Business Day described in clause
(a) and that is also a day for trading by and between banks in deposits for the
applicable Permitted Currency in the London interbank market and (ii) on which
banks are open for the conduct of their domestic and international banking
business in the place where the Administrative Agent or the Administrative
Agent’s Correspondent shall make available Loans in such Permitted
Currency.  Notwithstanding the foregoing, with respect to any amount
denominated or to be denominated in the euro, any reference to a “Business Day”
shall be construed as a reference to a day (other than a Saturday or Sunday) on
which banks are generally open for business in New York, New York and prime
banks in London generally provide quotations for deposits denominated in the
euro.

     

    “Calculation Date”
shall have the meaning assigned thereto in Section 4.1(c).

     

    “Canadian Dollar”
means, at any time of determination, the then official currency of
Canada.

     

    “Capital Expenditures”
means, with respect to the Borrower and its Subsidiaries for any period, the
aggregate amount of all expenditures of the Borrower and its Subsidiaries during
such period that, in conformity with GAAP, are included in “additions to
property, plant and equipment” or comparable items reflected in the consolidated
financial statements of the Borrower and its Subsidiaries.

     

    “Capital Lease” means
any lease of any property by the Borrower or any of its Subsidiaries, as lessee,
that should, in accordance with GAAP, be classified and accounted for as a
capital lease on a Consolidated balance sheet of the Borrower and its
Subsidiaries.

     

    “Change in Control”
shall have the meaning assigned thereto in Section 11.1(h).

     

    “Closing Date” means
the date of this Agreement or such later Business Day upon which each condition
described in Section 5.2 shall be satisfied or waived in all respects in a
manner acceptable to the Administrative Agent, in its sole
discretion.

     

    “Code” means the
Internal Revenue Code of 1986, and the rules and regulations thereunder, each as
amended or modified from time to time.

     

    “Collateral” means the
collateral security for the Obligations pledged or granted pursuant to the
Security Documents.

     

    “Collateral Agreement”
means the collateral agreement of even date executed by the Borrower and each of
the Subsidiary Guarantors and Borrower’s Wholly Owned Material Foreign
Subsidiaries in favor of the Administrative Agent, for the benefit of itself and
the Lenders, substantially in the form of Exhibit I, as
amended, restated, supplemented or otherwise modified from time to
time.

     

    “Commitment” means, as
to any Lender, the obligation of such Lender to make Loans (including, without
limitation, to participate in Swingline Loans and Alternative Currency Loans) to
the Borrower, and issue or participate in Letters of Credit issued for the
account of the Borrower, in an aggregate principal or face amount at any time
outstanding not to exceed the amount set forth opposite such Lender’s name on
Schedule 1.1(a)
hereto, as the same may be reduced or modified at any time or from time to time
pursuant to the terms hereof.

     

    “Commitment Fee Rate”
shall have the meaning assigned thereto in Section 4.3(a).

     

    “Commitment
Percentage” means, as to any Lender at any time, the ratio of (a) the
amount of the Commitment of such Lender to (b) the Aggregate Commitment of all
of the Lenders.

     

    “Consolidated” means,
when used with reference to financial statements or financial statement items of
the Borrower and its Subsidiaries, such statements or items on a consolidated
basis in accordance with applicable principles of consolidation under
GAAP.

     

    “Consolidated Net
Worth” means, with respect to the Borrower and its Subsidiaries, on any
date of determination, the total stockholders’ equity (including capital stock,
additional paid-in capital and retained earnings after deducting the treasury
stock) of the Borrower and its Subsidiaries appearing on a Consolidated balance
sheet of the Borrower and its Subsidiaries prepared in accordance with GAAP
(excluding on a cumulative basis any adjustments for foreign currency
translation).

     

    “Costs of Acquisition”
means, with respect to any Permitted Acquisition, as at the date of entering
into any agreement therefor, the sum of the following
(without duplication):  (i) the value of the capital stock, warrants
or options to acquire capital stock of the Borrower or any Subsidiary of the
Borrower to be transferred in connection therewith, (ii) the amount of any cash
and fair market value of other property (excluding property described in clause
(i) and the unpaid principal amount of any Debt instrument) given as
consideration, (iii) the amount (determined by using the face amount or the
amount payable at maturity, whichever is greater) of any Debt incurred, assumed
or acquired by the Borrower or any Subsidiary of the Borrower in connection with
such Permitted Acquisition, (iv) all additional purchase price amounts in the
form of  earnouts and other contingent obligations that should be
recorded on the financial statements of the Borrower and its Subsidiaries in
accordance with GAAP, (v) all amounts paid in respect of covenants not to
compete, consulting agreements that should be recorded on the financial
statements of the Borrower and its Subsidiaries in accordance with GAAP, and
other affiliated contracts in connection with such Permitted Acquisition, (vi)
the aggregate fair market value of all other consideration given by the Borrower
or any Subsidiary of the Borrower in connection with such Permitted Acquisition
recorded on the financial statements of the Borrower and its Subsidiaries in
accordance with GAAP, and (vii) out-of-pocket transaction costs for the services
and expenses of attorneys, accountants and other consultants incurred in
effecting such transaction, and other similar transaction costs so
incurred.  For purposes of determining the Cost of Acquisition for any
transaction, (A) the capital stock of the Borrower shall be valued (I) in the
case of capital stock that is then designated as a national market system
security by the National Association of Securities Dealers, Inc. (“NASDAQ”) or
is listed on a national securities exchange, the average of the last reported
bid and ask quotations or the last prices reported on, or immediately prior to,
the acquisition date and (II) with respect to any other shares of capital stock,
as reasonably determined by the Board of Directors of the Borrower, (B) the
capital stock of any Subsidiary shall be valued as reasonably determined by the
Board of Directors of such Subsidiary and (C) with respect to any Permitted
Acquisition accomplished pursuant to the exercise of options or warrants or the
conversion of securities, the Cost of Acquisition shall include both the cost of
acquiring such option, warrant or convertible security as well as the cost of
exercise or conversion.

     

    “Credit Facility”
means, collectively, the Revolving Credit Facility, the Swingline Facility, the
Alternative Currency Facility and the L/C Facility.

     

    “Debt” means, with
respect to the Borrower and its Subsidiaries at any date and without
duplication, the sum of the following calculated in accordance with
GAAP:  (a) all liabilities, obligations and indebtedness of any such
Person for borrowed money including but not limited to obligations evidenced by
bonds, debentures, notes or other similar instruments, (b) all obligations of
any such Person to pay a deferred purchase price for property or services (provided that “Debt”
shall not include trade payables and other accrued liabilities arising in the
ordinary course of business which are either (i) not more than ninety (90) days
past due or (ii) if more than ninety (90) days past due, being contested in good
faith by appropriate proceedings diligently conducted and for which adequate
reserves have been provided in accordance with GAAP), (c) all obligations of any
such Person as lessee under Capital Leases, (d) all Debt of any other Person
secured by a Lien on any asset of any such Person, (e) all Guaranty Obligations
of any such Person, (f) all obligations, contingent or otherwise, of any such
Person relative to the face amount of letters of credit, whether or not drawn,
including without limitation any Reimbursement Obligation, and banker’s
acceptances issued for the account of any such Person, (g) all obligations of
any such Person to redeem, repurchase, exchange, defease or otherwise make
payments in respect of capital stock or other securities or partnership
interests of such Person, (h) all net payment obligations incurred by any such
Person pursuant to Hedging Agreements (solely to the extent that such net
payment obligations are in excess of $2,000,000), (i) all outstanding payment
obligations with respect to Synthetic Leases and (j) all obligations of any such
Person under any asset securitization program.  For the purpose of
item (h) above, (1) the amount of any net payment obligation pursuant to any
Hedging Agreement on any date shall be deemed to be the Termination Value
thereof as of such date and (2) “Termination Value” means, in respect of any one
or more Hedging Agreements, after taking into account the effect of any legally
enforceable netting agreement relating to such Hedging Agreements, (A) for any
date on or after the date such Hedging Agreements have been closed out and
termination value(s) determined in accordance therewith, such termination
value(s), and (B) for any date prior to the date referenced in clause (A), the
amount(s) determined as the mark-to-market value(s) for such Hedging Agreements,
as determined based upon one or more mid-market or other readily available
quotations provided by any recognized dealer in such Hedging Agreements (which
may include any Person that is a Lender or an Affiliate thereof at the time such
Hedging Agreement is executed).

     

    “Default” means any of
the events specified in Section 11.1, which with the passage of time, the giving
of notice or any other condition, would constitute an Event of
Default.

     

    “Disputes” shall have
the meaning set forth in Section 13.6.

     

    “Dollars” or “$”
means, unless otherwise qualified, dollars in lawful currency of the United
States.

     

    “Dollar Amount” means
(a) with respect to each Loan made or continued (or to be made or continued), or
Letter of Credit issued or extended (or to be issued or extended), in Dollars,
the principal amount thereof and (b) with respect to each Loan made or continued
(or to be made or continued) in an Alternative Currency, the amount of Dollars
which is equivalent to the principal amount of such Loan, at the most favorable
spot exchange rate (to the Borrower) determined by the Administrative Agent at
approximately 11:00 a.m. (the time of the Administrative Agent’s Correspondent’s
office) two (2) Business Days before such Loan is made or continued (or to be
made or continued).  When used with respect to any other sum expressed
in an Alternative Currency, “Dollar Amount” shall mean the amount of Dollars
which is equivalent to the amount so expressed in such Alternative Currency at
the most favorable spot exchange rate (to the Borrower) determined by the
Administrative Agent to be available to it at the relevant time.

     

    “Domestic Subsidiary”
means any Subsidiary of the Borrower organized under the laws of any state of
the United States or the District of Columbia.

     

    “EBIT” means, for any
period, the sum of the following determined on a Consolidated basis, without
duplication, for the Borrower and its Subsidiaries in accordance with
GAAP:  (a) Net Income for such period plus (b) the sum of
the following to the extent deducted in determining Net Income: (i) income
taxes, franchise taxes and similar taxes imposed in lieu of net income taxes,
(ii) Interest Expense and (iii) all non cash charges associated with any asset
impairment less
(c) interest income; provided that for the
purposes of determining EBIT for any period during which any Permitted
Acquisition is consummated, EBIT shall be adjusted to give effect to the
consummation of such Permitted Acquisition on a pro forma basis in
accordance with GAAP, as if such Permitted Acquisition occurred on the first day
of such period, such adjustments to be calculated in a manner reasonably
satisfactory to the Administrative Agent.

     

    “EBITDA” means, for
any period, the sum of the following determined on a Consolidated basis, without
duplication, for the Borrower and its Subsidiaries in accordance with
GAAP:  (a) Net Income for such period plus (b) the sum of
the following to the extent deducted in determining Net Income: (i) income
taxes, franchise taxes and similar taxes imposed in lieu of net income taxes,
(ii) Interest Expense, (iii) amortization, depreciation and other non-cash
charges and (iv) all non cash charges associated with any asset impairment less (c) interest
income; provided that for the
purposes of determining EBITDA for any period during which any Permitted
Acquisition is consummated, EBITDA shall be adjusted to give effect to the
consummation of such Permitted Acquisition on a pro forma basis in
accordance with GAAP, as if such Permitted Acquisition occurred on the first day
of such period, such adjustments to be calculated in a manner reasonably
satisfactory to the Administrative Agent.

     

    “Eligible Assignee”
means, with respect to any assignment of the rights, interest and obligations of
a Lender hereunder, a Person that is at the time of such assignment (a) a
commercial bank organized under the laws of the United States or any state
thereof, having combined capital and surplus in excess of $500,000,000, (b) a
commercial bank organized under the laws of any other country that is a member
of the Organization of Economic Cooperation and Development, or a political
subdivision of any such country, having combined capital and surplus in excess
of $500,000,000, (c) a finance company, insurance company or other financial
institution which in the ordinary course of business extends credit of the type
extended hereunder and has total assets in excess of $1,000,000,000, (d) already
a Lender hereunder (whether as an original party to this Agreement or as the
assignee of another Lender), (e) the successor (whether by transfer of assets,
merger or otherwise) to all or substantially all of the commercial lending
business of the assigning Lender, (f) any Affiliate of the assigning Lender, (g)
any Approved Fund or (h) any other Person that has been approved in writing as
an Eligible Assignee by (i) other than upon the occurrence and during the
continuance of any Default or Event of Default, the Borrower, and (ii) the
Administrative Agent.

     

    “EMU”  means
the economic and monetary union as contemplated in the Treaty on European
Union.

     

    “EMU Legislation”
means legislative measures of the Council of European Union for the introduction
of, change over to or operation of the euro.

     

    “Employee Benefit
Plan” means any employee benefit plan within the meaning of Section 3(3)
of ERISA which (a) is maintained for employees of the Borrower or any ERISA
Affiliate or (b) has at any time within the preceding six (6) years been
maintained for the employees of the Borrower or any current or former ERISA
Affiliate.

     

    “Environmental Claims”
means any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of noncompliance or violation,
investigations (other than internal reports prepared by any Person in the
ordinary course of business and not in response to any third party action or
request of any kind) or proceedings relating in any way to any actual or alleged
violation of or liability under any Environmental Law or relating to any permit
issued, or any approval given, under any such Environmental Law, including,
without limitation, any and all claims by Governmental Authorities for
enforcement, cleanup, removal, response, remedial or other actions or damages,
contribution, indemnification cost recovery, compensation or injunctive relief
resulting from Hazardous Materials or arising from alleged injury or threat of
injury to human health or the environment.

     

    “Environmental Laws”
means any and all federal, foreign, state, provincial and local laws, statutes,
ordinances, rules, regulations, permits, licenses, approvals, interpretations
and orders of courts or Governmental Authorities, relating to the protection of
human health or the environment.

     

    “ERISA” means the
Employee Retirement Income Security Act of 1974, and the rules and regulations
thereunder, each as amended or modified from time to time.

     

    “ERISA Affiliate”
means any Person who together with the Borrower is treated as a single employer
within the meaning of Section 414(b), (c), (m) or (o) of the Code or Section
4001(b) of ERISA.

     

    “euro” means the
single currency to which the Participating Member States of the European Union
have converted.

     

    “Eurodollar Reserve
Percentage” means, for any day with respect to any LIBOR Rate Loan
denominated in Dollars, the percentage (expressed as a decimal and rounded
upwards, if necessary, to the next higher 1/100th of 1%) which is in effect for
such day as prescribed by the Federal Reserve Board (or any successor) for
determining the maximum reserve requirement (including without limitation any
basic, supplemental or emergency reserves) in respect of eurocurrency
liabilities or any similar category of liabilities for a member bank of the
Federal Reserve System in New York City.

     

    “Event of Default”
means any of the events specified in Section 11.1, provided that any requirement
for passage of time, giving of notice, or any other condition has been
satisfied.

     

    “Existing Credit
Agreement” shall have the meaning assigned thereto in the Statement of
Purpose.

     

    “Existing Facility”
means the credit facility established pursuant to the Existing Credit
Agreement.

     

    “Existing Bond
Documentation” means the agreements and other documentation described on
Schedule
1.1(c).

     

    “Extensions of Credit”
means, as to any Lender at any time, (a) an amount equal to the sum of (i) the
aggregate principal amount of all Revolving Credit Loans made by such Lender
then outstanding, (ii) such Lender’s Commitment Percentage of the L/C
Obligations then outstanding, (iii) such Lender’s Commitment Percentage of the
Swingline Loans then outstanding and (iv) such Lender’s Commitment Percentage of
the Alternative Currency Loans then outstanding or (b) the making of any Loan or
participation in any Letter of Credit by such Lender, as the context
requires.

     

    “FDIC” means the
Federal Deposit Insurance Corporation, or any successor thereto.

     

    “Federal Funds Rate”
means, the rate per annum (rounded upwards, if necessary, to the next higher
1/100th of 1%) representing the daily effective federal funds rate as quoted by
the Administrative Agent and confirmed in Federal Reserve Board Statistical
Release H.15 (519) or any successor or substitute publication selected by the
Administrative Agent.  If, for any reason, such rate is not available,
then “Federal Funds Rate” shall mean a daily rate which is determined, in the
opinion of the Administrative Agent, to be the rate at which federal funds are
being offered for sale in the national federal funds market at 9:00 a.m.
(Charlotte time).  Rates for weekends or holidays shall be the same as
the rate for the most immediately preceding Business Day.

     

    “Fiscal Year” means
the fiscal year of the Borrower and its Subsidiaries ending on the nearest
Sunday to December 31 (for United States reporting purposes).

     

    “Foreign Subsidiary”
means any Subsidiary of the Borrower not organized under the laws of any State
of the United States or the District of Columbia.

     

    “GAAP” means
accounting principles generally accepted in the United States of America, as
recognized by the U.S. Securities and Exchange Commissioin, the American
Institute of Certified Public Accountants and the Financial Accounting Standards
Board, consistently applied and maintained on a consistent basis for the
Borrower and its Subsidiaries throughout the period indicated and (subject to
Section 13.9) consistent with the prior financial practice of the Borrower and
its Subsidiaries.  Any differences in the recognition of GAAP between
such parties shall be resolved in favor of (i) the U.S. Securities and Exchange
Commission over the American Institute of Certified Public Accountants and the
Financial Accounting Standards Board and (ii) the Financial Accounting Standards
Board over the American Institute of Certified Public Accountants.

     

    “Governmental
Approvals” means all authorizations, consents, approvals, licenses and
exemptions of, registrations and filings with, and reports to, all Governmental
Authorities.

     

    “Governmental
Authority” means any nation, province, state or political subdivision
thereof, and any government or any Person exercising executive, legislative,
regulatory or administrative functions of or pertaining to government, and any
corporation or other entity owned or controlled, through stock or capital
ownership or otherwise, by any of the foregoing.

     

    “Guaranty Obligation”
means, with respect to the Borrower and its Subsidiaries, without duplication,
any obligation, contingent or otherwise, of any such Person pursuant to which
such Person has directly or indirectly guaranteed any Debt or other obligations
of any other Person and, without limiting the generality of the foregoing, any
obligation, direct or indirect, contingent or otherwise, of any such Person
(a) to purchase or pay (or advance or supply funds for the purchase or
payment of) such Debt or other obligation (whether arising by virtue of
partnership arrangements, by agreement to keep well, to purchase assets, goods,
securities or services, to take-or-pay, or to maintain financial statement
conditions or otherwise) or (b) entered into for the purpose of assuring in
any other manner the obligee of such Debt or other obligation of the payment
thereof or to protect such obligee against loss in respect thereof (in whole or
in part); provided, that the
term Guaranty Obligation shall not include endorsements for collection or
deposit in the ordinary course of business.

     

    “Hazardous Materials”
means any substances or materials that are toxic, explosive, corrosive,
flammable, infectious, radioactive, carcinogenic, mutagenic or otherwise harmful
to human health or the environment and are or become regulated by any
Governmental Authority, or that contain, without limitation, asbestos,
polychlorinated biphenyls, urea formaldehyde foam insulation, petroleum
hydrocarbons, petroleum derived substances or waste, crude oil, nuclear fuel,
natural gas or synthetic gas.

     

    “Hedging Agreement”
means any agreement with respect to any Interest Rate Contract, forward rate
agreement, commodity swap, forward foreign exchange agreement, currency swap
agreement, cross-currency rate swap agreement, currency option agreement or
other agreement or arrangement designed to alter the risks of any Person arising
from fluctuations in interest rates, currency values or commodity prices, all as
amended, restated, supplemented or otherwise modified from time to
time.

     

    “Hedging Obligations”
shall have the meaning assigned thereto in the definition of
“Obligations.”

     

    “Interest Expense”
means, with respect to the Borrower and its Subsidiaries for any period, the
gross interest expense of the Borrower and its Subsidiaries, all determined for
such period on a Consolidated basis, without duplication, in accordance with
GAAP.

     

    “Interest Period”
shall have the meaning assigned thereto in Section 4.1(b).

     

    “Interest Rate
Contract” means any interest rate swap agreement, interest rate cap
agreement, interest rate floor agreement, interest rate collar agreement,
interest rate option or any other agreement regarding the hedging of interest
rate risk exposure executed in connection with hedging the interest rate
exposure of any Person and any confirming letter executed pursuant to such
agreement, all as amended, restated, supplemented or otherwise modified from
time to time.

     

    “ISP 98” means the
International Standby Practices (1998 Revision, effective January 1, 1999),
International Chamber of Commerce Publication No. 590.

     

    “Issuing Lender” means
Wachovia, in its capacity as issuer of any Letter of Credit, or any successor
thereto.

     

    “Joinder Agreement”
means, collectively, each joinder agreement executed in favor of the
Administrative Agent for the ratable benefit of itself and the Lenders,
substantially in the form of Exhibit
J.

     

    “L/C Commitment” means
the lesser of (a) Ten Million Dollars ($10,000,000) and (b) the aggregate
Available Commitment.

     

    “L/C Facility” means
the letter of credit facility established pursuant to Article III.

     

    “L/C Obligations”
means at any time, an amount equal to the sum of (a) the aggregate undrawn and
unexpired amount of the then outstanding Letters of Credit and (b) the aggregate
amount of drawings under Letters of Credit which have not then been reimbursed
pursuant to Section 3.5.

     

    “L/C Participants”
means the collective reference to all the Lenders other than the Issuing
Lender.

     

    “Lender” means each
Person executing this Agreement as a Lender (including, without limitation, the
Issuing Lender, the Swingline Lender and the Alternative Currency Lender unless
the context otherwise requires) set forth on the signature pages hereto and each
Person that hereafter becomes a party to this Agreement as a Lender pursuant to
Section 13.10.

     

    “Lending Office”
means, with respect to any Lender, the office of such Lender maintaining such
Lender’s Commitment Percentage of the Extensions of Credit.

     

    “Letters of Credit”
shall have the meaning assigned thereto in Section 3.1.

     

    “Leverage Ratio” means
the ratio calculated pursuant to Section 9.1.

     

    “LIBOR” means the rate
of interest per annum determined on the basis of the rate for deposits in
Dollars in minimum amounts of at least $3,000,000 (or the Alternative Currency
Amount thereof with respect to a borrowing to be made in an Alternative
Currency) for a period equal to the applicable Interest Period which appears on
the Dow Jones Market Screen 3750, or the applicable Reuters Screen Page, as
determined by the Administrative Agent in its sole discretion, at approximately
11:00 a.m. (London time) two (2) Business Days prior to the first day of the
applicable Interest Period (rounded upward, if necessary, to the nearest
1/100th of
1%).  If, for any reason, such rate does not appear on Dow Jones
Market Screen 3750, or the applicable Reuters Screen Page, then “LIBOR” shall be
determined by the Administrative Agent to be the arithmetic average of the rate
per annum at which deposits in the Permitted Currency in which the applicable
Loan is denominated would be offered by first class banks in the London
interbank market to the Administrative Agent (or the Administrative Agent’s
Correspondent) at approximately 11:00 a.m. (London time) two (2) Business Days
prior to the first day of the applicable Interest Period for a period equal to
such Interest Period.  Each calculation by the Administrative Agent of
LIBOR shall be conclusive and binding for all purposes, absent manifest
error.

     

    “LIBOR Rate”
means

     

    (i)           with
respect to any LIBOR Rate Loan denominated in Dollars, a rate per annum (rounded
upwards, if necessary, to the next higher 1/100th of 1%) determined by the
Administrative Agent pursuant to the following formula:

     

    LIBOR Rate
=                                 LIBOR                                                                 

    1.00-Eurodollar Reserve
Percentage

    


    and

    


    (ii)           with
respect to any LIBOR Rate Loan denominated in any Alternative Currency, a rate
per annum (rounded upwards, if necessary, to the next higher 1/100th of 1%)
equal to LIBOR.

     

    Each
calculation by the Administrative Agent of the LIBOR Rate shall be conclusive
and binding for all purposes, absent manifest error.

     

    “LIBOR Rate Loan”
means any Loan bearing interest at a rate based upon the LIBOR Rate as provided
in Section 4.1(a).

     

    “Lien” means, with
respect to any asset, any mortgage, leasehold mortgage, lien, pledge, charge,
security interest, hypothecation or encumbrance of any kind in respect of such
asset.  For the purposes of this Agreement, a Person shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, Capital
Lease or other title retention agreement relating to such asset.

     

    “Liquidity” means,
with respect to the Borrower and its Subsidiaries as of any date of
determination, (i) consolidated cash and cash equivalents as of such date plus (ii) the
aggregate Available Commitments as of such date.

     

    “Loan Documents”
means, collectively, this Agreement, the Notes, the Applications, the Subsidiary
Guaranty Agreement, the Security Documents, each Joinder Agreement and each
other document, instrument, certificate and agreement executed and delivered by
the Borrower or any Subsidiary thereof in connection with this Agreement
(excluding any Hedging Agreement), all as may be amended, restated, supplemented
or otherwise modified from time to time.

     

    “Loans” means the
collective reference to the Revolving Credit Loans, the Alternative Currency
Loans and the Swingline Loans and “Loan” means any of such Loans.

     

    “Mandatory Cost Rate”
means an addition to the interest rate on any Revolving Credit Loan or
Alternative Currency Loan made by any Lender to compensate such Lender for the
cost imputed to the Lender resulting from the imposition from time to time under
or pursuant to the Bank of England Act 1998 and/or by the Bank of England and/or
the Financial Services Authority (or other Governmental Authorities of the
United Kingdom) of a requirement to place non-interest bearing cash ratio
deposits or special deposits (whether interest bearing or not) with the Bank of
England and/or fees to the Financial Services Authority calculated by reference
to liabilities used to fund the Revolving Credit Loans and the Alternative
Currency Loans, expressed as a rate per annum and determined pursuant to the
formula set forth on Schedule 1.1(b)
hereto.

     

    “Material
Acquisition”  means any Permitted Acquisition, the Costs of
Acquisition of which exceed five percent (5%) of the total net assets of the
Borrower and its Subsidiaries as reflected on the financial statements delivered
in accordance with Section 7.1.

     

    “Material Adverse
Effect”  means a material adverse effect on (i) the properties,
business, prospects, operations or condition (financial or otherwise) of the
Borrower and its Subsidiaries taken as a whole, (ii) the ability of the Borrower
or any of its Subsidiaries to perform its material obligations under the Loan
Documents to which it is a party, or (iii) the validity and enforceability of
the Loan Documents.

     

    “Material Domestic
Subsidiary” means, at any time, (a) any Domestic Subsidiary of the
Borrower with net assets in excess of five percent (5%) of the total net assets
of the Borrower and its Subsidiaries as reflected on the financial statements
delivered in accordance with Section 7.1, (b) any parent of any Domestic
Subsidiary referred to in clause (a) of this definition, which parent is also a
Domestic Subsidiary and which parent is not deemed a “Material Domestic
Subsidiary” pursuant to clause (a) of this definition, (c) any Domestic
Subsidiary of the Borrower voluntarily designated in writing to the
Administrative Agent by the Borrower as a “Material Domestic Subsidiary”
regardless of whether such Domestic Subsidiary is deemed a “Material Domestic
Subsidiary” pursuant to clause (a) or (b) of this definition and (d) any
Domestic Subsidiary of the Borrower that executes all the relevant joinder
documents in compliance with Section 8.10 regardless of whether such Domestic
Subsidiary is deemed a “Material Domestic Subsidiary” pursuant to clause (a),
(b) or (c) of this definition.

     

    “Material Foreign
Subsidiary” means, at any time, (a) any Foreign Subsidiary of the
Borrower directly owned by the Borrower or a Domestic Subsidiary of the Borrower
with net assets in excess of five percent (5%) of the total net assets of the
Borrower and its Subsidiaries as reflected on the financial statements delivered
in accordance with Section 7.1 and (b) any Foreign Subsidiary of the Borrower
voluntarily designated in writing to the Administrative Agent by the Borrower as
a “Material Foreign Subsidiary” regardless of whether such Foreign Subsidiary is
deemed a “Material Foreign Subsidiary” pursuant to clause (a) of this
definition.

     

    “Multiemployer Plan”
means a “multiemployer plan” as defined in Section 4001(a)(3) of ERISA to which
the Borrower or any ERISA Affiliate is making, or is accruing an obligation to
make, or has accrued an obligation to make, contributions within the preceding
six (6) years.

     

    “Net Cash Position”
means on any day, with respect to the Operating Account, a sum equal to the
opening available balance in the Operating Account, plus any maturing investment
principal and interest credited to the Operating Account, minus the daily
presentment of checks and Operating Account holds, minus any floor balance which
has been established to cover bank charges, minus any maturing interest debited
to the Operating Account, in each case for such day.

     

    “Net Income” means,
with respect to the Borrower and its Subsidiaries, for any period of
determination, the net income (or loss) of the Borrower and its Subsidiaries for
such period, determined on a Consolidated basis in accordance with GAAP; provided that there
shall be excluded from Net Income (a) the net income (or loss) of any Person in
which the Borrower or any of its Subsidiaries has a joint interest with a third
party, except to the extent such net income is actually paid to the Borrower or
any of its Subsidiaries by dividend or other distribution during such period,
(b) the net income (or loss) of any Person accrued prior to the date it becomes
a Subsidiary of such Person or is merged into or consolidated with such Person
or any of its Subsidiaries or that Person’s assets are acquired by such Person
or any of its Subsidiaries, (c) the cumulative effect of a change in accounting
principles required or permitted by a change in GAAP subsequent to the Closing
Date, and (d) any net gain classified as an extraordinary item in accordance
with GAAP.

     

    “Notes” means the
collective reference to the Revolving Credit Notes, the Alternative Currency
Note and the Swingline Note and “Note” means any of such Notes.

     

    “Notice of Account
Designation” shall have the meaning assigned thereto in Section
2.4(b).

     

    “Notice of Borrowing”
shall have the meaning assigned thereto in Section 2.4(a).

     

    “Notice of
Conversion/Continuation” shall have the meaning assigned thereto in
Section 4.2.

     

    “Obligations” means,
in each case, whether now in existence or hereafter arising: (a) the principal
of and interest on (including interest accruing after the filing of any
bankruptcy or similar petition) the Loans, (b) the L/C Obligations, (c) all
existing or future payment and other obligations owing by the Borrower under any
Hedging Agreement (which such Hedging Agreement is permitted hereunder) with any
Person that is a Lender hereunder or an Affiliate of a Lender hereunder at the
time such Hedging Agreement is executed (all such obligations with respect to
any such Hedging Agreement, “Hedging Obligations”) and (d) all other fees and
commissions (including attorneys’ fees), charges, indebtedness, loans,
liabilities, financial accommodations, obligations, covenants and duties owing
by the Borrower or any of its Subsidiaries to the Lenders or the Administrative
Agent, in each case under or in respect of this Agreement, any Note, any Letter
of Credit or any of the other Loan Documents of every kind, nature and
description, direct or indirect, absolute or contingent, due or to become due,
contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any note.

     

    “Officer’s Compliance
Certificate” shall have the meaning assigned thereto in Section
7.2.

     

    “Operating Account”
means the principal operating account of the Borrower maintained with
Wachovia.

     

    “Operating Lease”
shall mean, as to any Person as determined in accordance with GAAP, any lease of
property (whether real, personal or mixed) by such Person as lessee which is not
a Capital Lease.

     

    “Other Taxes” shall
have the meaning assigned thereto in Section 4.13(b).

     

    “Participating Member
State” means each state so described in any EMU Legislation.

     

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

     

    “Pension Plan” means
any Employee Benefit Plan, other than a Multiemployer Plan, which is subject to
the provisions of Title IV of ERISA or Section 412 of the Code and which (a) is
maintained for the employees of the Borrower or any ERISA Affiliate or (b) has
at any time within the preceding six (6) years been maintained for the employees
of the Borrower or any of its current or former ERISA Affiliates.

     

    “Permitted
Acquisition” has the meaning set forth in Section 10.3(c).

     

    “Permitted Acquisition
Documents” means with respect to any acquisition proposed by the Borrower
or any Subsidiary thereof, the purchase agreement, sale agreement, merger
agreement or other agreement evidencing such acquisition, including, without
limitation, all legal opinions and each other document executed, delivered,
contemplated by or prepared in connection therewith and any amendment,
modification or supplement to any of the foregoing.

     

    “Permitted Currency”
means Dollars or any Alternative Currency, or each such currency, as the context
requires.

     

    “Permitted Holders”
means (i) Harold C. Simmons, (ii) the trustees of the Harold C. Simmons Family
Trust No. 1 dated January 1, 1964, the Harold C. Simmons Family Trust No. 2
dated January 1, 1964 and any trust or trusts established after the Closing Date
for the benefit of Harold C. Simmons and/or his spouse or his or her
descendants, whether natural or adopted (such trusts collectively, the “Trusts”
and such individuals, collectively the “Beneficiaries”), (iii) each of the
Trusts, (iv) each of the Beneficiaries, (v) any Person controlled, directly or
indirectly, by one or more of the Persons described in clauses (i) through (iv)
above, (vi) any employee benefit plan or pension fund of the Borrower or any
Subsidiary and any Person holding any class of voting stock of the Borrower or
Subsidiary for or pursuant to the terms of any such plan or fund, and (vii) any
group made up of Persons described in clauses (i) through (vi)
above.

     

    “Person” means an
individual, corporation, limited liability company, partnership, association,
trust, business trust, joint venture, joint stock company, pool, syndicate, sole
proprietorship, unincorporated organization, Governmental Authority or any other
form of entity or group thereof.

     

    “Pounds Sterling”
means, at any time of determination, the then official currency of the United
Kingdom of Great Britain and Northern Ireland.

     

    “Prime Rate” means, at
any time, the rate of interest per annum publicly announced from time to time by
Wachovia as its prime rate.  Each change in the Prime Rate shall be
effective as of the opening of business on the day such change in such prime
rate occurs.  The parties hereto acknowledge that the rate announced
publicly by Wachovia as its prime rate is an index or base rate and shall not
necessarily be its lowest or best rate charged to its customers or other
banks.

     

    “Register” shall have
the meaning assigned thereto in Section 13.10(d).

     

    “Reimbursement
Obligation” means the obligation of the Borrower to reimburse the Issuing
Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit.

     

    “Replaced Lender”
shall have the meaning assigned thereto in Section 4.15(c).

     

    “Replacement Lender”
shall have the meaning assigned thereto in Section 4.15(c).

     

    “Required Lenders”
means, at any date, any combination of Lenders whose Commitment Percentages
aggregate at least sixty-six and two-thirds percent (66-2/3%) of the Aggregate
Commitment or, if the Credit Facility has been terminated pursuant to Section
11.2, any combination of Lenders holding at least sixty-six and two-thirds
percent (66-2/3%) of the aggregate Extensions of Credit (with the aggregate
amount of each Lender’s risk participation and funded participation in
Alternative Currency Loans, Swingline Loans and L/C Obligations being deemed
“held” by such Lender for the purposes of this definition).

     

    “Responsible Officer”
means any of the following: the chief executive officer, president, chief
financial officer or controller of the Borrower or any other officer of the
Borrower reasonably acceptable to the Administrative Agent.

     

    “Revolving Credit
Facility” means the revolving credit, alternative currency and swingline
facilities established pursuant to Article II.

     

    “Revolving Credit
Loans” means any revolving credit loan denominated in Dollars made by the
Lenders to the Borrower pursuant to Section 2.1, and all such revolving credit
loans collectively as the context requires.

     

    “Revolving Credit
Notes” means the collective reference to the Revolving Credit Notes made
by the Borrower payable to the order of each Lender, substantially in the form
of Exhibit A-1
hereto, evidencing the Revolving Credit Facility, and any amendments,
supplements and modifications thereto, any substitutes therefor, and any
replacements, restatements, renewals or extensions thereof, in whole or in part;
“Revolving Credit Note” means any of such Revolving Credit Notes.

     

    “Revolving Credit Termination
Date” means the earliest of the dates referred to in Section
2.8.

     

    “Security Documents”
means the collective reference to the Subsidiary Guaranty Agreement, the
Collateral Agreement and each other agreement or writing pursuant to which the
Borrower or any Subsidiary thereof purports to guaranty the payment and/or
performance of the Obligations, in each case, as amended, restated, supplemented
or otherwise modified from time to time.

     

    “Solvent” means, as to
the Borrower and its Subsidiaries on a particular date, that any such Person (a)
has capital sufficient to carry on its business and transactions and all
business and transactions in which it is about to engage and is able to pay its
debts as they mature, (b) owns property having a value, at fair valuation,
greater than the amount required to pay its probable liabilities (including
contingencies), and (c) does not believe that it will incur debts or liabilities
beyond its ability to pay such debts or liabilities as they mature.

     

    “Subordinated Debt”
means the collective reference to any Debt of the Borrower or any Subsidiary
subordinated in right and time of payment to the Obligations and containing such
other terms and conditions, in each case as are satisfactory to the Required
Lenders.

     

    “Subsidiary” means as
to any Person, any corporation, partnership, limited liability company or other
entity of which more than fifty percent (50%) of the outstanding capital stock
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other managers of such corporation, partnership,
limited liability company or other entity is at the time owned by or the
management is otherwise controlled by such Person (irrespective of whether, at
the time, capital stock or other ownership interests of any other class or
classes of such corporation, partnership, limited liability company or other
entity shall have or might have voting power by reason of the happening of any
contingency).  Unless otherwise qualified references to “Subsidiary”
or “Subsidiaries” herein shall refer to those of the Borrower.

     

    “Subsidiary
Guarantors” means the Material Domestic Subsidiaries of the
Borrower.

     

    “Subsidiary Guaranty
Agreement” means the unconditional guaranty agreement of even date
executed by the Subsidiary Guarantors in favor of the Administrative Agent, for
the ratable benefit of itself and the Lenders, substantially in the form of
Exhibit H, as
amended, restated, supplemented or otherwise modified from time to
time.

     

    “Sweep Plus Service
Program” means the Sweep Plus Service Program of Wachovia and any other
cash management arrangement which the Borrower and Wachovia agree should be
included in the borrowing and repayment of Swingline Loans pursuant to Section
2.3.

     

    “Swingline Commitment”
means the lesser of (a) Five Million Dollars ($5,000,000) and (b) the Aggregate
Commitment.

     

    “Swingline Facility”
means the swingline facility established pursuant to Section 2.3.

     

    “Swingline Lender”
means Wachovia in its capacity as swingline lender hereunder.

     

    “Swingline Loan” means
any swingline loan denominated in Dollars made by the Swingline Lender to the
Borrower pursuant to Section 2.3, and all such swingline loans collectively as
the context requires.

     

    “Swingline Note” means
the Swingline Note made by the Borrower payable to the order of the Swingline
Lender, substantially in the form of Exhibit A-2 hereto,
evidencing the Swingline Loans, and any amendments, supplements and
modifications thereto, any substitutes therefor, and any replacements,
restatements, renewals or extensions thereof, in whole or in part.

     

    “Swingline Termination
Date” means the first to occur of (a) the resignation of Wachovia as
Administrative Agent in accordance with Section 12.9 and (b) the Revolving
Credit Termination Date.

     

    “Synthetic Lease”
means any synthetic lease, tax retention operating lease, off-balance sheet loan
or similar off-balance sheet financing product where such transaction is
considered borrowed money indebtedness for tax purposes but is classified as an
Operating Lease in accordance with GAAP.

     

    “Taxes” shall have the
meaning assigned thereto in Section 4.13(a).

     

    “Termination Event”
means except for any such event or condition that could not reasonably be
expected to have a Material Adverse Effect:  (a) a “Reportable Event”
described in Section 4043 of ERISA for which the notice requirement has not been
waived by the PBGC, or (b) the withdrawal of the Borrower or any ERISA Affiliate
from a Pension Plan during a plan year in which it was a “substantial employer”
as defined in Section 4001(a)(2) of ERISA, or (c) the termination of a Pension
Plan, the filing of a notice of intent to terminate a Pension Plan or the
treatment of a Pension Plan amendment as a termination, under Section 4041 of
ERISA, if the plan assets are not sufficient to pay all plan liabilities, or (d)
the institution of proceedings to terminate, or the appointment of a trustee
with respect to, any Pension Plan by the PBGC, or (e) any other event or
condition which would constitute grounds under Section 4042(a) of ERISA for the
termination of, or the appointment of a trustee to administer, any Pension Plan,
or (f) the imposition of a Lien pursuant to Section 412 of the Code or Section
302 of ERISA, or (g) the partial or complete withdrawal of the Borrower or
any ERISA Affiliate from a Multiemployer Plan if withdrawal liability is
asserted by such plan, or (h) any event or condition which results in the
reorganization or insolvency of a Multiemployer Plan under Sections 4241 or 4245
of ERISA, or (i) any event or condition which results in the termination of a
Multiemployer Plan under Section 4041A of ERISA or the institution by the PBGC
of proceedings to terminate a Multiemployer Plan under Section 4042 of
ERISA.

     

    “Total Funded Debt”
means, as of any date of determination with respect to the Borrower and its
Subsidiaries on a Consolidated basis without duplication, the sum of all Debt of
the Borrower and its Subsidiaries.

     

    “Treaty on European
Union” means the Treaty of Rome of March 25, 1957, as amended by the
Single European Act of 1986 and the Maastricht Treaty (signed February 7, 1992),
as amended from time to time.

     

    “Uniform Customs”
means the Uniform Customs and Practice for Documentary Credits (1993 Revision),
effective January 1994 International Chamber of Commerce Publication
No. 500.

     

    “United States” means
the United States of America.

     

    “Wachovia” means
Wachovia Bank, National Association, a national banking association, and its
successors.

     

    “Wholly-Owned” means,
with respect to a Subsidiary, any Subsidiary for which all of the shares of
capital stock or other ownership interests are, directly or indirectly, owned or
controlled by the Borrower and/or one or more of its Wholly-Owned Subsidiaries
(except for directors’ qualifying shares or other shares required by Applicable
Law to be owned by a Person other than the Borrower).

     

    SECTION
1.2                                           General.  Unless
otherwise specified, a reference in this Agreement to a particular article,
section, subsection, Schedule or Exhibit is a reference to that article,
section, subsection, Schedule or Exhibit of this Agreement.  Wherever
from the context it appears appropriate, each term stated in either the singular
or plural shall include the singular and plural, and pronouns stated in the
masculine, feminine or neuter gender shall include the masculine, the feminine
and the neuter.  Any reference herein to “Charlotte time” shall refer
to the applicable time of day in Charlotte, North Carolina.

     

    SECTION
1.3                                           Effectiveness of Euro
Provisions.  With
respect to any state (or the currency of such state) that is not a Participating
Member State on the date of this Agreement, the provisions of Sections 4.1(g),
4.8(b), 4.8(c) and 4.14 shall become effective in relation to such state (and
the currency of such state) at and from the date on which such state becomes a
Participating Member State.

     

    SECTION
1.4.                                           Other Definitions and
Provisions.

     

    (a)           Use of Capitalized
Terms.  Unless otherwise defined therein, all capitalized terms
defined in this Agreement shall have the defined meanings when used in this
Agreement, the Notes and the other Loan Documents or any certificate, report or
other document made or delivered pursuant to this Agreement.

     

    (b)           Miscellaneous.  The
words “hereof”, “herein” and “hereunder” and words of similar import when used
in this Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement.

     

    ARTICLE
II

    


    REVOLVING CREDIT
FACILITY

    


    SECTION
2.1                                           Revolving Credit
Loans.  Subject
to the terms and conditions of this Agreement, and in reliance upon the
representations and warranties set forth herein, each Lender severally agrees to
make Revolving Credit Loans in Dollars to the Borrower from time to time from
the Closing Date through, but not including, the Revolving Credit Termination
Date as requested by the Borrower, in accordance with the terms of Section 2.4;
provided, that,
based upon the Dollar Amount of all outstanding Loans and L/C Obligations, (a)
the aggregate principal amount of all outstanding Revolving Credit Loans (after
giving effect to any amount requested) shall not exceed the Aggregate Commitment
less the sum of
all outstanding Swingline Loans, Alternative Currency Loans and L/C Obligations
and (b) the aggregate principal amount of all outstanding Revolving Credit Loans
from any Lender to the Borrower shall not at any time exceed such Lender’s
Commitment less
such Lender’s Commitment Percentage of the sum of all outstanding Swingline
Loans, Alternative Currency Loans and L/C Obligations.  Each Revolving
Credit Loan by a Lender shall be in a principal amount equal to such Lender’s
Commitment Percentage of the aggregate principal amount of Revolving Credit
Loans requested on such occasion.  Subject to the terms and conditions
hereof, the Borrower may borrow, repay and reborrow Revolving Credit Loans
hereunder until the Revolving Credit Termination Date.

     

    SECTION
2.2                                           Alternative Currency
Loans.

     

    (a)           Availability.  Subject
to the terms and conditions of this Agreement, and in reliance upon the
representations and warranties set forth herein, the Alternative Currency Lender
agrees to make Alternative Currency Loans to the Borrower from time to time from
the Closing Date through, but not including, the Revolving Credit Termination
Date as requested by the Borrower in accordance with the terms of Section 2.4;
provided, that,
based upon the Dollar Amount of all outstanding Loans and L/C Obligations, the
aggregate principal amount of all outstanding Alternative Currency Loans (after
giving effect to any amount requested) shall not exceed the lesser of (i) the
Aggregate Commitment less the sum of the
aggregate principal amount of all outstanding Revolving Credit Loans less the sum of all
outstanding Swingline Loans and L/C Obligations, and (ii) the Alternative
Currency Commitment; provided further that the
Alternative Currency Lender will not make an Alternative Currency Loan from and
after the date which is one (1) day after it has received written notice from
the Administrative Agent (upon the request of the Required Lenders) that one or
more of the applicable conditions to Extensions of Credit specified in Section
5.3 is not then satisfied until such conditions are satisfied or waived in
accordance with the provisions of this Agreement (and the Alternative Currency
Lender shall be entitled to conclusively rely on any such notice and shall have
no obligation to independently investigate the accuracy of such notice and shall
have no liability to the Borrower in respect thereof if such notice proves to be
inaccurate).  Alternative Currency Loans shall be funded in an amount
equal to the Alternative Currency Amount of such Alternative Currency
Loan.  Subject to the terms and conditions hereof, the Borrower may
borrow, repay and reborrow Alternative Currency Loans hereunder until the
Revolving Credit Termination Date.

     

    (b)           Refunding of Alternative
Currency  Loans.

     

    (i)           Upon
the occurrence and during the continuance of an Event of Default, each
Alternative Currency Loan may, at the discretion of the Alternative Currency
Lender, be converted immediately to a Base Rate Loan funded in Dollars by the
Lenders in an amount equal to the Dollar Amount of such Alternative Currency
Loan for the remainder of the Interest Period applicable to such Alternative
Currency Loan.  Such Base Rate Loan shall thereafter be reflected as a
Revolving Credit Loan of the Lenders on the books and records of the
Administrative Agent.  Each Lender shall fund its respective
Commitment Percentage of such Revolving Credit Loan as required to repay
Alternative Currency Loans outstanding to the Alternative Currency Lender upon
such demand by the Alternative Currency Lender in no event later than 2:00 p.m.
(Charlotte time) on the next succeeding Business Day after such demand is
made.  No Lender’s obligation to fund its respective Commitment
Percentage of any Revolving Credit Loan required to repay such Alternative
Currency Loan shall be affected by any other Lender’s failure to fund its
Commitment Percentage of such Revolving Credit Loan, nor shall any Lender’s
Commitment Percentage be increased as a result of any such failure of any other
Lender to fund its Commitment Percentage of such Revolving Credit
Loan.

     

    (ii)           The
Borrower shall pay to the Alternative Currency Lender, for the account of the
Alternative Currency Lender, on demand the amount of such Alternative Currency
Loans to the extent amounts received from the Lenders are not sufficient to
refund in full the outstanding Alternative Currency Loans requested or required
to be refunded upon the occurrence and during the continuance of an Event of
Default.  In addition, the Borrower hereby authorizes the
Administrative Agent, upon the occurrence and during the continuance of an Event
of Default, to charge any account maintained by the Borrower with the
Alternative Currency Lender (up to the amount available therein) in order to
immediately pay the Alternative Currency Lender the amount of such Alternative
Currency Loans to the extent amounts received from the Lenders are not
sufficient to repay in full the outstanding Alternative Currency Loans requested
or required to be refunded.  If any portion of any such amount paid to
the Alternative Currency Lender shall be recovered by or on behalf of the
Borrower from the Alternative Currency Lender in bankruptcy or otherwise, the
loss of the amount so recovered shall be ratably shared among all the Lenders in
accordance with their respective Commitment Percentages (unless the amount so
recovered by or on behalf of the Borrower pertains to an Alternative Currency
Loan extended after the occurrence and during the continuance of an Event of
Default of which the Alternative Currency Lender has received notice in the
manner required pursuant to Section 12.5 and which such Event of Default has not
been waived by the Required Lenders or the Lenders, as applicable).

     

    (iii)           Each
Lender acknowledges and agrees that its obligation to refund Alternative
Currency Loans in accordance with the terms of this Section 2.2 is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
Article V.  Further, each Lender agrees and acknowledges that if prior
to the refunding of any outstanding Alternative Currency Loans pursuant to this
Section 2.2, one of the events described in Section 11.1(i) or (j) shall have
occurred, each Lender will, on the date the applicable Revolving Credit Loans
would have been made, purchase an undivided participating interest in such
Alternative Currency Loans to be refunded in an amount equal to its Commitment
Percentage of the aggregate amount of such Alternative Currency
Loans.  Each Lender will immediately transfer to the Administrative
Agent, for the account of the Alternative Currency Lender, in immediately
available funds in Dollars, the amount of its
participation.  Whenever, at any time after the Alternative Currency
Lender has received from any Lender such Lender’s participating interest in the
refunded Alternative Currency Loans, the Alternative Currency Lender receives
any payment on account thereof, the Alternative Currency Lender will distribute
to such Lender its participating interest in such amount (appropriately
adjusted, in the case of interest payments, to reflect the period of time during
which such Lender’s participating interest was outstanding and
funded).

     

    (iv)           In
the event that any Lender fails to make payment to the Alternative Currency
Lender of any amount due under this Section 2.2, the Administrative Agent,
on behalf of the Alternative Currency Lender, shall be entitled to receive,
retain and apply against such obligation the principal and interest otherwise
payable to such Lender hereunder until the Alternative Currency Lender receives
such payment from such Lender or such obligation is otherwise fully
satisfied.  In addition to the foregoing, if for any reason any Lender
fails to make payment to the Alternative Currency Lender of any amount due under
this Section 2.2, such Lender shall be deemed, at the option of the
Administrative Agent, to have unconditionally and irrevocably purchased from the
Alternative Currency Lender, without recourse or warranty, an undivided interest
and participation in the applicable Alternative Currency Loan, and such interest
and participation may be recovered from such Lender together with interest
thereon at the Federal Funds Effective Rate for each day during the period
commencing on the date of demand and ending on the date such amount is
received.

     

    SECTION
2.3                                           Swingline
Loans.

     

    (a)           Availability.  Subject
to the terms and conditions of this Agreement, the Swingline Lender agrees to
make Swingline Loans to the Borrower from time to time from the Closing Date
through, but not including, the Swingline Termination Date; provided, that (i)
all Swingline Loans shall be denominated in Dollars and (ii) based upon the
Dollar Amount of all outstanding Loans and L/C Obligations, the aggregate
principal amount of all outstanding Swingline Loans (after giving effect to any
amount requested), shall not exceed the lesser of (A) the Aggregate Commitment
less the sum of
all outstanding Revolving Credit Loans, Alternative Currency Loans and L/C
Obligations and (B) the Swingline Commitment; provided further that the
Swingline Lender will not make a Swingline Loan from and after the date which is
one (1) day after it has received written notice from the Administrative Agent
(upon the request of the Required Lenders) that one or more of the applicable
conditions to Extensions of Credit specified in Section 5.3 is not then
satisfied until such conditions are satisfied or waived in accordance with the
provisions of this Agreement (and the Swingline Lender shall be entitled to
conclusively rely on any such notice and shall have no obligation to
independently investigate the accuracy of such notice and shall have no
liability to the Borrower in respect thereof if such notice proves to be
inaccurate).

     

    (b)           Sweep Plus Service
Program.  On each Business Day, the Administrative Agent shall
calculate the Net Cash Position.  If the Net Cash Position is less
than zero, then the Borrower shall be deemed to have irrevocably requested that
the Swingline Lender make a Swingline Loan to the Borrower in an amount equal to
the lesser of (i) an amount, which when rounded up to the nearest $1,000, equals
or exceeds the amount of the deficit Net Cash Position and (ii) an amount, which
when added to the aggregate principal amount of all outstanding Swingline Loans
(after giving effect to any amount requested), shall not exceed the lesser of,
based upon the Dollar Amount of all outstanding Loans and L/C Obligations, (A)
the Aggregate Commitment less the sum of all outstanding Revolving Credit Loans,
all outstanding Alternative Currency Loans and the L/C Obligations and (B) the
Swingline Commitment; provided, however,
that the obligation of the Swingline Lender to make any such Swingline Loan to
the Borrower shall be subject to all the terms and conditions hereof (including,
without limitation, Section 5.3 hereof).

     

    (c)           Payment of Principal and
Interest.  Principal and interest on Swingline Loans deemed
requested pursuant to Section 2.3(b) hereof shall be paid pursuant to the terms
and conditions of the Sweep Plus Service Program without any deduction, setoff
or counterclaim whatsoever.  Principal and interest on Swingline Loans
requested pursuant to Section 2.3 hereof shall be paid pursuant to the terms of
this Agreement.  Unless sooner paid pursuant to the provisions hereof
or the provisions of the Sweep Plus Service Program, the principal of the
Swingline Loans shall be paid in full, together with accrued interest thereon,
on the Swingline Termination Date.

     

    (d)           Refunding.

     

    (i)           Swingline
Loans shall be refunded by the Lenders on demand by the Swingline
Lender.  Such refundings shall be made by the Lenders in accordance
with their respective Commitment Percentages and shall thereafter be reflected
as Revolving Credit Loans of the Lenders on the books and records of the
Administrative Agent.  Each Lender shall fund its respective
Commitment Percentage of Revolving Credit Loans as required to repay Swingline
Loans outstanding to the Swingline Lender upon demand by the Swingline Lender
but in no event later than 2:00 p.m. (Charlotte time) on the next succeeding
Business Day after such demand is made.  No Lender’s obligation to
fund its respective Commitment Percentage of a Swingline Loan shall be affected
by any other Lender’s failure to fund its Commitment Percentage of a Swingline
Loan, nor shall any Lender’s Commitment Percentage be increased as a result of
any such failure of any other Lender to fund its Commitment Percentage of a
Swingline Loan.

     

    (ii)           The
Borrower shall pay to the Swingline Lender on demand the amount of such
Swingline Loans to the extent amounts received from the Lenders are not
sufficient to refund in full the outstanding Swingline Loans requested or
required to be refunded.  In addition, the Borrower hereby authorizes
the Administrative Agent to charge any account maintained by the Borrower with
the Swingline Lender (up to the amount available therein) in order to
immediately pay the Swingline Lender the amount of such Swingline Loans to the
extent amounts received from the Lenders are not sufficient to repay in full the
outstanding Swingline Loans requested or required to be refunded.  If
any portion of any such amount paid to the Swingline Lender shall be recovered
by or on behalf of the Borrower from the Swingline Lender in bankruptcy or
otherwise, the loss of the amount so recovered shall be ratably shared among all
the Lenders in accordance with their respective Commitment Percentages (unless
the amounts so recovered by or on behalf of the Borrower pertain to a Swingline
Loan extended after the occurrence and during the continuance of an Event of
Default of which the Administrative Agent has received notice in the manner
required pursuant to Section 12.5 and which such Event of Default has not been
waived by the Required Lenders or the Lenders, as applicable).

     

    (iii)           Each
Lender acknowledges and agrees that its obligation to refund Swingline Loans in
accordance with the terms of this Section 2.3 is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including, without
limitation, non-satisfaction of the conditions set forth in Article
V.  Further, each Lender agrees and acknowledges that if prior to the
refunding of any outstanding Swingline Loans pursuant to this Section 2.3, one
of the events described in Section 11.1(i) or (j) shall have occurred, each
Lender will, on the date the applicable Revolving Credit Loans would have been
made, purchase an undivided participating interest in such Swingline Loans to be
refunded in an amount equal to its Commitment Percentage of the aggregate amount
of such Swingline Loans.  Each Lender will immediately transfer to the
Swingline Lender, in immediately available funds, the amount of its
participation and upon receipt thereof the Swingline Lender will deliver to such
Lender a certificate evidencing such participation dated the date of receipt of
such funds and for such amount.  Whenever, at any time after the
Swingline Lender has received from any Lender such Lender’s participating
interest in a Swingline Loan, the Swingline Lender receives any payment on
account thereof, the Swingline Lender will distribute to such Lender its
participating interest in such amount (appropriately adjusted, in the case of
interest payments, to reflect the period of time during which such Lender’s
participating interest was outstanding and funded).

     

    (iv)           In
the event that any Lender fails to make payment to the Swingline Lender of any
amount due under this Section 2.3, the Administrative Agent, on behalf of
the Swingline Lender, shall be entitled to receive, retain and apply against
such obligation the principal and interest otherwise payable to such Lender
hereunder until the Swingline Lender receives such payment from such Lender or
such obligation is otherwise fully satisfied.  In addition to the
foregoing, if for any reason any Lender fails to make payment to the Swingline
Lender of any amount due under this Section 2.3, such Lender shall be deemed, at
the option of the Administrative Agent, to have unconditionally and irrevocably
purchased from the Swingline Lender, without recourse or warranty, an undivided
interest and participation in the applicable Swingline Loan, and such interest
and participation may be recovered from such Lender together with interest
thereon at the Federal Funds Effective Rate for each day during the period
commencing on the date of demand and ending on the date such amount is
received.

     

    SECTION
2.4                                           Procedure for Advances of
Revolving Credit Loans, Alternative Currency Loans and Swingline
Loans.

     

    (a)           Requests for
Borrowing.

     

    (i)           Revolving Credit Loans and
Alternative Currency Loans.  The Borrower shall give the
Administrative Agent irrevocable prior written notice substantially in the form
attached hereto as Exhibit B (a “Notice of Borrowing”)
not later than 12:00 p.m. (Charlotte time) (A) on the same Business Day as each
Base Rate Loan requested under this Section 2.4(a), (B) at least three (3)
Business Days before each LIBOR Rate Loan denominated in Dollars and (C) at
least four (4) Business Days before each LIBOR Rate Loan denominated in an
Alternative Currency, of its intention to borrow, specifying:

     

    (1)           the
date of such borrowing, which shall be a Business Day;

     

    (2)           if
such Loan is to be a Revolving Credit Loan or an Alternative Currency
Loan;

     

    (3)           if
such Loan is to be a Revolving Credit Loan, whether such Revolving Credit Loan
shall be a LIBOR Rate Loan or a Base Rate Loan;

     

    (4)           the
amount of such borrowing, which shall be in an amount equal to the amount of the
Aggregate Commitment or the Alternative Currency Commitment, as applicable, then
available to the Borrower, or if less, (A) with respect to Base Rate Loans
(other than Swingline Loans), in an aggregate principal amount of $3,000,000 or
a whole multiple of $1,000,000 in excess thereof, (B) with respect to LIBOR Rate
Loans denominated in Dollars, in an aggregate principal amount of $3,000,000 or
a whole multiple of $1,000,000 in excess thereof and (C) with respect to LIBOR
Rate Loans denominated in an Alternative Currency, in an aggregate principal
Alternative Currency Amount of $2,000,000 or a whole multiple of $1,000,000 in
excess thereof; and

     

    (5)           if
such Loan is to be a LIBOR Rate Loan, the duration of the Interest Period
applicable thereto.

     

    A Notice
of Borrowing received after 12:00 p.m. (Charlotte time) shall be deemed received
on the next Business Day.  The Administrative Agent shall promptly
notify the Lenders of each Notice of Borrowing.

     

    (ii)           Swingline
Loans.  Swingline Loans shall be requested in the manner set
forth in Section 2.3.

     

    (b)           Disbursements.

     

    (i)           Revolving Credit
Loans.  Not later than 2:00 p.m. (Charlotte time) on the
proposed borrowing date for any Revolving Credit Loan, each Lender will make
available to the Administrative Agent, for the account of the Borrower, at the
Administrative Agent’s Office in Dollars in funds immediately available to the
Administrative Agent, such Lender’s Commitment Percentage of the Revolving
Credit Loan to be made on such borrowing date.  The Borrower hereby
irrevocably authorizes the Administrative Agent to disburse the proceeds of each
borrowing requested pursuant to this Section 2.4 in immediately available funds
by crediting or wiring such proceeds to the deposit account of the Borrower
identified in the most recent notice substantially in the form of Exhibit C hereto (a
“Notice of Account
Designation”) delivered by the Borrower to the Administrative Agent or as
may be otherwise requested by the Borrower from time to time (subject to the
reasonable consent of the Administrative Agent).  Subject to Section
4.7 hereof, the Administrative Agent shall not be obligated to disburse the
portion of the proceeds of any Revolving Credit Loan requested pursuant to this
Section 2.4 to the extent that any Lender has not made available to the
Administrative Agent its Commitment Percentage of such Revolving Credit
Loan.  Revolving Credit Loans to be made for the purpose of refunding
Swingline Loans shall be made by the Lenders as provided in Section
2.3(d).  Revolving Credit Loans to be made for the purpose of
refunding Alternative Currency Loans shall be made by the Lenders as provided in
Section 2.2(b).

     

    (ii)           Alternative Currency
Loans.  Not later than 11:00 a.m. (the time of the
Administrative Agent’s Correspondent’s office) on or before the proposed
borrowing date for any Alternative Currency Loan, the Alternative Currency
Lender will make available to the Administrative Agent, for the account of the
Borrower, at the office of the Administrative Agent’s Correspondent in the
requested Alternative Currency in funds immediately available to the
Administrative Agent, the Alternative Currency Loan to be made on such borrowing
date.  The Borrower hereby irrevocably authorizes the Administrative
Agent to disburse the proceeds of each borrowing requested pursuant to this
Section 2.4 in immediately available funds by crediting or wiring such proceeds
to the deposit account of the Borrower identified in the most recent Notice of
Account Designation delivered by the Borrower to the Administrative Agent or as
may be otherwise requested by the Borrower from time to time (subject to the
reasonable consent of the Administrative Agent).  Subject to Section
4.7, the Administrative Agent shall not be obligated to disburse the portion of
the proceeds of any Loan requested pursuant to this Section 2.4 to the extent
that the Alternative Currency Lender has not made available to the
Administrative Agent such Alternative Currency Loan.

     

    (iii)           Swingline
Loans.  Swingline Loans shall be disbursed in the manner set
forth in Section 2.3.

     

    SECTION
2.5                                           Repayment of
Loans.

     

    (a)           Repayment on the Revolving
Credit Termination Date.  The Borrower hereby agrees to repay
the outstanding principal amount of (i) all Revolving Credit Loans in full in
Dollars on the Revolving Credit Termination Date, (ii) all Alternative
Currency Loans in full in the Alternative Currency in which each Alternative
Currency Loan was initially funded on the Revolving Credit Termination Date and
(iii) all Swingline Loans in full in Dollars on the Swingline Termination Date
(or, if earlier, in accordance with Section 2.3(d)), together, in each case,
with all accrued but unpaid interest thereon.

     

    (b)           Mandatory Repayment of
Revolving Credit Loans.

     

    (i)           Aggregate
Commitment.  If at any time (as determined by the
Administrative Agent under Section 2.5(b)(v)), based upon the Dollar Amount of
all outstanding Loans and L/C Obligations, (A) solely because of currency
fluctuation, the outstanding principal amount of all Revolving Credit Loans
exceeds one hundred and five percent (105%) of the Aggregate Commitment less the sum of all
outstanding Swingline Loans, Alternative Currency Loans and L/C Obligations or
(B) for any other reason, the outstanding principal amount of all Revolving
Credit Loans exceeds the Aggregate Commitment less the sum of all
outstanding Swingline Loans, Alternative Currency Loans and L/C Obligations,
then, in each such case, the Borrower shall (I) first, if (and to the
extent) necessary to eliminate such excess, immediately repay outstanding
Swingline Loans (and/or reduce any pending request for such Loans on such day by
the Dollar Amount of such excess), (II) second, if (and to
the extent) necessary to eliminate such excess, immediately repay outstanding
Revolving Credit Loans which are Base Rate Loans by the Dollar Amount of such
excess (and/or reduce any pending request for such Loans on such day by the
Dollar Amount of such excess), (III) third, if (and to the
extent) necessary to eliminate such excess, immediately repay Revolving Credit
Loans which are LIBOR Rate Loans and Alternative Currency Loans (and/or reduce
any pending requests for a borrowing or continuation or conversion of such Loans
submitted in respect of such Loans on such day by the Dollar Amount of such
excess) and (IV) fourth, with respect
to any Letters of Credit then outstanding, make a payment of cash collateral
into a cash collateral account opened by the Administrative Agent for the
benefit of the Lenders in an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit (such cash collateral to be applied
in accordance with Section 11.2(b)).

     

    (ii)           Alternative Currency
Commitment.  If at any time (as determined by the
Administrative Agent under Section 2.5(b)(v)), based upon the Dollar Amount of
all outstanding Loans and L/C Obligations, (A) solely because of currency
fluctuation, the outstanding principal amount of all Alternative Currency Loans
exceeds the lesser of (1) one hundred and five percent (105%) of the Aggregate
Commitment less
the sum of all outstanding Swingline Loans, Revolving Credit Loans and L/C
Obligations and (2) one hundred and five percent (105%) of the Alternative
Currency Commitment or (B) for any other reason, the outstanding principal
amount of all Alternative Currency Loans exceeds the lesser of (1) the Aggregate
Commitment less
the sum of all outstanding Swingline Loans, Revolving Credit Loans and L/C
Obligations and (2) the Alternative Currency Commitment, then, in each such
case, such excess shall be immediately repaid, in the currency in which such
Alternative Currency Loan or Alternative Currency Loans were initially funded,
by the Borrower to the Administrative Agent for the account of the Alternative
Currency Lender.

     

    (iii)           Swingline
Commitment.  If at any time (as determined by the
Administrative Agent under Section 2.5(b)(v)), based upon the Dollar Amount of
all outstanding Loans and L/C Obligations, and for any reason the outstanding
principal amount of all Swingline Loans exceeds the lesser of (1) the Aggregate
Commitment less
the sum of all outstanding Revolving Credit Loans, Alternative Currency Loans
and L/C Obligations and (2) the Swingline Commitment, then, in each such case,
such excess shall be immediately repaid by the Borrower to the Administrative
Agent for the account of the Swingline Lender.

     

    (iv)           Excess L/C
Obligations.  If at any time (as determined by the
Administrative Agent under Section 2.5(b)(v)) and for any reason, based upon the
Dollar Amount of all outstanding Loans and L/C Obligations, the outstanding
amount of all L/C Obligations exceeds the lesser of (A) the Aggregate Commitment
less the sum of
the amount of all outstanding Swingline Loans, Revolving Credit Loans and
Alternative Currency Loans and (B) the L/C Commitment, then, in each such case,
the Borrower shall make a payment of cash collateral into a cash collateral
account opened by the Administrative Agent for the benefit of the Lenders in an
amount equal to the aggregate then undrawn and unexpired amount of such Letters
of Credit (such cash collateral to be applied in accordance with Section
11.2(b)).

     

    (v)           Compliance and
Payments.  The Borrower’s compliance with this Section 2.5(b)
shall be tested from time to time by the Administrative Agent at its sole
discretion, but in any event shall be tested on (A) the date on which the
Borrower requests the Lenders to make a Revolving Credit Loan or the Alternative
Currency Lender to make an Alternative Currency Loan or the Issuing Lender to
issue a Letter of Credit and (B) the date an interest payment is due under
Section 4.1(e).  Each such repayment pursuant to this Section 2.5(b)
shall be accompanied by any amount required to be paid pursuant to Section 4.11
hereof.

     

    (c)           Optional
Repayments.  The Borrower may at any time and from time to time
repay the Loans, in whole or in part, upon at least four (4) Business Days’
irrevocable notice to the Administrative Agent with respect to Alternative
Currency Loans, upon at least three (3) Business Days’ irrevocable notice to the
Administrative Agent with respect to LIBOR Rate Loans denominated in Dollars and
upon receipt of Borrower’s irrevocable notice with respect to Base Rate Loans
and Swingline Loans (if received prior to 11:00 a.m. (Charlotte time),
otherwise, upon at least one (1) Business Days’ irrevocable notice to the
Administrative Agent), substantially in the form attached hereto as Exhibit D ,
specifying (i) the date of repayment, (ii) the amount of repayment, (iii)
whether the repayment is of Revolving Credit Loans, Alternative Currency Loans,
Swingline Loans, or a combination thereof, and, if of a combination thereof, the
amount allocable to each and (iv) whether the repayment is of LIBOR Rate Loans
denominated in an Alternative Currency, LIBOR Rate Loans denominated in Dollars,
Base Rate Loans, or a combination thereof, and, if of a combination thereof, the
amount allocable to each.  Upon receipt of such notice, the
Administrative Agent shall promptly notify each Lender.  If any such
notice is given, the amount specified in such notice shall be due and payable on
the date set forth in such notice.  Partial repayments shall be in an
aggregate amount (i) of $2,000,000 or a whole multiple of $500,000 in excess
thereof with respect to Base Rate Loans (other than Swingline Loans), (ii) of
$3,000,000 or a whole multiple of $1,000,000 in excess thereof with respect to
LIBOR Rate Loans denominated in Dollars, (iii) of $2,000,000 or a whole multiple
of $1,000,000 in excess thereof (based upon the Alternative Currency Amount
thereof) with respect to Alternative Currency Loans and (iv) permitted pursuant
to the terms and conditions of the Sweep Plus Service Program (or as otherwise
agreed to by the Swingline Lender and the Borrower).  Each such
repayment shall be accompanied by any amount required to be paid pursuant to
Section 4.11 hereof.

     

    (d)           Limitation on Repayment of
LIBOR Rate Loans.  The Borrower may not repay any LIBOR Rate
Loan on any day other than on the last day of the Interest Period applicable
thereto unless such repayment is accompanied by any amount required to be paid
pursuant to Section 4.11 hereof.

     

    (e)           Hedging
Agreements.  No repayment or prepayment pursuant to this
Section 2.5 shall affect any of the Borrower’s obligations under any Hedging
Agreement.

     

    (f)           Payment of Interest and
Other Expenses.  Each repayment or prepayment pursuant to this
Section 2.5 shall be accompanied by accrued interest on the amount
repaid.

     

    SECTION
2.6                                           Notes.

     

    (a)           Revolving Credit
Notes.  Except as otherwise provided in Section 13.10(a) - (e),
each Lender’s Revolving Credit Loans and the obligation of the Borrower to repay
such Revolving Credit Loans shall be evidenced by a separate Revolving Credit
Note executed by the Borrower payable to the order of such Lender.

     

    (b)           Alternative Currency
Note.  The Alternative Currency Loans and the obligation of the
Borrower to repay such Alternative Currency Loans shall be evidenced by a
separate Alternative Currency Note executed by the Borrower payable to the order
of the Alternative Currency Lender.

     

    (c)           Swingline
Note.  The Swingline Loans and the obligation of the Borrower
to repay such Swingline Loans shall be evidenced by a separate Swingline Note
executed by the Borrower payable to the order of the Swingline
Lender.

     

    SECTION
2.7                                           Permanent Reduction of the
Aggregate Commitment and the Alternative Currency
Commitment.

     

    (a)           Voluntary
Reduction.  The Borrower shall have the right at any time and
from time to time, upon at least five (5) Business Days prior written notice to
the Administrative Agent, to permanently reduce, without premium or penalty, (i)
the entire Aggregate Commitment at any time or (ii) portions of the Aggregate
Commitment, from time to time, in an aggregate principal amount not less than
$2,000,000 or any whole multiple of $500,000 in excess thereof; provided that in no
event shall the Aggregate Commitment be reduced to an amount less than the face
amount of all Letters of Credit then outstanding.

     

    (b)           Corresponding
Reductions.  Each partial permanent reduction permitted
pursuant to this Section 2.7 shall (i) permanently reduce the Lenders’
Commitments pro
rata in
accordance with their respective Commitment Percentages and (ii) permanently
reduce the Alternative Currency Commitment pro rata in accordance
with the relative amount of the Alternative Currency Commitment and the
Aggregate Commitment.

     

    (c)           Corresponding
Payments.  Each permanent reduction permitted pursuant to this
Section 2.7 shall be accompanied by a payment of principal sufficient to reduce
(i) the aggregate Dollar Amount of all outstanding Revolving Credit Loans,
Alternative Currency Loans, Swingline Loans and L/C Obligations, as applicable,
after such reduction to the Aggregate Commitment as so reduced and (ii) to the
extent that the Alternative Currency Commitment is reduced, the aggregate Dollar
Amount of all outstanding Alternative Currency Loans to the Alternate Currency
Commitment as so reduced.  If the Aggregate Commitment as so reduced
is less than the aggregate amount of all outstanding Letters of Credit, the
Borrower shall be required to deposit cash collateral in a cash collateral
account opened by the Administrative Agent in an amount equal to the aggregate
then undrawn and unexpired amount of such Letters of Credit.  Such
cash collateral shall be applied in accordance with Section
11.2(b).  Any reduction of the Aggregate Commitment to zero shall be
accompanied by payment of all outstanding Revolving Credit Loans, Alternative
Currency Loans and Swingline Loans (and furnishing of cash collateral
satisfactory to the Administrative Agent for all L/C Obligations) and shall
result in the termination of the Commitments and Credit
Facility.  Such cash collateral shall be applied in accordance with
Section 11.2(b).  If the reduction of the Aggregate Commitment or the
Alternative Currency Commitment, as applicable requires the repayment of any
LIBOR Rate Loan, such repayment shall be accompanied by any amount required to
be paid pursuant to Section 4.11 hereof.

     

    SECTION
2.8                                           Termination of Credit
Facility.  The
Credit Facility shall terminate on the earliest of (a) January 15, 2009,
(b) the date of termination by the Borrower pursuant to Section 2.7 or (c) the
date of termination by the Administrative Agent on behalf of the Lenders
pursuant to Section 11.2(a).

     

               


    ARTICLE
III

    


    LETTER OF CREDIT
FACILITY

    


    SECTION
3.1                                           L/C
Commitment.  Subject
to the terms and conditions hereof, the Issuing Lender, in reliance on the
agreements of the other Lenders set forth in Section 3.4(a), agrees to issue
standby letters of credit (“Letters of Credit”)
for the account of the Borrower on any Business Day from the Closing Date
through but not including the Revolving Credit Termination Date in such form as
may be approved from time to time by the Issuing Lender; provided, that the
Issuing Lender shall have no obligation to issue any Letter of Credit if, after
giving effect to such issuance, based upon the Dollar Amount of all outstanding
Loans and L/C Obligations, (a) the L/C Obligations would exceed the lesser of (i) the L/C
Commitment or (ii) the Aggregate Commitment less the aggregate
principal amount of all outstanding Swingline Loans, Revolving Credit Loans and
Alternative Currency Loans or (b) the Available Commitment of any Lender would
be less than zero.  Each Letter of Credit shall (i) be denominated in
Dollars in a
minimum amount of $100,000, (ii) be a standby letter of credit issued to support
obligations of the Borrower or any of its Subsidiaries, contingent or otherwise,
incurred in the ordinary course of business, (iii) expire on a date satisfactory
to the Issuing Lender, which date shall be no later than ninety (90) days prior
to the Revolving Credit Termination Date and (iv) be subject to the Uniform
Customs and/or ISP 98, as set forth in the Application or as determined by the
Issuing Lender, and, to the extent not inconsistent therewith, the laws of the
State of North Carolina.  The Issuing Lender shall not at any time be
obligated to issue any Letter of Credit hereunder if such issuance would
conflict with, or cause the Issuing Lender or any L/C Participant to exceed any
limits imposed by, any Applicable Law.  References herein to “issue”
and derivations thereof with respect to Letters of Credit shall also include
extensions or modifications of any existing Letters of Credit, unless the
context otherwise requires.

     

    SECTION
3.2                                           Procedure for Issuance of
Letters of Credit.  The
Borrower, may from time to time request that the Issuing Lender issue a Letter
of Credit by delivering to the Issuing Lender at the Administrative Agent’s
Office an Application therefor, completed to the satisfaction of the Issuing
Lender, and such other certificates, documents and other papers and information
as the Issuing Lender may reasonably request.  Upon receipt of any
Application, the Issuing Lender shall process such Application and the
certificates, documents and other papers and information delivered to it in
connection therewith in accordance with its customary procedures and shall,
subject to Section 3.1 and Article V hereof, promptly issue the Letter of Credit
requested thereby (but in no event shall the Issuing Lender be required to issue
any Letter of Credit earlier than four (4) Business Days after its receipt of
the Application therefor and all such other certificates, documents and other
papers and information relating thereto) by issuing the original of such Letter
of Credit to the beneficiary thereof or as otherwise may be agreed by the
Issuing Lender and the Borrower; provided that the
Issuing Lender shall not issue a Letter of Credit from and after the date which
is one (1) day after it has received written notice from the Administrative
Agent (upon the request of the Required Lenders) that one or more of the
applicable conditions to Extensions of Credit specified in Section 5.3 is not
then satisfied until such conditions are satisfied or waived in accordance with
the provisions of this Agreement (and the Issuing Lender shall be entitled to
conclusively rely on any such notice and shall have no obligation to
independently investigate the accuracy of such notice and shall have no
liability to the Borrower in respect thereof if such notice proves to be
inaccurate).  The Issuing Lender shall promptly furnish to the
Borrower a copy of such Letter of Credit and promptly notify each Lender of the
issuance and upon request by any Lender, furnish to such Lender a copy of such
Letter of Credit and the amount of such Lender’s participation
therein.

     

    SECTION
3.3                                           Commissions and Other
Charges.

     

    (a)           The
Borrower shall pay to the Administrative Agent, for the account of the Issuing
Lender and the L/C Participants, a letter of credit commission with respect to
each Letter of Credit in an amount equal to the face amount of such Letter of
Credit multiplied by the Applicable Margin with respect to LIBOR Rate Loans
(determined on a per annum basis).  Such commission shall be payable
quarterly in arrears on the last Business Day of each calendar quarter and on
the Revolving Credit Termination Date.  The Administrative Agent
shall, promptly following its receipt thereof, distribute to the Issuing Lender
and the L/C Participants all commissions received pursuant to this Section
3.3(a) in accordance with their respective Commitment Percentages.

     

    (b)           In
addition to the foregoing commission, the Borrower shall pay the Issuing Lender
an issuance fee with respect to each Letter of Credit in an amount equal to the
face amount of such Letter of Credit multiplied by one-eighth of one percent
(0.125%) per annum.  Such issuance fee shall be payable quarterly in
arrears on the last Business Day of each calendar quarter and on the Revolving
Credit Termination Date.

     

    (c)           In
addition to the foregoing fees and commissions, the Borrower shall pay or
reimburse the Issuing Lender for such normal and customary costs and expenses as
are incurred or charged by the Issuing Lender in issuing, effecting payment
under, amending or otherwise administering any Letter of Credit.

     

    SECTION
3.4                                           L/C
Participations.

     

    (a)           The
Issuing Lender irrevocably agrees to grant and hereby grants to each L/C
Participant, and, to induce the Issuing Lender to issue Letters of Credit
hereunder, each L/C Participant irrevocably agrees to accept and purchase and
hereby accepts and purchases from the Issuing Lender, on the terms and
conditions hereinafter stated, for such L/C Participant’s own account and risk
an undivided interest equal to such L/C Participant’s Commitment Percentage in
the Issuing Lender’s obligations and rights under and in respect of each Letter
of Credit issued hereunder and the amount of each draft paid by the Issuing
Lender thereunder.  Each L/C Participant unconditionally and
irrevocably agrees with the Issuing Lender that, if a draft is paid under any
Letter of Credit for which the Issuing Lender is not reimbursed in full by the
Borrower through a Revolving Credit Loan or otherwise in accordance with the
terms of this Agreement, such L/C Participant shall pay to the Issuing Lender
upon demand at the Issuing Lender’s address for notices specified herein an
amount equal to such L/C Participant’s Commitment Percentage of the amount of
such draft, or any part thereof, which is not so reimbursed.

     

    (b)           Upon
becoming aware of any amount required to be paid by any L/C Participant to the
Issuing Lender pursuant to Section 3.4(a) in respect of any unreimbursed
portion of any payment made by the Issuing Lender under any Letter of Credit,
the Issuing Lender shall notify each L/C Participant of the amount and due date
of such required payment and such L/C Participant shall pay to the Issuing
Lender the amount specified on the applicable due date.  If any such
amount is paid to the Issuing Lender after the date such payment is due, such
L/C Participant shall pay to the Issuing Lender on demand, in addition to such
amount, the product of (i) such amount, times (ii) the daily
average Federal Funds Rate as determined by the Administrative Agent during the
period from and including the date such payment is due to the date on which such
payment is immediately available to the Issuing Lender, times (iii) a
fraction the numerator of which is the number of days that elapse during such
period and the denominator of which is 360.  A certificate of the
Issuing Lender with respect to any amounts owing under this Section 3.4(b) shall
be conclusive in the absence of manifest error.  With respect to
payment to the Issuing Lender of the unreimbursed amounts described in this
Section 3.4(b), if the L/C Participants receive notice that any such payment is
due (A) prior to 1:00 p.m. (Charlotte time) on any Business Day, such payment
shall be due that Business Day, and (B) after 1:00 p.m. (Charlotte time) on any
Business Day, such payment shall be due on the following Business
Day.

     

    (c)           Whenever,
at any time after the Issuing Lender has made payment under any Letter of Credit
and has received from any L/C Participant its Commitment Percentage of such
payment in accordance with this Section 3.4, the Issuing Lender receives any
payment related to such Letter of Credit (whether directly from the Borrower or
otherwise), or any payment of interest on account thereof, the Issuing Lender
will distribute to such L/C Participant its pro rata share thereof;
provided, that
in the event that any such payment received by the Issuing Lender shall be
required to be returned by the Issuing Lender, such L/C Participant shall return
to the Issuing Lender the portion thereof previously distributed by the Issuing
Lender to it.

     

    SECTION
3.5                                           Reimbursement Obligation of
the Borrower.  In
the event of any drawing under any Letter of Credit, the Borrower agrees to
reimburse (either with the proceeds of a Revolving Credit Loan as provided for
in this Section 3.5 or with funds from other sources), in the same day funds,
the Issuing Lender on each date on which the Issuing Lender notifies the
Borrower of the date and amount of a draft paid under any Letter of Credit for
the amount of (a) such draft so paid and (b) any amounts referred to in Section
3.3(c) incurred by the Issuing Lender in connection with such
payment.  Unless the Borrower shall immediately notify the Issuing
Lender that the Borrower intends to reimburse the Issuing Lender for such
drawing from other sources or funds, the Borrower shall be deemed to have timely
given a Notice of Borrowing to the Administrative Agent requesting that the
Lenders make a Revolving Credit Loan bearing interest at the Base Rate on such
date in the amount of (a) such draft so paid and (b) any amounts referred to in
Section 3.3(c) incurred by the Issuing Lender in connection with such payment,
and the Lenders shall make a Revolving Credit Loan bearing interest at the Base
Rate in such amount, the proceeds of which shall be applied to reimburse the
Issuing Lender for the amount of the related drawing and costs and
expenses.  Each Lender acknowledges and agrees that its obligation to
fund a Revolving Credit Loan in accordance with this Section 3.5 to reimburse
the Issuing Lender for any draft paid under a Letter of Credit is absolute and
unconditional and shall not be affected by any circumstance whatsoever,
including, without limitation, non-satisfaction of the conditions set forth in
Section 2.4(a) or Article V.  If the Borrower has elected to pay the
amount of such drawing with funds from other sources and shall fail to reimburse
the Issuing Lender as provided above, the unreimbursed amount of such drawing
shall bear interest at the rate which would be payable on any outstanding Base
Rate Loans which were then overdue from the date such amounts become payable
(whether at stated maturity, by acceleration or otherwise) until payment in
full.

     

    SECTION
3.6                                           Obligations
Absolute.  The
Borrower’s obligations under this Article III (including without limitation the
Reimbursement Obligation) shall be absolute and unconditional under any and all
circumstances and irrespective of any set-off, counterclaim or defense to
payment which the Borrower may have or have had against the Issuing Lender or
any beneficiary of a Letter of Credit or any other Person.  The
Borrower also agrees that the Issuing Lender and the L/C Participants shall not
be responsible for, and the Borrower’s Reimbursement Obligation under Section
3.5 shall not be affected by, among other things, the validity or genuineness of
documents or of any endorsements thereon, even though such documents shall in
fact prove to be invalid, fraudulent or forged, or any dispute between or among
the Borrower and any beneficiary of any Letter of Credit or any other party to
which such Letter of Credit may be transferred or any claims whatsoever of the
Borrower against any beneficiary of such Letter of Credit or any such
transferee.  The Issuing Lender shall not be liable for any error,
omission, interruption or delay in transmission, dispatch or delivery of any
message or advice, however transmitted, in connection with any Letter of Credit,
except for errors or omissions caused by the Issuing Lender’s gross negligence
or willful misconduct.  The Borrower agrees that any action taken or
omitted by the Issuing Lender under or in connection with any Letter of Credit
or the related drafts or documents, if done in the absence of gross negligence
or willful misconduct, shall be binding on the Borrower and shall not result in
any liability of the Issuing Lender or any L/C Participant to the
Borrower.  The responsibility of the Issuing Lender to the Borrower in
connection with any draft presented for payment under any Letter of Credit
shall, in addition to any payment obligation expressly provided for in such
Letter of Credit, be limited to determining that the documents (including each
draft) delivered under such Letter of Credit in connection with such presentment
are in conformity with such Letter of Credit.

     

    SECTION
3.7                                           Effect of
Application.  To
the extent that any provision of any Application related to any Letter of Credit
is inconsistent with the provisions of this Article III, the provisions of this
Article III shall apply.

     

    ARTICLE
IV

    


    GENERAL LOAN
PROVISIONS

    


    SECTION
4.1                                           Interest.

     

    (a)           Interest Rate
Options.  Subject to the provisions of this Section 4.1, at the
election of the Borrower, (i) Revolving Credit Loans shall bear interest at (A)
the Base Rate plus the Applicable
Margin as set forth in Section 4.1(c) or (B) the LIBOR Rate plus the Applicable
Margin as set forth in Section 4.1(c), (ii) Alternative Currency Loans shall
bear interest at the LIBOR Rate plus the Applicable
Margin as set forth in Section 4.1(c) and (iii) Swingline Loans shall bear
interest at the Base Rate plus the Applicable
Margin as set forth in Section 4.1(c); provided that the
LIBOR Rate shall not be available until three (3) Business Days after the
Closing Date.  The Borrower shall select the rate of interest and
Interest Period, if any, applicable to any Loan at the time a Notice of
Borrowing is given pursuant to Section 2.4 or 3.5 or at the time a Notice of
Conversion/Continuation is given pursuant to Section 4.2.  Each Loan
or portion thereof bearing interest based on the Base Rate (including, without
limitation, each Swingline Loan) shall be a “Base Rate Loan” and
each Loan or portion thereof bearing interest based on the LIBOR Rate shall be a
“LIBOR Rate
Loan.”  Any Revolving Credit Loan or any portion thereof as to
which the Borrower has not duly specified an interest rate as provided herein
shall be deemed a Base Rate Loan denominated in Dollars.  Any
Alternative Currency Loan or any portion thereof as to which the Borrower has
not duly specified an interest rate as provided herein shall be deemed a LIBOR
Rate Loan with an Interest Period of one (1) month and shall be made four (4)
Business Days after receipt of such notice

     

    (b)           Interest
Periods.  In connection with each LIBOR Rate Loan, the
Borrower, by giving notice at the times described in Section 4.1(a), shall elect
an interest period (each, an “Interest Period”) to
be applicable to such Loan, which Interest Period shall be a period of one (1),
two (2), three (3), or six (6) months (or, if available to all of the Lenders,
nine (9) months or twelve (12) months) with respect to each LIBOR Rate Loan;
provided
that:

     

    (i)           the
Interest Period shall commence on the date of advance of or conversion to any
LIBOR Rate Loan and, in the case of immediately successive Interest Periods,
each successive Interest Period shall commence on the date on which the
immediately preceding Interest Period expires;

     

    (ii)           if
any Interest Period would otherwise expire on a day that is not a Business Day,
such Interest Period shall expire on the next succeeding Business Day; provided, that if any
Interest Period with respect to a LIBOR Rate Loan would otherwise expire on a
day that is not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire on the
immediately preceding Business Day;

     

    (iii)          any
Interest Period with respect to a LIBOR Rate Loan that begins on the last
Business Day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest Period)
shall end on the last Business Day of the relevant calendar month at the end of
such Interest Period;

     

    (iv)          no
Interest Period shall extend beyond the Revolving Credit Termination Date;
and

     

    (v)           there
shall be no more than six (6) Interest Periods in effect at any
time.

     

    (c)           Applicable
Margin.  The Applicable Margin provided for in Section 4.1(a)
with respect to any Loan (the “Applicable Margin”)
shall be based upon the table set forth below and shall be determined and
adjusted quarterly on the date (each a “Calculation Date”)
ten (10) Business Days after the date by which the Borrower provides an
Officer’s Compliance Certificate for the most recently ended fiscal quarter of
the Borrower; provided, however, that (a) the
initial Applicable Margin shall be based on Pricing Level IV (as shown below)
and shall remain at Pricing Level IV until the first Calculation Date occurring
after the Closing Date and, thereafter the Pricing Level shall be determined by
reference to the Leverage Ratio (as calculated pursuant
to the formula set forth in Section 9.1) as of the last day of the most recently
ended fiscal quarter of the Borrower preceding the applicable Calculation Date,
and (b) if the Borrower fails to provide the Officer’s Compliance Certificate as
required by Section 7.2 for the most recently ended fiscal quarter of the
Borrower preceding the applicable Calculation Date, the Applicable Margin from
such Calculation Date shall be based on Pricing Level I (as shown below) until
such time as an appropriate Officer’s Compliance Certificate is provided, at
which time the Pricing Level shall be determined by reference to the Leverage
Ratio as of the last day of the most recently ended fiscal quarter of the
Borrower preceding such Calculation Date.  The Applicable Margin shall
be effective from one Calculation Date until the next Calculation
Date.  Any adjustment in the Applicable Margin shall be applicable to
all Extensions of Credit then existing or subsequently made or
issued.

     

    


    
      	 
      
	
              Pricing Level

            	
              Leverage Ratio

            	
              LIBOR Rate

              Applicable Margin

            	
              Base Rate

              Applicable Margin

            
	
              I

            	
              Greater
      than 2.00 to 1.00

            	
              1.85%

            	
              1.00%

            
	
              II

            	
              Greater
      than 1.50 to 1.00 but less than or equal to 2.00 to 1.00

            	
              1.60%

            	
              0.75%

            
	
              III

            	
              Greater
      than 1.00  to 1.00 but less than or equal to 1.50 to
      1.00

            	
              1.35%

            	
              0.50%

            
	
              IV

            	
              Less
      than or equal to 1.00 to 1.00

            	
              1.10%

            	
              0.25%

            


    

    


    (d)           Default
Rate.  Subject to Section 11.3, at the discretion of the
Administrative Agent or as directed by the Required Lenders, upon the occurrence
and during the continuance of any Event of Default, (i) the Borrower shall no
longer have the option to request LIBOR Rate Loans (including, without
limitation, Alternative Currency Loans) or Swingline Loans, (ii) all outstanding
LIBOR Rate Loans shall bear interest at a rate per annum two percent (2%) in
excess of the rate then applicable to LIBOR Rate Loans until the end of the
applicable Interest Period and thereafter at a rate equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans, and (iii) all outstanding
Base Rate Loans and other Obligations arising hereunder or under any other Loan
Document shall bear interest at a rate per annum equal to two percent (2%) in
excess of the rate then applicable to Base Rate Loans or such other Obligations
arising hereunder or under any other Loan Document; provided that clauses
(i), (ii) and (iii) shall apply immediately upon the occurrence and during the
continuance of any Event of Default under Sections 11.1(a), 11.1(b), 11.1(i) and
11.1(j).  Interest shall continue to accrue on the Notes after the
filing by or against the Borrower of any petition seeking any relief in
bankruptcy or under any act or law pertaining to insolvency or debtor relief,
whether state, federal or foreign.

     

    (e)           Interest Payment and
Computation.  Interest on each Base Rate Loan shall be payable
in arrears on the last Business Day of each calendar quarter commencing December
31, 2005; and interest on each LIBOR Rate Loan shall be payable on the last day
of each Interest Period applicable thereto, and if such Interest Period extends
over three (3) months, at the end of each three (3) month interval during such
Interest Period. Interest on LIBOR Rate Loans and all fees payable hereunder
shall be computed on the basis of a 360-day year and assessed for the actual
number of days elapsed (except, to the extent that Pounds Sterling is agreed
upon as an Alternative Currency pursuant to the definition thereof, for
Alternative Currency Loans denominated in Pounds Sterling which shall be
computed on the basis of a 365/66-day year) and interest on Base Rate Loans
shall be computed on the basis of a 365/66-day year and assessed for the actual
number of days elapsed.

     

    (f)           Maximum
Rate.  In no contingency or event whatsoever shall the
aggregate of all amounts deemed interest hereunder or under any of the Notes
charged or collected pursuant to the terms of this Agreement or pursuant to any
of the Notes exceed the highest rate permissible under any Applicable Law which
a court of competent jurisdiction shall, in a final determination, deem
applicable hereto.  In the event that such a court determines that the
Lenders have charged or received interest hereunder in excess of the highest
applicable rate, the rate in effect hereunder shall automatically be reduced to
the maximum rate permitted by Applicable Law and the Lenders shall at the
Administrative Agent’s option (i) promptly refund to the Borrower any interest
received by the Lenders in excess of the maximum lawful rate or (ii) apply such
excess to the principal balance of the Obligations on a pro rata
basis.  It is the intent hereof that the Borrower not pay or contract
to pay, and that neither the Administrative Agent nor any Lender receive or
contract to receive, directly or indirectly in any manner whatsoever, interest
in excess of that which may be paid by the Borrower under Applicable
Law.

     

    (g)           Basis of
Accrual.  Subject to Section 1.3 hereof, if the basis of
accrual of interest or fees expressed in this Agreement with respect to the
currency of any state that becomes a Participating Member State, in the judgment
of the Administrative Agent, shall not be available because interest rate quotes
for the applicable national currency unit are no longer provided, or shall be
inconsistent with any convention or practice in the London Interbank Market for
the basis of accrual of interest or fees in respect of the euro, such convention
or practice shall replace such expressed basis effective as of and from the date
on which such state becomes a Participating Member State; provided that if any
Loan in the currency of such state is outstanding immediately prior to such
date, such replacement shall take effect, with respect to such Loan, at the end
of the then current Interest Period.

     

    SECTION
4.2                                           Notice and Manner of
Conversion or Continuation of Loans.  Provided
that no Default or Event of Default has occurred and is then continuing, the
Borrower shall have the option to (a) convert at any time following the third
Business Day after the Closing Date all or any portion of any outstanding Base
Rate Loans (other than Swingline Loans) in a principal amount equal to
$3,000,000 or any whole multiple of $1,000,000 in excess thereof into one or
more LIBOR Rate Loans denominated in Dollars, (b) upon the expiration of any
Interest Period, convert all or any part of its outstanding LIBOR Rate Loans
denominated in Dollars in a principal amount equal to $3,000,000 or a whole
multiple of $1,000,000 in excess thereof into Base Rate Loans (other than
Swingline Loans), (c) upon the expiration of any Interest Period, continue any
LIBOR Rate Loan denominated in Dollars in a principal amount of $3,000,000 or
any whole multiple of $1,000,000 in excess thereof as a LIBOR Rate Loan
denominated in Dollars or (d) upon the expiration of any Interest Period,
continue any LIBOR Rate Loan denominated in any Alternative Currency in a
principal amount of $2,000,000 or any whole multiple of $1,000,000 in excess
thereof (based on the Alternative Currency Amount thereof) as a LIBOR Rate Loan
in the same Alternative Currency.  Whenever the Borrower desires to
convert or continue Loans as provided above, the Borrower shall give the
Administrative Agent irrevocable prior written notice in the form attached as
Exhibit E (a
“Notice of
Conversion/Continuation”) not later than 12:00 p.m. (Charlotte time) four
(4) Business Days (with respect to any Alternative Currency Loan) and three (3)
Business Days (with respect to any Loan denominated in Dollars) before the day
on which a proposed conversion or continuation of such Loan is to be effective
specifying (A) the Loans to be converted or continued, and, in the case of any
LIBOR Rate Loan to be converted or continued, the last day of the Interest
Period therefor, (B) the Permitted Currency in which such Loan is denominated,
(C) the effective date of such conversion or continuation (which shall be a
Business Day), (D) the principal amount of such Loans to be converted or
continued, and (E) the Interest Period to be applicable to such converted or
continued LIBOR Rate Loan.  The Administrative Agent shall promptly
notify the Lenders of such Notice of Conversion/Continuation.

     

    SECTION
4.3                                           Fees.

     

    (a)           Commitment
Fee.  Commencing on the Closing Date, the Borrower shall pay to
the Administrative Agent, for the account of the Lenders, a non-refundable
commitment fee at a rate per annum equal to the applicable rate based upon the
table set forth below (the “Commitment Fee Rate”)
on the average daily unused portion of the Aggregate Commitment; provided that the
amount of outstanding Swingline Loans and Alternative Currency Loans shall not
be considered usage of the Revolving Credit Commitment for the purpose of
calculating such commitment fee with regard to any Lender other than the
Swingline Lender (as to outstanding Swingling Loans) and the Alternative
Currency Lender (as to outstanding Alternative Currency Loans).  The
commitment fee shall be payable in arrears on the last Business Day of each
calendar quarter during the term of this Agreement commencing December 31, 2005,
and on the Revolving Credit Termination Date.  Such commitment fee
shall be distributed by the Administrative Agent to the Lenders pro rata in accordance
with the Lenders’ respective Commitment Percentages.  The Commitment
Fee Rate shall be determined and adjusted quarterly on each Calculation Date;
provided, however, that (a) the
initial Commitment Fee Rate shall be based on Pricing Level IV (as shown below)
and shall remain at Pricing Level IV until the first Calculation Date occurring
after the Closing Date and thereafter the Pricing Level shall be determined by
reference to the Leverage Ratio (as calculated pursuant
to the formula set forth in Section 9.1) as of the last day of the most recently
ended fiscal quarter of the Borrower preceding the applicable Calculation Date,
and (b) if the Borrower fails to provide the Officer’s Compliance Certificate as
required by Section 7.2 for the most recently ended fiscal quarter of the
Borrower preceding the applicable Calculation Date, the Commitment Fee Rate from
such Calculation Date shall be based on Pricing Level I (as shown below) until
such time as an appropriate Officer’s Compliance Certificate is provided, at
which time the Pricing Level shall be determined by reference to the Leverage
Ratio as of the last day of the most recently ended fiscal quarter of the
Borrower preceding such Calculation Date.  The Commitment Fee Rate
shall be effective from one Calculation Date until the next Calculation
Date.

     

    


    
      	
              Pricing
      Level

            	
              Leverage
      Ratio

            	
              Commitment
      Fee Rate

            
	
               

              I

            	
               

              Greater
      than 2.00 to 1.00

            	
               

              0.35%

            
	
               

              II

            	
               

              Greater
      than 1.50 to 1.00 but less than or equal to 2.00 to 1.00

            	
               

              0.30%

            
	
               

              III

            	
               

              Greater
      than 1.00  to 1.00 but less than or equal to 1.50 to
      1.00

            	
               

              0.25%

            
	
               

              IV

            	
               

              Less
      than or equal to 1.00 to 1.00

            	
               

              0.20%

            


    

    


    (b)           Administrative Agent’s and
Other Fees.  In order to compensate the Administrative Agent
for structuring and syndicating the Extensions of Credit and for its obligations
hereunder, the Borrower agrees to pay to the Administrative Agent, for its
account, the fees set forth in the separate fee letter agreement executed by the
Borrower and the Administrative Agent dated November 4, 2005.

     

    SECTION
4.4                                           Manner of
Payment.

     

    (a)           Loans and Letters of Credit
Denominated in Dollars.  Each payment by the Borrower on
account of the principal of or interest on any Loan or Letter of Credit
denominated in Dollars or of any fee, commission or other amounts (including the
Reimbursement Obligation with respect to any Letter of Credit denominated in
Dollars) payable to the Lenders under this Agreement or any Note (except as set
forth in Section 4.4(b)) shall be made in Dollars not later than 1:00 p.m.
(Charlotte time) on the date specified for payment under this Agreement to the
Administrative Agent at the Administrative Agent’s Office for the account of the
Lenders (other than as set forth below) pro rata in accordance
with their respective Commitment Percentages (except as specified below) in
immediately available funds and shall be made without any set-off, counterclaim
or deduction whatsoever.  Any payment received after such time but
before 2:00 p.m. (Charlotte time) on such day shall be deemed a payment on such
date for the purposes of Section 11.1, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day.  Any
payment received after 2:00 p.m. (Charlotte time) shall be deemed to have been
made on the next succeeding Business Day for all purposes.  With
respect to each Letter of Credit denominated in Dollars, each payment to the
Administrative Agent of the Issuing Lender’s fees or L/C Participants’
commissions shall be made in like manner, but for the account of the Issuing
Lender or the L/C Participants, as the case may be.

     

    (b)           Alternative Currency
Loans.  Each payment by the Borrower on account of the
principal of or interest on the Alternative Currency Loans shall be made in such
Alternative Currency not later than 11:00 a.m. (the time of the
Administrative Agent’s Correspondent) on the date specified for payment under
this Agreement to the Administrative Agent’s account with the Administrative
Agent’s Correspondent for the account of the Alternative Currency Lender (other
than as set forth below) in immediately available funds, and shall be made
without any set-off, counterclaim or deduction whatsoever.  Any
payment received after such time but before 12:00 noon (the time of the
Administrative Agent’s Correspondent) on such day shall be deemed a payment on
such date for the purposes of Section 11.1, but for all other purposes shall be
deemed to have been made on the next succeeding Business Day. Any payment
received after 12:00 noon (the time of the Administrative Agent’s Correspondent)
shall be deemed to have been made on the next succeeding Business Day for all
purposes.

     

    (c)           Pro Rata
Treatment.  Upon receipt by the Administrative Agent of each
such payment, the Administrative Agent shall distribute to each Lender, at its
address for notices set forth herein, its pro rata share of such
payment in accordance with such Lender’s Commitment Percentage (except as
specified below) and shall wire advice of the amount of such credit to each
Lender.  Each payment to the Administrative Agent of the Issuing
Lender’s fees or L/C Participants’ commissions shall be made in like manner, but
for the account of the Issuing Lender or the L/C Participants, as the case may
be.  Each payment to the Administrative Agent of Administrative
Agent’s fees or expenses shall be made for the account of the Administrative
Agent.  Each payment to the Administrative Agent with respect to the
Swingline Note (including, without limitation, the Swingline Lender’s fees or
expenses) shall be made for the account of the Swingline Lender.  Each
payment to the Administrative Agent with respect to the Alternative Currency
Note shall be made for the account of the Alternative Currency
Lender.  Any amount payable to any Lender under Sections 4.10, 4.11,
4.12, 4.13 or 13.2 shall be paid to the Administrative Agent for the account of
the applicable Lender.  Subject to Section 4.1(b)(ii), if any payment
under this Agreement or any Note shall be specified to be made upon a day which
is not a Business Day, it shall be made on the next succeeding day which is a
Business Day and such extension of time shall in such case be included in
computing any interest if payable along with such payment.

     

    SECTION
4.5                                           Crediting of Payments and
Proceeds.  In
the event that the Borrower shall fail to pay any of the Obligations when due
and the Obligations have been accelerated pursuant to Section 11.2, all payments
received by the Lenders upon the Notes and the other Obligations and all net
proceeds from the enforcement of the Obligations shall be applied: (a) first to
all expenses then due and payable by the Borrower hereunder and under the other
Loan Documents, (b) then to all indemnity obligations then due and payable by
the Borrower hereunder and under the other Loan Documents, (c) then to all
Administrative Agent’s and Issuing Lender’s fees then due and payable, (d) then
to all commitment and other fees and commissions then due and payable, (e) then
to accrued and unpaid interest on the Swingline Note to the Swingline Lender and
the Alternative Currency Note to the Alternative Currency Lender (pro rata in accordance
with all such amounts due), (f) then to the principal amount outstanding under
the Swingline Note to the Swingline Lender and the Alternative Currency Note to
the Alternative Currency Lender (pro rata in accordance
with all such amounts due), (g) then to accrued and unpaid interest on the
Revolving Credit Notes, accrued and unpaid interest on the Reimbursement
Obligation and any Hedging Obligations (including any termination payments and
any accrued and unpaid interest thereon) (pro rata in accordance
with all such amounts due), (h) then to the principal amount of the Revolving
Credit Notes and Reimbursement Obligation (pro rata in accordance
with all such amounts due) and (i) then to the cash collateral account described
in Section 11.2(b) hereof to the extent of any L/C Obligations then outstanding,
in that order.

     

    SECTION
4.6                                           Adjustments.  If
any Lender (a “Benefited Lender”)
shall at any time receive any payment of all or part of the Obligations owing to
it, or interest thereon, or if any Lender shall at any time receive any
collateral in respect to the Obligations owing to it (whether voluntarily or
involuntarily, by set-off or otherwise) (other than pursuant to Sections 4.8,
4.9, 4.10, 4.11, 4.12, 4.13 or 13.2 hereof) in a greater proportion than any
such payment to and collateral received by any other Lender, if any, in respect
of the similar Obligations owing to such other Lender, or interest thereon, such
Benefited Lender shall purchase for cash from the other Lenders such portion of
each such other Lender’s Extensions of Credit, or shall provide such other
Lenders with the benefits of any such collateral, or the proceeds thereof, as
shall be necessary to cause such Benefited Lender to share the excess payment or
benefits of such collateral or proceeds ratably with each of the Lenders; provided, that if all
or any portion of such excess payment or benefits is thereafter recovered from
such Benefited Lender, such purchase shall be rescinded, and the purchase price
and benefits returned to the extent of such recovery, but without
interest.  The Borrower agrees that each Lender so purchasing a
portion of another Lender’s Extensions of Credit may exercise all rights of
payment (including, without limitation, rights of set-off) with respect to such
portion as fully as if such Lender were the direct holder of such
portion.

     

    SECTION
4.7                                           Nature of Obligations of
Lenders Regarding Extensions of Credit; Assumption by the Administrative
Agent.  The
obligations of the Lenders under this Agreement to make the Loans and issue or
participate in Letters of Credit are several and are not joint or joint and
several.  Unless the Administrative Agent shall have received notice
from a Lender prior to a proposed borrowing date that such Lender will not make
available to the Administrative Agent such Lender’s ratable portion of the
amount to be borrowed on such date (which notice shall not release such Lender
of its obligations hereunder), the Administrative Agent may assume that such
Lender has made such portion available to the Administrative Agent on the
proposed borrowing date in accordance with Section 2.4(b) and the Administrative
Agent may, in reliance upon such assumption, make available to the Borrower on
such date a corresponding amount.  If such amount is made available to
the Administrative Agent on a date after such borrowing date, such Lender shall
pay to the Administrative Agent on demand an amount, until paid, equal to (a)
with respect to any Loan denominated in Dollars, the product of (i) the amount
not made available by such Lender in accordance with the terms hereof, times (ii) the daily
average Federal Funds Rate during such period as determined by the
Administrative Agent, times (iii) a
fraction the numerator of which is the number of days that elapse from and
including such borrowing date to the date on which such amount not made
available by such Lender in accordance with the terms hereof shall have become
immediately available to the Administrative Agent and the denominator of which
is 360 and (b) with respect to any Loan denominated in an Alternative Currency,
the amount not made available by such Lender in accordance with the terms hereof
and interest thereon at a rate per annum equal to the Administrative Agent’s
aggregate marginal cost (including the cost of maintaining any required reserves
or deposit insurance and of any fees, penalties, overdraft charges or other
costs or expenses incurred by the Administrative Agent as a result of the
failure to deliver funds hereunder) of carrying such amount.  A
certificate of the Administrative Agent with respect to any amounts owing under
this Section 4.7 shall be conclusive, absent manifest error.  If such
Lender’s Commitment Percentage of such borrowing is not made available to the
Administrative Agent by such Lender within three (3) Business Days after such
borrowing date, the Administrative Agent shall be entitled to recover such
amount made available by the Administrative Agent with interest thereon at the
rate per annum applicable to Base Rate Loans hereunder, on demand, from the
Borrower.  The failure of any Lender to make available its Commitment
Percentage of any Loan requested by the Borrower shall not relieve it or any
other Lender of its obligation, if any, hereunder to make its Commitment
Percentage of such Loan available on the borrowing date, but no Lender shall be
responsible for the failure of any other Lender to make its Commitment
Percentage of such Loan available on the borrowing date. Notwithstanding
anything set forth herein to the contrary, any Lender that fails to make
available its Commitment Percentage of any Loan shall not (a) have any voting or
consent rights under or with respect to any Loan Document or (b) constitute a
“Lender” (or be included in the calculation of Required Lenders hereunder) for
any voting or consent rights under or with respect to any Loan
Document.

     

    SECTION
4.8.                                           Redenomination of
Alternative Currency Loans.

     

    (a)           Conversion to the Base
Rate.  If any Alternative Currency Loan is required to bear
interest at the Base Rate rather than the LIBOR Rate pursuant to Section 4.1(d),
Section 4.10 or any other applicable provision hereof, such Loan shall be funded
in Dollars in an amount equal to the Dollar Amount of such Alternative Currency
Loan, all subject to the provisions of Section 2.5(b).  The Borrower
shall reimburse the Alternative Currency Lender or the Lenders, as applicable,
upon any such conversion for any amounts required to be paid under Section
4.11.

     

    (b)           Redenomination of Loans and
Obligations.  Subject to Section 1.3 hereof, (i) any Loan to be
denominated in the currency of the applicable Participating Member State shall
be made in the euro and (ii) any obligation of any party under this Agreement or
any other Loan Document which has been denominated in the currency of a
Participating Member State shall be redenominated into the euro.

     

    (c)           Further
Assurances.  The terms and provisions of this Agreement will be
subject to such reasonable changes of construction as determined by the
Administrative Agent to reflect the implementation of the EMU in any
Participating Member State or any market conventions relating to the fixing
and/or calculation of interest being changed or replaced and to reflect market
practice at that time, and subject thereto, to put the Administrative Agent, the
Lenders and the Borrower in the same position, so far as possible, that they
would have been if such implementation had not occurred.  In
connection therewith, the Borrower agrees, at the request of the Administrative
Agent, at the time of or at any time following the implementation of the EMU in
any Participating Member State or any market conventions relating to the fixing
and/or calculation of interest being changed or replaced, to enter into an
agreement amending this Agreement in such manner as the Administrative Agent
shall reasonably request.

     

    SECTION
4.9.                                           Regulatory
Limitation.  In
the event, as a result of increases in the value of Alternative Currencies
against the Dollar or for any other reason, the obligation of any of the Lenders
to make Loans (taking into account the Dollar Amount of the Obligations and all
other indebtedness required to be aggregated under 12 U.S.C.A. §84, as amended,
the regulations promulgated thereunder and any other Applicable Law) is
determined by such Lender to exceed its then applicable legal lending limit
under 12 U.S.C.A. §84, as amended, and the regulations promulgated thereunder,
or any other Applicable Law, the amount of additional Extensions of Credit such
Lender shall be obligated to make or issue or participate in hereunder shall
immediately be reduced to the maximum amount which such Lender may legally
advance (as determined by such Lender), the obligation of each of the remaining
Lenders hereunder shall be proportionately reduced, based on their applicable
Commitment Percentages and, to the extent necessary under such laws and
regulations (as determined by each of the Lenders, with respect to the
applicability of such laws and regulations to itself), and the Borrower shall
reduce, or cause to be reduced, complying to the extent practicable with the
remaining provisions hereof, the Obligations outstanding hereunder by an amount
sufficient to comply with such maximum amounts.

     

    SECTION
4.10                                Changed
Circumstances.

     

    (a)           Circumstances Affecting
LIBOR Rate and Alternative Currency Availability.  If with
respect to any Interest Period for any LIBOR Rate Loan, the Administrative
Agent, the Alternative Currency Lender or any Lender (after consultation with
the Administrative Agent) shall determine that (i) by reason of circumstances
affecting the foreign exchange and interbank markets generally, deposits in
eurodollars or an Alternative Currency in the applicable amounts are not being
quoted via Dow Jones Market Screen 3750 or the applicable Reuters Screen Page or
offered to the Administrative Agent or such Lender for such Interest Period,
(ii) a fundamental change has occurred in the foreign exchange or interbank
markets with respect to any Alternative Currency (including, without limitation,
changes in national or international financial, political or economic conditions
or currency exchange rates or exchange controls) or (iii) it has become
otherwise materially impractical for the Alternative Currency Lender to make
such Alternative Currency Loans, then the Administrative Agent shall forthwith
give notice thereof to the Borrower.  Thereafter, until the
Administrative Agent notifies the Borrower that such circumstances no longer
exist, the obligation of the Lenders or the Alternative Currency Lender, as
applicable, to make LIBOR Rate Loans or Alternative Currency Loans, as
applicable, and the right of the Borrower to convert any Loan to or continue any
Loan as a LIBOR Rate Loan or an Alternative Currency Loan, as applicable, shall
be suspended, and the Borrower shall repay in full (or cause to be repaid in
full) the then outstanding principal amount of each such LIBOR Rate Loan or
Alternative Currency Loan, as applicable, together with accrued interest
thereon, on the last day of the then current Interest Period applicable to such
LIBOR Rate Loan or Alternative Currency Loan, as applicable, or convert the then
outstanding principal amount of each such LIBOR Rate Loan or Alternative
Currency Loan, as applicable, to a Base Rate Loan in Dollars as of the last day
of such Interest Period; provided that if the
Borrower elects to make such conversion, the Borrower shall pay to the
Administrative Agent, the Alternative Currency Lender and the Lenders any and
all costs, fees and other expenses incurred by the Administrative Agent, the
Alternative Currency Lender and the Lenders in effecting such
conversion.

     

    (b)           Laws Affecting LIBOR Rate
and Alternative Currency Availability.  If, after the date
hereof, the introduction of, or any change in, any Applicable Law or any change
in the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or compliance by any of the Lenders (or any of their
respective Lending Offices) with any request or directive (whether or not having
the force of law) of any such Governmental Authority, central bank or comparable
agency, shall make it unlawful or impossible for any of the Lenders (or any of
their respective Lending Offices) to honor its obligations hereunder to make or
maintain any LIBOR Rate Loan or any Alternative Currency Loan, such Lender shall
promptly give notice thereof to the Administrative Agent and the Administrative
Agent shall promptly give notice to the Borrower, and the other
Lenders.  Thereafter, until the Administrative Agent notifies the
Borrower that such circumstances no longer exist, (i) the obligations of the
Lenders or the Alternative Currency Lender, as applicable, to make LIBOR Rate
Loans or Alternative Currency Loans, as applicable, and the right of the
Borrower to convert any Loan or continue any Loan as a LIBOR Rate Loan or an
Alternative Currency Loan, as applicable, shall be suspended and thereafter the
Borrower may select only Base Rate Loans hereunder, and (ii) if any of the
Lenders or the Alternative Currency Lender, as applicable, may not lawfully
continue to maintain a LIBOR Rate Loan or an Alternative Currency Loan, as
applicable, to the end of the then current Interest Period applicable thereto as
a LIBOR Rate Loan or Alternative Currency Loan, as applicable, the applicable
LIBOR Rate Loan or an Alternative Currency Loan, as applicable, shall
immediately be converted to a Base Rate Loan in Dollars for the remainder of
such Interest Period; provided that if the
Borrower elects to make such conversion, the Borrower shall pay to the
Administrative Agent, the Alternative Currency Lender and the Lenders any and
all costs, fees and other expenses incurred by the Administrative Agent, the
Alternative Currency Lender and the Lenders in effecting such conversion,
including any amounts required to be paid under Section 4.11.

     

    (c)           Increased
Costs.  If, after the date hereof, the introduction of, or any
change in, any Applicable Law, or in the interpretation or administration
thereof by any Governmental Authority, central bank or comparable agency charged
with the interpretation or administration thereof, or compliance by any of the
Lenders (or any of their respective Lending Offices) with any request or
directive (whether or not having the force of law) of such Governmental
Authority, central bank or comparable agency:

     

    (i)           shall
(except as provided in Section 4.13(e)) subject any of the Lenders (or any of
their respective Lending Offices) to any tax, duty or other charge with respect
to any Note, Letter of Credit or Application or shall change the basis of
taxation of payments to any of the Lenders (or any of their respective Lending
Offices) of the principal of or interest on any Note, Letter of Credit or
Application or any other amounts due under this Agreement in respect thereof
(except for changes in the rate of franchise tax or tax on the overall net
income of any of the Lenders or any of their respective Lending Offices imposed
by the jurisdiction in which such Lender is organized or is or should be
qualified to do business or such Lending Office is located); provided that the
Borrower shall not be obligated to pay any amounts pursuant to this Section
4.10(c)(i) to the extent that such amounts are duplicative of any amounts paid
by the Borrower pursuant to Section 4.13; or

     

    (ii)          shall
impose, modify or deem applicable any reserve (including, without limitation,
any reserve imposed by the Board of Governors of the Federal Reserve System),
special deposit, insurance or capital or similar requirement against assets of,
deposits with or for the account of, or credit extended by any of the Lenders
(or any of their respective Lending Offices) or shall impose on any of the
Lenders (or any of their respective Lending Offices) or the foreign exchange and
interbank markets any other condition affecting any Note;

     

    and the
result of any of the foregoing events described in clause (i) or (ii) above is
to increase the costs to any of the Lenders of maintaining any LIBOR Rate Loan
or an Alternative Currency Loan, as applicable, or issuing or participating in
Letters of Credit or to reduce the yield or amount of any sum received or
receivable by any of the Lenders under this Agreement or under the Notes in
respect of a LIBOR Rate Loan or an Alternative Currency Loan, as applicable, or
Letter of Credit or Application, then such Lender shall promptly notify the
Administrative Agent, and the Administrative Agent shall promptly notify the
Borrower of such fact and demand compensation therefor and, within fifteen (15)
days after such notice by the Administrative Agent, the Borrower shall pay to
such Lender such additional amount or amounts as will compensate such Lender or
Lenders for such increased cost or reduction.  The Administrative
Agent will promptly notify the Borrower of any event of which it has knowledge
which will entitle such Lender to compensation pursuant to this Section 4.10(c);
provided, that
the Administrative Agent shall incur no liability whatsoever to the Lenders or
the Borrower in the event it fails to do so.  The amount of such
compensation shall be determined, in the applicable Lender’s reasonable
discretion, based upon the assumption that such Lender funded its Commitment
Percentage of the LIBOR Rate Loans or Alternative Currency Loans, as applicable,
in the London interbank market and using any reasonable attribution or averaging
methods which such Lender deems appropriate and practical.  A
certificate of such Lender setting forth the basis for determining such amount
or amounts necessary to compensate such Lender shall be forwarded to the
Borrower through the Administrative Agent and shall be conclusively presumed to
be correct save for manifest error.

     

    (d)           Exchange Indemnification and
Increased Costs.  The Borrower shall, upon demand from the
Administrative Agent, pay to the Administrative Agent or any applicable Lender,
the amount of  (i) any loss or cost or increased cost incurred by the
Administrative Agent or any applicable Lender, (ii) any reduction in any amount
payable to or in the effective return on the capital to the Administrative Agent
or any applicable Lender, (iii) any interest or any other return, including
principal, foregone by the Administrative Agent or any applicable Lender as a
result of the introduction of, change over to or operation of the euro, or (iv)
any currency exchange loss, that Administrative Agent or any Lender sustains as
a result of any payment being made by the Borrower in a currency other than that
originally extended to the Borrower.  A certificate of the
Administrative Agent setting forth the basis for determining such additional
amount or amounts necessary to compensate the Administrative Agent or the
applicable Lender shall be conclusively presumed to be correct save for manifest
error.

     

    SECTION
4.11                                Indemnity.  The
Borrower hereby indemnifies each of the Lenders against any loss or expense
(including, without limitation, any foreign exchange costs) which may arise or
be attributable to each Lender’s obtaining, liquidating or employing deposits or
other funds acquired to effect, fund or maintain any Loan (a) as a consequence
of any failure by the Borrower to make any payment when due of any amount due
hereunder in connection with a LIBOR Rate Loan or an Alternative Currency Loan,
(b) due to any failure of the Borrower to borrow, continue or convert on a date
specified therefor in a Notice of Borrowing or Notice of Conversion/Continuation
or (c) due to any payment, prepayment or conversion of any LIBOR Rate Loan
or any Alternative Currency Loan on a date other than the last day of the
Interest Period therefor.  The amount of such loss or expense shall be
determined, in the applicable Lender’s reasonable discretion, based upon the
assumption that such Lender funded its Commitment Percentage of the LIBOR Rate
Loans in the London interbank market and using any reasonable attribution or
averaging methods which such Lender deems appropriate and
practical.  A certificate of such Lender setting forth the basis for
determining such amount or amounts necessary to compensate such Lender shall be
forwarded to the Borrower through the Administrative Agent and shall be
conclusively presumed to be correct save for manifest error.

     

    SECTION
4.12                                Capital
Requirements.  If
either (a) the introduction of, or any change in, or in the interpretation of,
any Applicable Law or (b) compliance with any guideline or request from any
central bank or comparable agency or other Governmental Authority (whether or
not having the force of law), has or would have the effect of reducing the rate
of return on the capital of, or has affected or would affect the amount of
capital required to be maintained by, any Lender or any corporation controlling
such Lender as a consequence of, or with reference to the Commitments and other
commitments of this type, below the rate which such Lender or such other
corporation could have achieved but for such introduction, change or compliance,
then within five (5) Business Days after written demand by any such Lender, the
Borrower shall pay to such Lender from time to time as specified by such Lender
additional amounts sufficient to compensate such Lender or other corporation for
such reduction.  A certificate as to such amounts submitted to the
Borrower and the Administrative Agent by such Lender, shall, in the absence of
manifest error, be presumed to be correct and binding for all
purposes.

     

    SECTION
4.13                                Taxes.

     

    (a)           Payments Free and
Clear.  Except as otherwise provided in Section 4.13(e), any
and all payments by the Borrower hereunder or under the Notes or the Letters of
Credit shall be made free and clear of and without deduction for any and all
present or future taxes, levies, imposts, deductions, charges or withholding,
and all liabilities with respect thereto excluding, (i) in the case of each
Lender and the Administrative Agent, income and franchise taxes imposed by the
jurisdiction under the laws of which such Lender or the Administrative Agent (as
the case may be) is organized or is or should be qualified to do business or any
political subdivision thereof and (ii) in the case of each Lender, income and
franchise taxes imposed by the jurisdiction of such Lender’s Lending Office or
any political subdivision thereof (all such non-excluded taxes, levies, imposts,
deductions, charges, withholdings and liabilities being hereinafter referred to
as “Taxes”).  If
the Borrower shall be required by law to deduct or withhold any Taxes from or in
respect of any sum payable hereunder or under any Note or in respect of any
Letter of Credit to any Lender or the Administrative Agent, (A) except as
otherwise provided in Section 4.13(e), the sum payable shall be increased as may
be necessary so that after making all required deductions or withholdings
(including deductions or withholdings applicable to additional sums payable
under this Section 4.13) such Lender or the Administrative Agent (as the case
may be) receives an amount equal to the amount such party would have received
had no such deductions or withholdings been made, (B) the Borrower shall
make such deductions or withholdings, (C) the Borrower shall pay the full amount
deducted to the relevant taxing authority or other authority in accordance with
Applicable Law, and (D) the Borrower shall deliver to the Administrative Agent
and such Lender evidence of such payment to the relevant taxing authority or
other Governmental Authority in the manner provided in Section
4.13(d).

     

    (b)           Stamp and Other
Taxes.  In addition, the Borrower shall pay any present or
future stamp, registration, recordation or documentary taxes or any other
similar fees or charges or excise or property taxes, levies of the United States
or any state or political subdivision thereof or any applicable foreign
jurisdiction which arise from any payment made hereunder or from the execution,
delivery or registration of, or otherwise with respect to, this Agreement, the
Loans, the Letters of Credit, the other Loan Documents, or the perfection of any
rights or security interest in respect thereof (hereinafter referred to as
“Other
Taxes”).

     

    (c)           Indemnity.  Except
as otherwise provided in Section 4.13(e), the Borrower shall indemnify each
Lender and the Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes and Other Taxes imposed by any
jurisdiction on amounts payable under this Section 4.13) paid by such Lender or
the Administrative Agent (as the case may be) and any liability (including
penalties, interest and expenses) arising therefrom or with respect thereto,
whether or not such Taxes or Other Taxes were correctly or legally
asserted.  Such indemnification shall be made within thirty (30) days
from the date such Lender or the Administrative Agent (as the case may be) makes
written demand therefor.  Within sixty (60) days of the written
request of the Borrower, the Administrative Agent and each Lender shall execute
and deliver such certificates, forms or other documents which can be reasonably
furnished thereby con­sistent with the facts and which are reasonably
necessary to as­sist the Borrower in applying for refunds of such Taxes or
Other Taxes.

     

    (d)           Evidence of
Payment.  Within thirty (30) days after the date of any payment
of Taxes or Other Taxes, the Borrower shall furnish to the Administrative Agent,
at its address referred to in Section 13.1, the original or a certified copy of
a receipt evidencing payment thereof or other evidence of payment satisfactory
to the Administrative Agent.

     

    (e)           Delivery of Tax
Forms. To the extent required by Applicable Law to reduce or eliminate
withholding or payment of taxes, each Lender and the Administrative Agent shall
deliver to the Borrower, with a copy to the Administrative Agent, on the Closing
Date or concurrently with the delivery of the relevant Assignment and
Acceptance, as applicable, (i) two United States Internal Revenue Service Forms
W-9, Forms W-8ECI or Forms W-8BEN, as applicable (or successor forms) properly
completed and certifying in each case that such Lender is entitled to a complete
exemption from withholding or deduction for or on account of any United States
federal income taxes, and (ii) an Internal Revenue Service Form W-8BEN or W-8ECI
or successor applicable form, as the case may be, to establish an exemption from
United States backup withholding taxes.  Each such Lender further
agrees to deliver to the Borrower with a copy to the Administrative Agent, as
applicable, two Form W-9, Form W-8BEN or W-8ECI, or successor applicable forms
or manner of certification, as the case may be, on or before the date that any
such form expires or becomes obsolete or after the occurrence of any event
requiring a change in the most recent form previously delivered by it to the
Borrower certifying in the case of a Form W-9, Form W-8BEN or W-8ECI (or
successor forms) that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes (unless in any such case an event (including without limitation any change
in treaty, law or regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders such forms inapplicable or
the exemption to which such forms relate unavailable and such Lender notifies
the Borrower and the Administrative Agent that it is not entitled to receive
payments without deduction or withholding of United States federal income taxes)
and, in the case of a Form W-9, Form W-8BEN or W-8ECI, establishing an exemption
from United States backup withholding tax.  Notwithstanding anything
in any Loan Document to the contrary, the Borrower shall not be required to pay
additional amounts to any Lender or the Administrative Agent under Section 4.13
or Section 4.10(c), (i) if such Lender or the Administrative Agent fails to
comply with the requirements of this Section 4.13(e), other than to the extent
that such failure is due to a change in law occurring after the date on which
such Lender or the Administrative Agent became a party to this Agreement or
(ii) that are the result of such Lender’s or the Administrative Agent’s
gross negligence or willful misconduct, as applicable.

     

    (f)           Survival.  Without
prejudice to the survival of any other agreement of the Borrower hereunder, the
agreements and obligations of the Borrower contained in this Section 4.13 shall
survive the payment in full of the Obligations and the termination of the
Commitments.

     

    SECTION
4.14.                                Other Consequential
Changes.  Subject
to Section 1.3 hereof, without prejudice and in addition to any method of
conversion or rounding prescribed by any EMU Legislation and without prejudice
to the respective obligations of the Borrower to the Administrative Agent and
the Lenders and the Administrative Agent and the Lenders to the Borrower under
or pursuant to this Agreement, except as expressly provided in this Agreement,
each provision of this Agreement, including,  without limitation, the
right to combine currencies to effect a set-off,  shall be subject to
such reasonable changes of interpretation as the Administrative Agent may from
time to time specify to be necessary or appropriate to reflect the introduction
of or change over to the euro in Participating Member States.

     

    SECTION
4.15.                                Replacement of
Lenders.

     

    (a)           If
any Lender requests compensation pursuant to Section 4.10 or Section 4.12,
or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.13,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Extensions of Credit hereunder or to assign
its rights and obligations hereunder to another of its offices, branches or
affiliates, if, in the judgment of such Lender, such designation or assignment
(A) would eliminate or reduce amounts payable pursuant to Section 4.10, Section
4.12 or Section 4.13, as the case may be, in the future and (B) would not
subject such Lender to any unreimbursed cost or expense and would not otherwise
be disadvantageous to such Lender.

     

    (b)           If
any Lender requests compensation pursuant to Section 4.10 or Section 4.12,
or if the Borrower is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 4.13,
then the Borrower may, upon notice to such Lender and the Administrative Agent,
require such Lender to assign and delegate, without recourse (in accordance with
and subject to the restrictions contained in Section 13.10), all of its
interests, rights and obligations under this Agreement to an Eligible Assignee
that shall assume such obligations (which assignee may be another Lender, if a
Lender accepts such assignment); provided that (A) the
Borrower shall have received the prior written consent of the Administrative
Agent, which consent shall not unreasonably be withheld, (B) such Lender shall
have received payment of an amount equal to the outstanding principal of its
Extensions of Credit, accrued interest thereon, accrued fees, breakage costs and
all other amounts payable to it hereunder, from the assignee (to the extent of
such outstanding principal and accrued interest and fees) or the Borrower (in
the case of all other amounts) and (C) in the case of any such assignment
resulting from a claim for compensation pursuant to Section 4.10 or Section
4.12, such assignment will result in a reduction in such compensation or
payments.  A Lender shall not be required to make any such assignment
and delegation if, prior thereto, as a result of a waiver by such Lender or
otherwise, the circumstances entitling the Borrower to require
such  assignment and delegation cease to apply.

     

    (c)           To
the extent that any Lender (a “Replaced Lender”) is
required to assign all of its interests, rights and obligations under this
Agreement to an Eligible Assignee (a “Replacement Lender”)
pursuant to this Section 4.15, upon the execution of all applicable assignment
documents and the satisfaction of all other conditions set forth herein, the
Replacement Lender shall become a Lender hereunder and the Replaced Lender shall
cease to be a Lender hereunder, except with respect to the indemnification
provisions under this Agreement, which provisions shall survive as to such
Replaced Lender.

     

    SECTION
4.16.                                Security.  The
Obligations shall be secured as provided in the Security Documents.

     

    ARTICLE
V

    


    CLOSING; CONDITIONS OF
CLOSING AND BORROWING

    


    SECTION
5.1                                    Closing.  The
closing shall take place at the offices of Womble Carlyle Sandridge & Rice,
PLLC at 10:00 a.m. on December ____, 2005, or on such other date and time as the
parties hereto shall mutually agree.

     

    SECTION
5.2                                    Conditions to Closing and
Initial Extensions of Credit.  The
obligation of the Lenders to close this Agreement and to make the initial Loan
or issue or participate in the initial Letter of Credit, if any, is subject to
the satisfaction of each of the following conditions:

     

    (a)           Executed Loan
Documents.  The following Loan Documents in form and substance
satisfactory to the Administrative Agent and each Lender:

     

    (i)           
this Agreement,

     

    (ii)           the
Revolving Credit Notes,

     

    (iii)          the
Alternative Currency Note,

     

    (iv)          the
Swingline Note,

     

    (v)           the
Subsidiary Guaranty Agreement;

     

    (vi)          the
Collateral Agreement; and

     

    (vii)         each
other applicable Loan Document;

     

    shall
have been duly authorized, executed and delivered to the Administrative Agent by
the parties thereto, shall be in full force and effect and no Default or Event
of Default shall exist thereunder, and the Borrower shall have delivered
original counterparts thereof to the Administrative Agent.

     

    (b)           Closing Certificates;
etc.

     

    (i)           Officer’s Certificate of the
Borrower.  The Administrative Agent shall have received a
certificate from a Responsible Officer of the Borrower, in form and substance
satisfactory to the Administrative Agent, to the effect that all representations
and warranties of the Borrower and its Subsidiaries contained in this Agreement
and the other Loan Documents are true, correct and complete; that the Borrower
and its Subsidiaries are not in violation of any of the covenants contained in
this Agreement and the other Loan Documents; that, after giving effect to the
transactions contemplated by this Agreement, no Default or Event of Default has
occurred and is continuing; and that the Borrower and its Subsidiaries have
satisfied each of the closing conditions.

     

    (ii)           Certificate of Secretary of
the Borrower and each Subsidiary Guarantor.  The Administrative
Agent shall have received a certificate of the secretary or assistant secretary
of the Borrower and each Subsidiary Guarantor certifying as to the incumbency
and genuineness of the signature of each officer of the Borrower or such
Subsidiary Guarantor executing Loan Documents to which it is a party and
certifying that attached thereto is a true, correct and complete copy of (A) the
articles of incorporation of the Borrower or such Subsidiary Guarantor and all
amendments thereto, certified by the appropriate Governmental Authority in its
jurisdiction of incorporation, (B) the bylaws of the Borrower or such Subsidiary
Guarantor as in effect on the date of such certifications, (C) resolutions duly
adopted by the Board of Directors of the Borrower and such Subsidiary Guarantor
authorizing the borrowings contemplated hereunder and the execution, delivery
and performance of this Agreement and the other Loan Documents to which it is a
party, and (D) each certificate required to be delivered pursuant to Section
5.2(b)(iii).

     

    (iii)           Certificates of Good
Standing.  The Administrative Agent shall have received (A)
certificates as of a recent date of the good standing of the Borrower and each
Subsidiary Guarantor under the laws of its jurisdiction of organization and, to
the extent requested by the Administrative Agent, each other jurisdiction where
the Borrower and each Subsidiary Guarantor is qualified to do business and (B) a
certificate of the relevant taxing authority of the jurisdiction of organization
of the Borrower and each Subsidiary Guarantor certifying that such Person has
filed required tax returns and owes no delinquent taxes.

     

    (iv)           Opinions of
Counsel.  The Administrative Agent shall have received
favorable opinions of counsel to the Borrower and each Subsidiary Guarantor
addressed to the Administrative Agent and the Lenders with respect to the
Borrower, the Subsidiary Guarantors, the Loan Documents and such other matters
as the Lenders shall request.

     

    (v)           Tax
Forms.  The Administrative Agent shall have received copies of
the United States Internal Revenue Service forms required by Section 4.13(e)
hereof.

     

    (c)           Security
Interests.

     

    (i)           Pledged
Collateral.  To the extent that the Applicable Laws and
practices of any relevant foreign jurisdiction provide for the issuance of stock
certificates or other certificates, the Administrative Agent shall have received
original stock certificates or other certificates (or the equivalent taking into
account the Applicable Laws and practices of any relevant foreign jurisdiction)
of each Material Foreign Subsidiary evidencing the capital stock or other
ownership interests pledged pursuant to the Collateral Agreement, together with
an undated stock power for each such certificate duly executed in blank by the
registered owner thereof; provided that the
Borrower may evidence compliance herewith by providing a perfected first
priority security interest (or the equivalent thereof pursuant to the Applicable
Laws and practices of any relevant foreign jurisdiction) in the relevant indicia
of ownership of such Material Foreign Subsidiary; provided, further,
that the Borrower or the applicable Domestic Subsidiary of the Borrower owning
the capital stock or other ownership interests of such Material Foreign
Subsidiary shall not be required to pledge more than that percentage of all
issued and outstanding shares of all capital stock or other ownership interests
of such Foreign Subsidiary the granting of a security interest in which shall
not result in material adverse tax consequences to the Borrower or such
applicable Domestic Subsidiary (it being acknowledged by the Borrower, the
Lenders and the Administrative Agent that, as of the Closing Date, such
percentage required to be pledged is sixty-five percent (65%)).

     

    (ii)           Foreign Security Interests
and Filings.  Notwithstanding anything in the Loan Documents to
the contrary, (A) the Borrower shall not be required to deliver a foreign pledge
agreement unless reasonably requested to do so by the Administrative Agent and
(B) the Borrower shall not be required to deliver an opinion of counsel as to
the perfection, validity and binding nature of the security interests created
pursuant to such foreign pledge agreement unless reasonably requested to do so
by the Administrative Agent.

     

    (d)           Consents;
Defaults.

     

    (ii)           Governmental and Third Party
Approvals.  The Borrower shall have obtained all necessary
material approvals, authorizations and consents of any Person and of all
Governmental Authorities and courts having jurisdiction with respect to the
transactions contemplated by this Agreement and the other Loan
Documents.

     

    (i)           No Injunction,
Etc.  No action, suit, proceeding, investigation, regulation or
legislation shall have been instituted, threatened or proposed before any
Governmental Authority to enjoin, restrain, or prohibit, or to obtain
substantial damages in respect of, or which is related to or arises out of, this
Agreement or the other Loan Documents or the consummation by the Borrower or any
of its Subsidiaries of the transactions contemplated hereby or thereby, or which
would be reasonably likely to have a Material Adverse Effect.

     

    (ii)           No Event of
Default.  No Default or Event of Default shall have occurred
and be continuing.

     

    (e)           Financial
Matters.

     

    (i)           Financial
Statements.  The Administrative Agent shall have received the
audited Consolidated financial statements of the Borrower and its Subsidiaries
for each of the Borrower’s Fiscal Years ending in 2004, 2003 and 2002, each as
filed with the Securities and Exchange Commission and prepared in accordance
with GAAP.

     

    (ii)           Financial Condition
Certificate.  The Borrower shall have delivered to the
Administrative Agent a certificate, in form and substance satisfactory to the
Administrative Agent, and certified as accurate by a Responsible Officer, that
(A) the Borrower and each of its Subsidiaries are each Solvent as of the Closing
Date, (B) attached thereto are calculations evidencing compliance with the
covenants contained in Article IX hereof as of the most recent quarterly
financial statements of the Borrower and its Subsidiaries, and (C) the financial
projections previously delivered to the Administrative Agent represent the good
faith estimates (utilizing reasonable assumptions) of the financial condition
and operations of the Borrower and its Subsidiaries as of the date
thereof.

     

    (iii)           Payment at Closing; Fee
Letters.  The Borrower shall have paid to the Administrative
Agent and the Lenders the fees set forth or referenced in Section 4.3 and any
other accrued and unpaid fees or commissions due hereunder (including, without
limitation, reasonable legal fees and expenses) and to any other Person such
amount as may be due thereto in connection with the transactions contemplated
hereby, including all taxes, fees and other charges in connection with the
execution, delivery, recording, filing and registration of any of the Loan
Documents.

     

    (f)           Miscellaneous.

     

    (i)           Notice of
Borrowing.  The Administrative Agent shall have received (A) a
Notice of Borrowing, as applicable, from the Borrower in accordance with Section
2.4(a) and (B) a Notice of Account Designation from the Borrower in accordance
with Section 2.4(b) specifying the account or accounts to which the proceeds of
any Loans made after the Closing Date are to be disbursed.

     

    (ii)           Existing
Facility.  The Existing Facility shall be repaid in full and
terminated.

     

    (iii)           Miscellaneous
Matters.  The Administrative Agent shall have received such
information as it may have requested from the Borrower and its Subsidiaries
relating to litigation, tax, accounting, labor, insurance, pension liabilities
(actual or contingent), leases of real property, agreements evidencing Debt,
ownership of assets by the Borrower or any of its Subsidiaries, environmental
matters, contingent liabilities and management of the Borrower and its
Subsidiaries (including, as applicable, copies of all documents, instruments and
agreements relating to such subjects), and such information shall be in form and
substance satisfactory to Administrative Agent.

     

    (iv)           Other
Documents.  All opinions, certificates and other instruments
and all proceedings in connection with the transactions contemplated by this
Agreement shall be satisfactory in form and substance to the Administrative
Agent.  The Administrative Agent shall have received copies of all
other documents, certificates and instruments reasonably requested thereby with
respect to the transactions contemplated by this Agreement.

     

    SECTION
5.3                                           Conditions to All Extensions
of Credit.  The
obligations of the Lenders to make any Extensions of Credit (including the
initial Extension of Credit), convert or continue any Loan and/or the Issuing
Lender to issue or extend any Letter of Credit are subject to the satisfaction
of the following conditions precedent on the relevant borrowing, conversion,
continuation, issuance or extension date:

     

    (a)           Continuation of
Representations and Warranties.  The representations and
warranties contained in Section 6.1(a), (c), (d), (e), (j), (m) and (n) shall be
true and correct on and as of such borrowing, conversion, continuation, issuance
or extension date with the same effect as if made on and as of such date, except
for any representation and warranty made as of an earlier date, which
representation and warranty shall remain true and correct as of such earlier
date.

     

    (b)           No Existing
Default.  No Default or Event of Default shall have occurred
and be continuing (i) on the borrowing, conversion or continuation date with
respect to such Loan or after giving effect to the Loans to be made, converted
or continued on such date or (ii) on the issue date with respect to such Letter
of Credit or after giving effect to the issuance or extension of such Letter of
Credit on such date.

     

    (c)           Notices.  The
Administrative Agent shall have received a Notice of Borrowing or Notice of
Conversion/Continuation, as applicable, from the Borrower in accordance with
Section 2.4(a) or 4.2.

     

    (d)           Compliance with Borrowing
Limits.  The Borrower shall have demonstrated compliance with
Section 2.5(b) (i) on the borrowing, conversion or continuation date with
respect to such Loan or after giving effect to the Loans to be made, converted
or continued on such date or (ii) on the issuance or extension date with respect
to such Letter of Credit or after giving effect to the issuance or extension of
such Letter of Credit on such date.

     

    (e)           Additional
Documents.  The Administrative Agent shall have received each
additional document, instrument, legal opinion or other item reasonably
requested by it.

     

    ARTICLE
VI

    


    REPRESENTATIONS AND
WARRANTIES OF THE BORROWER

    


    SECTION
6.1                                           Representations and
Warranties.  To
induce the Administrative Agent and the Lenders to enter into this Agreement and
to induce the Lenders to make Extensions of Credit, the Borrower hereby
represents and warrants to the Administrative Agent and Lenders both before and
after giving effect to the transactions contemplated hereunder
that:

     

    (a)           Organization; Power;
Qualification.  Each of the Borrower and its Subsidiaries (i)
is duly organized, validly existing and in good standing under the laws of the
jurisdiction of its incorporation or formation, (ii) has the power and authority
to own its properties and to carry on its business and (iii) is duly qualified
and authorized to do business in each jurisdiction in which its business
requires such qualification and authorization, except where the failure to be so
qualified could not reasonably be expected to have a Material Adverse
Effect.  The jurisdictions in which the Borrower and its Subsidiaries
are organized and qualified to do business as of the Closing Date are described
on Schedule
6.1(a).

     

    (b)           Ownership.  Each
Subsidiary of the Borrower as of the Closing Date is listed, and the Material
Domestic Subsidiaries and Material Foreign Subsidiaries are identified as such,
on Schedule
6.1(b).  As of the Closing Date, the capitalization of the
Borrower and its Subsidiaries consists of the number of shares, authorized,
issued and outstanding, of such classes and series, with or without par value,
described on Schedule
6.1(b).  All outstanding shares or equity interests have been
duly authorized and validly issued and are fully paid and nonassessable, with no
personal liability attaching to the ownership thereof, and not subject to any
preemptive or similar rights.  The shareholders of the Subsidiaries of
the Borrower and the number of shares owned by each as of the Closing Date are
described on Schedule
6.1(b).  As of the Closing Date, there are no outstanding stock
purchase warrants, subscriptions, options, securities, instruments or other
rights of any type or nature whatsoever, which are convertible into,
exchangeable for or otherwise provide for or permit the issuance of capital
stock of the Borrower or its Subsidiaries, except pursuant to plans and
agreements described in the Borrower’s periodic filings with the
SEC.

     

    (c)           Authorization of Agreement,
Loan Documents and Borrowing. Each of the Borrower and its Subsidiaries
has the right, power and authority and has taken all necessary corporate and
other organizational action to authorize the execution, delivery and performance
of this Agreement and each of the other Loan Documents to which it is a party in
accordance with their respective terms.  This Agreement and each of
the other Loan Documents have been duly executed and delivered by the duly
authorized officers of the Borrower and each of its Subsidiaries party thereto,
and each such document constitutes the legal, valid and binding obligation of
the Borrower or its Subsidiary party thereto, enforceable in accordance with its
terms, except as such enforceability may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar state or federal debtor relief laws from
time to time in effect which affect the enforcement of creditors’ rights in
general and the availability of equitable remedies.

     

    (d)           Compliance of Agreement,
Loan Documents and Borrowing with Laws, Etc.  The execution,
delivery and performance by the Borrower and its Subsidiaries of the Loan
Documents to which each such Person is a party, in accordance with their
respective terms, the Extensions of Credit hereunder and the transactions
contemplated hereby do not and will not, by the passage of time, the giving of
notice or otherwise, (i) require any material Governmental Approval or violate
any material Applicable Law relating to the Borrower or any of its Subsidiaries,
(ii) conflict with, result in a breach of or constitute a default under the
articles of incorporation, bylaws or other organizational documents of the
Borrower or any of its Subsidiaries or any material indenture, agreement or
other instrument to which such Person is a party or by which any of its
properties may be bound or any Governmental Approval relating to such Person,
(iii) result in or require the creation or imposition of any material Lien upon
or with respect to any property now owned or hereafter acquired by such Person
other than Liens arising under the Loan Documents or (iv) require any material
consent or material authorization of, material filing with, or other material
act in respect of, an arbitrator or Governmental Authority and no material
consent of any other Person is required in connection with the execution,
delivery, performance, validity or enforceability of this
Agreement.

     

    (e)           Compliance with Law;
Governmental Approvals.  Each of the Borrower and its
Subsidiaries (i) has all Governmental Approvals required by any Applicable Law
for it to conduct its business, each of which is in full force and effect, is
final and not subject to review on appeal and is not the subject of any pending
or, to Borrower’s knowledge, threatened attack by direct or collateral
proceeding, (ii) is in compliance in all material respects with each
Governmental Approval applicable to it, (iii) is in compliance, and has been in
compliance, with all Applicable Laws relating to it or any of its respective
properties and (iv) has timely filed all material reports, documents and other
materials required to be filed by it under all Applicable Laws with any
Governmental Authority and has retained all material records and documents
required to be retained by it under Applicable Law, except where the failure to
comply with or satisfy could not reasonably be expected to have a Material
Adverse Effect.

     

    (f)           Taxes.  No
Governmental Authority has asserted any Lien or other claim against the Borrower
or any Subsidiary thereof with respect to unpaid taxes which has not been
discharged or resolved, except unpaid taxes which are being contested in good
faith and for which adequate reserves have been provided in accordance with
GAAP.

     

    (g)           Intellectual Property
Matters.  Each of the Borrower and its Subsidiaries owns or
possesses rights to use all franchises, licenses, copyrights, copyright
applications, patents, patent rights or licenses, patent applications,
trademarks, trademark rights, service marks, service mark rights, trade names,
trade name rights, copyrights and rights with respect to the foregoing which are
required to conduct its business, except for those, the failure of which to own
or possess, could not reasonably be expected to have a Material Adverse
Effect.  To its knowledge, (i) no event has occurred which permits, or
after notice or lapse of time or both would permit, the revocation or
termination of any such rights and (ii) neither the Borrower nor any Subsidiary
thereof is liable to any Person for infringement under Applicable Law with
respect to any such rights as a result of its business operations, in each case
which could reasonably be expected to have a Material Adverse
Effect.

     

    (h)           Environmental
Matters.

     

    (i)           To
the Borrower’s knowledge, there is no contamination at, under or about the
Borrower’s or any of its Subsidiaries’ properties or such operations which could
interfere with the continued operation of such properties or impair the fair
saleable value thereof, except to the extent any such non-compliance or
contamination could not reasonably be expected to have a Material Adverse
Effect;

     

    (ii)           Neither
the Borrower nor any Subsidiary thereof has received any notice of violation,
alleged violation, non-compliance, liability or potential liability
regarding  Environmental Laws, except as could not reasonably be
expected to have a Material Adverse Effect; and

     

    (iii)           To
the Borrower’s knowledge, Hazardous Materials have not been transported or
disposed of by the Borrower or any of its Subsidiaries or by any other Person to
or from the properties owned, leased or operated by the Borrower and its
Subsidiaries in a manner or to a location which could give rise to liability
under Environmental Laws that could reasonably be expected to have a Material
Adverse Effect.

     

    (i)           ERISA.

     

    (i)           As
of the Closing Date, neither the Borrower nor any ERISA Affiliate maintains or
contributes to, or has any obligation under, any Employee Benefit Plans other
than those identified on Schedule
6.1(i);

     

    (ii)           Each
Employee Benefit Plan that is intended to be qualified under Section 401(a) of
the Code has been determined by the Internal Revenue Service to be so qualified,
and each trust related to such plan has been determined to be exempt under
Section 501(a) of the Code except for such plans that have not yet received
determination letters but for which the remedial amendment period for submitting
a determination letter has not yet expired;

     

    (iii)           As
of the Closing Date, no Pension Plan has been terminated, nor has any
accumulated funding deficiency (as defined in Section 412 of the Code) been
incurred (without regard to any waiver granted under Section 412 of the Code),
nor has any funding waiver from the Internal Revenue Service been received or
requested with respect to any Pension Plan, nor has there been any event
requiring any disclosure under Section 4041(c)(3)(C) or 4063(a) of ERISA with
respect to any Pension Plan; and

     

    (iv)           No
Termination Event has occurred or is reasonably expected to occur.

     

    (j)           Margin
Stock.  Neither the Borrower nor any Subsidiary thereof is
engaged principally or as one of its activities in the business of extending
credit for the purpose of “purchasing” or “carrying” any “margin stock” (as each
such term is defined or used, directly or indirectly, in Regulation U of the
Board of Governors of the Federal Reserve System).  No part of the
proceeds of any of the Loans or Letters of Credit will be used for purchasing or
carrying margin stock or for any purpose which violates, or which would be
inconsistent with, the provisions of Regulation T, U or X of such Board of
Governors.

     

    (k)           Government
Regulation.  Neither the Borrower nor any Subsidiary thereof is
an “investment company” or a company “controlled” by an “investment company” (as
each such term is defined or used in the Investment Company Act of 1940, as
amended) and neither the Borrower nor any Subsidiary thereof is, or after giving
effect to any Extension of Credit will be, subject to regulation under the
Public Utility Holding Company Act of 1935 or the Interstate Commerce Act, each
as amended, or any other Applicable Law which limits its ability to incur or
consummate the transactions contemplated hereby.

     

    (l)           Employee Relations.
Each of the Borrower and its Subsidiaries is not, as of the Closing Date, party
to any collective bargaining agreement nor has any labor union been recognized
as the representative of its employees except as set forth on Schedule
6.1(l).  The Borrower knows of no pending, threatened or
contemplated strikes, work stoppage or other collective labor disputes involving
its employees or those of its Subsidiaries that could reasonably be expected to
have a Material Adverse Effect.

     

    (m)           Financial Statements.
The (i) audited Consolidated balance sheet of the Borrower and its Subsidiaries
as of December 31, 2004 and the related audited statements of income and
retained earnings and cash flows for the Fiscal Year then ended and (ii)
unaudited Consolidated balance sheet of the Borrower and its Subsidiaries as of
September 30, 2005 and related unaudited interim statements of income and
retained earnings, in each case including the accompanying notes, copies of
which have been furnished to the Administrative Agent and each Lender, are
complete and correct and fairly present on a Consolidated basis the financial
position, results of operations and cash flows of the Borrower and its
Subsidiaries as of such dates and for the periods then ended (other than
customary, year end adjustments for unaudited financial
statements).  All such financial statements, including the related
schedules and notes thereto, have been prepared in accordance with
GAAP.  The Borrower and its Subsidiaries have no Debt, obligation or
other unusual forward or long-term commitment which is not fairly reflected in
the foregoing financial statements or in the notes thereto.

     

    (n)           No Material Adverse
Change.  Except as publicly disclosed by the Borrower prior to
the Closing Date, since September 30, 2005, there has been no material adverse
change in the properties, assets, liabilities (actual or contingent), business,
operations, prospects, or condition (financial or otherwise) of the Borrower and
its Subsidiaries, taken as a whole, and no event has occurred or condition
arisen that could reasonably be expected to have a Material Adverse
Effect.

     

    (o)           Solvency.  As
of the Closing Date and after giving effect to each Extension of Credit made
hereunder, the Borrower and each of its Subsidiaries will be
Solvent.

     

    (p)           Liens.  None
of the properties and assets of the Borrower or any Subsidiary thereof is
subject to any Lien, except Liens permitted pursuant to Section
10.2.  No financing statement under the Uniform Commercial Code of any
state which names the Borrower or any Subsidiary thereof or any of their
respective trade names or divisions as debtor and which has not been terminated,
has been filed in any state or other jurisdiction and neither the Borrower nor
any Subsidiary thereof has signed any such financing statement or any security
agreement authorizing any secured party thereunder to file any such financing
statement, except to perfect those Liens permitted by Section 10.2
hereof.

     

    (q)           Debt and Guaranty
Obligations.  Schedule 6.1(q) is a
complete and correct listing of all Debt and Guaranty Obligations of the
Borrower and its Subsidiaries as of the Closing Date in excess of
$3,000,000.

     

    (r)           Litigation. Except
for matters existing on the Closing Date and set forth on Schedule 6.1(r),
there are no actions, suits or proceedings pending nor, to the knowledge of the
Borrower, threatened against the Borrower or any Subsidiary thereof or any of
their respective properties in any court or before any arbitrator of any kind or
before or by any Governmental Authority that, if adversely determined, could
reasonably be expected to have a Material Adverse Effect.

     

    (s)           Absence of
Defaults.  No event has occurred or is continuing which
constitutes a Default or an Event of Default, or which constitutes, or which
with the passage of time or giving of notice or both would constitute, a default
or event of default by the Borrower or any Subsidiary thereof under any
judgment, decree or order to which the Borrower or its Subsidiaries is a party
or by which the Borrower or its Subsidiaries or any of their respective
properties may be bound or which would require the Borrower or its Subsidiaries
to make any payment thereunder prior to the scheduled maturity date therefor,
except where such default or defaults, if any, could not reasonably be expected
to have a Material Adverse Effect.

     

    (t)           Accuracy and Completeness of
Information.  All written information produced by or on behalf
of the Borrower or any Subsidiary thereof and furnished to the Lenders was, at
the time the same was so furnished, complete and correct in all material
respects to the extent necessary to give the recipient a true and accurate
knowledge of the subject matter, as it pertains to the financing contemplated by
this Agreement.  No document furnished or written statement made to
the Administrative Agent or the Lenders by the Borrower or any Subsidiary
thereof in connection with the negotiation, preparation or execution of this
Agreement or any of the Loan Documents contains any untrue statement of a fact
material to the creditworthiness of the Borrower or its Subsidiaries or omits to
state a material fact necessary in order to make the statements contained
therein not misleading in any material respect.  The Borrower is not
aware of any facts which it has not disclosed in writing to the Administrative
Agent having a Material Adverse Effect.

     

    SECTION
6.2                                           Survival of Representations
and Warranties, Etc.  All
representations and warranties set forth in this Article VI and all
representations and warranties contained in any certificate, or any of the Loan
Documents (including but not limited to any such representation or warranty made
in or in connection with any amendment thereto) shall constitute representations
and warranties made under this Agreement.  All representations and
warranties made under this Agreement shall be made or deemed to be made at and
as of the Closing Date (except those that are expressly made as of a specific
date), shall survive the Closing Date and shall not be waived by the execution
and delivery of this Agreement, any investigation made by or on behalf of the
Lenders or any borrowing hereunder.

     

    ARTICLE
VII

    


    FINANCIAL INFORMATION AND
NOTICES

    


    Until all
the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section
13.11, the Borrower will furnish or cause to be furnished to the Administrative
Agent at the Administrative Agent’s Office and to the Lenders at their
respective addresses as set forth on Schedule 1.1(a), or
such other office as may be designated by the Administrative Agent and Lenders
from time to time:

     

    SECTION
7.1                                           Financial Statements and
Projections.

     

    (a)           Quarterly Financial
Statements.  As soon as practicable and in any event within
fifty (50) days after each fiscal quarter of each Fiscal Year, unaudited
Consolidated financial statements of the Borrower and its Subsidiaries for the
fiscal quarter then ended and that portion of the Fiscal Year then ended,
including the notes thereto, all in reasonable detail and prepared by the
Borrower in accordance with GAAP and in compliance with the applicable reporting
requirements of the Securities and Exchange Commission for issuers of publicly
traded securities, and certified by the chief financial officer or the
controller of the Borrower to present fairly in all material respects the
financial condition of the Borrower and its Subsidiaries on a Consolidated basis
as of their respective dates and the results of operations of the Borrower and
its Subsidiaries for the respective periods then ended, subject to normal year
end adjustments (it being agreed that the requirements of this subsection may be
satisfied by filing of the applicable quarterly report on Form 10-Q of the
Borrower with the Securities and Exchange Commission to the extent that: (i) it
contains the foregoing information, (ii) it is available to the Administrative
Agent and the Lenders on EDGAR and (iii) the Borrower notifies the
Administrative Agent and the Lenders within the time period noted herein that it
is available to them on EDGAR).

     

    (b)           Annual Financial
Statements.  As soon as practicable and in any event within one
hundred and five (105) days after the end of each Fiscal Year, audited
Consolidated financial statements of the Borrower and its Subsidiaries for the
Fiscal Year then ended, including the notes thereto, all in reasonable detail
and certified by an independent public accounting firm in accordance with GAAP,
and accompanied by a report thereon by such independent public accounting firm
that is not qualified with respect to scope limitations imposed by the Borrower
or any of its Subsidiaries or with respect to accounting principles followed by
the Borrower or any of its Subsidiaries not in accordance with GAAP (it being
agreed that the requirements of this subsection may be satisfied by filing of
the applicable annual report on Form 10-K of the Borrower with the Securities
and Exchange Commission to the extent that: (i) it contains the foregoing
information, (ii) it is available to the Administrative Agent and the Lenders on
EDGAR and (iii) the Borrower notifies the Administrative Agent and the Lenders
within the time period noted herein that it is available to them on
EDGAR).

     

    SECTION
7.2                                           Officer’s Compliance
Certificate.  At
each time financial statements are delivered pursuant to Sections 7.1(a) or (b)
and at such other times as the Administrative Agent shall reasonably request, a
certificate of the chief financial officer, the controller or the treasurer of
the Borrower in the form of Exhibit F attached
hereto (an “Officer’s
Compliance Certificate”).

     

    SECTION
7.3                                           Other
Reports.  Such
other information regarding the operations, business affairs and financial
condition of the Borrower or any of its Subsidiaries as the Administrative Agent
or any Lender may reasonably request.

     

    SECTION
7.4                                           Notices.  Prompt
(but in no event later than ten (10) days after an officer of the Borrower
obtains knowledge thereof) telephonic and written notice of:

     

    (a)           any
attachment, judgment, lien, levy or order exceeding $3,000,000 that may be
assessed against the Borrower or any Subsidiary thereof;

     

    (b)           (i)
any Default or Event of Default or (ii) the occurrence or existence of any event
or circumstance that could reasonably be expected to become a Default or Event
of Default; and

     

    (c)           any
event which makes any of the representations set forth in Section 6.1 inaccurate
in any respect (provided that, with
respect to any representation set forth in Section 6.1 that is not subject to a
materiality or a Material Adverse Effect qualification, any event which makes
such representation inaccurate in any material respect).

     

    SECTION
7.5                                           Accuracy of
Information.  All
written information furnished by or on behalf of the Borrower to the
Administrative Agent or any Lender whether pursuant to this Article VII or any
other provision of this Agreement, or any of the Loan Documents, shall, at the
time the same is so furnished, comply with the representations and warranties
set forth in Section 6.1(w).

     

    ARTICLE
VIII

    


    AFFIRMATIVE
COVENANTS

    


    Until all
of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner provided for in
Section 13.11, the Borrower will, and will cause each of its Subsidiaries
to:

     

    SECTION
8.1                                           Preservation of Corporate
Existence and Related Matters.  Except
as permitted by Section 10.4, preserve and maintain its separate corporate
existence and all rights, franchises, licenses and privileges necessary to the
material conduct of its business, and qualify and remain qualified as a foreign
corporation and authorized to do business in each jurisdiction in which the
failure to so qualify could reasonably be expected to have a Material Adverse
Effect.

     

    SECTION
8.2                                           Maintenance of
Property.  Protect
and preserve all properties useful in and material to its business, including
copyrights, patents, trade names, service marks and trademarks; maintain in good
working order and condition all buildings, equipment and other tangible real and
personal property; and from time to time make or cause to be made all renewals,
replacements and additions to such property necessary for the conduct of its
business, so that the business carried on in connection therewith may be
conducted in a commercially reasonable manner.

     

    SECTION
8.3                                           Insurance.  Maintain
insurance with financially sound and reputable insurance companies against such
risks and in such amounts as are customarily maintained by similar businesses
(including, without limitation, hazard and business interruption coverage) and
as may be required by Applicable Law, and from time to time after the Closing
Date deliver to the Administrative Agent upon its request a detailed list of the
insurance then in effect, stating the names of the insurance companies,
retention amounts, the amounts of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby.

     

    SECTION
8.4                                           Accounting Methods and
Financial Records.  Maintain
a system of accounting, and keep such books, records and accounts (which shall
be true and complete in all material respects) as may be required or as may be
necessary to permit the preparation of financial statements in accordance with
GAAP and in compliance with the regulations of any Governmental Authority having
jurisdiction over it or any of its properties.

     

    SECTION
8.5                                           Payment and Performance of
Obligations.  Pay
and perform all Obligations under this Agreement and the other Loan Documents,
and pay or perform (a) all taxes, assessments and other governmental charges
that may be levied or assessed upon it or any of its property, and (b) all other
indebtedness, obligations and liabilities in accordance with customary trade
practices; provided, that the
Borrower or such Subsidiary may contest any item described in clauses (a) or (b)
of this Section 8.5 in good faith so long as adequate reserves are maintained
with respect thereto in accordance with GAAP.

     

    SECTION
8.6                                           Compliance With Laws and
Approvals.  Observe
and remain in compliance in all material respects with all Applicable Laws and
maintain in full force and effect all Governmental Approvals, in each case
applicable to its properties and the conduct of its business.

     

    SECTION
8.7                                           ERISA.  The
Borrower shall furnish to the Administrative Agent upon the Administrative
Agent’s request such additional information about any Employee Benefit Plan as
may be reasonably requested by the Administrative Agent.

     

    SECTION
8.8                                           Compliance With Material
Agreements.  Comply
in all material respects with each term, condition and provision of all material
agreements and other instruments entered into in the conduct of its business;
provided, that
the Borrower or any such Subsidiary may contest any such material agreement or
other instrument in good faith through applicable proceedings so long as
adequate reserves are maintained in accordance with GAAP.

     

    SECTION
8.9                                           Visits and
Inspections.  Permit
representatives of the Administrative Agent or any Lender, from time to time
upon reasonable notice, to visit and inspect its properties; inspect, audit and
make extracts from its books, records and files, including, but not limited to,
management letters prepared by independent accountants; and discuss with its
principal officers, and its independent accountants, its business, assets,
liabilities, financial condition, results of operations and business
prospects.

     

    SECTION
8.10                                Additional Subsidiaries and
Additional Collateral.  Notify
the Administrative Agent of (1) the creation or acquisition of any Material
Domestic Subsidiary or Material Foreign Subsidiary or (2) any Domestic
Subsidiary or Foreign Subsidiary of the Borrower becoming a Material Domestic
Subsidiary or Material Foreign Subsidiary as evidenced by the information set
forth in the Officer’s Compliance Certificate delivered pursuant to Section 7.2,
and promptly thereafter (and in any event within thirty (30) days), cause to be
executed and delivered to the Administrative Agent (i) a duly executed Joinder
Agreement (pursuant to which such Material Domestic Subsidiary shall become a
party to the Guaranty Agreement, the Collateral Agreement and any other
applicable Security Documents and such Material Foreign Subsidiary shall execute
the Collateral Agreement as an issuer), (ii) such other instruments and
documents and other items of the type required to be delivered pursuant to
Section 5.2(c), all in form and substance reasonably satisfactory to the
Administrative Agent, as may be reasonably required by the Administrative Agent
to obtain a first priority perfected security interest in the capital stock of
any Material Foreign Subsidiary to be pledged pursuant to the Loan Documents,
(iii) such closing documents and closing certificates of the type required to be
delivered pursuant to Section 5.2(b), including, without limitation, favorable
legal opinions addressed to the Administrative Agent and the Lenders in form and
substance reasonably satisfactory thereto with respect to such duly executed
Joinder Agreement (and (i) the Guaranty Agreement, the Collateral Agreement and
any other applicable Security Documents to which such Material Domestic
Subsidiary shall become party thereto in connection therewith and (ii) the
Collateral Agreement that the Material Foreign Subsidiary shall execute as an
issuer in connection therewith), in each case as may reasonably be requested by
the Administrative Agent, and (iv) such other documents and certificates as may
be reasonably requested by the Administrative Agent.  Notwithstanding
the foregoing, neither the Borrower nor any Material Domestic Subsidiary shall
pledge to the Administrative Agent more than that percentage of all issued and
outstanding shares of all capital stock or other ownership interests of a
Material Foreign Subsidiary the granting of a security interest in which shall
result in material adverse tax consequences to the Borrower or the applicable
Material Domestic Subsidiary (it being acknowledged by the Borrower, the Lenders
and the Administrative Agent that, as of the Closing Date, such percentage
required to be pledged is sixty-five percent (65%).

     

    SECTION
8.11                                Use of
Proceeds.  Use
the proceeds of the Extensions of Credit (a) to refinance the Existing Facility
and (b) for working capital and general corporate requirements of the Borrower
and its Subsidiaries, including the payment of certain fees and expenses
incurred in connection with the transactions contemplated by this
Agreement.

     

    SECTION
8.
12                                Burdensome
Provisions.  Neither
the Borrower nor any Subsidiary thereof shall be a party to any indenture,
agreement, lease or other instrument, or subject to any corporate or partnership
restriction, Governmental Approval or Applicable Law which could be reasonably
expected to have a Material Adverse Effect.  Except as set forth in
the Existing Bond Documentation, no Subsidiary shall be a party to any agreement
or instrument or otherwise subject to any restriction or encumbrance that
restricts or limits its ability to make dividend payments or other distributions
in respect of its capital stock to the Borrower or any Subsidiary or to transfer
any of its assets or properties to the Borrower or any other Subsidiary in each
case other than existing under or by reason of the Loan Documents or Applicable
Law.

     

    SECTION
8.
13                                Titles to
Properties.  Each
of the Borrower and its Subsidiaries shall have such title to the real property
owned or leased by it as is necessary or desirable to the conduct of its
business and valid and legal title to all of its personal property and assets,
except those which have been disposed of by the Borrower or its Subsidiaries in
the ordinary course of business or as otherwise expressly permitted
hereunder.

     

    SECTION
8.
14                                Senior Debt
Status.  The
Obligations of the Borrower and each of its Subsidiaries under this Agreement
and each of the other Loan Documents shall rank at least senior in priority of
payment to all Subordinated Debt of each such Person and shall be designated at
all times as “Senior Indebtedness” under all instruments and documents, now or
in the future, relating to all Subordinated Debt.

     

    SECTION
8.15                                Further
Assurances.  Make,
execute and deliver all such additional and further acts, things, deeds and
instruments as the Administrative Agent and the Required Lenders (through the
Administrative Agent) may reasonably require to document and consummate the
transactions contemplated hereby and to vest completely in and insure the
Administrative Agent and the Lenders their respective rights under this
Agreement, the Notes, the Letters of Credit and the other Loan
Documents.

     

    ARTICLE
IX

    


    FINANCIAL
COVENANTS

    


    Until all
of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section
13.11, the Borrower and its Subsidiaries on a Consolidated basis will
not:

     

    SECTION
9.1                                           Leverage
Ratio.  As
of any fiscal quarter end, permit the ratio of (a) Total Funded Debt on such
date, to (b) EBITDA for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date, to be greater than  2.50
to 1.00.

     

    SECTION
9.2                                           Consolidated Net
Worth.  Permit,
at any time, Consolidated Net Worth to be less than $120,000,000.

     

    SECTION
9.3                                           Interest Coverage
Ratio  As
of any fiscal quarter end during the periods set forth below, permit the ratio
of: (a)  EBIT for the period of four (4) consecutive fiscal quarters
ending on or immediately prior to such date, to (b)  Interest Expense
for the period of four (4) consecutive fiscal quarters ending on or immediately
prior to such date, to be less than 2.50 to 1.00.

     

    SECTION
9.4                                           Capital
Expenditures.  During
any Fiscal Year, permit Capital Expenditures to be greater than the sum of (i)
one hundred fifty percent (150%) of depreciation and amortization expense
(calculated in accordance with GAAP) for the prior Fiscal Year and (ii)
$5,000,000.

     

    ARTICLE
X

    


    NEGATIVE
COVENANTS

    


    Until all
of the Obligations have been paid and satisfied in full and the Commitments
terminated, unless consent has been obtained in the manner set forth in Section
13.11, the Borrower has not and will not permit any of its Subsidiaries
to:

     

    SECTION
10.1                                Limitations on
Debt.  Create,
incur, assume or suffer to exist any Debt except:

     

    (a)           the
Obligations (excluding any Hedging Obligations);

     

    (b)           Debt
incurred in connection with a Hedging Agreement with a counterparty and upon
terms and conditions (including interest rate) reasonably satisfactory to the
Administrative Agent; provided, that any
counterparty that is a Lender or the Bank of Montreal shall be deemed
satisfactory to the Administrative Agent;

     

    (c)           Debt
existing on the Closing Date and not otherwise permitted under this Section
10.1, as set forth on Schedule 6.1(q), and
the renewal, refinancing, extension and replacement (but not the increase in the
aggregate principal amount) thereof;

     

    (d)           Guaranty
Obligations in favor of the Administrative Agent for the benefit of the
Administrative Agent and the Lenders;

     

    (e)           unsecured
Debt of the Borrower and the Domestic Subsidiaries in an aggregate amount not to
exceed $5,000,000 on any date of determination (provided that such
Debt may be secured to the extent that any such Debt is created, incurred,
assumed or suffered to exist in connection with Capital Leases and purchase
money financing);

     

    (f)           Debt
of the Foreign Subsidiaries in an aggregate amount not to exceed $10,000,000 on
any date of determination;

     

    (g)           intercompany
Debt between the Borrower and any Subsidiary of the Borrower or between any
Subsidiary of the Borrower and any other Subsidiary of the Borrower;
or

     

    (h)           Debt
of any Person acquired in accordance with Section 10.3(c), including any
renewal, extension or refinancing, but not any increase in the aggregate
principal amount, thereof (provided that such
Debt was not incurred in connection with such acquisition);

     

    provided, that no
agreement or instrument with respect to Debt permitted to be incurred by this
Section shall restrict, limit or otherwise encumber (by covenant or otherwise)
the ability of any Subsidiary of the Borrower to make any payment to the
Borrower or any of its Subsidiaries (in the form of dividends, intercompany
advances or otherwise) for the purpose of enabling the Borrower to pay the
Obligations.

     

    SECTION
10.2                                Limitations on
Liens.  Create,
incur, assume or suffer to exist, any Lien on or with respect to any of its
assets or properties (including, without limitation, shares of capital stock or
other ownership interests), real or personal, whether now owned or hereafter
acquired, except:

     

    (a)           Liens
for taxes, assessments and other governmental charges or levies (excluding any
Lien imposed pursuant to any of the provisions of ERISA or the Environmental
Laws) not yet due or as to which the period of grace, if any, related thereto
has not expired or which are being contested in good faith and by appropriate
proceedings if adequate reserves are maintained to the extent required by
GAAP;

     

    (b)           the
claims of materialmen, mechanics, carriers, warehousemen, processors, landlords
or other similar parties for labor, materials, supplies or rentals incurred in
the ordinary course of business, (i) which are not overdue for a period of more
than thirty (30) days or (ii) which are being contested in good faith and by
appropriate proceedings;

     

    (c)           Liens
consisting of deposits or pledges made in the ordinary course of business in
connection with, or to secure payment of, obligations under workers’
compensation, unemployment insurance or similar legislation;

     

    (d)           Liens
constituting encumbrances in the nature of zoning restrictions, easements and
rights or restrictions of record on the use of real property, which in the
aggregate are not substantial in amount and which do not, in any case, prevent
the use thereof in the ordinary conduct of the Borrower’s business;

     

    (e)           Liens
of the Administrative Agent for the benefit of the Administrative Agent and the
Lenders;

     

    (f)           Liens
not otherwise permitted by this Section 10.2 and in existence on the Closing
Date and described on Schedule
10.2;

     

    (g)           Liens
securing Debt incurred in connection with Capital Leases and purchase money Debt
(in each case to the extent that such Debt is permitted under Section 10.1(e));
provided that
(A) such Liens shall be created substantially simultaneously with the
acquisition or lease of the related asset, (B) such Liens do not at any time
encumber any property other than the property financed by such Debt, (C) the
amount of such Debt secured thereby is not increased and (D) the principal
amount of such Debt secured by any such Lien shall at no time exceed one hundred
percent (100%) of the original purchase price or lease payment amount of such
property at the time it was acquired;

     

    (h)           Liens
on the assets of any Foreign Subsidiary securing Debt of such Foreign Subsidiary
(to the extent that such Debt is permitted under Section 10.1(f));

     

    (i)           Liens
securing judgments not giving rise to an Event of Default so long as (A) such
Lien is adequately bonded and (B) any appropriate legal proceeding which may
have been duly initiated for the review of such judgment shall not have been
finally terminated or the period within which such proceeding may be initiated
shall not have expired;

     

    (j)           Liens
encumbering deposits made to secure obligations arising from statutory,
regulatory, contractual or warranty requirements of the Borrower or any of its
Subsidiaries, including rights of offset and set-off, incurred in the ordinary
course of business;

     

    (k)           Liens
in favor of custom and revenue authorities arising as a matter of law to secure
payment of custom duties in connection with the importation of goods in the
ordinary course of business;

     

    (l)           Liens
arising from the precautionary filing of Uniform Commercial Code financing
statements (or similar foreign counterparts) regarding leases; and

     

    (m)           rights
of setoff or bankers’ liens upon deposits of cash in favor of banks or other
financial institutions in the ordinary course of business.

     

    SECTION
10.3                                Limitations on Loans,
Advances, Investments and Acquisitions.  Purchase,
own, invest in or otherwise acquire, directly or indirectly, any capital stock,
interests in any partnership or joint venture (including, without limitation,
the creation or capitalization of any Subsidiary), evidence of Debt or other
obligation or security, substantially all or a portion of the business or assets
of any other Person or any other investment or interest whatsoever in any other
Person, or make or permit to exist, directly or indirectly, any loans, advances
or extensions of credit to, or any investment in cash or by delivery of property
in, any Person except:

     

    (a)           investments
(i) existing on the Closing Date in Subsidiaries, (ii) in Subsidiaries
formed or acquired after the Closing Date so long as the Borrower and its
Subsidiaries comply with the provisions of Section 8.10 and (iii) existing
on the Closing Date in the form of loans, advances and investments described on
Schedule
10.3;

     

    (b)           investments
in (i) marketable direct obligations issued or unconditionally guaranteed
by the United States of America or any agency thereof maturing within three
hundred sixty-five (365) days from the date of acquisition thereof,
(ii) commercial paper maturing no more than one hundred twenty (120) days
from the date of creation thereof and currently having the highest rating
obtainable from either Standard & Poor’s Ratings Services, a division
of The McGraw-Hill Companies, Inc. or Moody’s Investors Service, Inc.,
(iii) certificates of deposit maturing no more than one hundred twenty
(120) days from the date of creation thereof issued by commercial banks
incorporated under the laws of the United States of America, each having
combined capital, surplus and undivided profits of not less than $500,000,000
and having a rating of “A” or better by a nationally recognized rating agency;
provided, that
the aggregate amount invested in such certificates of deposit shall not at any
time exceed $5,000,000 for any one such certificate of deposit and $10,000,000
for any one such bank, (iv) time deposits maturing no more than thirty
(30)  days from the date of creation thereof with commercial banks or
savings banks or savings and loan associations each having membership either in
the FDIC or the deposits of which are insured by the FDIC and in amounts not
exceeding the maximum amounts of insurance thereunder, (v) tax-exempt municipal
bonds maturing within one hundred twenty (120) days from the date of acquisition
thereof, (vi) any money market or bank fund investing only in the investments
set forth above or (vii) investments held in trust or escrow accounts subject to
government regulation, legal settlements, collateral requirements or other
similar arrangements; and

     

    (c)           investments
by the Borrower or any of its Subsidiaries in the form of acquisitions of all,
substantially all or a majority of the stock or assets of the business or a line
of business (whether by the acquisition of capital stock, assets or any
combination thereof) of any other Person (each, a “Permitted
Acquisition”); provided
that:

     

    (i)           the
Person to be acquired shall be a going concern, engaged in a business, or the
assets to be acquired shall be used in a business which is similar, related or
complimentary to the line of business of the Borrower and its Subsidiaries as
required pursuant to Section 10.12;

     

    (ii)           the
Borrower or such Subsidiary (unless the Person to be acquired complies with
Section 8.10), as applicable, shall be the surviving Person and no Change in
Control shall have been effected thereby;

     

    (iii)           with
respect to any Material Acquisition, the Borrower shall have delivered written
notice of such proposed acquisition to the Administrative Agent (for delivery by
the Administrative Agent to the Lenders) and the Lenders, which notice shall
include the proposed closing date of such proposed acquisition, not less than
twenty (20) calendar days prior to such proposed closing date;

     

    (iv)           with
respect to any Material Acquisition, the Borrower shall have delivered to the
Administrative Agent copies of the Permitted Acquisition Documents;

     

    (v)           with
respect to any Material Acquisition, the Borrower shall have certified on or
before the closing date of such proposed acquisition, in writing and in a form
reasonably acceptable to the Administrative Agent and the Lenders, that such
proposed acquisition has been approved by the board of directors or equivalent
governing body of the Person to be acquired;

     

    (vi)           no
Default or Event of Default shall have occurred and be continuing both before
and after giving effect to such proposed acquisition;

     

    (vii)           the
Borrower shall have complied with Section 8.10;

     

    (viii)           with
respect to any Material Acquisition, the Borrower shall have delivered to the
Administrative Agent and the Lenders an Officer’s Compliance Certificate dated
as of the closing date of such proposed acquisition demonstrating, in form and
substance reasonably satisfactory thereto, pro forma compliance with
each covenant contained in Article IX (both before and after giving effect to
such proposed acquisition) (it being agreed by the Borrower, the Administrative
Agent and the Lenders that such calculations shall assume that all Debt assumed
or incurred in conjunction with such proposed acquisition was incurred at the
beginning of the applicable calculation period and that all income and expenses
associated with such proposed acquisition shall be treated as earned and
included in the pro-forma calculations (both on a consolidated and consolidating
basis));

     

    (ix)           the
Borrower shall have at least $10,000,000 in Liquidity both before and after
giving effect to such proposed acquisition; and

     

    (x)           the
Person to be acquired is not subject to material pending litigation which could
reasonably be expected to have a Material Adverse Effect;

     

    (d)           investments
by the Borrower or any of its Subsidiaries in the form of acquisitions of less
than a majority of the capital stock or other ownership interests of any other
Person; provided
that:

     

    (i)           the
Person to be invested in shall be a going concern, engaged in a business which
is similar, related or complimentary to the line of business of the Borrower and
its Subsidiaries;

     

    (ii)           the
amount of the investment (regardless of the form of consideration), together
with the aggregate amounts of all other investments pursuant to this Section
10.3(d), shall not exceed $10,000,000 during the term of this
Agreement;

     

    (iii)           neither
the Borrower nor any Material Domestic Subsidiary or Material Foreign Subsidiary
shall make any investment in which such party’s potential liability is not
limited to the amount of its investment (i.e., investments as a general partner,
in joint ventures, etc.);

     

    (iv)           no
Default or Event of Default shall have occurred and be continuing both before
and after giving effect to such proposed investment;

     

    (v)           the
Borrower shall have complied with Section 8.10;

     

    (vi)           the
Borrower shall have at least $10,000,000 in Liquidity both before and after
giving effect to such proposed investment; and

     

    (vii)           the
Person to be invested in is not subject to material pending litigation which
could reasonably be expected to have a Material Adverse Effect.

     

    (e)           intercompany
loans and advances in connection with intercompany Debt permitted under Section
10.1(g);

     

    (f)           Hedging
Agreements permitted pursuant to Section 10.1; and

     

    (g)           purchases
of assets in the ordinary course of business.

     

    SECTION
10.4                                Limitations on Mergers and
Liquidation.  Merge,
consolidate or enter into any similar combination with any other Person or
liquidate, wind-up or dissolve itself (or suffer any liquidation or dissolution)
except:

     

    (a)           (i)
any Wholly-Owned Domestic Subsidiary of the Borrower may merge with the Borrower
or any other Wholly-Owned Domestic Subsidiary of the Borrower (provided that (1) in
any merger involving the Borrower, the Borrower shall be the surviving entity
and (2) in any merger involving any Subsidiary Guarantor (and not involving the
Borrower), such Subsidiary Guarantor shall be the surviving entity) and (ii) any
Wholly-Owned Foreign Subsidiary of the Borrower may merge with any other
Wholly-Owned Foreign Subsidiary of the Borrower;

     

    (b)           (i)
any Wholly-Owned Domestic Subsidiary of the Borrower may merge into the Person
such Wholly-Owned Domestic Subsidiary was formed to acquire in connection with
an acquisition permitted by Section 10.3(c) (provided that, after
giving effect to such acquisition, such Person shall be a Wholly-Owned Domestic
Subsidiary and shall comply with the requirements set forth in Section 8.10) and
(ii) any Wholly-Owned Foreign Subsidiary of the Borrower may merge into the
Person such Wholly-Owned Foreign Subsidiary was formed to acquire in connection
with an acquisition permitted by Section 10.3(c); and

     

    (c)           (i)
any Wholly-Owned Domestic Subsidiary of the Borrower may wind-up into the
Borrower or any other Wholly-Owned Domestic Subsidiary of the Borrower and (ii)
any Wholly-Owned Foreign Subsidiary of the Borrower may wind-up into any other
Wholly-Owned Foreign Subsidiary of the Borrower.

     

    SECTION
10.5                                Limitations on Sale of
Assets.  Convey,
sell, lease, assign, transfer or otherwise dispose of any of its property,
business or assets (including, without limitation, the sale of any receivables
and leasehold interests and any sale-leaseback or similar transaction), whether
now owned or hereafter acquired except:

     

    (a)           the
sale of inventory in the ordinary course of business;

     

    (b)           the
sale of assets, for fair market value in the ordinary course of business, that
are no longer used or usable in the business of the Borrower or any of its
Subsidiaries;

     

    (c)           the
transfer of assets to the Borrower or any Wholly-Owned Subsidiary of the
Borrower pursuant to Section 10.4(c);

     

    (d)           the
sale or discount without recourse of accounts receivable arising in the ordinary
course of business in connection with the compromise or collection
thereof;

     

    (e)           the
disposition of any Hedging Agreement;

     

    (f)           sales
or grants of licenses in the ordinary course of business to use the patents,
trade secrets, know-how and other intellectual property of the Borrower and its
Subsidiaries to the extent that any such license does not prohibit the Borrower
or its Subsidiaries from using any material technologies licensed unless for due
consideration, or require the Borrower or its Subsidiaries to pay fees for the
use of any material technology;

     

    (g)           any
distribution permitted pursuant to Section 10.6; and

     

    (h)           sales
of assets by the Borrower or any Subsidiary of the Borrower in an aggregate
amount not to exceed $10,000,000 during the term of this Agreement; provided that such
limitations on the sale of assets shall not include, so long as no Default or
Event of Default has occurred and is continuing, any sale of assets consisting
of property, plant or equipment of Borrower or any of its Subsidiaries in which
the net cash proceeds of such sale are reinvested in assets consisting of
property, plant or equipment (or otherwise in a manner acceptable to the
Administrative Agent in its sole discretion) within two hundred seventy (270)
days after receipt of such net cash proceeds.

     

    SECTION
10.6                                Limitations on Dividends and
Distributions.  Declare
or pay any dividends upon any of its capital stock or any other ownership
interests; purchase, redeem, retire or otherwise acquire, directly or
indirectly, any shares of its capital stock or other ownership interests, or
make any distribution of cash, property or assets among the holders of shares of
its capital stock or other ownership interests, or make any change in its
capital structure; provided
that:

     

    (a)           the
Borrower or any Subsidiary may pay dividends in shares of its own capital
stock;

     

    (b)           any
Subsidiary may pay cash dividends to the Borrower;

     

    (c)           the
Borrower may pay cash dividends on its capital stock, purchase, redeem, retire
or otherwise acquire, directly or indirectly, shares of its capital stock
(including purchases of treasury stock), or make distributions of cash, property
or assets among its shareholders in an aggregate amount not to exceed the lesser
of (i) twelve and one-half cents ($0.125) per share in any calendar quarter, or
(ii) $8,000,000 in any calendar year; and

     

    (d)           in
addition to transactions permitted under subsection (c) above, the Borrower may
pay cash dividends on its capital stock, purchase, redeem, retire or otherwise
acquire, directly or indirectly, shares of its capital stock (including
purchases of treasury stock), or make distributions of cash, property or assets
among its shareholders in an aggregate amount not to exceed, during the term of
this Agreement, the sum of (i) $20,000,000 plus (ii) an amount
equal to fifty percent (50%) of aggregate Net Income of the Borrower and its
Subsidiaries since September 30, 2005.

     

    SECTION
10.7                                Limitations on Exchange and
Issuance of Capital Stock.  Issue,
sell or otherwise dispose of any class or series of capital stock that, by its
terms or by the terms of any security into which it is convertible or
exchangeable, is, or upon the happening of an event or passage of time would be,
(a) convertible or exchangeable into Debt or (b) required to be redeemed or
repurchased, including at the option of the holder, in whole or in part, or has,
or upon the happening of an event or passage of time would have, a redemption or
similar payment due.

     

    SECTION
10.8                                Transactions with
Affiliates.  Except
for transactions permitted by 10.3, 10.6 and 10.7 and those transactions
existing on the Closing Date and identified on Schedule 10.8,
directly or indirectly enter into, or be a party to, any transaction with any of
its Affiliates, except pursuant to the reasonable requirements of its business
and upon fair and reasonable terms that are no less favorable to it than it
would obtain in a comparable arm’s length transaction with a Person not its
Affiliate.

     

    SECTION
10.9                                Certain Accounting Changes;
Organizational Documents.

     

    (a)           Make
any change in its accounting treatment and reporting practices except as
required or permitted by GAAP; or

     

    (b)           Amend,
modify or change its articles of incorporation (or corporate charter or other
similar organizational documents) or amend, modify or change its bylaws (or
other similar documents) in any manner adverse in any material respect to the
rights or interests of the Lenders.

     

    SECTION
10.10                                Amendments; Payments and
Prepayments of Subordinated Debt.  Amend
or modify (or permit the modification or amendment of) any of the terms or
provisions of any Subordinated Debt, or cancel or forgive, make any elective,
voluntary or optional payment or prepayment on, or redeem or acquire for value
(including, without limitation, by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when
due) any Subordinated Debt.

     

    SECTION
10.11                                Restrictive
Agreements.

     

    (a)           Enter
into any Debt which contains any negative pledge on assets or any covenants more
restrictive than the provisions of Articles VIII, IX and X hereof, or which
restricts, limits or otherwise encumbers its ability to incur Liens on or with
respect to any of its assets or properties other than the assets or properties
securing such Debt.

     

    (b)           Except
as provided in the Existing Bond Documentation, enter into or permit to exist
any agreement which impairs or limits the ability of any Subsidiary of the
Borrower to pay dividends to the Borrower.

     

    SECTION
10.12                                Nature of
Business.  Alter
in any material respect the character or conduct of the business conducted by
the Borrower and its Subsidiaries taken as a whole as of the Closing Date
(except as otherwise permitted by the terms of this Agreement).

     

    SECTION
10.13                                Impairment of Security
Interests.  Take
or omit to take any action, which might or would have the result of materially
impairing the security interests in favor of the Administrative Agent with
respect to the capital stock or other ownership interests of the Material
Foreign Subsidiaries pledged pursuant to the Collateral Agreement or grant to
any Person (other than the Administrative Agent for the benefit of itself and
the Lenders pursuant to the Security Documents) any interest whatsoever in the
capital stock or other ownership interest of the Material Foreign Subsidiaries
pledged pursuant to the Collateral Agreement, except for asset sales permitted
under Section 10.5.

     

    SECTION
10.14                                Subsidiaries.  Allow
the Subsidiaries of the Borrower that are not “Material Domestic Subsidiaries”
(including without limitation, Subsidiaries designated as Material Domestic
Subsidiaries pursuant to subsection (c) of the definition of Material Domestic
Subsidiary) or “Material Foreign Subsidiaries” (including without limitation,
Subsidiaries designated as Material Foreign Subsidiaries pursuant to subsection
(c) of the definition of Material Foreign Subsidiary) to have total net assets
equal to or greater than ten percent (10%) of total net assets of the Borrower
and its Subsidiaries at any time.

     

    ARTICLE
XI

    


    DEFAULT AND
REMEDIES

    


     

    SECTION
11.1                                Events of
Default.  Each
of the following shall constitute an Event of Default, whatever the reason for
such event and whether it shall be voluntary or involuntary or be effected by
operation of law or pursuant to any judgment or order of any court or any order,
rule or regulation of any Governmental Authority or otherwise:

     

    (a)           Default in Payment of
Principal of Loans and Reimbursement Obligations.  The Borrower
shall default in any payment of principal of any Loan, Note or Reimbursement
Obligation when and as due (whether at maturity, by reason of acceleration or
otherwise).

     

    (b)           Other Payment
Default.  The Borrower shall default in the payment when and as
due (whether at maturity, by reason of acceleration or otherwise) of (i)
interest on any Loan, Note or Reimbursement Obligation, and such default shall
continue unremedied for five (5) Business Days or (ii) any other Obligation, and
such default shall continue unremedied for ten (10) Business Days.

     

    (c)           Misrepresentation.  Any
representation or warranty made or deemed to be made by the Borrower or any of
its Subsidiaries under this Agreement, any other Loan Document or any amendment
hereto or thereto, shall at any time prove to have been incorrect or misleading
in any material respect when made or deemed made.

     

    (d)           Default in Performance of
Certain Covenants.  The Borrower or any of its Subsidiaries
shall default in the performance or observance of any covenant or agreement
contained in Sections 7.1, 7.2 or 7.4(b)(i) or Articles IX or X of this
Agreement, and the Borrower’s failure to perform or observe any covenant or
agreement in Section 7.1 or 7.2 shall continue unremedied for ten (10) Business
Days (during which time the Applicable Margin shall be based on Pricing Level
I).

     

    (e)           Default in Performance of
Other Covenants and Conditions.  The Borrower or any Subsidiary
thereof shall default in the performance or observance of any term, covenant,
condition or agreement contained in this Agreement (other than as specifically
provided for otherwise in this Section 11.1) or any other Loan Document and such
default shall continue for a period of thirty (30) days after written notice
thereof has been given to the Borrower by the Administrative Agent.

     

    (f)           Hedging
Agreement.  The Borrower shall default in the performance or
observance of any terms, covenant, condition or agreement (after giving effect
to any applicable grace or cure period) under any Hedging Agreement with respect
to any Debt or other obligation in a principal amount in excess of $3,000,000
and such default causes the termination of such Hedging Agreement or permits any
counterparty to such Hedging Agreement to terminate any such Hedging
Agreement.

     

    (g)           Debt
Cross-Default.  The Borrower or any of its Subsidiaries shall
(i) default in the payment of any Debt (other than the Notes or any
Reimbursement Obligation) the aggregate outstanding amount of which Debt is in
excess of $3,000,000 beyond the period of grace if any, provided in the
instrument or agreement under which such Debt was created, or (ii) default in
the observance or performance of any other agreement or condition relating to
any Debt (other than the Notes or any Reimbursement Obligation) the aggregate
outstanding amount of which Debt is in excess of $3,000,000 or contained in any
instrument or agreement evidencing, securing or relating thereto or any other
event shall occur or condition exist, the effect of which default or other event
or condition is to cause, or to permit the holder or holders of such Debt (or a
trustee or agent on behalf of such holder or holders) to cause, with the giving
of notice if required, any such Debt to become due prior to its stated maturity
(any applicable grace period having expired).

     

    (h)           Change in
Control.  (i) The sale, lease or transfer of all or
substantially all of the Borrower’s assets to any person or group of persons
(within the meaning of Section 13(d) of the Securities Exchange Act of 1934, as
amended), (ii) the liquidation or dissolution of the Borrower, (iii) any person
or group of persons (within the meaning of Section 13(d) of the Securities
Exchange Act of 1934, as amended), other than the Permitted Holders, shall
obtain ownership or control in one or more series of transactions of more than
thirty-five percent (35%) of the common stock or thirty-five percent (35%) of
the voting power of the Borrower entitled to vote in the election of members of
the board of directors of the Borrower or (iv) during any period of twelve (12)
consecutive calendar months, individuals who, at the beginning of such period,
constituted the Borrower’s board of directors (together with any new directors
whose election by the Borrower’s board of directors or whose nomination for
election by the Borrower’s stockholders was approved by a vote of at least
two-thirds (2/3rds) of the directors then still in office who either were
directors at the beginning of such period or whose election or nomination for
election was previously so approved) cease for any reason, other than death or
disability, to constitute a majority of the directors then in office (any such
event, a “Change in
Control”).

     

    (i)           Voluntary Bankruptcy
Proceeding.  The Borrower or any Subsidiary thereof shall (i)
commence a voluntary case under the federal bankruptcy laws (as now or hereafter
in effect), (ii) file a petition seeking to take advantage of any other laws,
domestic or foreign, relating to bankruptcy, insolvency, reorganization, winding
up or composition for adjustment of debts, (iii) consent to or fail to contest
in a timely and appropriate manner any petition filed against it in an
involuntary case under such bankruptcy laws or other laws, (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign, (v) admit in writing its inability to pay its debts as they become due,
(vi) make a general assignment for the benefit of creditors, or (vii) take any
corporate action for the purpose of authorizing any of the
foregoing.

     

    (j)           Involuntary Bankruptcy
Proceeding.  A case or other proceeding shall be commenced
against the Borrower or any Material Domestic Subsidiary thereof in any court of
competent jurisdiction seeking (i) relief under the federal bankruptcy laws (as
now or hereafter in effect) or under any other laws, domestic or foreign,
relating to bankruptcy, insolvency, reorganization, winding up or adjustment of
debts, or (ii) the appointment of a trustee, receiver, custodian, liquidator or
the like for the Borrower or any Material Domestic Subsidiary thereof or for all
or any substantial part of their respective assets, domestic or foreign, and
such case or proceeding shall continue without dismissal or stay for a period of
sixty (60) consecutive days, or an order granting the relief requested in such
case or proceeding (including, but not limited to, an order for relief under
such federal bankruptcy laws) shall be entered.

     

    (k)           Failure of
Agreements.  This Agreement or any other Loan Document, at any
time after its execution and delivery and for any reason other than as expressly
permitted hereunder or the satisfaction in full of all of the Obligations,
ceases to be in full force and effect; or the Borrower, any Subsidiary Guarantor
or any other Affiliate contests in any manner the validity or enforceability of
this Agreement or any other Loan Document; or the Borrower or any Subsidiary
Guarantor denies that it has any or further liability or obligation under this
Agreement or any other Loan Document, or purports to revoke, terminate or
rescind this Agreement or any other Loan Document.

     

    (l)           Termination
Event.  The occurrence of any of the following
events:  (i) the Borrower or any ERISA Affiliate fails to make full
payment when due of all amounts which, under the provisions of any Pension Plan
or Section 412 of the Code, the Borrower or any ERISA Affiliate is required to
pay as contributions thereto, (ii) an accumulated funding deficiency in excess
of $5,000,000 occurs or exists, whether or not waived, with respect to any
Pension Plan, (iii) a Termination Event or (iv) the Borrower or any ERISA
Affiliate as employers under one or more Multiemployer Plans makes a complete or
partial withdrawal from any such Multiemployer Plan and the plan sponsor of such
Multiemployer Plans notifies such withdrawing employer that such employer has
incurred a withdrawal liability requiring payments in an amount exceeding
$5,000,000.

     

    (m)           Judgment.  A
judgment or order for the payment of money which causes the aggregate amount of
all such judgments to exceed $5,000,000 in any Fiscal Year shall be entered
against the Borrower or any of its Subsidiaries by any court and such judgment
or order shall continue without discharge or stay for a period of sixty (60)
days.

     

    (n)           Environmental.  Any
one or more Environmental Claims shall have been asserted against the Borrower
or any of its Subsidiaries; the Borrower and its Subsidiaries would be
reasonable likely to incur liability as a result thereof; and such liability
would be reasonably likely, individually or in the aggregate, to have a Material
Adverse Effect.

     

    SECTION
11.2                                Remedies.  Upon
the occurrence of an Event of Default, with the consent of the Required Lenders,
the Administrative Agent may, or upon the request of the Required Lenders, the
Administrative Agent shall, by notice to the Borrower:

     

    (a)           Acceleration; Termination of
Facilities.  Declare the principal of and interest on the
Loans, the Notes and the Reimbursement Obligations at the time outstanding, and
all other amounts owed to the Lenders and to the Administrative Agent under this
Agreement or any of the other Loan Documents (including, without limitation, all
L/C Obligations, whether or not the beneficiaries of the then outstanding
Letters of Credit shall have presented or shall be entitled to present the
documents required thereunder) and all other Obligations (other than Hedging
Obligations), to be forthwith due and payable, whereupon the same shall
immediately become due and payable without presentment, demand, protest or other
notice of any kind, all of which are expressly waived, anything in this
Agreement or the other Loan Documents to the contrary notwithstanding, and
terminate the Credit Facility and any right of the Borrower to request
borrowings or Letters of Credit thereunder; provided, that upon
the occurrence of an Event of Default specified in Section 11.1(i) or (j), the
Credit Facility shall be automatically terminated and all Obligations (other
than Hedging Obligations) shall automatically become due and payable without
presentment, demand, protest or other notice of any kind, all of which are
expressly waived, anything in this Agreement or in any other Loan Document to
the contrary notwithstanding.

     

    (b)           Letters of
Credit.  With respect to all Letters of Credit with respect to
which presentment for honor shall not have occurred at the time of an
acceleration pursuant to the preceding paragraph, require the Borrower at such
time to, and the Borrower shall, deposit in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit.  Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon, if
any, shall be applied to repay the other Obligations on a pro rata
basis.  After all such Letters of Credit shall have expired or been
fully drawn upon, the Reimbursement Obligation shall have been satisfied and all
other Obligations shall have been paid in full, the balance, if any, in such
cash collateral account shall be returned to the Borrower.

     

    (c)           Rights of
Collection.  Exercise on behalf of the Lenders all of its other
rights and remedies under this Agreement, the other Loan Documents and
Applicable Law, in order to satisfy all of the Borrower’s
Obligations.

     

    SECTION
11.3                                Rights and Remedies
Cumulative; Non-Waiver; etc.  The
enumeration of the rights and remedies of the Administrative Agent and the
Lenders set forth in this Agreement is not intended to be exhaustive and the
exercise by the Administrative Agent and the Lenders of any right or remedy
shall not preclude the exercise of any other rights or remedies, all of which
shall be cumulative, and shall be in addition to any other right or remedy given
hereunder or under the other Loan Documents or that may now or hereafter exist
at law or in equity or by suit or otherwise.  No delay or failure to
take action on the part of the Administrative Agent or any Lender in exercising
any right, power or privilege shall operate as a waiver thereof, nor shall any
single or partial exercise of any such right, power or privilege preclude any
other or further exercise thereof or the exercise of any other right, power or
privilege or shall be construed to be a waiver of any Event of
Default.  No course of dealing between the Borrower, the
Administrative Agent and the Lenders or their respective agents or employees
shall be effective to change, modify or discharge any provision of this
Agreement or any of the other Loan Documents or to constitute a waiver of any
Event of Default.

     

    SECTION
11.4.                                Judgment
Currency.  The
obligation of the Borrower to make payments of the principal of and interest on
the Notes and the obligation of any such Person to make payments of any other
amounts payable hereunder or pursuant to any other Loan Document in the currency
specified for such payment shall not be discharged or satisfied by any tender,
or any recovery pursuant to any judgment, which is expressed in or converted
into any other currency, except to the extent that such tender or recovery shall
result in the actual receipt by each of the Administrative Agent and Lenders of
the full amount of the particular Permitted Currency expressed to be payable
pursuant to the applicable Loan Document.  The Administrative Agent
shall, using all amounts obtained or received from the Borrower pursuant to any
such tender or recovery in payment of principal of and interest on the
Obligations, promptly purchase the applicable currency at the most favorable
spot exchange rate (to the Borrower) determined by the Administrative Agent to
be available to it.  The obligation of the Borrower to make payments
in the applicable currency shall be enforceable as an alternative or additional
cause of action solely for the purpose of recovering in the applicable currency
the amount, if any, by which such actual receipt shall fall short of the full
amount of the currency expressed to be payable pursuant to the applicable Loan
Document.

     

    ARTICLE
XII

    


    THE ADMINISTRATIVE
AGENT

    


    SECTION
12.1                                Appointment.  Each
of the Lenders hereby irrevocably designates and appoints Wachovia as
Administrative Agent of such Lender under this Agreement and the other Loan
Documents for the term hereof and each such Lender irrevocably authorizes
Wachovia as Administrative Agent for such Lender, to take such action on its
behalf under the provisions of this Agreement and the other Loan Documents and
to exercise such powers and perform such duties as are expressly delegated to
the Administrative Agent by the terms of this Agreement and such other Loan
Documents, together with such other powers as are reasonably incidental
thereto.  Notwithstanding any provision to the contrary elsewhere in
this Agreement or such other Loan Documents, the Administrative Agent shall not
have any duties or responsibilities, except those expressly set forth herein and
therein, or any fiduciary relationship with any Lender, and no implied
covenants, functions, responsibilities, duties, obligations or liabilities shall
be read into this Agreement or the other Loan Documents or otherwise exist
against the Administrative Agent.  Any reference to the Administrative
Agent in this Article XII shall be deemed to refer to the Administrative Agent
solely in its capacity as Administrative Agent and not in its capacity as a
Lender.

     

    SECTION
12.2                                Delegation of
Duties.  The
Administrative Agent may execute any of its respective duties under this
Agreement and the other Loan Documents by or through agents or attorneys-in-fact
and shall be entitled to advice of counsel concerning all matters pertaining to
such duties.  The Administrative Agent shall not be responsible for
the negligence or misconduct of any agents or attorneys-in-fact selected by the
Administrative Agent with reasonable care.

     

    SECTION
12.3                                Exculpatory
Provisions.  Neither
the Administrative Agent nor any of its officers, directors, employees, agents,
attorneys-in-fact, Subsidiaries or Affiliates shall be (a) liable for any action
lawfully taken or omitted to be taken by it or such Person under or in
connection with this Agreement or the other Loan Documents (except for actions
occasioned solely by its or such Person’s own gross negligence or willful
misconduct), or (b) responsible in any manner to any of the Lenders for any
recitals, statements, representations or warranties made by the Borrower or any
of its Subsidiaries or any officer thereof contained in this Agreement or the
other Loan Documents or in any certificate, report, statement or other document
referred to or provided for in, or received by the Administrative Agent under or
in connection with, this Agreement or the other Loan Documents or for the value,
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or the other Loan Documents or for any failure of the Borrower or any
of its Subsidiaries to perform its obligations hereunder or
thereunder.  The Administrative Agent shall not be under any
obligation to any Lender to ascertain or to inquire as to the observance or
performance of any of the agreements contained in, or conditions of, this
Agreement, or to inspect the properties, books or records of the Borrower or any
of its Subsidiaries.

     

    SECTION
12.4                                Reliance by the
Administrative Agent.  The
Administrative Agent shall be entitled to rely, and shall be fully protected in
relying, upon any note, writing, resolution, notice, consent, certificate,
affidavit, letter, cablegram, telegram, telecopy, telex or teletype message,
statement, order or other document or conversation believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including, without
limitation, counsel to the Borrower), independent accountants and other experts
selected by the Administrative Agent.  The Administrative Agent may
deem and treat the payee of any Note as the owner thereof for all purposes
unless such Note shall have been transferred in accordance with Section
13.10.  The Administrative Agent shall be fully justified in failing
or refusing to take any action under this Agreement and the other Loan Documents
unless it shall first receive such advice or concurrence of the Required Lenders
(or, when expressly required hereby or by the relevant other Loan Documents, all
the Lenders) as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense which may
be incurred by it by reason of taking or continuing to take any such action
except for its own gross negligence or willful misconduct.  The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement and the Notes in accordance with a
request of the Required Lenders (or, when expressly required hereby, all the
Lenders), and such request and any action taken or failure to act pursuant
thereto shall be binding upon all the Lenders and all future holders of the
Notes.

     

    SECTION
12.5                                Notice of
Default.  The
Administrative Agent shall not be deemed to have knowledge or notice of the
occurrence of any Default or Event of Default unless it has received notice from
a Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of
default”.  In the event that the Administrative Agent receives such a
notice, it shall promptly give notice thereof to the Lenders.  The
Administrative Agent shall take such action with respect to such Default or
Event of Default as shall be reasonably directed by the Required Lenders (or,
when expressly required hereby, all the Lenders); provided that unless
and until the Administrative Agent shall have received such directions, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders, except to the extent
that other provisions of this Agreement expressly require that any such action
be taken or not be taken only with the consent and authorization or the request
of the Lenders or Required Lenders, as applicable.

     

    SECTION
12.6                                Non-Reliance on the
Administrative Agent and Other Lenders.  Each
Lender expressly acknowledges that neither the Administrative Agent nor any of
its respective officers, directors, employees, agents, attorneys-in-fact,
Subsidiaries or Affiliates has made any representations or warranties to it and
that no act by the Administrative Agent hereafter taken, including any review of
the affairs of the Borrower or any of its Subsidiaries, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender.  Each Lender represents to the Administrative Agent that it
has, independently and without reliance upon the Administrative Agent or any
other Lender, and based on such documents and information as it has deemed
appropriate, made its own appraisal of and investigation into the business,
operations, property, financial and other condition and creditworthiness of the
Borrower and its Subsidiaries and made its own decision to make its Loans and
issue or participate in Letters of Credit hereunder and enter into this
Agreement.  Each Lender also represents that it will, independently
and without reliance upon the Administrative Agent or any other Lender, and
based on such documents and information as it shall deem appropriate at the
time, continue to make its own credit analysis, appraisals and decisions in
taking or not taking action under this Agreement and the other Loan Documents,
and to make such investigation as it deems necessary to inform itself as to the
business, operations, property, financial and other condition and
creditworthiness of the Borrower and its Subsidiaries.  Except for
notices, reports and other documents expressly required to be furnished to the
Lenders by the Administrative Agent hereunder or by the other Loan Documents,
the Administrative Agent shall not have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
operations, property, financial and other condition or creditworthiness of the
Borrower or any of its Subsidiaries which may come into the possession of the
Administrative Agent or any of its respective officers, directors, employees,
agents, attorneys-in-fact, Subsidiaries or Affiliates.

     

    SECTION
12.7                                Indemnification.  The
Lenders agree to indemnify the Administrative Agent in its capacity as such and
(to the extent not reimbursed by the Borrower and without limiting the
obligation of the Borrower to do so), ratably according to the respective
amounts of their Commitment Percentages, from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses or disbursements of any kind whatsoever which may at any time
(including, without limitation, at any time following the payment of the Notes
or any Reimbursement Obligation) be imposed on, incurred by or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or the other Loan Documents, or any documents, reports or other information
provided to the Administrative Agent or any Lender or contemplated by or
referred to herein or therein or the transactions contemplated hereby or thereby
or any action taken or omitted by the Administrative Agent under or in
connection with any of the foregoing; provided that no
Lender shall be liable for the payment of any portion of such liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, costs,
expenses or disbursements resulting solely from the Administrative Agent’s bad
faith, gross negligence or willful misconduct.  The agreements in this
Section 12.7 shall survive the payment of the Notes, any Reimbursement
Obligation and all other amounts payable hereunder and the termination of this
Agreement.

     

    SECTION
12.8                                The Administrative Agent in
Its Individual Capacity.  The
Administrative Agent and its respective Subsidiaries and Affiliates may make
loans to, accept deposits from and generally engage in any kind of business with
the Borrower as though the Administrative Agent were not the Administrative
Agent hereunder.  With respect to any Loans made or renewed by it and
any Note issued to it and with respect to any Letter of Credit issued by it or
participated in by it, the Administrative Agent shall have the same rights and
powers under this Agreement and the other Loan Documents as any Lender and may
exercise the same as though it were not the Administrative Agent, and the terms
“Lender” and “Lenders” shall include the Administrative Agent in its individual
capacity.

     

    SECTION
12.9                                Resignation of the
Administrative Agent; Successor Administrative Agent.  Subject
to the appointment and acceptance of a successor as provided below, the
Administrative Agent may resign at any time by giving notice thereof to the
Lenders and the Borrower.  Upon any such resignation, the Required
Lenders shall have the right to appoint a successor Administrative Agent, which
successor shall have minimum capital and surplus of at least
$500,000,000.  If no successor Administrative Agent shall have been so
appointed by the Required Lenders and shall have accepted such appointment
within thirty (30) days after the Administrative Agent’s giving of notice of
resignation, then the Administrative Agent may, on behalf of the Lenders,
appoint a successor Administrative Agent, which successor shall have minimum
capital and surplus of at least $500,000,000.  Upon the acceptance of
any appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all rights, powers, privileges and duties of the retiring
Administrative Agent, and the retiring Administrative Agent shall be discharged
from its duties and obligations hereunder.  After any retiring
Administrative Agent’s resignation hereunder as Administrative Agent, the
provisions of this Section 12.9 shall continue in effect for its benefit in
respect of any actions taken or omitted to be taken by it while it was acting as
Administrative Agent.

     

    SECTION
12.10                                Administrative Agent May
File Proofs of Claim.  In
case of the pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to the Borrower or any Guarantor, the Administrative Agent
(irrespective of whether the principal of any Loan or L/C Obligation shall then
be due and payable as herein expressed or by declaration or otherwise and
irrespective of whether the Administrative Agent shall have made any demand on
the Borrower) shall be entitled and empowered, by intervention in such
proceeding or otherwise:

     

    (a)           to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Loans, the L/C Obligations and all other
Obligations that are owing and unpaid and to file such other documents as may be
necessary or advisable in order to have the claims of the Administrative Agent
and the Lenders (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Administrative Agent and the Lenders and their
respective agents and counsel and all other amounts due the Administrative Agent
and the Lenders under this Agreement, including, without limitation, Section
3.3, Section 4.3 and Section 13.2) allowed in such judicial proceeding;
and

     

    (b)           to
collect and receive any monies or other property payable or deliverable on any
such claims and to distribute the same;

     

    and any
custodian, receiver, assignee, trustee, liquidator, sequestrator or other
similar official in any such judicial proceeding is hereby authorized by each
Lender to make such payments to the Administrative Agent and, in the event that
the Administrative Agent shall consent to the making of such payments directly
to the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under this Agreement (including, without limitation,
Section 4.3 and Section 13.2).

     

    Nothing
contained herein shall be deemed to authorize the Administrative Agent to
authorize or consent to or accept or adopt on behalf of any Lender any plan of
reorganization, arrangement, adjustment or composition affecting the Obligations
or the rights of any Lender or to authorize the Administrative Agent to vote in
respect of the claim of any Lender in any such proceeding.

     

    ARTICLE
XIII

    


    MISCELLANEOUS

    


    SECTION
13.1                                Notices.

     

    (a)           Method of
Communication.  Except as otherwise provided in this Agreement,
all notices and communications hereunder shall be in writing (for purposes
hereof, the term “writing” shall include information in electronic format such
as electronic mail and internet web pages), or by telephone subsequently
confirmed in writing.  Any notice shall be effective if delivered by
hand delivery or sent via electronic mail, posting on an internet web page,
telecopy, recognized overnight courier service or certified mail, return receipt
requested, and shall be presumed to be received by a party hereto (i) on the
date of delivery if delivered by hand or sent by electronic mail, posting on an
internet web page, telecopy, (ii) on the next Business Day if sent by recognized
overnight courier service and (iii) on the third Business Day following the date
sent by certified mail, return receipt requested.  A telephonic notice
to the Administrative Agent as understood by the Administrative Agent will be
deemed to be the controlling and proper notice in the event of a discrepancy
with or failure to receive a confirming written notice.

     

    (b)           Addresses for
Notices.  Notices to any party shall be sent to it at the
following addresses, or any other address as to which all the other parties are
notified in writing.

     

    If to the
Borrower:                                CompX
International Inc.

    Three Lincoln Centre

    5430 LBJ Freeway, Suite
1700

    Dallas, Texas 75240-2697

    Attention: J. Mark
Hollingsworth

    Telephone No.: (972)
233-1700

    Telecopy No.: (972)
448-1445

    


    If to Wachovia
as                                Wachovia
Bank, National Association

    Administrative
Agent:                        Charlotte
Plaza, CP-8

    201 South College Street

    Charlotte, North Carolina
28288-0680

                        Attention: 
Syndication Agency Services

    
    

    Telephone No.:  (704)
374-2698

    Telecopy No.:  (704)
383-0288

    


    With a copy
to:                                    Womble
Carlyle Sandridge & Rice, PLLC

    One West Fourth Street

    Winston-Salem, North Carolina
27101

    Attention: Christopher E.
Leon

    Telephone No.: (336)
721-3518

    Telecopy No.: (336)
726-6932

    


    If to any
Lender:                                   To
the address set forth on Schedule
1.1(a)

    


    (c)           Administrative Agent’s
Office.  The Administrative Agent hereby designates its office
located at the address set forth above, or any subsequent office which shall
have been specified for such purpose by written notice to the Borrower and
Lenders, as the Administrative Agent’s Office referred to herein, to which
payments due are to be made and at which Loans will be disbursed and Letters of
Credit issued, except for Alternative Currency Loans, to which payments due are
to be made at the office of the Administrative Agent’s
Correspondent.

     

    SECTION
13.2                                Expenses;
Indemnity.  The
Borrower will (a) pay all reasonable out-of-pocket expenses (including, without
limitation, all costs of electronic or internet distribution of any information
hereunder) of the Administrative Agent in connection with (i) the preparation,
execution and delivery of this Agreement and each other Loan Document, whenever
the same shall be executed and delivered, including, without limitation, all
out-of-pocket syndication and due diligence expenses and reasonable fees and
disbursements of counsel for the Administrative Agent and (ii) the preparation,
execution and delivery of any waiver, amendment or consent by the Administrative
Agent or the Lenders relating to this Agreement or any other Loan Document,
including, without limitation, reasonable fees and disbursements of
counsel  for the Administrative Agent, (b) pay all reasonable
out-of-pocket expenses of the Administrative Agent and each Lender actually
incurred in connection with the administration and enforcement of any rights and
remedies of the Administrative Agent and Lenders under the Credit Facility,
including, without limitation, in connection with any workout, restructuring,
bankruptcy or other similar proceeding, creating and perfecting Liens in favor
of Administrative Agent on behalf of Lenders pursuant to any Security Document,
enforcing any Obligations of, or collecting any payments due from, the Borrower
or any Subsidiary Guarantor by reason of an Event of Default (including in
connection with the sale of, collection from, or other realization upon any of
the Collateral or the enforcement of the Subsidiary Guaranty Agreement),
consulting with appraisers, accountants, engineers, attorneys and other Persons
concerning the nature, scope or value of any right or remedy of the
Administrative Agent or any Lender hereunder or under any other Loan Document or
any factual matters in connection therewith, which expenses shall include,
without limitation, the reasonable fees and disbursements of such Persons, and
(c) defend, indemnify and hold harmless the Administrative Agent and the
Lenders, and their respective parents, Subsidiaries, Affiliates, employees,
agents, officers and directors, from and against any losses, penalties, fines,
liabilities, settlements, damages, costs and expenses, suffered by any such
Person in connection with any claim (including, without limitation, any
Environmental Claims), investigation, litigation or other proceeding (whether or
not the Administrative Agent or any Lender is a party thereto) and the
prosecution and defense thereof, arising out of or in any way connected with the
Loans, this Agreement, any other Loan Document or any documents, reports or
other information provided to the Administrative Agent or any Lender or
contemplated by or referred herein or therein or the transactions contemplated
hereby or thereby, including, without limitation, reasonable attorney’s and
consultant’s fees and settlement costs, except to the extent that any of the
foregoing directly result from the gross negligence or willful misconduct of the
party seeking indemnification therefor.

     

    SECTION
13.3                                Set-off.

     

    (a)           In
addition to any rights now or hereafter granted under Applicable Law and not by
way of limitation of any such rights, upon and after the occurrence of any Event
of Default and during the continuance thereof, the Lenders and any assignee or
participant of a Lender in accordance with Section 13.10 are hereby authorized
by the Borrower at any time or from time to time, without notice to the Borrower
or to any other Person, any such notice being hereby expressly waived, to set
off and to appropriate and to apply any and all deposits (general or special,
time or demand, including, but not limited to, indebtedness evidenced by
certificates of deposit, whether matured or unmatured) and any other
indebtedness at any time held or owing by the Lenders, or any such assignee or
participant to or for the credit or the account of the Borrower against and on
account of the Obligations irrespective of whether or not (a) the Lenders shall
have made any demand under this Agreement or any of the other Loan Documents or
(b) the Administrative Agent shall have declared any or all of the Obligations
to be due and payable as permitted by Section 11.2 and although such Obligations
shall be contingent or unmatured.  Notwithstanding the preceding
sentence, each Lender agrees to notify the Borrower and the Administrative Agent
after any such set-off and application; provided, that the
failure to give such notice shall not affect the validity of such set-off and
application.

     

    (b)           Any
amount to be set-off pursuant to Section 13.3(a) shall be denominated in Dollars
and any amount denominated in an Alternative Currency shall be in an amount
equal to the Dollar Amount of such amount at the most favorable spot exchange
rate (to the Borrower) determined by the Administrative Agent to be available to
it; provided
that if at the time of any such determination no such spot exchange rate can
reasonably be determined, the Administrative Agent may use any reasonable method
as it deems applicable to determine such rate, any such determination to be
conclusive absent manifest error.

     

    (c)           Each
Lender and any assignee or participant of such Lender in accordance with Section
13.10 are hereby authorized by the Borrower to combine currencies, as deemed
necessary by such Person, in order to effect any set-off pursuant to Section
13.3(a).

     

    SECTION
13.4                                Governing
Law.  This
Agreement, the Notes and the other Loan Documents, unless otherwise expressly
set forth therein, shall be governed by, construed and enforced
in  accordance with the laws of the State of North Carolina, without
reference to the conflicts or choice of law principles thereof.

     

    SECTION
13.5                                Jurisdiction and
Venue.


     

    (a)           Jurisdiction.  The
Borrower hereby irrevocably consents to the personal jurisdiction of the state
and federal courts located in Mecklenburg County, North Carolina (and any courts
from which an appeal from any of such courts must or may be taken), in any
action, claim or other proceeding arising out of any dispute in connection with
this Agreement, the Notes and the other Loan Documents, any rights or
obligations hereunder or thereunder, or the performance of such rights and
obligations.  The Borrower hereby irrevocably consents to the service
of a summons and complaint and other process in any action, claim or proceeding
brought by the Administrative Agent or any Lender in connection with this
Agreement, the Notes or the other Loan Documents, any rights or obligations
hereunder or thereunder, or the performance of such rights and obligations, on
behalf of itself or its property, in the manner specified in Section
13.1.  Nothing in this Section 13.5 shall affect the right of the
Administrative Agent or any Lender to serve legal process in any other manner
permitted by Applicable Law or affect the right of the Administrative Agent or
any Lender to bring any action or proceeding against the Borrower or its
properties in the courts of any other jurisdictions.

     

    (b)           Venue.  The
Borrower hereby irrevocably waives any objection it may have now or in the
future to the laying of venue in the aforesaid jurisdiction in any action, claim
or other proceeding arising out of or in connection with this Agreement, any
other Loan Document or the rights and obligations of the parties hereunder or
thereunder.  The Borrower irrevocably waives, in connection with such
action, claim or proceeding, any plea or claim that the action, claim or other
proceeding has been brought in an inconvenient forum.

     

    SECTION
13.6                                Binding Arbitration; Waiver
of Jury Trial.

     

    (a)           Binding
Arbitration.  Upon demand of the Borrower, the Administrative
Agent or the Required Lenders, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Agreement or any other Loan Document (“Disputes”), between
or among parties hereto and to the other Loan Documents shall be resolved by
binding arbitration as provided herein.  Institution of a judicial
proceeding by a party does not waive the right of that party to demand
arbitration hereunder.  Disputes may include, without limitation, tort
claims, counterclaims, claims brought as class actions, claims arising from Loan
Documents executed in the future, disputes as to whether a matter is subject to
arbitration, or claims concerning any aspect of the past, present or future
relationships arising out of or connected with the Loan
Documents.  Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”)
of the American Arbitration Association (the “AAA”) and the Federal
Arbitration Act. All arbitration hearings shall be conducted in Charlotte, North
Carolina.  The expedited procedures set forth in Rule 51, et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000.  All applicable statutes of limitations shall apply to any
Dispute.  A judgment upon the award may be entered in any court having
jurisdiction.  Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one-hundred twenty (120)
days after such demand.  These time limitations may not be extended
unless a party hereto shows cause for extension and then such extension shall
not exceed a total of sixty (60) days.  The panel from which all
arbitrators are selected shall be comprised of licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA.  The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted.  The parties hereto do not waive any
applicable Federal or state substantive law except as provided
herein.  Notwithstanding the foregoing, this paragraph shall not apply
to any Hedging Agreement.

     

    (b)           Jury
Trial.  THE
ADMINISTRATIVE AGENT, EACH LENDER AND THE BORROWER HEREBY ACKNOWLEDGE THAT BY
AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, THE NOTES OR THE
OTHER LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER, OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS.

     

    (c)           Preservation of Certain
Remedies.  Notwithstanding the preceding binding arbitration
provisions, the parties hereto and the other Loan Documents preserve, without
diminution, certain remedies that such Persons may employ or exercise freely,
either alone, in conjunction with or during a Dispute.  Each such
Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies, as applicable:  (i) all rights to foreclose against any real
or personal property or other security by exercising a power of sale granted in
the Loan Documents or under Applicable Law or by judicial foreclosure and sale,
including a proceeding to confirm the sale, (ii) all rights of self help
including peaceful occupation of property and collection of rents, set off, and
peaceful possession of property, (iii) obtaining provisional or ancillary
remedies including injunctive relief, sequestration, garnishment, attachment,
appointment of receiver and in filing an involuntary bankruptcy proceeding, and
(iv) when applicable, a judgment by confession of
judgment.  Preservation of these remedies does not limit the power of
an arbitrator to grant similar remedies that may be requested by a party in a
Dispute.

     

    SECTION
13.7                                Reversal of
Payments.  To
the extent the Borrower makes a payment or payments to the Administrative Agent
for the ratable benefit of the Lenders or the Administrative Agent receives any
payment or proceeds of the Collateral, which payments or proceeds or any part
thereof are subsequently invalidated, declared to be fraudulent or preferential,
set aside and/or required to be repaid to a trustee, receiver or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then, to the extent of such payment or proceeds repaid, the Obligations or part
thereof intended to be satisfied shall be revived and continued in full force
and effect as if such payment or proceeds had not been received by the
Administrative Agent.

     

    SECTION
13.8                                Injunctive Relief; Punitive
Damages.

     

    (a)           The
Borrower recognizes that, in the event the Borrower fails to perform, observe or
discharge any of its obligations or liabilities under this Agreement, any remedy
of law may prove to be inadequate relief to the Lenders. Therefore, the Borrower
agrees that the Lenders, at the Lenders’ option, shall be entitled to temporary
and permanent injunctive relief in any such case without the necessity of
proving actual damages.

     

    (b)           The
Administrative Agent, the Lenders and the Borrower (on behalf of itself and its
Subsidiaries) hereby agree that no such Person shall have a remedy of punitive
or exemplary damages against any other party to a Loan Document and each such
Person hereby waives any right or claim to punitive or exemplary damages that
they may now have or may arise in the future in connection with any Dispute,
whether such Dispute is resolved through arbitration or judicially.

     

    SECTION
13.9                                Accounting
Matters.  Except
as otherwise expressly provided herein, all terms of an accounting or financial
nature shall be construed in accordance with GAAP, as in effect from time to
time, provided that, if the Borrower notifies the Administrative Agent that the
Borrower requests an amendment to any provision hereof to eliminate the effect
of any change occurring after the date hereof in GAAP or in the application
thereof on the operation of such provision (or if the Administrative Agent
notifies the Borrower that the Required Lenders request an amendment to any
provision hereof for such purpose), regardless of whether any such notice is
given before or after such change in GAAP or in the application thereof, then
such provision shall be interpreted on the basis of GAAP as in effect and
applied immediately before such change shall have become effective until such
notice shall have been withdrawn or such provision amended in accordance
therewith.

     

    SECTION
13.10                                Successors and Assigns;
Participations.

     

    (a)           Benefit of
Agreement.  This Agreement shall be binding upon and inure to
the benefit of the Borrower, the Administrative Agent and the Lenders, all
future holders of the Notes, and their respective successors and assigns, except
that the Borrower shall not assign or transfer any of its rights or obligations
under this Agreement without the prior written consent of each
Lender.

     

    (b)           Assignment by
Lenders.  Each Lender may, in the ordinary course of its
business and in accordance with Applicable Law, sell or assign to any Lender,
any Affiliate of a Lender and with the consent of the Borrower (so long as no
Default or Event of Default has occurred and is continuing) and the consent of
the Administrative Agent, which consents shall not be unreasonably withheld or
delayed, assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement and the other Loan
Documents (including, without limitation, all or a portion of the Extensions of
Credit at the time owing to it and the Notes held by it); provided
that:

     

    (i)           each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning Lender’s rights and obligations under this Agreement;

     

    (ii)           if
less than all of the assigning Lender’s Commitment is to be assigned, the
Commitment so assigned shall not be less than $5,000,000;

     

    (iii)           the
parties to each such assignment shall execute and deliver to the Administrative
Agent, for its acceptance and recording in the Register, an Assignment and
Acceptance substantially in the form of Exhibit G attached
hereto (an “Assignment
and Acceptance”), together with (to the extent requested by any
Purchasing Lender) any Note or Notes subject to such assignment;

     

    (iv)           where
consent of the Borrower to an assignment to a Purchasing Lender is required
hereunder (including consent to an assignment to an Approved Fund), the Borrower
shall be deemed to have given its consent five (5) Business Days after the date
written notice thereof has been delivered by the assigning Lender (through the
Administrative Agent) unless such consent is expressly refused by the Borrower
prior to such fifth (5th)
Business Day;

     

    (v)           such
assignment shall not, without the consent of the Borrower require the Borrower
to file a registration statement with the Securities and Exchange Commission or
apply to or qualify the Loans or the Notes under the blue sky laws of any state;
and

     

    (vi)           the
assigning Lender shall pay to the Administrative Agent an assignment fee of
$3,500 upon the execution by such Lender of the Assignment and Acceptance; provided that no such
fee shall be payable upon any assignment by a Lender to an Affiliate of such
Lender.

     

    Upon such
execution, delivery, acceptance and recording, from and after the effective date
specified in each Assignment and Acceptance, which effective date shall be at
least five (5) Business Days after the execution thereof (unless otherwise
agreed to by the Administrative Agent), (A) the Purchasing Lender thereunder
shall be a party hereto and, to the extent provided in such Assignment and
Acceptance, have the rights and obligations of a Lender hereby and (B) the
Lender thereunder shall, to the extent provided in such assignment, be released
from its obligations under this Agreement.

     

    (c)           Rights and Duties Upon
Assignment.  By executing and delivering an Assignment and
Acceptance, the assigning Lender thereunder and the Purchasing Lender thereunder
confirm to and agree with each other and the other parties hereto as set forth
in such Assignment and Acceptance.

     

    (d)           Register.  The
Administrative Agent shall maintain a copy of each Assignment and Acceptance
delivered to it and a register for the recordation of the names and addresses of
the Lenders and the amount of the Extensions of Credit with respect to each
Lender from time to time (the “Register”).  The
entries in the Register shall be conclusive, in the absence of manifest error,
and the Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all purposes of
this Agreement.  The Register shall be available for inspection by the
Borrower or any Lender at any reasonable time and from time to time upon
reasonable prior notice.

     

    (e)           Issuance of New
Notes.  Upon its receipt of an Assignment and Acceptance
executed by an assigning Lender and a Purchasing Lender together with any Note
or Notes (if applicable) subject to
such assignment and (if applicable) the written consent to such assignment, the
Administrative Agent shall, if such Assignment and Acceptance has been completed
and is substantially in the form of Exhibit
G:

     

    (i)           accept
such Assignment and Acceptance;

     

    (ii)          record
the information contained therein in the Register;

     

    (iii)        
give prompt notice thereof to the Lenders and the Borrower; and

     

    (iv)         promptly
deliver a copy of such Assignment and Acceptance to the Borrower.

     

    Within
five (5) Business Days after receipt of notice, the Borrower shall execute and
deliver to the Administrative Agent, in exchange for the surrendered Note or
Notes, a new Note or Notes to the order of such Purchasing Lender (to the extent
requested thereby) in amounts equal to the
Commitment assumed by it pursuant to such Assignment and Acceptance and a new
Note or Notes to the order of the assigning Lender (to the extent requested
thereby) in an
amount equal to the Commitment retained by it hereunder. Such new Note or Notes
shall be in an aggregate principal amount equal to the aggregate principal
amount of such surrendered Note or Notes, shall be dated the effective date of
such Assignment and Acceptance and shall otherwise be in substantially the form
of the assigned Notes delivered to the assigning Lender.  Each
surrendered Note or Notes shall be canceled and returned to the
Borrower.  Notwithstanding anything in this Agreement to the contrary,
any Lender which has not been issued a Note or Notes hereunder may at any time
deliver a written request for a Note or Notes to the Administrative Agent and
the Borrower.  Within five (5) Business Days after receipt of notice,
the Borrower shall execute and deliver to the Administrative Agent, a Note or
Notes (as applicable) to the order of such Lender in amounts equal to the
Commitment of such Lender.  Upon receipt thereby, the Administrative
Agent shall promptly deliver such Note or Notes to such Lender.

     

    (f)           Participations.  Each
Lender may, without notice to or the consent of the Borrower or the
Administrative Agent, in the ordinary course of its commercial banking business
and in accordance with Applicable Law, sell participations to one or more banks
or other entities (any such bank or other entity, a “Participant”) in all
or a portion of its rights and obligations under this Agreement (including,
without limitation, all or a portion of its Extensions of Credit and the Notes
held by it); provided
that:

     

    (i)           
each such participation shall be in an amount not less than
$5,000,000;

     

    (ii)           such
Lender’s obligations under this Agreement (including, without limitation, its
Commitment) shall remain unchanged;

     

    (iii)          such
Lender shall remain solely responsible to the other parties hereto for the
performance of such obligations;

     

    (iv)          such
Lender shall remain the holder of the Notes held by it for all purposes of this
Agreement;

     

    (v)           the
Borrower, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender’s rights and
obligations under this Agreement;

     

    (vi)          such
Lender shall not permit such Participant the right to approve any waivers,
amendments or other modifications to this Agreement or any other Loan Document
other than waivers, amendments or modifications which would reduce the principal
of or the interest rate on any Loan or Reimbursement Obligation, extend the term
or increase the amount of the Commitment, reduce the amount of any fees to which
such Participant is entitled, extend any scheduled payment date for principal of
any Loan or, except as expressly contemplated hereby or thereby, release
substantially all of the Collateral or any Security Document; and

     

    (vii)         any
such disposition shall not, without the consent of the Borrower require the
Borrower to file a registration statement with the Securities and Exchange
Commission to apply to qualify the Loans or the Notes under the blue sky law of
any state.

     

    The
Borrower agrees that each Participant shall be entitled to the benefits of
Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11, Section 4.12,
Section 4.13 and Section 13.3 to the same extent as if it were a Lender and had
acquired its interest by assignment pursuant to paragraph (b) of this Section
13.10; provided
that a Participant shall not be entitled to receive any greater payment under
Section 4.7, Section 4.8, Section 4.9, Section 4.10, Section 4.11, Section 4.12,
and Section 4.13 than the applicable Lender would have been entitled to receive
with respect to the participation sold to such Participant, unless the sale of
the participation to such Participant is made with the Borrower’s prior written
consent and such Participant shall have delivered to the Administrative Agent
all United States Internal Revenue Service Forms required pursuant to Section
4.13(e).

     

    (g)           Disclosure of Information;
Confidentiality.  The Administrative Agent and the Lenders
shall hold all non-public information with respect to the Borrower obtained
pursuant to the Loan Documents (or any Hedging Agreement with a Lender or the
Administrative Agent) in accordance with their customary procedures for handling
confidential information; provided, that the
Administrative Agent may disclose information relating to this Agreement to
Gold Sheets and
other similar bank trade publications, such information to consist of deal terms
and other information customarily found in such publications and provided further, that the
Administrative Agent or any Lender may disclose any such information to the
extent such disclosure is (i) required by law or requested or required pursuant
to any legal process, (ii) requested by, or required to be disclosed to, any
rating agency, or regulatory or similar authority (including, without
limitation, the National Association of Insurance Commissioners) or (iii) used
in any suit, action or proceeding for the purpose of defending itself, reducing
its liability or protecting any of its claims, rights, remedies or interests
under or in connection with the Loan Documents (or any Hedging Agreement with a
Lender or the Administrative Agent).  Any Lender may, in connection
with any assignment, proposed assignment, participation or proposed
participation pursuant to this Section 13.10, disclose to the Purchasing Lender,
proposed Purchasing Lender, Participant, proposed Participant, or to any direct
or indirect contractual counterparty in swap agreements or such contractual
counterparty’s professional advisor any information relating to the Borrower
furnished to such Lender by or on behalf of the Borrower; provided, that prior
to any such disclosure, each such Purchasing Lender, proposed Purchasing Lender,
Participant or proposed Participant, contractual counterparty or professional
advisor shall agree to be bound by the provisions of this Section
13.10(g).

     

    (h)           Certain Pledges or
Assignments.  Any Lender may at any time pledge or assign a
security interest in all or any portion of its rights under this Agreement or
any other Loan Document to secure obligations of such Lender, including, without
limitation, any pledge or assignment to secure obligations to a Federal Reserve
Bank; provided
that no such pledge or assignment of a security interest shall release a Lender
form any of its obligations hereunder or substitute such pledgee or assignee for
such Lender as a party hereto.

     

    SECTION
13.11                                Amendments, Waivers and
Consents.  Except
as set forth below or as specifically provided in the Credit Agreement or any
other Loan Document, any term, covenant, agreement or condition of this
Agreement or any of the other Loan Documents may be amended or waived by the
Lenders, and any consent given by the Lenders, if, but only if, such amendment,
waiver or consent is in writing signed by the Required Lenders (or by the
Administrative Agent with the consent of the Required Lenders) and delivered to
the Administrative Agent and, in the case of an amendment, signed by the
Borrower; provided that no
amendment, waiver or consent shall (a) increase (i) the Commitment of any
Lender, (ii) the Alternative Currency Commitment or (iii) the Swingline
Commitment, (b)  reduce the rate of interest or fees payable on any
Loan or Reimbursement Obligation, (c) reduce or forgive the principal amount of
any Loan or Reimbursement Obligation, (d) extend the originally scheduled time
or times of payment of the principal of any Loan or Reimbursement Obligation or
the time or times of payment of interest on any Loan or Reimbursement Obligation
or any fee or commission with respect thereto, (e) permit any subordination of
the principal or interest on any Loan or Reimbursement Obligation, (f) release
the Borrower from the Obligations (other than Hedging Obligations) hereunder,
(g) release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty Agreement, (h) permit any assignment (other than as specifically
permitted or contemplated in this Agreement) of any of the Borrower’s rights and
obligations hereunder, (i) release any Collateral or any Security Documents
(other than asset sales permitted pursuant to Section 10.5 and as otherwise
specifically permitted or contemplated in this Agreement or the applicable
Security Document), (j) amend the definition of Alternative Currency, (k) amend
the provisions of this Section 13.11 or the definition of Required Lenders, or
(l) extend the time of the obligation of the Lenders to make or issue or
participate in Letters of Credit, in each case, without the prior written
consent of each Lender.  In addition, no amendment, waiver or consent
to the provisions (a) of Article XII shall be made without the written consent
of the Administrative Agent, (b) of Article III shall be made without the
written consent of the Issuing Lender, (c) relating to Swingline Loans or the
Swingline Facility shall be made without the written consent of the Swingline
Lender and (d)  relating to Alternative Currency Loans or the Alternative
Currency Facility shall be made without the written consent of the Alternative
Currency Lender.

     

    SECTION
13.12                                Performance of
Duties.  The
Borrower’s obligations under this Agreement and each of the other Loan Documents
shall be performed by the Borrower at its sole cost and expense.

     

    SECTION
13.13                                All Powers Coupled with
Interest.  All
powers of attorney and other authorizations granted to the Lenders, the
Administrative Agent and any Persons designated by the Administrative Agent or
any Lender pursuant to any provisions of this Agreement or any of the other Loan
Documents shall be deemed coupled with an interest and shall be irrevocable so
long as any of the Obligations remain unpaid or unsatisfied, any of the
Commitments remain in effect or the Credit Facility has not been
terminated.

     

    SECTION
13.14                                Survival of
Indemnities.  Notwithstanding
any termination of this Agreement, the indemnities to which the Administrative
Agent and the Lenders are entitled under the provisions of this Article XIII and
any other provision of this Agreement and the other Loan Documents shall
continue in full force and effect and shall protect the Administrative Agent and
the Lenders against events arising after such termination as well as
before.

     

    SECTION
13.15                                Titles and
Captions.  Titles
and captions of Articles, Sections and subsections in, and the table of contents
of, this Agreement are for convenience only, and neither limit nor amplify the
provisions of this Agreement.

     

    SECTION
13.16                                Severability of
Provisions.  Any
provision of this Agreement or any other Loan Document which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

     

    SECTION
13.17                                Counterparts.  This
Agreement may be executed in any number of counterparts and by different parties
hereto in separate counterparts, each of which when so executed shall be deemed
to be an original and shall be binding upon all parties, their successors and
assigns, and all of which taken together shall constitute one and the same
agreement.

     

    SECTION
13.18                                Term of
Agreement.  This
Agreement shall remain in effect from the Closing Date through and including the
date upon which all Obligations arising hereunder or under any other Loan
Document shall have been indefeasibly and irrevocably paid and satisfied in full
and all Commitments have been terminated.  The Administrative Agent is
hereby permitted to release all security interests in the capital stock or other
ownership interests of the Material Foreign Subsidiaries pledged pursuant to the
Collateral Agreement in favor of the Administrative Agent, for the ratable
benefit of itself and the Lenders, upon repayment of the outstanding principal
of and all accrued interest on the Loans, payment of all outstanding fees and
expenses hereunder and the termination of the Lender’s
Commitments.  No termination of this Agreement shall affect the rights
and obligations of the parties hereto arising prior to such termination or in
respect of any provision of this Agreement which survives such
termination.

     

    SECTION
13.19                                Advice of
Counsel.  Each
of the parties represents to each other party hereto that it has discussed this
Agreement with its counsel.

     

    SECTION
13.20                                No Strict
Construction.  The
parties hereto have participated jointly in the negotiation and drafting of this
Agreement.  In the event an ambiguity or question of intent or
interpretation arises, this Agreement shall be construed as if drafted jointly
by the parties hereto and no presumption or burden of proof shall arise favoring
or disfavoring any party by virtue of the authorship of any provisions of this
Agreement.

     

    SECTION
13.21                                Inconsistencies with Other
Documents; Independent Effect of Covenants.

     

    (a)           In
the event there is a conflict or inconsistency between this Agreement and any
other Loan Document, the terms of this Agreement shall control; provided, that any
provision of the Security Documents which imposes additional burdens on the
Borrower or its Subsidiaries or further restricts the rights of the Borrower or
its Subsidiaries or gives the Administrative Agent or Lenders additional rights
shall not be deemed to be in conflict or inconsistent with this Agreement and
shall be given full force and effect.

     

    (b)           The
Borrower expressly acknowledges and agrees that each covenant contained in
Articles VIII, IX, or X hereof shall be given independent
effect.  Accordingly, the Borrower shall not engage in any transaction
or other act otherwise permitted under any covenant contained in Articles VIII,
IX, or X if, before or after giving effect to such transaction or act, the
Borrower shall or would be in breach of any other covenant contained in Articles
VIII, IX, or X.

     

    SECTION
13.22                                Continuity of
Contract.  The
parties hereto agree that the occurrence or non-occurrence of EMU, any event or
events associated with EMU and/or the introduction of the euro in any additional
part of the European Union (a) will not result in the discharge, cancellation,
rescission or termination in whole or in part of this Agreement or any other
Loan Document, (b) will not give any party the right to cancel, rescind,
terminate or vary this Agreement or any other Loan Document or (c) will not give
rise to an Event of Default, in each case other than as specifically provided in
this Agreement.

     

    SECTION
13.23                                Release of
Collateral.  The
parties hereto agree that at Closing, all of the mortgages and security
interests granted to the Administrative Agent in the assets of the Borrower and
its Subsidiaries pursuant the Existing Credit Agreement, other than in the
Collateral, shall be released.  The Administrative Agent shall take
such action and execute and deliver such documents, certificates and instruments
as may be reasonably requested by Borrower to evidence the release contemplated
hereby.

     

    


    [Signature
pages to follow]

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    IN
WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed
under seal by their duly authorized officers, all as of the day and year first
written above.

     

     

     

    
 

      BORROWER:

     

    [CORPORATE SEAL]             COMPX
INTERNATIONAL INC., as Borrower


    
    

    


     
By:   Darryl R.
Halbert                        

    Name:    Darryl R.
Halbert          

    Title:      Chief Financial Officer

    


    


    [Signature
pages continued on the following page]

    


    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

     

     

                          ADMINISTRATIVE
AGENT AND LENDERS:

     

                            

                          WACHOVIA BANK,
NATIONAL

    
                            ASSOCIATION, as Administrative
Agent

      
                              and
Lender

      

    

     

    
      


       
By:      /s/Thomas F.
Snider     

      Name:    Thomas F. Snider

      Title:     
Senior Vice
President

      


      


      [Signature
pages continued on the following page]

      


      


    

     

    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    COMPASS BANK, as Lender

    


    By:     /s/ Key Coker

    Name:   Key Coker

    Title:     Executive Vice
President                                                        

    


    


    [Signature
pages continued on the following page]

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    COMERICA BANK, as Lender

    


    By:    /s/Janet L. Wheeler

    Name:   Janet L.
Wheeler             

    Title:     Assistant Vice President

    


    


    


    
      
        
          
             

            


            


            WINSTON
1636051v7

          

           


        

        
           


          
            

          

        

        
           


        

      

    

    
 

    
      EXHIBIT
A-I

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      


      FORM OF REVOLVING CREDIT
NOTE


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      REVOLVING CREDIT
NOTE

      


       

      


      


      FOR VALUE
RECEIVED, the undersigned, COMPX INTERNATIONAL INC., a corporation organized
under the laws of Delaware (the “Borrower”), promises
to pay to the order of ____________________ (the “Lender”), at the
place and times provided in the Credit Agreement referred to below, the
principal sum of _____________________ DOLLARS ($__________) or, if less, the
principal amount of all Revolving Credit Loans made by the Lender from time to
time pursuant to that certain Credit Agreement, dated as of December 23, 2005
(as amended, restated, supplemented or otherwise modified, the “Credit Agreement”) by
and among the Borrower, the lenders who are or may become a party thereto, as
Lenders (collectively, the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).  Capitalized terms used herein and not defined herein
shall have the meanings assigned thereto in the Credit Agreement.

       

      The
unpaid principal amount of this Revolving Credit Note from time to time
outstanding is subject to mandatory repayment from time to time as provided in
the Credit Agreement and shall bear interest as provided in Section 4.1 of the
Credit Agreement.  All payments of principal and interest on this
Revolving Credit Note shall be payable in lawful currency of the United States
of America in immediately available funds to the account designated in the
Credit Agreement.

       

      This
Revolving Credit Note is entitled to the benefits of, and evidences Obligations
incurred under, the Credit Agreement, to which reference is made for a
description of the security for this Revolving Credit Note and for a statement
of the terms and conditions on which the Borrower is permitted and required to
make prepayments and repayments of principal of the Obligations evidenced by
this Revolving Credit Note and on which such Obligations may be declared to be
immediately due and payable.

       

      THIS
REVOLVING CREDIT NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE
WITH THE LAWS OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF
LAW PRINCIPLES THEREOF.

       

      The Debt
evidenced by this Revolving Credit Note is senior in right of payment to all
Subordinated Debt referred to in the Credit Agreement.

       

      The
Borrower hereby waives all requirements as to diligence, presentment, demand of
payment, protest and (except as required by the Credit Agreement) notice of any
kind with respect to this Revolving Credit Note.

       

      IN
WITNESS WHEREOF, the undersigned has executed this Revolving Credit Note under
seal as of the day and year first above written.

       

      COMPX
INTERNATIONAL INC.

      [CORPORATE
SEAL]

      


      


      By:                                                                              

      Name:  ___________________________

      Title:    ____________________________                                                                  


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
A-2

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF SWINGLINE
NOTE


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      


      SWINGLINE
NOTE

      


      


      $5,000,000.00                                                                    December 23,
2005

      


      FOR VALUE
RECEIVED, the undersigned, COMPX INTERNATIONAL INC., a corporation organized
under the laws of Delaware (the “Borrower”), promises
to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Lender”), at the
place and times provided in the Credit Agreement referred to below, the
principal sum of FIVE MILLION AND 00/100 DOLLARS ($5,000,000.00) or, if less,
the principal amount of all Swingline Loans made by the Lender from time to time
pursuant to that certain Credit Agreement, dated as of December 23, 2005 (as
amended, restated, supplemented or otherwise modified, the “Credit Agreement”) by
and among the Borrower, the lenders who are or may become a party thereto, as
Lenders (collectively, the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).  Capitalized terms used herein and not defined herein
shall have the meanings assigned thereto in the Credit Agreement.

       

      The
unpaid principal amount of this Swingline Note from time to time outstanding is
subject to mandatory repayment from time to time as provided in the Credit
Agreement and shall bear interest as provided in Section 4.1 of the Credit
Agreement.  Swingline Loans refunded as Revolving Credit Loans in
accordance with Section 2.3(d) of the Credit Agreement shall be payable by
the Borrower as Revolving Credit Loans pursuant to the Revolving Credit Notes,
and shall not be payable under this Swingline Note as Swingline
Loans.  All payments of principal and interest on this Swingline Note
shall be payable in lawful currency of the United States of America in
immediately available funds to the account designated in the Credit
Agreement.

       

      This
Swingline Note is entitled to the benefits of, and evidences Obligations
incurred under, the Credit Agreement, to which reference is made for a
description of the security for this Swingline Note and for a statement of the
terms and conditions on which the Borrower is permitted and required to make
prepayments and repayments of principal of the Obligations evidenced by this
Swingline Note and on which such Obligations may be declared to be immediately
due and payable.

       

      THIS
SWINGLINE NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN ACCORDANCE WITH THE
LAWS OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS OR CHOICE OF LAW
PRINCIPLES THEREOF.

       

      The Debt
evidenced by this Swingline Note is senior in right of payment to all
Subordinated Debt referred to in the Credit Agreement.

       

      The
Borrower hereby waives all requirements as to diligence, presentment, demand of
payment, protest and (except as required by the Credit Agreement) notice of any
kind with respect to this Swingline Note.

       

      IN
WITNESS WHEREOF, the undersigned has executed this Swingline Note under seal as
of the day and year first above written.

       

      COMPX
INTERNATIONAL INC.

      


      [CORPORATE
SEAL]            By:    _______________________________

         
                    Name:  _____________________________

        
                    Title:    ______________________________


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
A-3

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF ALTERNATIVE CURRENCY
NOTE


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      ALTERNATIVE CURRENCY
NOTE

      


      


      $10,000,000.00
(or the equivalent

         thereof
described below)

      


      FOR VALUE
RECEIVED, the undersigned, COMPX INTERNATIONAL INC., a corporation organized
under the laws of Delaware (the “Borrower”), promises
to pay to the order of WACHOVIA BANK, NATIONAL ASSOCIATION (the “Lender”), at the
place and times provided in the Credit Agreement referred to below, the
principal sum of TEN MILLION AND 00/100 DOLLARS ($10,000,000.00) (or the
applicable Alternative Currency Amount then outstanding under this Alternative
Currency Note), or, if less, the principal amount of all Alternative Currency
Loans made by the Lender from time to time pursuant to that certain Credit
Agreement, dated as of December 23, 2005 (as amended, restated, supplemented or
otherwise modified, the “Credit Agreement”) by
and among the Borrower, the lenders who are or may become a party thereto, as
Lenders (collectively, the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).  Capitalized terms used herein and not defined herein
shall have the meanings assigned thereto in the Credit Agreement.

       

      The
unpaid principal amount of this Alternative Currency Note from time to time
outstanding is subject to mandatory repayment from time to time as provided in
the Credit Agreement and shall bear interest as provided in Section 4.1 of
the Credit Agreement. Alternative Currency Loans refunded as Revolving Credit
Loans in accordance with Section 2.2(b) of the Credit Agreement shall be
payable by the Borrower as Revolving Credit Loans pursuant to the Revolving
Credit Notes, and shall not be payable under this Alternative Currency Note as
Alternative Currency Loans.  All payments of principal and interest on
this Alternative Currency Note shall be payable in the applicable Permitted
Currency in immediately available funds to the account designated in the Credit
Agreement.

       

      This
Alternative Currency Note is entitled to the benefits of, and evidences
Obligations incurred under, the Credit Agreement, to which reference is made for
a description of the security for this Alternative Currency Note and for a
statement of the terms and conditions on which the Borrower is permitted and
required to make prepayments and repayments of principal of the Obligations
evidenced by this Alternative Currency Note and on which such Obligations may be
declared to be immediately due and payable.

       

      THIS
ALTERNATIVE CURRENCY NOTE SHALL BE GOVERNED, CONSTRUED AND ENFORCED IN
ACCORDANCE WITH THE LAWS OF NORTH CAROLINA, WITHOUT REFERENCE TO THE CONFLICTS
OR CHOICE OF LAW PRINCIPLES THEREOF.

       

      The Debt
evidenced by this Alternative Currency Note is senior in right of payment to all
Subordinated Debt referred to in the Credit Agreement.

       

      The
Borrower hereby waives all requirements as to diligence, presentment, demand of
payment, protest and (except as required by the Credit Agreement) notice of any
kind with respect to this Alternative Currency Note.

       

      IN
WITNESS WHEREOF, the undersigned has executed this Alternative Currency Note
under seal as of the day and year first above written.

       

      COMPX
INTERNATIONAL INC.

      [CORPORATE
SEAL]

      
        By:                                                                           

                                                                                                                                                             

                                                                               

      

      



      
        
           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
B

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF NOTICE OF
BORROWING


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      


      NOTICE OF
BORROWING

      


      


      Dated as
of:______________

      


      


      


      Wachovia
Bank, National Association,

        as
Administrative Agent

      Charlotte
Plaza, CP-8

      201 South
College Street

      Charlotte,
North Carolina 28288-0680

      Attention:  Syndication
Agency Services

      


      Ladies
and Gentlemen:

      


      This
irrevocable Notice of Borrowing is delivered to you pursuant to
Section 2.4(a) of the Credit Agreement dated as of December 23, 2005 (as
amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
by and among CompX International Inc., a corporation organized under the laws of
Delaware (the “Borrower”), the
lenders who are or may become party thereto, as Lenders (the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).

       

      1.           The
Borrower hereby requests that [the Lenders] [the Alternative Currency Lender]
make a [Revolving Credit Loan] [Alternative Currency Loan] to the Borrower
denominated in [Applicable Permitted Currency] in the aggregate principal amount
of $________________.  (Complete with the name of the
applicable Lender(s), the type of applicable Loan, the applicable Permitted
Currency and the applicable amount in accordance with Section 2.4(a) of the
Credit Agreement.)

       

      2.           The
Borrower hereby requests that such Loan be made on the following Business
Day:____________________.  (Complete with a Business Day in
accordance with Section 2.4(a) of the Credit
Agreement).

       

      3.           The
Borrower hereby requests that such Loan bear interest at the following interest
rate, plus the Applicable Margin, as set forth below:

       

      
        	
                 

                 

                Component of Loan

              	
                 

                 

                Interest Rate

              	
                 

                Interest
      Period

                (LIBOR Rate only)

              	
                Termination
      Date for

                Interest
      Period

                (if applicable)

                 

              
	 
      	
                [Base
      Rate or LIBOR Rate (in accordance with Section 4.1 of the Credit
      Agreement)]

              	 
      	 
      


      

      


      4.           The
principal amount of all Loans and L/C Obligations outstanding as of the date
hereof (including the requested Loan) does not exceed the maximum amount
permitted to be outstanding pursuant to the terms of the Credit
Agreement.

       

      5.           All
of the conditions applicable to the Loan requested herein as set forth in the
Credit Agreement have been satisfied as of the date hereof and will remain
satisfied to the date of such Loan.

       

      6.           Capitalized
terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

       

      [Signature
Page Follows]

      



      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the undersigned has executed this Notice of Borrowing as of the
____ day of ______________, ____.

       

      COMPX
INTERNATIONAL INC.

      


      


      


      By:   ___________________________                                                                                

      Name:   ______________________                                                                           

      Title:     ______________________                                                                         

      



      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
C

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF NOTICE OF ACCOUNT
DESIGNATION

      



      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      NOTICE OF ACCOUNT
DESIGNATION

      


      


      Dated as
of:___________

      


      Wachovia
Bank, National Association,

        as
Administrative Agent

      Charlotte
Plaza, CP-8

      201 South
College Street

      Charlotte,
North Carolina 28288-0680

      Attention:  Syndication
Agency Services

      


      Ladies
and Gentlemen:

      


      This
Notice of Account Designation is delivered to you pursuant to
Section 2.4(b) of the Credit Agreement dated as of December 23, 2005 (as
amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
by and among CompX International Inc., a corporation organized under the laws of
Delaware (the “Borrower”), the
lenders who are or may become party thereto, as Lenders (the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).

       

      1.           The
Administrative Agent is hereby authorized to disburse all Loan proceeds into the
following account(s):

       

      ___________________________

      ABA Routing
Number:________

      Account
Number:_____________

      


      2.           This
authorization shall remain in effect until revoked or until a subsequent Notice
of Account Designation is provided to the Administrative Agent.

       

      3.           Capitalized
terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

       

      IN
WITNESS WHEREOF, the undersigned has executed this Notice of Account Designation
as of the ____ day of ________________, _____.

       

      COMPX
INTERNATIONAL INC.

      


      


      


      By:   ________________________                                                                                

      Name:   ___________________                                                                           

      Title:    ___________________                                                                          

      



      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
D

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF NOTICE OF
PREPAYMENT


      
        
           


        

        
           


          
            

          

        

        
           


        

      


      NOTICE OF
PREPAYMENT

      


      


      Dated as
of:____________

      


      


      Wachovia
Bank, National Association,

        as
Administrative Agent

      Charlotte
Plaza, CP-8

      201 South
College Street

      Charlotte,
North Carolina 28288-0680

      Attention:  Syndication
Agency Services

      


      Ladies
and Gentlemen:

      


      This
irrevocable Notice of Prepayment is delivered to you pursuant to
Section 2.5(c) of the Credit Agreement dated as of December 23, 2005 (as
amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
by and among CompX International Inc., a corporation organized under the laws of
Delaware (the “Borrower”), the
lenders who are or may become party thereto, as Lenders (the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).

       

      

        1.           The
Borrower hereby provides notice to the Administrative Agent that it shall repay
the following [Base Rate Loans] and/or [LIBOR Rate Loans] denominated in
[Applicable Permitted Currency]:____________________.  (Complete with the type of Loan, the
applicable Permitted Currency and the applicable amount in accordance with
Section 2.5(c) of the Credit Agreement.)

         

        2.   The Loan
to be prepaid is a [check each applicable box]

         

        
        

         

        o    Swingline
Loan

        


        o  Revolving Credit
Loan

        


        o    Alternative Currency
Loan

        


        3.           The
Loan shall be prepaid on the following Business
Day:___________________.  (Complete with a Business Day in
accordance with Section 2.5(c) of the Credit
Agreement.)

         

        4.           Capitalized
terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

         

      

       

      IN
WITNESS WHEREOF, the undersigned has executed this Notice of Prepayment as of
the ____ day of ________________, ____.

       

      COMPX
INTERNATIONAL INC.

      


      


      


      By:   ____________________________                                                                               

      Name:  _______________________                                                                            

      Title:     _______________________                                                                         

      



      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
E

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF NOTICE OF
CONVERSION/CONTINUATION

      



      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      NOTICE OF
CONVERSION/CONTINUATION

      


      


      Dated as
of:_______________

      


      


      Wachovia
Bank, National Association,

        as
Administrative Agent

      Charlotte
Plaza, CP-8

      201 South
College Street

      Charlotte,
North Carolina 28288-0680

      Attention:  Syndication
Agency Services

      


      Ladies
and Gentlemen:

      


      This
irrevocable Notice of Conversion/Continuation (the “Notice”) is delivered
to you pursuant to Section 4.2 of the Credit Agreement dated as of December
23, 2005 (as amended, restated, supplemented or otherwise modified, the “Credit Agreement”),
by and among CompX International Inc., a corporation organized under the laws of
Delaware (the “Borrower”), the
lenders who are or may become party thereto, as Lenders (the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).

       

      1.           The
Loan to which this Notice relates is [a Revolving Credit Loan] [an Alternative
Currency Loan].  (Delete as
applicable.)

       

      2.           This
Notice is submitted for the purpose of:  (Check one and complete applicable
information in accordance with the Credit Agreement.)

       

               o   Converting all or a portion of a Base Rate
Loan into a LIBOR Rate Loan

       

      (a)           The
aggregate outstanding principal balance of such Loan is
$_________________.

       

      (b)           The
principal amount of such Loan to be converted is
$_________________.

       

      (c)           The
requested effective date of the conversion of such Loan is
________________.

       

      (d)           The
requested Interest Period applicable to the converted Loan is
_________________.

       

                     
o Converting a portion of LIBOR Rate Loan into
a Base Rate Loan

       

      (a)           The
aggregate outstanding principal balance of such Loan is
$_______________.

       

      (b)           The
last day of the current Interest Period for such Loan is
_________________.

       

      (c)           The
principal amount of such Loan to be converted is
$___________________.

       

      (d)           The
requested effective date of the conversion of such Loan is
________________.

       

       

      o Continuing all or a portin of a LIBOR Rate
Loan  as a  LIBOR Rate Loan

         

      

      (a)           The
aggregate outstanding principal balance of such Loan is
$________________.

       

      (b)           The
applicable Permitted Currency in which such Loan is denominated is
________________.

       

      (c)           The
last day of the current Interest Period for such Loan is
__________________.

       

      (d)           The
principal amount of such Loan to be continued is
$____________________.

       

      (e)           The
requested effective date of the continuation of such Loan is
_______________.

       

      (f)           The
requested Interest Period applicable to the continued Loan is
_______________.

       

      3.           The
principal amount of all Loans and L/C Obligations outstanding as of the date
hereof does not exceed the maximum amount permitted to be outstanding pursuant
to the terms of the Credit Agreement.

       

      4.           All
of the conditions applicable to the conversion or continuation of the Loan
requested herein as set forth in the Credit Agreement have been satisfied or
waived as of the date hereof and will remain satisfied or waived to the date of
such Loan.

       

      5.           Capitalized
terms used herein and not defined herein shall have the meanings assigned
thereto in the Credit Agreement.

       

      [Signature
Page Follows]


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the undersigned has executed this Notice of
Conversion/Continuation as of the ____ day of ______________, ____.

       

       COMPX
INTERNATIONAL INC.

      


      


                        
By:   ____________________________                                                                               

                          Name:  _______________________                                                                            

                          Title:     _______________________                                                                            


      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
F

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF OFFICER’S COMPLIANCE
CERTIFICATE


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      OFFICER’S COMPLIANCE
CERTIFICATE

      


      


      The
undersigned, on behalf of CompX International Inc., a corporation organized
under the laws of Delaware (the “Borrower”), hereby
certifies to the Administrative Agent and the Lenders, each as defined in the
Credit Agreement referred to below, as follows:

       

      1.           This
Certificate is delivered to you pursuant to Section 7.2 of the Credit
Agreement dated as of December 23, 2005 (as amended, restated, supplemented or
otherwise modified, the “Credit Agreement”),
by and among the Borrower, the lenders who are or may become party thereto, as
Lenders (the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).  Capitalized terms used herein and not defined herein
shall have the meanings assigned thereto in the Credit Agreement.

       

      2.           I
have reviewed the financial statements of the Borrower and its Subsidiaries
dated as of ____________ and for the ______________ period[s] then ended and
such statements fairly present on a Consolidated basis in all material respects
the financial condition of the Borrower and its Subsidiaries as of the dates
indicated and the results of their operations and cash flows for the period[s]
indicated.

       

      3.           I
have reviewed the terms of the Credit Agreement and the related Loan Documents,
and have made, or caused to be made under my supervision, a review in reasonable
detail of the financial condition of the Borrower and its Subsidiaries during
the accounting period covered by the financial statements referred to in
Paragraph 2 above.  Such review has not disclosed the existence
during or at the end of such accounting period of any condition or event that
constitutes a Default or an Event of Default, nor do I have any knowledge of the
existence of any such condition or event as of the date of this Certificate
[except, if such condition or event existed or exists, describe the nature and
period of existence thereof and what action the Borrower has taken, is taking
and proposes to take with respect thereto].

       

      4.           The
Borrower and its Subsidiaries are in compliance with the financial covenants
contained in Article IX of the Credit Agreement as shown on the attached Schedule I and
the Borrower and its Subsidiaries are in compliance with the other covenants and
restrictions contained in the Credit Agreement.

       

      5.           The
Applicable Margin, the Commitment Fee Rate and calculations determining such
figures are set forth on the attached Schedule 2.

       

      6.           Attached
hereto as Schedule 3 are
calculations setting forth the total net assets of each Subsidiary of the
Borrower for the purpose of determining which Domestic Subsidiaries of the
Borrower are Material Domestic Subsidiaries.

       

      


      [Signature
Page Follows]


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      WITNESS
the following signature as of the ____ day of ______________, ____.

       

        
COMPX INTERNATIONAL INC.

      


      


                         By:   ____________________________                                                                               

                          Name:  :                                                                                                                   

                          Title:                                      
                                                                                 

      



      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
1

      to

      Officer’s
Compliance Certificate

      


      Financial
Calculations

      


      For the
Fiscal Quarter Ending ___________

      


      [TO BE
ATTACHED HERETO]

      



      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
2

      to

      Officer’s
Compliance Certificate

      


      Applicable Margin and
Commitment Fee Rate

      


      For the
Fiscal Quarter Ending ______________

      


      I.           Applicable Margin
(Section 4.1(c))

      


      Leverage Ratio (See Part A of Schedule
I)                                                                                                _____________

      


      Applicable
Margin                                                                                     _____________

      


      
        	
                Pricing Level

              	
                Leverage Ratio

              	
                LIBOR Rate

                Applicable Margin

              	
                Base Rate

                Applicable Margin

              
	
                I

              	
                Greater
      than 2.00 to 1.00

              	
                1.85%

              	
                1.00%

              
	
                II

              	
                Greater
      than 1.50 to 1.00 but less than or equal to 2.00 to 1.00

              	
                1.60%

              	
                0.75%

              
	
                III

              	
                Greater
      than 1.00 to 1.00 but less than or equal to 1.50 to 1.00

              	
                1.35%

              	
                0.50%

              
	
                IV

              	
                Less
      than or equal to 1.00 to 1.00

              	
                1.10%

              	
                0.25%

              


      

      


      


      II.           Commitment Fee Rate
(Section 4.3(a))

      


      Leverage Ratio (See Part A of Schedule
I)                                              _____________

      


      Commitment Fee
Rate                                                                                 _____________

      


      
        	
                Pricing Level

              	
                Leverage Ratio

              	
                Commitment Fee Rate

              
	
                I

              	
                Greater
      than 2.00 to 1.00

              	
                0.35%

              
	
                II

              	
                Greater
      than 1.50 to 1.00 but less than or equal to 2.00 to 1.00

              	
                0.30%

              
	
                III

              	
                Greater
      than 1.00 to 1.00 but less than or equal to 1.50 to 1.00

              	
                0.25%

              
	
                IV

              	
                Less
      than or equal to 1.00 to 1.00

              	
                0.20%

              


      

      



      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
3

      to

      Officer’s
Compliance Certificate

      


      Material Domestic
Subsidiaries

      


      For the
Fiscal Quarter ending ______________

      


      
        	
                Name
      of Domestic

                Subsidiary

              	
                 

                Total Net Assets

              	
                Percentage
      of

                Total Net Assets

              	
                Material

                (Yes/No)

                 

              
	
                1.

              	 
      	 
      	 
      
	
                2.

              	 
      	 
      	 
      
	
                3.

              	 
      	 
      	 
      
	
                4.

              	 
      	 
      	 
      


      

      


      


      For
purposes of the foregoing determination, the total net assets of the Borrower
and its Subsidiaries are $________________ (as reflected on the financial
statements of the Borrower and its Subsidiaries for such fiscal
quarter).

      



      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
G

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF ASSIGNMENT AND
ACCEPTANCE


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      ASSIGNMENT AND
ACCEPTANCE

      


      Dated as
of: _____________

      


      


      Reference
is made to the Credit Agreement dated as of December 23, 2005 (as amended,
restated, supplemented or otherwise modified, the “Credit Agreement”),
by and among CompX International Inc., a corporation organized under the laws of
Delaware (the “Borrower”), the
lenders who are or may become party thereto, as Lenders (the “Lenders”) and
Wachovia Bank, National Association, as Administrative Agent (the “Administrative
Agent”).  Capitalized terms used herein which are not defined
herein shall have the meanings assigned thereto in the Credit
Agreement.

       

      ____________________
(the “Assignor”) and
___________________ (the “Assignee”) agree as
follows:

       

      1.           The
Assignor hereby sells and assigns to the Assignee, and the Assignee hereby
purchases and assumes from the Assignor, as of the Effective Date (as defined
below), a ____% interest in and to all of the Assignor’s interest, rights and
obligations with respect to its Revolving Credit Commitment and Revolving Credit
Loans (including such percentage of the outstanding Swingline Loans and L/C
Obligations) and the Assignor thereby retains _____% of its interest
therein.  This Assignment and Acceptance is entered pursuant to, and
authorized by, Section 13.10 of the Credit Agreement.

       

      2.           The
Assignor (i) represents that, as of the date hereof, its Commitment
Percentage (without giving effect to assignments thereof which have not yet
become effective) under the Credit Agreement is _____%, the outstanding balances
of its Revolving Credit Loans (including its Commitment Percentage of the
outstanding Swingline Loans and L/C Obligations) (unreduced by any assignments
thereof which have not yet become effective) under the Credit Agreement is
$____________; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or any other Loan Document or
the execution, legality, validity, enforceability, genuineness, sufficiency or
value of the Credit Agreement or any other instrument or document furnished
pursuant thereto, other than that the Assignor is the legal and beneficial owner
of the interest being assigned by it hereunder and that such interest is free
and clear of any adverse claim; (iii) makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
Borrower or its Subsidiaries or the performance or observance by the Borrower or
its Subsidiaries of any of their obligations under the Credit Agreement or any
other instrument or document furnished or executed pursuant thereto; and
(iv) attaches the Revolving Credit Note delivered to it under the Credit
Agreement and requests that the Borrower exchange such Revolving Credit Note for
new Revolving Credit Notes payable to each of the Assignor and the Assignee as
follows:

       

      

        
          	
                  Revolving
      Credit Note

                  Payable to the Order of:

                	
                  Principal Amount of
Note:

                
	
                  ______________________________________

                	
                  __________________________________________________

                
	
                  ______________________________________

                	
                  __________________________________________________

                


        



       

      3.           The
Assignee (i) represents and warrants that it is legally authorized to enter
into this Assignment and Acceptance; (ii) confirms that it has received a
copy of the Credit Agreement, together with copies of the most recent financial
statements delivered pursuant to Section 7.1 thereof and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance;
(iii) agrees that it will, independently and without reliance upon the
Assignor or any other Lender or the Administrative Agent and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) confirms that it is an Eligible Assignee; (v) appoints and
authorizes the Administrative Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement and the other Loan
Documents as are delegated to the Administrative Agent by the terms thereof,
together with such powers as are reasonably incidental thereto; (vi) agrees
that it will perform in accordance with their terms all the obligations which by
the terms of the Credit Agreement and the other Loan Documents are required to
be performed by it as a Lender; (vii) agrees to hold all confidential
information in a manner consistent with the provisions of Section 13.10(g)
of the Credit Agreement; and (viii) includes herewith for the
Administrative Agent the two forms required by Section 4.13(e) of the
Credit Agreement (if not previously delivered).

       

      4.           The
effective date for this Assignment and Acceptance shall be as set forth in
Section 1 of Schedule I
hereto (the “Effective
Date”).  Following the execution of this Assignment and
Acceptance, it will be delivered to the Administrative Agent for, to the extent
required by the Credit Agreement, consent by the Borrower and the Administrative
Agent and acceptance and recording in the Register.

       

      5.           Upon
such consents, acceptance and recording, from and after the Effective Date,
(i) the Assignee shall be a party to the Credit Agreement and the other
Loan Documents to which Lenders are parties and, to the extent provided in this
Assignment and Acceptance, have the rights and obligations of a Lender under
each such agreement, and (ii) the Assignor shall, to the extent provided in
this Assignment and Acceptance, relinquish its rights and be released from its
obligations under the Credit Agreement and the other Loan
Documents.

       

      6.           Upon
such consents, acceptance and recording, from and after the Effective Date, the
Administrative Agent shall make all payments in respect of the interest assigned
hereby (including payments of principal, interest, fees and other amounts) to
the Assignee.  The Assignor and Assignee shall make all appropriate
adjustments in payments for periods prior to the Effective Date or with respect
to the making of this assignment directly between themselves.

       

      7.           THIS ASSIGNMENT AND ACCEPTANCE SHALL
BE DEEMED TO BE A CONTRACT UNDER SEAL AND SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REGARD TO THE
CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

       

      8.           This
Assignment and Acceptance may be executed in separate counterparts, each of
which when executed and delivered is an original but all of which taken together
constitute one and the same instrument.

       

      [Signature
Page Follows]


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      WITNESS
the following signatures as of the _____ day of _____________,
_____.

       

      ASSIGNOR:

      


      


      


      


      


      By:                                                                                   

      Name:                                                                                   

      Title:                                                                                   

      


      Commitment
Percentage: _____%

      Commitment:
$____________

      


      ASSIGNEE:

      


      


      


      


      


      By:                                                                                   

      Name:                                                                                   

      Title:                                                                                   

      


      


      Commitment
Percentage: ______%

      Commitment:
$_____________

      


      
        	
                *

              	
                The
      Commitment Percentage and the Commitment of the Assignor and the Assignee
      set forth on this signature page are as of the Effective Date of this
      Assignment and Acceptance.

              


      

       


      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      


      Acknowledged
and Consented to on behalf of

      the
Borrower:1

      


      


      COMPX
INTERNATIONAL INC.

      


      


      


      By:                                                                           

      Name:                                                                           

      Title:                                                                           

      


      


      Consented
to and Accepted by:

      


      WACHOVIA
BANK, NATIONAL ASSOCIATION,

      as
Administrative Agent

      


      


      


      By:                                                                          

      Name:                                                                          

      Title:                                                                          

      


      

        

      

        
        1           If
applicable pursuant to Section 13.10.

      


      
        
          
             

            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      Schedule
I

      to

      Assignment and
Acceptance

      


      Assignment
and Acceptance pursuant to the Credit Agreement dated as of December 23, 2005,
as amended, restated, supplemented or otherwise modified, by and among CompX
International Inc., a corporation organized under the laws of Delaware, as
Borrower, the lenders party thereto, as Lenders, and Wachovia Bank, National
Association, as Administrative Agent.

       

      
        	
                1.           Effective
      Date

              	
                __________,
      ____

              
	
                2.           Assignor’s Interest
      Prior to Assignment

              	 
      
	
                (a)           Commitment
      Percentage

              	
                ____%

              
	
                (b)           Outstanding
      balance of Revolving Credit Loans

              	
                $__________

              
	
                (c)           Outstanding
      balance of:

              	 
      
	
                (i)           Assignor’s
      Commitment Percentage

                of the L/C
      Obligations

              	
                 

                $__________

              
	
                (ii)           Assignor’s
      Commitment Percentage

                of the Swingline
      Loans

              	
                 

                $__________

              
	
                (iii)           Assignor’s
      Commitment Percentage

                of the Alternative Currency
      Loans

              	
                 

                $__________

              
	
                3.           Assigned
      Interest (from Section 1) of Revolving Credit Loans

              	
                _____%

              
	
                4.           Assignee’s Extensions
      of Credit After Effective Date

              	 
      
	
                (a)           Total
      outstanding balance of

                Assignee’s Revolving Credit
      Loans

                (line 2(b) times line 3)

              	
                 

                 

                $_________

              
	
                (b)           Total
      outstanding balance of Assignee’s

                Commitment Percentage of the L/C
      Obligations

                (line 2(c)(i) times line 3)

              	
                 

                 

                $_________

              
	
                (c)           Total
      outstanding balance of

                Assignee’s Commitment Percentage
      of the

                Swingline Loans

                (line 2(c)(ii) times line 3)

              	
                 

                 

                 

                $_________

              
	
                (d)           Total
      outstanding balance of

                Assignee’s Commitment Percentage
      of the

                Alternative Currency
      Loans

                (line 2(c)(iii) times line 3)

              	
                 

                 

                 

                $_________

              
	
                5.           Retained Interest of
      Assignor after Effective Date

              	 
      
	
                (a)           Retained
      Interest (from Section 1)

                of Commitment
      Percentage

              	
                 

                ____%

              
	
                (b)           Outstanding
      balance of Assignor’s Revolving

                Credit Loans

                (line 2(b) times line 5(a))

              	
                 

                 

                $________

              
	
                (c)           Outstanding
      balance of Assignor’s

                Commitment Percentage of
      L/C

                Obligations (line 2(c)(i) times line 5(a))

              	
                 

                 

                $________

              
	
                (d)           Outstanding
      balance of Assignor’s

                Commitment Percentage of
      Swingline

                Loans (line 2(c)(ii) times line 5(a))

              	
                 

                 

                $________

              
	
                (e)           Outstanding
      balance of Assignor’s

                Commitment Percentage of
      Alternative

                Currency Loans (line 2(c)(iii)
      times line 5(a))

              	
                 

                 

                $________

              


      

      


      6.           Payment Instructions

      


      (a)           If
payable to Assignor,

      to the account of Assignor
to:

      


      __________________________________

      __________________________________

      ABA
No.:__________________________

      Account
Name:______________________

      Account
No.:________________________

      Attn:______________________________

      Ref:_______________________________

      


      (b)           If
payable to Assignee, to the account

      of Assignee to:

      


      __________________________________

      __________________________________

      ABA
No.:__________________________

      Account
Name:______________________

      Account
No.:________________________

      Attn:______________________________

      Ref:_______________________________


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      EXHIBIT
H

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      FORM OF SUBSIDIARY GUARANTY
AGREEMENT


      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


      SUBSIDIARY GUARANTY
AGREEMENT

      


      THIS
SUBSIDIARY GUARANTY AGREEMENT, dated as of December 23, 2005, is made by certain
Domestic Subsidiaries of COMPX INTERNATIONAL INC., a Delaware corporation (the
“Borrower”), as
identified on the signature pages hereto and any Additional Guarantor (as
defined below) who may become party to this Guaranty (such Subsidiaries and
Additional Guarantors, collectively, the “Guarantors”), in
favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (in such
capacity, the “Administrative
Agent”) for the ratable benefit of the banks and other financial
institutions (the “Lenders”) from time
to time parties to the Credit Agreement, dated as of December 23, 2005 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit
Agreement”), by and among the Borrower, the Lenders, and the
Administrative Agent.

       

      Statement Of
Purpose

      


      Pursuant
to the Credit Agreement, the Lenders have agreed to make extensions of credit to
the Borrower upon the terms and subject to the conditions set forth
therein.

       

      The
Borrower and the Guarantors are part of a related corporate structure and
therefore extensions of credit to the Borrower will directly benefit the
Guarantors through increased working capital to the entire corporate
structure.

       

      It is a
condition precedent to the obligation of the Lenders to make their respective
extensions of credit to the Borrower under the Credit Agreement that the
Guarantors shall have executed and delivered this Guaranty to the Administrative
Agent, for the ratable benefit of itself and the Lenders.

       

      NOW,
THEREFORE, in consideration of the premises and the mutual agreements set forth
herein, and to induce the Administrative Agent and the Lenders to enter into and
to make available extensions of credit pursuant to the Credit Agreement, each
Guarantor hereby agrees with the Administrative Agent, for the ratable benefit
of the Administrative Agent and the Lenders, as follows:

       

      ARTICLE
I

      


      DEFINED
TERMS

      


      SECTION
1.1                           Defined Terms. The
following terms when used in this Guaranty shall have the meanings assigned to
them below:

       

      “Additional Guarantor”
means each Domestic Subsidiary of the Borrower which hereafter becomes a
Guarantor pursuant to Section 4.16
hereof and Section 8.10(a)
of the Credit Agreement.

       

      “Applicable Insolvency
Laws” means all Applicable Laws governing bankruptcy, reorganization,
arrangement, adjustment of debts, relief of debtors, dissolution, insolvency,
fraudulent transfers or conveyances or other similar laws (including, without
limitation, 11 U.S.C. Sections 547, 548 and 550 and other “avoidance” provisions
of Title 11 of the United States Code).

       

      “Guaranteed
Obligations” shall have the meaning set forth in Section 2.1(a)
hereof.

       

      “Guaranty” means this
Subsidiary Guaranty Agreement, as amended, restated, supplemented or otherwise
modified from time to time.

       

      SECTION
1.2                           Other Definitional
Provisions. Terms defined in the Credit Agreement and not otherwise
defined herein shall have the meaning assigned thereto in the Credit Agreement.
The words “hereof,” “herein”, “hereto” and “hereunder” and words of similar
import when used in this Guaranty shall refer to this Guaranty as a whole and
not to any particular provision of this Guaranty, and Section references are to
this Guaranty unless otherwise specified.  The meanings given to terms
defined herein shall be equally applicable to both the singular and plural forms
of such terms. Where the context requires, terms relating to the Collateral or
any part thereof, when used in relation to a Guarantor, shall refer to the
Collateral of such Guarantor or the relevant part thereof

       

      ARTICLE
II

      


      UNCONDITIONAL
GUARANTY

      


      SECTION
2.1                           Terms of the
Guaranty.

       

      (a)           Guaranty of Obligations of
Guarantors.  Each Guarantor hereby, jointly and severally with
the other Guarantors, unconditionally guarantees to the Administrative Agent,
for the ratable benefit of the Administrative Agent and the Lenders, and their
respective successors, endorsees, transferees and assigns, the prompt payment
and performance of all Obligations of the Borrower, whether primary or secondary
(whether by way of endorsement or otherwise), whether now existing or hereafter
arising, whether or not from time to time reduced or extinguished (except by
payment thereof) or hereafter increased or incurred, whether or not recovery may
be or hereafter becomes barred by the statute of limitations, whether
enforceable or unenforceable as against the Borrower, whether or not discharged,
stayed or otherwise affected by any Applicable Insolvency Law or proceeding
thereunder, whether created directly with the Administrative Agent or any Lender
or acquired by the Administrative Agent or any Lender through assignment,
endorsement or otherwise, whether matured or unmatured, whether joint or
several, as and when the same become due and payable (whether at maturity or
earlier, by reason of acceleration, mandatory repayment or otherwise), in
accordance with the terms of any such instruments evidencing any such
obligations, including all renewals, extensions or modifications thereof (all
Obligations of the Borrower, including all of the foregoing, being hereinafter
collectively referred to as the “Guaranteed
Obligations”).

       

      (b)           Notwithstanding
anything to the contrary contained in subsection (a) above, it is the intention
of each Guarantor, the Administrative Agent and the Lenders that, in any
proceeding involving the bankruptcy, reorganization, arrangement, adjustment of
debts, relief of debtors, dissolution or insolvency or any similar proceeding
with respect to such Guarantor or its assets, the amount of such Guarantor’s
obligations under this Guaranty shall be in, but not in excess of, the maximum
amount thereof not subject to avoidance or recovery by operation of law after
giving effect to subsection (c) below.  To that end, but only in
the event and to the extent that after giving effect to subsection (c)
below such Guarantor’s obligations under this Guaranty or any payment made
pursuant hereto would, but for the operation of the first sentence of this
subsection (b), be subject to avoidance or recovery in any such proceeding
under Applicable Insolvency Laws after giving effect to subsection (c)
below, the amount of such Guarantor’s obligations under this Guaranty shall be
limited to the largest amount which, after giving effect thereto, would not,
under Applicable Insolvency Laws, render such Guarantor’s obligations
unenforceable or avoidable or otherwise subject to recovery under Applicable
Insolvency Laws. To the extent any payment actually made exceeds the limitation
of the first sentence of this subsection (b) and is otherwise subject to
avoidance and recovery in any such proceeding under Applicable Insolvency Laws,
the amount subject to avoidance shall in all events be limited to the amount by
which such actual payment exceeds such limitation and the obligations of
Guarantor hereunder, as limited by the first sentence of this
subsection (b), shall in all events remain in full force and effect and be
fully enforceable against such Guarantor. The first sentence of this
subsection (b) is intended solely to preserve the rights of the
Administrative Agent hereunder against such Guarantor in such proceeding to the
maximum extent permitted by Applicable Insolvency Laws and neither such
Guarantor, the Borrower, any of its Subsidiaries, any other guarantor nor any
other Person shall have any right or claim under such sentence that would not
otherwise be available under Applicable Insolvency Laws in such
proceeding.

       

      (c)           To
the extent each Guarantor is required, by reason of its obligations hereunder,
to pay to the Administrative Agent or any Lender an amount greater than the
amount of value (as determined in accordance with Applicable Insolvency Laws)
actually made available to or for the benefit of such Guarantor on account of
the Credit Agreement, this Guaranty or any other Loan Document, such Guarantor
shall have an enforceable right of contribution against the Borrower and
Guarantors.  Subject only to the subordination provided in the
following subsection (d), such Guarantor shall be subrogated to any and all
rights of the Administrative Agent and the Lenders against the other Guarantors
to the extent of such excess payment.

       

      (d)           Notwithstanding
any payment or payments by each Guarantor hereunder, or any set-off or
application of funds of such Guarantor by the Administrative Agent or any
Lender, or the receipt of any amounts by the Administrative Agent or any Lender
with respect to any of the obligations of such Guarantor hereunder, such
Guarantor shall not be entitled to be subrogated to any of the rights of the
Administrative Agent or any Lender against the other Guarantors or any other
guarantors or against any collateral security held by or for the benefit of the
Administrative Agent or any Lender for the payment of the Obligations nor shall
such Guarantor seek any reimbursement from any of the other Guarantors in
respect of payments made by such Guarantor in connection with such obligations
of such Guarantor hereunder, until all amounts owing to the Administrative Agent
and the Lenders on account of the Obligations are paid in full and the Aggregate
Commitment is terminated. If any amount shall be paid to such Guarantor on
account of such subrogation rights at any time when all of the Obligations shall
not have been paid in full, such amount shall be held by such Guarantor in trust
for the Administrative Agent, segregated from all other funds of such Guarantor,
and shall, forthwith upon receipt by such Guarantor, be turned over to the
Administrative Agent in the exact form received by such Guarantor (duly endorsed
by such Guarantor to the Administrative Agent, if required) to be applied
against the Guaranteed Obligations, whether matured or unmatured, in such order
as set forth in the Credit Agreement.

       

      (e)           This
Guaranty is an absolute, unconditional, continuing and unlimited guaranty of the
full and punctual payment and performance by the Borrower of the Obligations and
not of their collectibility only and is in no way conditioned upon any
requirement that the Administrative Agent or the Lenders first attempt to
collect any of the Guaranteed Obligations from the Borrower, any other
Guarantor, or any other person, or resort to any security for the Guaranteed
Obligations or this Guaranty or to other means of obtaining payment of any of
the Guaranteed Obligations which the Administrative Agent now has or may acquire
after the date hereof, or upon any other contingency whatsoever, and the
Administrative Agent may proceed hereunder against any Guarantor in the first
instance to collect the Guaranteed Obligations when due, without first
proceeding against the Borrower or any other Person and without first resorting
to any security or other means of obtaining payment.  The obligations
of each Guarantor hereunder are irrevocable, absolute and unconditional,
irrespective of genuineness, validity, regularity or enforceability of the
Guaranteed Obligations or any security given therefor or in connection therewith
or any other circumstance (except payment to, or express, written waiver,
release or consent by, the Administrative Agent or the Lenders pursuant to the
terms of the Credit Agreement) which might otherwise constitute a legal or
equitable discharge of a surety or guarantor.  The liability of each
Guarantor hereunder shall in no way be affected or impaired by any acceptance by
the Administrative Agent or any Lender of any direct or indirect security for,
or other guaranties of, the Guaranteed Obligations or any other indebtedness,
liability or obligations of the Borrower, any Guarantor or other Person to the
Administrative Agent or any Lender or by any failure, delay, neglect or omission
of the Administrative Agent or any Lender to realize upon or protect any
Guaranteed Obligations or any such other indebtedness, liability or obligation
or any notes or other instruments evidencing the same or any direct or indirect
security therefor, or by any approval, consent, waiver or other action taken or
omitted to be taken by the Administrative Agent or any Lender.

       

      (f)           Each
Guarantor hereby agrees and acknowledges that its obligations under this
Guaranty are not and shall not be subject to any counterclaims, offsets or
defenses of any kind against the Administrative Agent, the Lenders or the
Borrower whether now existing or which may arise in the future (except for those
certain rights and defenses available at law and pursuant to the terms of this
Guaranty, the Credit Agreement and the other Loan Documents; provided, that the
availability of such rights and defenses shall be subject to any covenants,
agreements, acknowledgement or waivers to the contrary which may be set forth in
this Guaranty, the Credit Agreement or any other Loan Document).

       

      (g)           Each
Guarantor hereby agrees and acknowledges that the Guaranteed Obligations, and
any of them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon this
Guaranty, and all dealings between the Borrower and the Guarantors, on the one
hand, and the Administrative Agent and the Lenders, on the other hand, likewise
shall be conclusively presumed to have been had or consummated in reliance upon
this Guaranty.

       

      SECTION
2.3                           Waivers.  To
the extent permitted by law, each Guarantor expressly waives all of the
following rights and defenses (and agrees not to take advantage of or assert any
such right or defense):

       

      (a)           rights
it may now or in the future have under any statute (including, without
limitation, North Carolina General Statutes Section 26-7, et seq. or similar
law), or at law or in equity, or otherwise, to compel the Administrative Agent
or any Lender to proceed in respect of the Guaranteed Obligations against the
Borrower or any other Person or against any security for or other guaranty of
the payment and performance of the Guaranteed Obligations before proceeding
against, or as a condition to proceeding against, such Guarantor;

       

      (b)           any
defense based upon the failure of the Administrative Agent or any Lender to
commence an action in respect of the Guaranteed Obligations against the
Borrower, such Guarantor, any other guarantor or any other Person or any
security for the payment and performance of the Guaranteed
Obligations;

       

      (c)           any
right to insist upon, plead or in any manner whatsoever claim or take the
benefit or advantage of, any appraisal, valuation, stay, extension, marshalling
of assets or redemption laws, or exemption, whether now or at any time hereafter
in force, which may delay, prevent or otherwise affect the performance by such
Guarantor of its obligations under, or the enforcement by the Administrative
Agent or the Lenders of, this Guaranty;

       

      (d)           any
right of diligence, presentment, demand, protest and notice (except as
specifically required herein) of whatever kind or nature with respect to any of
the Guaranteed Obligations and waives, to the extent permitted by law, the
benefit of all provisions of law which are or might be in conflict with the
terms of this Guaranty; and

       

      (e)           any
and all right to notice of the creation, renewal, extension or accrual of any of
the Guaranteed Obligations and notice of or proof of reliance by the
Administrative Agent or any Lender upon, or acceptance of, this
Guaranty.

       

      Each
Guarantor agrees that any notice or directive given at any time to the
Administrative Agent or any Lender which is inconsistent with any of the
foregoing waivers shall be null and void and may be ignored by the
Administrative Agent or such Lender, and, in addition, may not be pleaded or
introduced as evidence in any litigation relating to this Guaranty for the
reason that such pleading or introduction would be at variance with the written
terms of this Guaranty, unless the Administrative Agent and the Required Lenders
have specifically agreed otherwise in writing.  The foregoing waivers
are of the essence of the transaction contemplated by the Credit Agreement and
the other Loan Documents and, but for this Guaranty and such waivers, the
Administrative Agent and the Lenders would decline to enter into the Credit
Agreement and the other Loan Documents.

       

      SECTION
2.4                           Modification of Loan
Documents etc.  Neither the Administrative Agent nor any Lender
shall incur any liability to any Guarantor as a result of any of the following,
and none of the following shall impair or release this Guaranty or any of the
obligations of any Guarantor under this Guaranty:

       

      (a)           any
change or extension of the manner, place or terms of payment of, or renewal or
alteration of all or any portion of, the Guaranteed Obligations;

       

      (b)           any
action under or in respect of the Credit Agreement or the other Loan Documents
in the exercise of any remedy, power or privilege contained therein or available
to any of them at law, in equity or otherwise, or the waiver of or refrain from
exercising any such remedies, powers or privileges;

       

      (c)           any
amendment or modification, in any manner whatsoever, of the Credit Agreement or
the other Loan Documents;

       

      (d)           any
extension or waiver of the time for performance by the Borrower, any Guarantor
or any other Person of, or compliance with, any term, covenant or agreement on
its part to be performed or observed under the Credit Agreement or any other
Loan Document, or waiver of such performance or compliance or consent to a
failure of, or departure from, such performance or compliance;

       

      (e)           any
taking and holding security or collateral for the payment of the Guaranteed
Obligations or any sale, exchange, release, disposal of, or other dealing with,
any property pledged, mortgaged or conveyed, or in which the Administrative
Agent or any Lender have been granted a Lien, to secure any Debt of the
Borrower, any Guarantor or any other Person to the Administrative Agent or the
Lenders;

       

      (f)           any
release of anyone who may be liable in any manner for the payment of any amounts
owed by the Borrower, any Guarantor or any other Person to the Administrative
Agent or any Lender;

       

      (g)           any
modification or termination of the terms of any intercreditor or subordination
agreement pursuant to which claims of other creditors of the Borrower, any
Guarantor or any other Person are subordinated to the claims of the
Administrative Agent or any Lender; or

       

      (h)           any
application of any sums by whomever paid or however realized to any amounts
owing by the Borrower, any Guarantor or any other Person to the Administrative
Agent or any Lender on account of the Guaranteed Obligations in such manner as
the Administrative Agent or any Lender shall determine in its reasonable
discretion.

       

      SECTION
2.5                           Demand by the Administrative
Agent.  In addition to the terms set forth in this
Article II, and in no manner imposing any limitation on such terms, if all
or any portion of the then outstanding Guaranteed Obligations under the Credit
Agreement are declared to be immediately due and payable upon the occurrence of
an Event of Default, then the Guarantors shall, upon demand in writing therefor
by the Administrative Agent to the Guarantors, pay all or such portion of the
outstanding Guaranteed Obligations then declared due and
payable.  Notwithstanding the foregoing, each Guarantor agrees that,
in the event of the dissolution or insolvency of the Borrower or any Guarantor,
or the inability or failure of the Borrower or any Guarantor to pay debts as
they become due, or an assignment by the Borrower or any Guarantor for the
benefit of creditors, or the commencement of any case or proceeding in respect
of the Borrower or any Guarantor under bankruptcy, insolvency or similar laws,
and if such event shall occur at a time when any of the Guaranteed Obligations
may not then be due and  payable, each Guarantor will pay to the
Administrative Agent, for the ratable benefit of the Lenders and their
respective successors, endorsees, transferees and assigns, forthwith the full
amount which would be payable hereunder by each Guarantor if all such Guaranteed
Obligations were then due and payable.

       

      SECTION
2.6                           Remedies.  Upon
the occurrence and during the continuance of any Event of Default, with the
consent of the Required Lenders, the Administrative Agent may, or upon the
request of the Required Lenders, the Administrative Agent shall, enforce against
the Guarantors their respective obligations and liabilities hereunder and
exercise such other rights and remedies as may be available to the
Administrative Agent hereunder, under the Credit Agreement and the other Loan
Documents or otherwise.

       

      SECTION
2.7                           Benefits of
Guaranty.  The provisions of this Guaranty are for the benefit
of the Administrative Agent and the Lenders and their respective permitted
successors, transferees, endorsees and assigns, and nothing herein contained
shall impair, as between the Borrower, the Administrative Agent and the Lenders,
the obligations of the Borrower under the Credit Agreement and the other Loan
Documents. In the event all or any part of the Guaranteed Obligations are
transferred, endorsed or assigned by the Administrative Agent or any Lender to
any Person or Persons as permitted under the Credit Agreement, any reference to
an “Administrative Agent”, or “Lender” herein shall be deemed to refer equally
to such Person or Persons.

       

      SECTION
2.8                           Termination;
Reinstatement.

       

      (a)           Subject
to subsection (c) below, this Guaranty shall remain in full force and effect
until all of the Guaranteed Obligations and all the obligations of the
Guarantors have been paid in full and the Commitments terminated.

       

      (b)           No
payment made by the Borrower, any Guarantor or any other Person received or
collected by the Administrative Agent or any Lender from the Borrower, any
Guarantor or any other Person by virtue of any action or proceeding or any
set-off or appropriation or application at any time or from time to time in
reduction of or in payment of the Guaranteed Obligations shall be deemed to
modify, reduce, release or otherwise affect the liability of any Guarantor
hereunder which shall, notwithstanding any such payment (other than any payment
made by such Guarantor in respect of the obligations of the Guarantors or any
payment received or collected from such Guarantor in respect of the obligations
of the Guarantors), remain liable for the obligations of the Guarantors up to
the maximum liability of such Guarantor hereunder until the Guaranteed
Obligations and all the obligations of the Guarantors shall have been paid in
full and the Commitments terminated.

       

      (c)           Each
Guarantor agrees that, if any payment made by the Borrower or any other Person
applied to the Guaranteed Obligations is at any time annulled, set aside,
rescinded, invalidated, declared to be fraudulent or preferential or otherwise
required to be refunded or repaid or the proceeds of any collateral are required
to be refunded by the Administrative Agent or any Lender to the Borrower, its
estate, trustee, receiver or any other Person, including, without limitation,
any Guarantor, under any applicable law or equitable cause, then, to the extent
of such payment or repayment, each Guarantor’s liability hereunder (and any Lien
or collateral securing such liability) shall be and remain in full force and
effect, as fully as if such payment had never been made, and, if prior thereto,
this Guaranty shall have been canceled or surrendered (and if any Lien or
collateral securing such Guarantor’s liability hereunder shall have been
released or terminated by virtue of such cancellation or surrender), this
Guaranty (and such Lien or collateral) shall be reinstated in full force and
effect, and such prior cancellation or surrender shall not diminish, release,
discharge, impair or otherwise affect the obligations of such Guarantor in
respect of the amount of such payment (or any Lien or collateral securing such
obligation).

       

      SECTION
2.9                           Payments.  Payments
by the Guarantors shall be made to the Administrative Agent, to be credited and
applied upon the Guaranteed Obligations, in immediately available funds in the
Permitted Currency in which the relevant Guaranteed Obligations are denominated
to an account designated by the Administrative Agent or at the Administrative
Agent’s Office or at any other address that may be specified in writing from
time to time by the Administrative Agent.

       

      ARTICLE
III

      


      REPRESENTATIONS AND
WARRANTIES

      


      SECTION
3.1                           Representations and
Warranties.  To induce the Lenders to make any Extensions of
Credit, each Guarantor hereby represents and warrants that:

       

      (a)           such
Guarantor has the corporate, limited liability company or other organizational
right, power and authority to execute, deliver and perform this Guaranty and has
taken all necessary corporate, limited liability company or other organizational
action to authorize the execution, delivery and performance of this
Guaranty;

       

      (b)           this
Guaranty constitutes the legal, valid and binding obligation of such Guarantor
enforceable in accordance with its terms, except as enforceability may be
limited by bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by the availability
of equitable remedies;

       

      (c)           the
execution, delivery and performance of this Guaranty by such Guarantor will not
violate any Applicable Law relating to such Guarantor or contractual obligation
of such Guarantor and will not result in the creation or imposition of any Lien
(other than a Permitted Lien) upon or with respect to any property or revenues
now owned or hereafter acquired by such Guarantor;

       

      (d)           no
consent or authorization of, filing with, or other act by or in respect of, any
arbitrator, Governmental Authority or any other Person is required in connection
with the execution, delivery, performance, validity or enforceability of this
Guaranty;

       

      (e)           no
actions, suits or proceedings before any arbitrator or Governmental Authority
are pending or, to the knowledge of such Guarantor, threatened by or against
such Guarantor or against any of its properties with respect to this Guaranty or
any of the transactions contemplated hereby;

       

      (f)           such
Guarantor has title to the real property owned by it and a valid leasehold
interest in the real property leased by it, and has good and marketable title to
all of its personal property sufficient to carry on its business free and clear
of all Liens of any type whatsoever, except for Permitted Liens;

       

      (g)           as
of the Closing Date (or such later date upon which such Guarantor became a party
hereto), such Guarantor is Solvent; and

       

      (h)           such
Guarantor shall comply with the provisions of Articles VIII
and X of the
Credit Agreement as if a party thereto.

       

      ARTICLE
IV

      


      MISCELLANEOUS

      


      SECTION
4.1                           Enforcement Expenses;
Indemnification.

       

      (a)           Each
Guarantor agrees to pay or reimburse the Administrative Agent and each Lender
for all reasonable costs and expenses incurred in connection with enforcing or
preserving any rights under this Guaranty and the other Loan Documents to which
such Guarantor is a party, including, without limitation, the reasonable fees
and disbursements of counsel to the Administrative Agent and each
Lender.  All such costs and expenses shall be additional Guaranteed
Obligations hereunder.

       

      (b)           Each
Guarantor agrees to pay, and to save the Administrative Agent and each Lender
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes which may be
payable or determined to be payable with respect to any of the Collateral or in
connection with any of the transactions contemplated by this
Guaranty.

       

      (c)           Each
Guarantor agrees to pay, and to save the Administrative Agent and each Lender
harmless from any and all liabilities, obligations, losses, damages, penalties,
costs and expenses in connection with actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Guaranty to the
extent that the Borrower would be required to do so pursuant to Section 13.2 of
the Credit Agreement.

       

      (d)           The
agreements in this Section 4.1
shall survive repayment of the Guaranteed Obligations and all other amounts
payable under the Credit Agreement and the other Loan Documents.

       

      SECTION
4.2                           Notices.  All
notices and communications hereunder shall be given to the addresses and
otherwise made in accordance with Section 13.1 of
the Credit Agreement; provided that notices and communications to the Guarantors
shall be directed to the Guarantors at the address of the Company set forth in
Section 13.1 of
the Credit Agreement.

       

      SECTION
4.3                           Successors and
Assigns.  This Guaranty is for the benefit of the
Administrative Agent and the Lenders and their permitted successors and
assigns.  This Guaranty shall be binding on each Guarantor and its
successors and assigns; provided that no Guarantor may assign any of its rights
or obligations hereunder without the prior written consent of the Administrative
Agent and the Lenders.

       

      SECTION
4.4                           Amendments, Waivers and
Consents.  No term, covenant, agreement or condition of this
Guaranty may be amended or waived, nor may any consent be given, except in the
manner set forth in Section 13.11 of
the Credit Agreement.

       

      SECTION
4.5                           No Waiver by Course of
Conduct; Cumulative Remedies.  Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
Section 4.4), be deemed to have waived any right or remedy hereunder or to
have acquiesced in any Default or Event of Default.  No failure to
exercise, nor any delay in exercising on the part of the Administrative Agent or
any Lender, any right, power or privilege hereunder shall operate as a waiver
thereof.  No single or partial exercise of any right, power or
privilege hereunder shall preclude any other or further exercise thereof or the
exercise of any other right, power or privilege.  A waiver by the
Administrative Agent or any Lender of any right or remedy hereunder on any one
occasion shall not be construed as a bar to any right or remedy which the
Administrative Agent or such Lender would otherwise have on any future
occasion.  The rights and remedies herein provided are cumulative, may
be exercised singly or concurrently and are not exclusive of any other rights or
remedies provided by law.

       

      SECTION
4.6                           Set-Off.  Each
Guarantor hereby irrevocably authorizes the Administrative Agent and each Lender
at any time and from time to time pursuant to Section 13.3 of
the Credit Agreement, without prior notice to such Guarantor or any other
Guarantor, any such prior notice being expressly waived by each Guarantor, to
set-off and appropriate and apply any and all deposits (general or special, time
or demand, provisional or final), in any currency, and any other credits,
indebtedness or claims, in any currency, in each case whether direct or
indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative Agent or such Lender to or for the credit or the
account of such Guarantor, or any part thereof in such amounts as the
Administrative Agent or such Lender may elect, against and on account of the
obligations and liabilities of such Guarantor to the Administrative Agent or
such Lender hereunder and claims of every nature and description of the
Administrative Agent or such Lender against such Guarantor, in any currency,
whether arising hereunder, under the Credit Agreement, any other Loan Document
or otherwise, as the Administrative Agent or such Lender may elect, whether or
not the Administrative Agent or any Lender has made any demand for payment and
although such obligations, liabilities and claims may be contingent or
unmatured.  The Administrative Agent and each Lender shall notify such
Guarantor promptly of any such set-off and the application made by the
Administrative Agent or such Lender of the proceeds thereof; provided that the
failure to give such notice shall not affect the validity of such set-off and
application. The rights of the Administrative Agent and each Lender under this
Section 4.6 are
in addition to any other rights and remedies (including, without limitation,
other rights of set-off) which the Administrative Agent or such Lender may
have.

       

      SECTION
4.7                           Integration.  This
Guaranty and the other Loan Documents represent the agreement of the Guarantors,
the Administrative Agent and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to the subject
matter hereof and thereof not expressly set forth or referred to herein or in
the other Loan Documents.

       

      SECTION
4.8                           Acknowledgements.  Each
Guarantor hereby acknowledges that:

       

      (a)           it
has been advised by counsel in the negotiation, execution and delivery of this
Guaranty and the other Loan Documents to which it is a party;

       

      (b)           neither
the Administrative Agent nor any Lender has any fiduciary relationship with or
duty to any Guarantor arising out of or in connection with this Guaranty or any
of the other Loan Documents, and the relationship between the Guarantors, on the
one hand, and the Administrative Agent and Lenders, on the other hand, in
connection herewith or therewith is solely that of debtor and creditor;
and

       

      (c)           no
joint venture is created hereby or by the other Loan Documents or otherwise
exists by virtue of the transactions contemplated hereby among the Lenders or
among the Guarantors and the Lenders.

       

      SECTION
4.9                           Powers Coupled with an
Interest.  All powers of attorney and other authorizations
herein contained shall be deemed coupled with an interest and irrevocable so
long as the Guaranteed Obligation remains unpaid or unsatisfied, any of the
Commitments remain in effect or the Credit Agreement has not been
terminated.

       

      SECTION
4.10                           Governing
Law.  This Guaranty shall be governed by, construed and
enforced in accordance with the laws of the State of North Carolina, without
reference to the conflicts or choice of law principles thereof.

       

      SECTION
4.11                           Jurisdiction and
Venue.

       

      (a)           Jurisdiction. The
Guarantors hereby irrevocably consent to the personal jurisdiction of the state
and federal courts located in Mecklenburg County, North Carolina (and any courts
from which an appeal from any of such courts must or may be taken), in any
action, claim or other proceeding arising out of any dispute in connection with
this Guaranty and the other Loan Documents, any rights or obligations hereunder
or thereunder, or the performance of such rights and obligations.  The
Guarantors hereby irrevocably consent to the service of a summons and complaint
and other process in any action, claim or proceeding brought by the
Administrative Agent or any Lender in connection with this Guaranty or the other
Loan Documents, any rights or obligations hereunder or thereunder, or the
performance of such rights and obligations, on behalf of itself or its property,
in the manner specified in Section 13.1 of
the Credit Agreement. Nothing in this Section 4.11
shall affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding against
any Guarantor or its properties in the courts of any other
jurisdictions.

       

      (b)           Venue.  The
Guarantors hereby irrevocably waive any objection they may have now or in the
future to the laying of venue in the aforesaid jurisdiction in any action, claim
or other proceeding arising out of or in connection with this Guaranty or the
rights and obligations of the parties hereunder or thereunder.  The
Guarantors irrevocably waive, in connection with such action, claim or
proceeding, any plea or claim that the action, claim or other proceeding has
been brought in an inconvenient forum.

       

      SECTION
4.12                           Binding Arbitration; Waiver
of Jury Trial.

       

      (a)           Binding Arbitration.
Upon demand of any party, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Guaranty (“Disputes”), between
or among the parties hereto shall be resolved by binding arbitration as provided
herein. Institution of a judicial proceeding by a party does not waive the right
of that party to demand arbitration hereunder.  Disputes may include,
without limitation, tort claims, counterclaims, claims brought as class actions,
claims arising from this Guaranty, disputes as to whether a matter is subject to
arbitration, or claims concerning any aspect of the past, present or future
relationships arising out of or connected with this
Guaranty.  Arbitration shall be conducted under and governed by the
Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”)
of the American Arbitration Association (the “AAA”) and the Federal
Arbitration Act.  All arbitration hearings shall be conducted in
Charlotte, North Carolina.  The expedited procedures set forth in Rule
51, et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000.  All applicable statutes of limitations shall apply to any
Dispute.  A judgment upon the award may be entered in any court having
jurisdiction.  Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one-hundred twenty (120)
days after such demand.  These time limitations may not be extended
unless a party hereto shows cause for extension and then such extension shall
not exceed a total of sixty (60) days.  The panel from which all
arbitrators are selected shall be comprised of licensed attorneys selected from
the Commercial Financial Dispute Arbitration Panel of the AAA.  The
single arbitrator selected for expedited procedure shall be a retired judge from
the highest court of general jurisdiction, state or federal, of the state where
the hearing will be conducted.  The parties hereto do not waive any
applicable Federal or state substantive law except as provided
herein.

       

      (b)           Jury
Trial.  THE
ADMINISTRATIVE AGENT, EACH LENDER AND EACH GUARANTOR HEREBY ACKNOWLEDGE THAT BY
AGREEING TO BINDING ARBITRATION THEY HAVE IRREVOCABLY WAIVED THEIR RESPECTIVE
RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY ACTION, CLAIM OR OTHER PROCEEDING
ARISING OUT OF ANY DISPUTE IN CONNECTION WITH THIS GUARANTY, ANY RIGHTS OR
OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF SUCH RIGHTS AND
OBLIGATIONS.

       

      (c)           Preservation of Certain
Remedies.  Notwithstanding the preceding binding arbitration
provisions, the parties hereto preserve, without diminution, certain remedies
that such Persons may employ or exercise freely, either alone, in conjunction
with or during a Dispute. Each such Person shall have and hereby reserves the
right to proceed in any court of proper jurisdiction or by self help to exercise
or prosecute the following remedies, as applicable:  (i) all
rights to foreclose against any real or personal property or other security by
exercising a power of sale granted in this Guaranty or under Applicable Law or
by judicial foreclosure and sale, including a proceeding to confirm the sale,
(ii) all rights of self help including peaceful occupation of property and
collection of rents, set off, and peaceful possession of property,
(iii) obtaining provisional or ancillary remedies including injunctive
relief, sequestration, garnishment, attachment, appointment of receiver and in
filing an involuntary bankruptcy proceeding, and (iv) when applicable, a
judgment by confession of judgment. Preservation of these remedies does not
limit the power of an arbitrator to grant similar remedies that may be requested
by a party in a Dispute.

       

      SECTION
4.13                           Severability.  If
any provision hereof is invalid and unenforceable in any jurisdiction, then, to
the fullest extent permitted by law, (a) the other provisions hereof shall
remain in full force and effect in such jurisdiction and shall be liberally
construed in favor of the Administrative Agent and the Lenders in order to carry
out the intentions of the parties hereto as nearly as may be possible; and
(b) the invalidity or unenforceability of any provisions hereof in any
jurisdiction shall not affect the validity or enforceability of such provision
in any other jurisdiction.

       

      SECTION
4.14                           Headings. The various
headings of this Guaranty are inserted for convenience only and shall not affect
the meaning or interpretation of this Guaranty or any provisions
hereof.

       

      SECTION
4.15                           Counterparts.  This
Guaranty may be executed by the parties hereto in several counterparts, each of
which shall be deemed to be an original and all of which shall constitute
together but one and the same agreement.

       

      SECTION
4.16                           Additional
Guarantors.  Each Domestic Subsidiary of the Borrower that is
required to become a party to this Guaranty pursuant to Section 8.10 of the
Credit Agreement shall become a Guarantor for all purposes of this Guaranty upon
execution and delivery by such Domestic Subsidiary of a supplement in form and
substance satisfactory to the Administrative Agent.

       

      SECTION
4.17                           Releases.  At
such time as the Guaranteed Obligations shall have been paid in full and the
Commitments and the Credit Agreement have been terminated, this Guaranty and all
obligations (other than those expressly stated to survive such termination) of
each Guarantor hereunder shall terminate, all without delivery of any instrument
or performance of any act by any party.

       

      


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      IN
WITNESS WHEREOF, each of the Guarantors has executed and delivered this Guaranty
as of the date first above written.

       

      GUARANTORS:

      


      [CORPORATE
SEAL]                                                                COMPX
SECURITY PRODUCTS, INC.

      


      


      By:                                                                           

      Name:

      Title:                                                                           

      


      


      [CORPORATE
SEAL]                                                                COMPX
PRECISION SLIDES, INC.

      


      


      By:                                                                           

      Name:

      Title:                                                                           

      


      


      [CORPORATE
SEAL]                                                                COMPX
MARINE INC.

      


      


      By:                                                                           

      Name:

      Title:                                                                           

      


      


      [CORPORATE
SEAL]                                                                CUSTOM
MARINE ACQUISITION INC.

      


      


      By:                                                                           

      Name:

      Title:                                                                           

      


      



      
        
          
             

            WINSTON
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      EXHIBIT
I

      to

      Credit
Agreement

      dated as
of December 23, 2005

      by and
among

      CompX
International Inc.,

      as
Borrower,

      the
Lenders party thereto

      and

      Wachovia
Bank, National Association,

      as
Administrative Agent

      


      


      


      FORM OF COLLATERAL
AGREEMENT

      



      
        
          
            


            WINSTON
1676450v4

          

           


        

        
           


          
            

          

        

        
           


        

      


       

      


      


      COLLATERAL
AGREEMENT

      


      dated as
of December 23, 2005

      


      


      by and
among

      


      


      COMPX
INTERNATIONAL INC.,

      and
certain of its Subsidiaries

      as
Grantors,

      


      in favor
of

      


      WACHOVIA
BANK, NATIONAL ASSOCIATION,

      as
Administrative Agent

      


      


      



      
        
          
            


            WINSTON
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      TABLE OF
CONTENTS

       

      

        
          	
                  ARTICLE
      I  DEFINED TERMS

                	
                  1

                
	
                  SECTION
      1.1                              Terms
      Defined in the Uniform Commercial Code

                	
                  1

                
	
                  SECTION
      1.2                              Definitions

                	
                  2

                
	
                  SECTION
      1.3                              Other
      Definitional Provisions

                	
                  3

                
	 
      	 
      
	
                  ARTICLE
      II  SECURITY INTEREST

                	
                  4

                
	 
      	 
      
	
                  ARTICLE
      III  REPRESENTATIONS AND WARRANTIES

                	
                  4

                
	
                  SECTION
      3.1                              Existence

                	
                  4

                
	
                  SECTION
      3.2                              Authorization
      of Agreement; No Conflict

                	
                  4

                
	
                  SECTION
      3.3                              Consents

                	
                  4

                
	
                  SECTION
      3.4                              Perfected
      Liens

                	
                  5

                
	
                  SECTION
      3.5                              Title,
      No Other Liens

                	
                  5

                
	
                  SECTION
      3.6                              Exact
      Legal Name, State of Organization; Location of Inventory, Equipment and
      Fixtures; Other Information

                	
                  5

                
	
                  SECTION
      3.7                              Investment
      Collateral

                	
                  5

                
	 
      	 
      
	
                  ARTICLE
      IV  COVENANTS

                	
                  6

                
	
                  SECTION
      4.1                              Maintenance
      of Perfected Security Interest; Further Information

                	
                  6

                
	
                  SECTION
      4.2                              Changes
      in Locations: Changes in Name or Structure

                	
                  6

                
	
                  SECTION
      4.3                              Required
      Notifications

                	
                  6

                
	
                  SECTION
      4.4                              Delivery
      Covenants

                	
                  6

                
	
                  SECTION
      4.5                              Filing
      Covenants

                	
                  7

                
	
                  SECTION
      4.6                              Investment
      Collateral

                	
                  7

                
	
                  SECTION
      4.7                              Further
      Assurances

                	
                  7

                
	 
      	 
      
	
                  ARTICLE
      V  REMEDIAL PROVISIONS

                	
                  8

                
	
                  SECTION
      5.1                              General
      Remedies

                	
                  8

                
	
                  SECTION
      5.2                              Specific
      Remedies

                	
                  9

                
	
                  SECTION
      5.3                              Application
      of Proceeds

                	
                  10

                
	
                  SECTION
      5.4.                             Waiver,
      Deficiency

                	
                  10

                
	 
      	 
      
	
                  ARTICLE
      VI  THE ADMINISTRATIVE AGENT

                	
                  10

                
	
                  SECTION
      6.1                              Administrative
      Agent’s Appointment as Attorney-In-Fact

                	
                  10

                
	
                  SECTION
      6.2                              Duty
      of Administrative Agent

                	
                  12

                
	
                  SECTION
      6.3                              Authority
      of Administrative Agent

                	
                  12

                
	 
      	 
      
	
                  ARTICLE
      VII  MISCELLANEOUS

                	
                  13

                
	
                  SECTION
      7.1                              Amendments
      in Writing

                	
                  13

                
	
                  SECTION
      7.2                              Notices

                	
                  13

                
	
                  SECTION
      7.3                              No
      Waiver by Course of Conduct, Cumulative Remedies

                	
                  13

                
	
                  SECTION
      7.4                              Enforcement
      Expenses, Indemnification

                	
                  13

                
	
                  SECTION
      7.5                              Binding
      Arbitration; Waiver of Jury Trial; Preservation of
Remedies

                	
                  14

                
	
                  SECTION
      7.6                              Successors
      and Assigns

                	
                  15

                
	
                  SECTION
      7.7                              Counterparts

                	
                  15

                
	
                  SECTION
      7.8                              Severability

                	
                  15

                
	
                  SECTION
      7.9                              Section
      Heading

                	
                  15

                
	
                  SECTION
      7.10                            Integration

                	
                  15

                
	
                  SECTION
      7.11                            Governing
      Law

                	
                  15

                
	
                  SECTION
      7.12                            Consent
      to Jurisdiction

                	
                  15

                
	
                  SECTION
      7.13                            Acknowledgements

                	
                  16

                
	
                  SECTION
      7.14                            Additional
      Grantors

                	
                  16

                
	
                  SECTION
      7.15                            Releases

                	
                  16

                


        



      
 

       

      
        
          
             

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      SCHEDULES:

       

      
        	
                Schedule
      3.6

              	
                Exact
      Legal Name; Jurisdiction of Organization; Taxpayer Identification Number;
      Mailing Address; Chief Executive Office and other Locations; Locations of
      Collateral

              
	
                Schedule
      3.7

              	
                Listing
      of Collateral

              


      

      


      



      
        
          
             

            WINSTON
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      COLLATERAL
AGREEMENT

      


      THIS
COLLATERAL AGREEMENT (this “Agreement”), dated as of December 23, 2005, by
and among COMPX INTERNATIONAL INC., a Delaware corporation (the “Borrower”), certain
of its Subsidiaries as identified on the signature pages hereto and any
Additional Grantor (as defined below) who may become party to this Agreement
(such Subsidiaries and Additional Grantors, collectively, with the Borrower, the
“Grantors”), in
favor of WACHOVIA BANK, NATIONAL ASSOCIATION, as Administrative Agent (in such
capacity, the “Administrative
Agent”) for the ratable benefit of the banks and other financial
institutions (the “Lenders”) from time
to time parties to the Credit Agreement, dated as of December 23, 2005 (as
amended, restated, supplemented or otherwise modified from time to time, the
“Credit Agreement”), by and among the Borrower, the Lenders, and the
Administrative Agent.

       

      STATEMENT OF
PURPOSE

      


      Pursuant
to the Credit Agreement, the Lenders have agreed to make Extensions of Credit to
the Borrower upon the terms and subject to the conditions set forth
therein.

       

      Pursuant
to the terms of the Subsidiary Guaranty Agreement, certain Material Domestic
Subsidiaries of the Borrower have guaranteed the payment and performance of the
Obligations of the Borrower.

       

      It is a
condition precedent to the obligation of the Lenders to make their respective
Extensions of Credit to the Borrower under the Credit Agreement that the
Grantors shall have executed and delivered this Collateral Agreement to the
Administrative Agent, for the ratable benefit of itself and the
Lenders.

       

      NOW,
THEREFORE, for good and valuable consideration, the receipt and sufficiency of
which are hereby acknowledged by the parties hereto, and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective Extensions of Credit to the Borrower
thereunder, each Grantor hereby agrees with the Administrative Agent, for the
ratable benefit of itself and the Lenders, as follows:

       

      ARTICLE
I

      


      DEFINED
TERMS

      


      SECTION
1.1.                           Terms Defined in the Uniform
Commercial Code.

       

      (a)           The
following terms when used in this Agreement shall have the meanings assigned to
them in the UCC (as defined in Section 1.2 below) as
in effect from time to time: “Certificated
Security”, “Issuer” and “Proceeds”.

       

      (b)           Terms
defined in the UCC and not otherwise defined herein or in the Credit Agreement
shall have the meaning assigned in the UCC as in effect from time to
time.

       

      SECTION
1.2.                           Definitions.  The
following terms when used in this Agreement shall have the meanings assigned to
them below:

       

      “Additional Grantor”
means each Domestic Subsidiary of the Borrower which hereafter becomes a Grantor
pursuant to Section 7.14
hereof and Section 8.10 of
the Credit Agreement.

       

      “Agreement” means this
Collateral Agreement, as further amended, restated, supplemented or otherwise
modified from time to time.

       

      “Applicable
Percentage” means such percentage of a Material Foreign Subsidiary’s
Stock or Partnership/LLC Interests, the granting of a security interest in shall
not result in material adverse tax consequences to the Borrower or the
applicable Grantor (it being acknowledged by the Grantors, the Lenders and the
Administrative Agent that, as of the Closing Date, such percentage shall be
sixty-five percent (65%)).

       

      “Collateral” means the
Stock Collateral and the Partnership/LLC Collateral.

       

      “Control” means the
manner in which “control” is achieved under the UCC with respect to any
Collateral for which the UCC specifies a method of achieving
“control.”

       

      “Effective Endorsement and
Assignment” means, with respect to any specific type of Collateral, all
such endorsements, assignments and other instruments of transfer reasonably
requested by the Administrative Agent with respect to the Security Interest
granted in such Collateral, and in each case, in form and substance satisfactory
to the Administrative Agent.

       

      “Grantors” has the
meaning set forth in the Preamble of this Agreement.

       

      “Material Foreign
Subsidiary” shall have the meaning assigned thereto in the Credit
Agreement.

       

      “Obligations” means
with respect to the Borrower, the meaning assigned thereto in the Credit
Agreement and with respect to each Subsidiary Guarantor, the obligations of such
Subsidiary Guarantor under the Subsidiary Guaranty Agreement executed by such
Subsidiary Guarantor.

       

      “Partnership/LLC
Collateral” means the Applicable Percentage of the Partnership/LLC
Interests of the Grantors in any Material Foreign Subsidiary and all Proceeds
therefrom.

       

      “Partnership/LLC
Interests” means, with respect to any Grantor, the entire partnership
interest, membership interest or limited liability company interest, as
applicable, of such Grantor in each Material Foreign Subsidiary, including,
without limitation, such Grantor’s capital account, its interest as a partner or
member, as applicable, in the net cash flow, net profit and net loss, and items
of income, gain, loss, deduction and credit of any such Material Foreign
Subsidiary, such Grantor’s interest in all distributions made or to be made by
any such Material Foreign Subsidiary to such Grantor and all of the other
economic rights, titles and interests of such Grantor as a partner or member, as
applicable, of any such Material Foreign Subsidiary, whether set forth in the
partnership agreement or membership agreement, as applicable, of such Material
Foreign Subsidiary, by separate agreement or otherwise.

       

      “Permitted Liens”
shall mean those Liens on the assets of the Grantors which are permitted
pursuant to Section
10.2 of the Credit Agreement.

       

      “Securities Act” means
the Securities Act of 1933, including all amendments thereto and regulations
promulgated thereunder.

       

      “Security Interests”
means the security interests granted pursuant to Article II, as
well as all other security interests created or assigned as additional security
for the Obligations pursuant to the provisions of the Credit
Agreement.

       

      “Stock” means, with
respect to any Grantor, all shares of capital stock of each Material Foreign
Subsidiary owned by such Grantor, together with all stock certificates, options
or rights of any nature whatsoever that may be issued or granted by such
Material Foreign Subsidiary to such Grantor while this Agreement is in
effect.

       

      “Stock Collateral”
means the Applicable Percentage of the Stock and all Proceeds
therefrom.

       

      “Subsidiary
Guarantors” means the collective reference to each Person executing the
Subsidiary Guaranty Agreement.

       

      “Subsidiary Guaranty
Agreement” shall have the meaning assigned thereto in the Credit
Agreement.

       

      “UCC” means the
Uniform Commercial Code as in effect in the State of North Carolina, as amended
or modified from time to time.

       

      SECTION
1.3.                           Other Definitional
Provisions.  Terms defined in the Credit Agreement and not
otherwise defined herein shall have the meaning assigned thereto in the Credit
Agreement.  The words “hereof,” “herein”, “hereto” and “hereunder” and
words of similar import when used in this Agreement shall refer to this
Agreement as a whole and not to any particular provision of this Agreement, and
Section and Schedule references are to this Agreement unless otherwise
specified.  The meanings given to terms defined herein shall be
equally applicable to both the singular and plural forms of such
terms.  Where the context requires, terms relating to the Collateral
or any part thereof, when used in relation to a Grantor, shall refer to such
Grantor’s Collateral or the relevant part thereof.  To the extent that
there exists a direct conflict between the provisions of this Agreement and the
provisions of the Credit Agreement (other than with respect to any provision of
this Agreement relating to the grant, pledge and assignment of the Security
Interest in the Collateral or the exercise of remedies with respect thereto),
the Credit Agreement shall govern.

       

      ARTICLE
II

      


      GRANT OF SECURITY
INTEREST

      


      Each
Grantor hereby grants, pledges and collaterally assigns to the Administrative
Agent, for the ratable benefit of itself and the Lenders, a security interest in
all of such Grantor’s right, title and interest in the Collateral now owned or
at any time hereafter acquired by such Grantor or in which such Grantor now has
or at any time in the future may acquire any right, title or interest, and
wherever located or deemed located, including all Proceeds therein, as
collateral security for the prompt and complete payment and performance when due
(whether at the stated maturity, by acceleration or otherwise) of the
Obligations.

       

      ARTICLE
III

      


      REPRESENTATIONS AND
WARRANTIES

      


      To induce
the Administrative Agent and the Lenders to enter into the Credit Agreement and
to induce the Lenders to make their respective Extensions of Credit to the
Borrower thereunder, each Grantor hereby represents and warrants to the
Administrative Agent and each Lender that:

       

      SECTION
3.1.                           Existence.  Each
Grantor is duly organized, validly existing and in good standing under the laws
of the jurisdiction of its incorporation or formation, has the requisite power
and authority to own, lease or operate its properties and to carry on its
business, and is duly qualified and authorized to do business in each
jurisdiction in which its business requires such qualification and authorization
other than in any such jurisdiction where failure to so qualify could not
reasonably be expected to have a Material Adverse Effect.

       

      SECTION
3.2.                           Authorization of Agreement;
No Conflict.  Each Grantor has the right, power and authority
and has taken all necessary corporate and other action to authorize the
execution, delivery and performance of this Agreement.  This Agreement
has been duly executed and delivered by the duly authorized officers of each
Grantor and this Agreement constitutes the legal, valid and binding obligation
of the Grantors enforceable in accordance with its terms, except as such
enforcement may be limited by bankruptcy, insolvency, reorganization, moratorium
or similar state or federal debtor relief laws from time to time in effect which
affect the enforcement of creditors’ rights in general and the availability of
equitable remedies.  The execution, delivery and performance by the
Grantors of this Agreement will not, by the passage of time, the giving of
notice or otherwise, violate any material provision of any Applicable Law and
will not result in the creation or imposition of any Lien on the Collateral,
other than the Security Interests and Permitted Liens.

       

      SECTION
3.3.                           Consents.  No
consent or authorization of, filing with, or other act by or in respect of, any
arbitrator or Governmental Authority and no consent of any other Person is
required in connection with the execution, delivery, performance, validity or
enforceability against any Grantor or any Material Foreign Subsidiary of this
Agreement, except (a) as may be required by laws (i) affecting the offering and
sale of securities generally and (ii) under foreign jurisdictions with respect
to the perfection of the Security Interest in any Collateral, (b) filings under
the UCC, or (c) where the failure to obtain such consent could not reasonably be
expected to have a Material Adverse Effect.

       

      SECTION
3.4.                           Perfected
Liens.  The Security Interests granted pursuant to this
Agreement (a) constitute valid perfected security interests in all of the
Collateral in favor of the Administrative Agent, for the ratable benefit of
itself and the Lenders, as collateral security for the Obligations, enforceable
in accordance with the terms hereof against all creditors of any Grantor and any
Persons purporting to purchase any Collateral from such Grantor and (b) are
prior to all other Liens on the Collateral in existence on the date hereof
except for Permitted Liens.

       

      SECTION
3.5.                           Title, No Other
Liens.  Except for the Security Interests and Permitted Liens,
each Grantor owns each item of the Collateral to which it has title free and
clear of any and all Liens or claims.  No financing statement under
the UCC of any state which names a Grantor as debtor or other public notice with
respect to all or any part of the Collateral is on file or of record in any
public office, except such as no longer represent an enforceable security
interest or have been filed in favor of the Administrative Agent, for the
ratable benefit of itself and the Lenders, pursuant to this Agreement or in
connection with Permitted Liens.  No Collateral is in the possession
or Control of any Person asserting any claim thereto or security interest
therein, except that the Administrative Agent or its designee may have
possession or Control of Collateral as contemplated hereby.

       

      SECTION
3.6.                           Exact Legal Name, State of
Organization; Other Information.

       

      (a)           The
exact legal name of each Grantor as it appears in its Articles of Incorporation,
Articles of Organization or other organizational document is as set forth on
Schedule
3.6.  Each Grantor was organized and remains organized under
the laws of the state identified on Schedule 3.6
under such Grantor’s name.  The taxpayer identification number of each
Grantor is set forth on Schedule 3.6 under
such Grantor’s name.  Except as disclosed on Schedule 3.6 under
such Grantor’s name, no Grantor has, during the past five (5) years, changed its
identity or organizational structure.

       

      (b)           The
mailing address, chief place of business, chief executive office and office
where each Grantor keeps its books and records relating to the Collateral in
which it has any interest is located at the locations specified on Schedule 3.6
under such Grantor’s name.

       

      SECTION
3.7.                           Listing of
Collateral.

       

      (a)           As
of the date hereof, all Collateral owned by any Grantor is listed on Schedule 3.7.

       

      (b)           All
Collateral issued by any Material Foreign Subsidiary to any Grantor (i) have
been duly and validly issued and, if applicable, are fully paid and
nonassessable, and (ii) are owned of record and beneficially by such
Grantor.

       

      ARTICLE
IV

      


      COVENANTS

      


      Until the
Obligations shall have been paid in full and the Commitments terminated, unless
consent has been obtained in the manner provided for in Section 7.1, each
Grantor covenants and agrees that:

       

      SECTION
4.1.                           Maintenance of Perfected
Security Interest; Further Information.  Each Grantor shall
take all actions necessary, or otherwise reasonably requested by the
Administrative Agent, to enable the Administrative Agent to maintain the
Security Interest created by this Agreement as a perfected Security Interest
having at least the priority described in Section 3.4 and
shall defend such Security Interest against the claims and demands of all
Persons whomsoever (other than claims of priority in favor of any Person
actually holding a Permitted Lien which is prior to such Security
Interest).

       

      SECTION
4.2.                           Changes in Locations:
Changes in Name or Structure.  No Grantor will, except upon
thirty (30) days’ prior written notice to the Administrative Agent and delivery
to the Administrative Agent of (a) all additional financing statements
(executed, if necessary, for any particular filing jurisdiction) and other
instruments and documents reasonably requested by the Administrative Agent to
maintain the validity, perfection and priority of the Security Interests and (b)
if applicable, a written supplement to the Schedules of this
Agreement:

       

      (i)           permit
any Collateral to be held by or at any Person (including by or at the Borrower
or its Subsidiaries), other than Certificated Securities delivered to the
Administrative Agent pursuant to Section
4.4;

       

      (ii)           change
its jurisdiction of organization or the location of its chief executive office
from that identified on Schedule 3.6;
or

       

      (iii)           change
its name, identity or corporate or organizational structure to such an extent
that any financing statement filed by the Administrative Agent in connection
with this Agreement would become misleading.

       

      SECTION
4.3.                           Required
Notifications.  Each Grantor shall promptly notify the
Administrative Agent, in writing, of:  (a) any Lien (other than the
Security Interests or Permitted Liens) on any of the Collateral which would
adversely affect in a material manner the ability of the Administrative Agent to
exercise any of its remedies hereunder, (b) the occurrence of any other event
which could reasonably be expected to have a Material Adverse Effect on the
aggregate value of the Collateral or on the Security Interests, and (c) the
acquisition or ownership by such Grantor of any Collateral after the date
hereof.

       

      SECTION
4.4.                           Delivery
Covenants.  Each Grantor will (i) deliver and pledge to the
Administrative Agent, for the ratable benefit of itself and the Lenders, (a) all
Certificated Securities, and (b) all Partnership/LLC Interests evidenced by a
certificate,  in each case representing Collateral and owned or held
by such Grantor, together with an Effective Endorsement and Assignment, and (ii)
cause each Material Foreign Subsidiary that it has pledged Collateral in under
the terms of this Agreement, to execute a counterpart signature page hereto as
an Issuer.

       

      SECTION
4.5.                           Filing
Covenants.  Pursuant to Section 9-509 of the UCC and any other
Applicable Law, each Grantor authorizes the Administrative Agent to file or
record financing statements (including continuation statements) and other filing
or recording documents or instruments with respect to the Collateral without the
signature of such Grantor in such form and in such offices as the Administrative
Agent determines appropriate to perfect the Security Interests of the
Administrative Agent under this Agreement.  Such financing statements
may describe the Collateral in the same manner as described herein or may
contain an indication or description of Collateral that describes such property
in any other manner as the Administrative Agent may determine, in its sole
discretion, is necessary, advisable or prudent to ensure the perfection of the
Security Interest in the Collateral granted herein.  Further, a
photographic or other reproduction of this Agreement shall be sufficient as a
financing statement or other filing or recording document or instrument for
filing or recording in any jurisdiction.  Each Grantor hereby
authorizes, ratifies and confirms all financing statements and other filing or
recording documents or instruments filed by Administrative Agent with respect to
the Collateral prior to the date of this Agreement.

       

      SECTION
4.6.                           Limitations.

       

      (a)           Without
the prior written consent of the Administrative Agent, no Grantor will
(i) vote to enable, or take any other action to permit, any Material
Foreign Subsidiary to issue any Collateral, except for such additional
Collateral that will be subject to the Security Interest granted herein in favor
of the Administrative Agent, or (ii) enter into any agreement or undertaking
restricting the right or ability of such Grantor or the Administrative Agent to
sell, assign or transfer any Collateral or Proceeds thereof.  The
Grantors will defend the right, title and interest of the Administrative Agent
in and to any Collateral against the claims and demands of all Persons
whomsoever.

       

      (b)           If
any Grantor shall become entitled to receive or shall receive (i) any
Certificated Securities (including, without limitation, any certificate
representing a stock dividend or a distribution in connection with any
reclassification, increase or reduction of capital or any certificate issued in
connection with any reorganization), option or rights in respect of the
ownership interests of any Material Foreign Subsidiary, whether in addition to,
in substitution of, as a conversion of, or in exchange for, any Collateral, or
otherwise in respect thereof, or (ii) any sums paid upon or in respect of
any Collateral upon the liquidation or dissolution of any Material Foreign
Subsidiary, such Grantor shall accept the same as the agent of the
Administrative Agent and the Lenders, hold the same in trust for the
Administrative Agent and the Lenders, segregated from all other funds of such
Grantor, and promptly deliver the same to the Administrative Agent in accordance
with the terms hereof.

       

      SECTION
4.7.                           Further
Assurances.  Upon the request of the Administrative Agent and
at the sole expense of the Grantors, each Grantor will promptly and duly execute
and deliver, and have recorded, such further instruments and documents and take
such further actions as the Administrative Agent may reasonably request for the
purpose of obtaining or preserving the full benefits of this Agreement and of
the rights and powers herein granted, including, without limitation, (i) a
foreign pledge agreement, in form and substance satisfactory to the
Administrative Agent, duly executed by the applicable Grantor granting a
security interest to the Administrative Agent in the applicable Collateral
(including, without limitation, an opinion of counsel with respect thereto), and
(ii) all applications, certificates, instruments, registration statements, and
all other documents and papers the Administrative Agent may reasonably request
and as may be required by law in connection with the obtaining of any consent,
approval, registration, qualification, or authorization of any Person deemed
necessary or appropriate for the effective exercise of any rights under this
Agreement.

       

      ARTICLE
V

      


      REMEDIAL
PROVISIONS

      


      SECTION
5.1.                           General
Remedies.  If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Lenders, may exercise, in
addition to all other rights and remedies granted to the Administrative Agent
and/or the Lenders in this Agreement and in any other instrument or agreement
securing, evidencing or relating to the Obligations, all rights and remedies of
a secured party under the UCC or any other Applicable Law.  Without
limiting the generality of the foregoing, the Administrative Agent, without
demand of performance or other demand, presentment, protest, advertisement or
notice of any kind (except any notice required by law referred to below) to or
upon any Grantor or any other Person (all and each of which demands, defenses,
advertisements and notices are hereby waived), may in such circumstances
forthwith collect, receive, appropriate and realize upon the Collateral, or any
part thereof, and/or may forthwith sell, lease, assign, give option or options
to purchase, or otherwise dispose of and deliver the Collateral or any part
thereof (or contract to do any of the foregoing), in one or more parcels at
public or private sale or sales, at any exchange, broker’s board or office of
the Administrative Agent or any Lender or elsewhere upon such terms and
conditions as it may deem advisable and at such prices as it may deem best, for
cash or on credit or for future delivery without assumption of any credit
risk.  The Administrative Agent may disclaim any warranties of title,
possession and quiet enjoyment.  The Administrative Agent or any
Lender shall have the right upon any such public sale or sales, and, to the
extent permitted by law, upon any such private sale or sales, to purchase the
whole or any part of the Collateral so sold, free of any right or equity of
redemption in any Grantor, which right or equity is hereby waived and
released.  Each Grantor further agrees, at the Administrative Agent’s
request, to assemble the Collateral and make it available to the Administrative
Agent at places which the Administrative Agent shall reasonably select, whether
at such Grantor’s premises or elsewhere.  To the extent permitted by
Applicable Law, each Grantor waives all claims, damages and demands it may
acquire against the Administrative Agent or any Lender arising out of the
exercise by them of any rights hereunder except to the extent any such claims,
damages, or demands result solely from the gross negligence or willful
misconduct of the Administrative Agent or any Lender, in each case against whom
such claim is asserted.  If any notice of a proposed sale or other
disposition of Collateral shall be required by law, such notice shall be deemed
reasonable and proper if given at least ten (10) days before such sale or other
disposition.

       

      SECTION
5.2.                           Specific
Remedies.

       

      (a)           Upon
the occurrence and during the continuance of an Event of Default:

       

      (i)           the
Administrative Agent shall have the right to receive any and all cash dividends,
payments or distributions made in respect of any Collateral or other Proceeds
paid in respect of any Collateral, and, immediately upon the request of the
Administrative Agent, any or all of any Collateral shall be registered in the
name of the Administrative Agent or its nominee, and the Administrative Agent or
its nominee may thereafter exercise (A) all voting, corporate and other rights
pertaining to such Collateral at any meeting of shareholders, partners or
members of the relevant Material Foreign Subsidiary and (B) any and all
rights of conversion, exchange and subscription and any other rights, privileges
or options pertaining to such Collateral, as if it were the absolute owner
thereof (including, without limitation, the right to exchange at its discretion
any and all of the Collateral upon the merger, consolidation, reorganization,
recapitalization or other fundamental change in the corporate, partnership or
company structure of any Material Foreign Subsidiary or upon the exercise by any
Grantor or the Administrative Agent of any right, privilege or option pertaining
to such Collateral, and in connection therewith, the right to deposit and
deliver any and all of the Collateral with any committee, depositary, transfer
agent, registrar or other designated agency upon such terms and conditions as
the Administrative Agent may determine), all without liability except to account
for property actually received by it; but the Administrative Agent shall have no
duty to any Grantor to exercise any such right, privilege or option and the
Administrative Agent and the Lenders shall not be responsible for any failure to
do so or delay in so doing. In furtherance thereof, each Grantor hereby
authorizes and instructs each Material Foreign Subsidiary with respect to any
Collateral to (1) comply with any instruction received by it from the
Administrative Agent in writing that (A) states that an Event of Default
has occurred and is continuing and (B) is otherwise in accordance with the
terms of this Agreement, without any other or further instructions from such
Grantor, and each Grantor agrees that each Material Foreign Subsidiary shall be
fully protected in so complying, and (2) except as otherwise expressly permitted
hereby, pay any dividends, distributions or other payments with respect to any
Collateral directly to the Administrative Agent; and

       

      (ii)           the
Administrative Agent shall be entitled to (but shall not be required
to):  (A) do all acts which the Administrative Agent may deem
necessary or proper to protect its Security Interest granted hereunder, provided
such acts are not inconsistent with or in violation of the terms of any of the
Credit Agreement, of the other Loan Documents or Applicable Law, and
(B) sell, assign or otherwise transfer any Collateral in accordance with
the Credit Agreement, the other Loan Documents and Applicable Law;

       

      (b)           Unless
an Event of Default shall have occurred and be continuing and the Administrative
Agent shall have given notice to the relevant Grantor of the Administrative
Agent’s intent to exercise its corresponding rights pursuant to Section 5.2(a), each
Grantor shall be permitted to receive all cash dividends, payments or other
distributions made in respect of any Collateral, in each case paid in the normal
course of business of the relevant Issuer and consistent with past practice, to
the extent permitted in the Credit Agreement, and to exercise all voting and
other corporate, company and partnership rights with respect to any Collateral;
provided that,
no vote shall be cast or other corporate, company and partnership right
exercised or other action taken which, in the Administrative Agent’s reasonable
judgment, would impair the Collateral or which would result in a Default or
Event of Default under any provision of the Credit Agreement, this Agreement or
any other Loan Document.

       

      SECTION
5.3.                           Application of
Proceeds.  At such intervals as may be agreed upon by the
Borrower and the Administrative Agent, or, if an Event of Default shall have
occurred and be continuing, at any time at the Administrative Agent’s election,
the Administrative Agent may apply all or any part of the Collateral or any
Proceeds of the Collateral in payment in whole or in part of the Obligations
(after deducting all reasonable costs and expenses of every kind incurred in
connection therewith or incidental to the care or safekeeping of any of the
Collateral or in any way relating to the Collateral or the rights of the
Administrative Agent and the Lenders hereunder, including, without limitation,
reasonable attorneys’ fees and disbursements) in accordance with Section 4.5 of the
Credit Agreement.  Any balance of such Proceeds remaining thereafter
shall be paid over to the Borrower, on behalf of the Grantors, or to whomsoever
(if such Person is not a Grantor) may be lawfully entitled to receive the
same.  Only after (1) the payment by the Administrative Agent of any
other amount required by any provision of law, including, without limitation,
Section 9-610 and Section 9-615 of the UCC and (2) the payment in full of the
Obligations and the termination of the Commitments, shall the Administrative
Agent account for the surplus, if any, to any Grantor, or to whomever may be
lawfully entitled to receive the same (if such Person is not a
Grantor).

       

      SECTION
5.4.                           Waiver,
Deficiency.  Except to the extent prohibited under Applicable
Law (including Section 9-602 of the UCC), each Grantor waives and agrees not to
assert any rights or privileges which it may acquire under Sections 9-210,
9-607, 9-608, 9-610, 9-615, 9-620, 9-621, 9-623, 9-624, 9-625 or 9-627 of the
UCC.  Each Grantor shall remain liable for any deficiency if the
proceeds of any sale or other disposition of the Collateral are insufficient to
pay its Obligations and the fees and disbursements of any attorneys employed by
the Administrative Agent or any Lender to collect such deficiency.

       

      ARTICLE
VI

      


      THE ADMINISTRATIVE
AGENT

      


      SECTION
6.1.                           Administrative Agent’s
Appointment as Attorney-In-Fact.

       

      (a)           Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent and
any officer or agent thereof, with full power of substitution, as its true and
lawful attorney-in-fact with full irrevocable power and authority in the place
and stead of such Grantor and in the name of such Grantor or in its own name,
for the purpose of carrying out the terms of this Agreement, following the
occurrence and during the continuance of an Event of Default, to take any and
all appropriate action and to execute any and all documents and instruments
which may be necessary or desirable to accomplish the purposes of this
Agreement, and, without limiting the generality of the foregoing, each Grantor
hereby gives the Administrative Agent the power and right, on behalf of such
Grantor, without notice to or assent by such Grantor, to do any or all of the
following upon the occurrence and continuation of an Event of
Default:

       

      (i)           in
the name of such Grantor or its own name, or otherwise, take possession of and
endorse and collect any checks, drafts, notes, acceptances or other instruments
for the payment of moneys due with respect to any Collateral and file any claim
or take any other action or proceeding in any court of law or equity or
otherwise deemed appropriate by the Administrative Agent for the purpose of
collecting any and all such moneys due with respect to any Collateral whenever
payable;

       

      (ii)           pay
or discharge taxes and Liens levied or placed on or against the
Collateral;

       

      (iii)           execute,
in connection with any sale provided for in this Agreement, any endorsements,
assignments or other instruments of conveyance or transfer with respect to the
Collateral; and

       

      (iv)           (A)
direct any party liable for any payment under any of the Collateral to make
payment of any and all moneys due or to become due thereunder directly to the
Administrative Agent or as the Administrative Agent shall direct; (B) ask or
demand for, collect, and receive payment of and receipt for, any and all moneys,
claims and other amounts due or to become due at any time in respect of or
arising out of any Collateral; (C) sign and endorse any assignments,
verifications, notices and other documents in connection with any of the
Collateral; (D) commence and prosecute any suits, actions or proceedings at law
or in equity in any court of competent jurisdiction to collect the Collateral or
any portion thereof and to enforce any other right in respect of any Collateral;
(E) defend any suit, action or proceeding brought against such Grantor with
respect to any Collateral; (F) settle, compromise or adjust any such suit,
action or proceeding and, in connection therewith, give such discharges or
releases as the Administrative Agent may deem appropriate; and (G) generally,
sell, transfer, pledge and make any agreement with respect to or otherwise deal
with any of the Collateral as fully and completely as though the Administrative
Agent were the absolute owner thereof for all purposes, and do, at the
Administrative Agent’s option and such Grantor’s expense, at any time, or from
time to time, all acts and things which the Administrative Agent deems necessary
to protect, preserve or realize upon the Collateral and the Administrative
Agent’s and the Lenders’ Security Interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might
do.

       

      (b)           If
any Grantor fails to perform or comply with any of its agreements contained
herein, the Administrative Agent, at its option, but without any obligation so
to do, may perform or comply, or otherwise cause performance or compliance, with
such agreement in accordance with the provisions of Section 6.1(a).

       

      (c)           The
expenses of the Administrative Agent incurred in connection with actions taken
pursuant to the terms of this Agreement, together with interest thereon as
required pursuant to Section 4.1 of the
Credit Agreement, from the date of payment by the Administrative Agent to the
date reimbursed by the relevant Grantor, shall be payable by such Grantor to the
Administrative Agent on demand.

       

      (d)           Each
Grantor hereby ratifies all that said attorneys shall lawfully do or cause to be
done by virtue hereof in accordance with Section
6.1(a).  All powers, authorizations and agencies contained in
this Agreement are coupled with an interest and are irrevocable until this
Agreement is terminated and the Security Interests created hereby are
released.

       

      SECTION
6.2.                           Duty of Administrative
Agent.  The Administrative Agent’s sole duty with respect to
the custody, safekeeping and physical preservation of the Collateral in its
possession, under Section 9-207 of the UCC or otherwise, shall be to deal
with it in the same manner as the Administrative Agent deals with similar
property for its own account.  Neither the Administrative Agent, any
Lender nor any of their respective officers, directors, employees or agents
shall be liable for failure to demand, collect or realize upon any of the
Collateral or for any delay in doing so or shall be under any obligation to sell
or otherwise dispose of any Collateral upon the request of any Grantor or any
other Person or to take any other action whatsoever with regard to the
Collateral or any part thereof.  The powers conferred on the
Administrative Agent and the Lenders hereunder are solely to protect the
Administrative Agent’s and the Lenders’ interests in the Collateral and shall
not impose any duty upon the Administrative Agent or any Lender to exercise any
such powers.  The Administrative Agent and the Lenders shall be
accountable only for amounts that they actually receive as a result of the
exercise of such powers, and neither they nor any of their officers, directors,
employees or agents shall be responsible to any Grantor for any act or failure
to act hereunder, except for their own gross negligence or willful
misconduct.

       

      SECTION
6.3.                           Authority of Administrative
Agent.  Each Grantor acknowledges that the rights and
responsibilities of the Administrative Agent under this Agreement with respect
to any action taken by the Administrative Agent or the exercise or non-exercise
by the Administrative Agent of any option, voting right, request, judgment or
other right or remedy provided for herein or resulting or arising out of this
Agreement shall, as between the Administrative Agent and the Lenders, be
governed by the Credit Agreement and by such other agreements with respect
thereto as may exist from time to time among them, but, as between the
Administrative Agent and the Grantors, the Administrative Agent shall be
conclusively presumed to be acting as agent for the Lenders with full and valid
authority so to act or refrain from acting, and no Grantor shall be under any
obligation, or entitlement to make any inquiry respecting such
authority.

       

      ARTICLE
VII

      


      MISCELLANEOUS

      


      SECTION
7.1.                           Amendments in
Writing.  None of the terms or provisions of this Agreement may
be waived, amended, supplemented or otherwise modified except in accordance with
Section 13.11 of
the Credit Agreement.

       

      SECTION
7.2.                           Notices.  All
notices, requests and demands to or upon the Administrative Agent or any Grantor
hereunder shall be effected in the manner provided for in Section 13.1 of the
Credit Agreement.

       

      SECTION
7.3.                           No Waiver by Course of
Conduct, Cumulative Remedies.  Neither the Administrative Agent
nor any Lender shall by any act (except by a written instrument pursuant to
Section 7.1),
be deemed to have waived any right or remedy hereunder or to have acquiesced in
any Default or Event of Default. No failure to exercise, nor any delay on the
part of the Administrative Agent or any Lender in exercising, any right, power
or privilege hereunder shall operate as a waiver thereof.  No single
or partial exercise of any right, power or privilege hereunder shall preclude
any other or further exercise thereof or the exercise of any other right, power
or privilege.  A waiver by the Administrative Agent or any Lender of
any right or remedy hereunder on any one occasion shall not be construed as a
bar to any right or remedy which the Administrative Agent or such Lender would
otherwise have on any future occasion.  The rights and remedies herein
provided are cumulative, may be exercised singly or concurrently and are not
exclusive of any other rights or remedies provided by law.

       

      SECTION
7.4.                           Enforcement Expenses,
Indemnification.

       

      (a)           Each
Grantor agrees to pay or reimburse each Lender and the Administrative Agent for
all its costs and expenses incurred in connection with enforcing or preserving
any rights under this Agreement and the other Loan Documents to which such
Grantor is a party, (including, without limitation, in connection with any
workout, restructuring, bankruptcy or other similar proceeding) including,
without limitation, the reasonable fees and disbursements of counsel to each
Lender and of counsel to the Administrative Agent.

       

      (b)           Each
Grantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from, any and all liabilities with respect to, or resulting from any
delay in paying, any and all stamp, excise, sales or other taxes (in each case,
subject to Section
4.13 of the Credit Agreement) which may be payable or determined to be
payable with respect to any of the Collateral or in connection with any of the
transactions contemplated by this Agreement.

       

      (c)           Each
Grantor agrees to pay, and to save the Administrative Agent and the Lenders
harmless from any and all liabilities, obligations, losses, damages, penalties,
costs and expenses in connection with actions, judgments, suits, costs, expenses
or disbursements of any kind or nature whatsoever with respect to the execution,
delivery, enforcement, performance and administration of this Agreement to the
extent any Grantor would be required to do so pursuant to Section 13.2 of the
Credit Agreement.

       

      (d)           The
agreements in this Section 7.4 shall
survive termination of the Commitments and repayment of the Obligations and all
other amounts payable under the Credit Agreement and the other Loan
Documents.

       

      SECTION
7.5.                           Binding Arbitration; Waiver
of Jury Trial; Preservation of Remedies.

       

      (a)           Binding Arbitration.
Upon demand of any party, whether made before or after institution of any
judicial proceeding, any dispute, claim or controversy arising out of, connected
with or relating to this Agreement (“Disputes”), between
or among parties to this Agreement shall be resolved by binding arbitration as
provided herein. Institution of a judicial proceeding by a party does not waive
the right of that party to demand arbitration hereunder.  Disputes may
include, without limitation, tort claims, counterclaims, claims brought as class
actions, claims arising from Loan Documents executed in the future, or claims
concerning any aspect of the past, present or future relationships arising out
of or connected with this Agreement. Arbitration shall be conducted under and
governed by the Commercial Financial Disputes Arbitration Rules (the “Arbitration Rules”)
of the American Arbitration Association (“AAA”) and
Title 9 of the U.S. Code.  All arbitration hearings shall be
conducted in Charlotte, North Carolina.  The expedited procedures set
forth in Rule 51, et seq. of the
Arbitration Rules shall be applicable to claims of less than
$1,000,000.  All applicable statutes of limitation shall apply to any
Dispute.  A judgment upon the award may be entered in any court having
jurisdiction.  Notwithstanding anything foregoing to the contrary, any
arbitration proceeding demanded hereunder shall begin within ninety (90) days
after such demand thereof and shall be concluded within one-hundred and twenty
(120) days after such demand.  These time limitations may not be
extended unless a party hereto shows cause for extension and then such extension
shall not exceed a total of sixty (60) days.  The panel from which all
arbitrators are selected shall be comprised of licensed attorneys selected from
the Commercial Finance Dispute Panel of the AAA.  The single
arbitrator selected for expedited procedure shall be a retired judge from the
highest court of general jurisdiction, state or federal, of the state where the
hearing will be conducted.  The parties hereto do not waive any
applicable Federal or state substantive law except as provided
herein.

       

      (b)           Waiver of Jury
Trial.  EACH
GRANTOR HEREBY ACKNOWLEDGES THAT BY AGREEING TO BINDING ARBITRATION IT HAS
IRREVOCABLY WAIVED ITS RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION, CLAIM OR OTHER PROCEEDING ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, ANY RIGHTS OR OBLIGATIONS HEREUNDER, OR THE PERFORMANCE OF SUCH
RIGHTS AND OBLIGATIONS.

       

      (c)           Preservation of Certain
Remedies.  Notwithstanding the preceding binding arbitration
provisions, the parties hereto and the other Loan Documents preserve, without
diminution, certain remedies that such Persons may employ or exercise freely,
either alone, in conjunction with or during a Dispute.  Each such
Person shall have and hereby reserves the right to proceed in any court of
proper jurisdiction or by self help to exercise or prosecute the following
remedies, as applicable:  (i) all rights to foreclose against any
personal property or other security by exercising a power of sale granted in the
Loan Documents or under Applicable Law or by judicial foreclosure and sale,
including a proceeding to confirm the sale, (ii) all rights of self help
including peaceful possession of property, (iii) obtaining provisional or
ancillary remedies including injunctive relief, sequestration, garnishment,
attachment, appointment of receiver and in filing an involuntary bankruptcy
proceeding, and (iv) when applicable, a judgment by confession of judgment.
Preservation of these remedies does not limit the power of an arbitrator to
grant similar remedies that may be requested by a party in a
Dispute.

       

      SECTION
7.6.                           Successors and
Assigns.  This Agreement shall be binding upon the successors
and assigns of each Grantor and shall inure to the benefit of each Grantor (and
shall bind all Persons who become bound as a Grantor to this Collateral
Agreement), the Administrative Agent and the Lenders and their successors and
assigns; provided that no Grantor may assign, transfer or delegate any of its
rights or obligations under this Agreement without the prior written consent of
the Administrative Agent (given in accordance with Section 7.1
above).

       

      SECTION
7.7.                           Counterparts.  This
Agreement may be executed by one or more of the parties to this Agreement on any
number of separate counterparts (including by telecopy), and all of said
counterparts taken together shall be deemed to constitute one and the same
instrument.

       

      SECTION
7.8.                           Severability.  Any
provision of this Agreement or any other Loan Agreement which is prohibited or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
only to the extent of such prohibition or unenforceability without invalidating
the remainder of such provision or the remaining provisions hereof or thereof or
affecting the validity or enforceability of such provision in any other
jurisdiction.

       

      SECTION
7.9.                           Section
Heading.  The Section headings used in this Agreement are for
convenience of reference only and are not to affect the construction hereof or
be taken into consideration in the interpretation hereof.

       

      SECTION
7.10.                           Integration.  This
Agreement and the other Loan Documents represent the agreement of the Grantors,
the Administrative Agent and the Lenders with respect to the subject matter
hereof and thereof, and there are no promises, undertakings, representations or
warranties by the Administrative Agent or any Lender relative to the subject
matter hereof and thereof not expressly set forth or referred to herein or in
the other Loan Documents.

       

      SECTION
7.11.                           Governing
Law.  This Agreement shall be governed by, and construed and
interpreted in accordance with, the law of the State of North Carolina without
reference to the conflict or choice of law principles thereof.

       

      SECTION
7.12.                           Consent to
Jurisdiction.  Each Grantor hereby irrevocably consents to the
personal jurisdiction of the state and federal courts located in Mecklenburg
County, North Carolina, in any action, claim or other proceeding arising out of
any dispute in connection with this Agreement, the Notes and the other Loan
Documents, any rights or obligations hereunder or thereunder, or the performance
of such rights and obligations.  Each Grantor hereby irrevocably
consents to the service of a summons and complaint and other process in any
action, claim or proceeding brought by the Administrative Agent or any Lender in
connection with this Agreement, the Notes or the other Loan Documents, any
rights or obligations hereunder or thereunder, or the performance of such rights
and obligations, on behalf of itself or its property, in the manner specified in
Section 13.1 of
the Credit Agreement.  Nothing in this Section 7.12 shall
affect the right of the Administrative Agent or any Lender to serve legal
process in any other manner permitted by Applicable Law or affect the right of
the Administrative Agent or any Lender to bring any action or proceeding against
any Grantor or its properties in the courts of any other
jurisdictions.

       

      SECTION
7.13.                           Acknowledgements.

       

      (a)           Each
Grantor hereby acknowledges that:  (i) it has been advised by counsel
in the negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party, (ii) neither the Administrative Agent nor any
Lender has any fiduciary relationship with or duty to any Grantor arising out of
or in connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative Agent
and Lenders, on the other hand, in connection herewith or therewith is solely
that of debtor and creditor, and (iii) no joint venture is created hereby or by
the other Loan Documents or otherwise exists by virtue of the transactions
contemplated hereby or thereby among the Lenders or among the Grantors and the
Lenders.

       

      (b)           Each
Issuer party to this Agreement acknowledges receipt of a copy of this Agreement
and agrees to be bound thereby and to comply with the terms thereof insofar as
such terms are applicable to it. Each Issuer agrees to provide such notices to
the Administrative Agent as may be necessary to give full effect to the
provisions of this Agreement.

       

      SECTION
7.14.                           Additional
Grantors.  Each Domestic Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 8.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of a Joinder Agreement as provided in
the Credit Agreement.

       

      SECTION
7.15.                           Releases.

       

      (a)           At
such time as the Obligations shall have been paid in full and the Commitments
have been terminated, the Collateral shall be released from the Liens created
hereby, and this Agreement and all obligations (other than those expressly
stated to survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or performance
of any act by any party, and all rights to the Collateral shall revert to the
Grantors. At the request and sole expense of any Grantor following any such
termination, the Administrative Agent shall deliver to such Grantor any
Collateral held by the Administrative Agent hereunder, and execute and deliver
to such Grantor such documents as such Grantor shall reasonably request to
evidence such termination

       

      (b)           If
any of the Collateral shall be sold, transferred or otherwise disposed of by any
Grantor in a transaction permitted by the Credit Agreement, then the
Administrative Agent, at the request and sole expense of such Grantor, shall
execute and deliver to such Grantor all releases or other documents reasonably
necessary or desirable for the release of the Liens created hereby on such
Collateral.  In the event that all the capital stock of any Grantor
shall be sold, transferred or otherwise disposed of in a transaction permitted
by the Credit Agreement, then, at the request of the Borrower and at the expense
of the Grantors, such Grantor shall be released from its obligations hereunder;
provided that
the Borrower shall have delivered to the Administrative Agent, at least ten (10)
Business Days prior to the date of the proposed release, a written request for
release identifying the relevant Grantor and the terms of the sale or other
disposition in reasonable detail, including the price thereof and any expenses
in connection therewith, together with a certification by the Borrower stating
that such transaction is in compliance with the Credit Agreement and the other
Loan Documents.

       

      [Signature
Pages to Follow]


      
        
          
             

            WINSTON
1762934v1

          

           


        

        
           


          
            

          

        

        
           


        

      


      IN
WITNESS WHEREOF, the parties hereto have caused this Collateral Agreement to be
executed under seal by their duly authorized officers, all as of the day and
year first written above.

       

      [CORPORATE
SEAL]                                                                COMPX
INTERNATIONAL INC., as Grantor

      


      


         By:
_____________________________

      Name:
_________________________

      Title: 
_________________________

      


      


      [CORPORATE
SEAL]                                                                COMPX
SECURITY PRODUCTS INC., as Grantor

       

      
 

                               By:
_____________________________ 

        Name:
_________________________

        Title: 
_________________________

      

      


      


      [CORPORATE
SEAL]                                                                COMPX
PRECISION SLIDES INC., as Grantor

       

      
 

                              By:
_____________________________

      
        Name:
_________________________

        Title: 
_________________________

      

      


      


      [CORPORATE
SEAL]                                                                COMPX
MARINE INC., as Grantor

      


      


            
By: _____________________________

                             
Name: _________________________

      Title: 
_________________________

      


      


      [CORPORATE
SEAL]                                                                CUSTOM
MARINE ACQUISITION INC.,a s
Grantor

      


      


            By:
_____________________________ 

                               
Name: _________________________

        Title: 
_________________________

      

      


          
COMPX ASIA HOLDING CORPORATION, as
Issuer

      


      


           By:
_____________________________ 

                               
Name: _________________________

        Title: 
_________________________



      


          WATERLOO
FURNITURE COMPONENT

          LIMITED, as
Issuer

      


      


          By:
_____________________________ 

                               
Name: _________________________

        Title: 
_________________________

         

        
 

        
                               WACHOVIA BANK, NATIONAL

               ASSOCIATION as
Administrative Agent

          


          


          
            


                By:
_____________________________ 

                                     
Name: _________________________

              Title: 
_________________________


            

          



         

        
          
             

            WINSTON
1762934v1

          

        

         

         

        

          
            
               


            

            
               


              
                

              

            

            
               


            

          


          SCHEDULE
3.6

          to

          Collateral
Agreement

          


          EXACT
LEGAL NAME; JURISDICTION OF ORGANIZATION; TAXPAYER

          IDENTIFICATION
NUMBER; MAILING ADDRESS; CHIEF EXECUTIVE OFFICE AND OTHER LOCATIONS

          


          


          


          3.6(a)                 Identification
Information.

           

          
            	
                     
      

                  	
                    (1)

                  	
                    The
      exact legal name of each Grantor as it appears in its Articles of
      Incorporation, Articles or Organization or other organizational documents
      is as follows:

                  


          

          
 

          
            	
                     
      

                  	
                    (2)

                  	
                    The
      jurisdiction of incorporation, organization or formation of each Grantor
      is as follows:

                  


          

           

           

          
            	
                  	
                    (3)  

                  	
                    The
      taxpayer identification number of each Grantor is as
    follows:

                  


          

           

          


          
            	
                     
      

                  	
                    (4)

                  	
                    Changes
      in identity or organizational structure in any way within the past five
      years:

                  


          

           

          


           

          
            	
                    3.6(b)

                  	
                    Mailing Address, Chief
      Executive Office, Location of Books and Records and other Places of
      Business.

                  


          

           

           

          
            	
                  	
                    (1) 

                  	
                    The
      location of the chief executive office of each Grantor is as
      follows:

                  


          

           

          
            	
                    Grantor

                  	
                    Mailing
      Address

                  	
                    County and
      State

                  


          

           

          
            	
                     
      

                  	
                    (2)

                  	
                    The
      following are the only locations at which any Grantor maintains any books
      or records relating to the
Collateral:

                  


          

             

            
              	
                      Grantor

                    	
                      Mailing
      Address

                    	
                      County and
      State

                    


            

            






          
            
              
                 

                WINSTON
1762934v1

              

               


            

            
               


              
                

              

            

            
               


            

          


          SCHEDULE
3.7

          to

          Collateral
Agreement

          


          Listing
of Collateral

          


          


          


          Certificated
Securities:

           

          [List Each
Grantor]:

           

          
            	
                    
                      Name
      of Subsidiary Issuer

                    

                  	
                    
                      Class
      and Series

                    

                  	
                    
                      Par
      Value per Share

                    

                  	
                    
                      Certificate
      Number

                    

                  	
                    
                      Shares
      Represented by such Certificate

                    

                  	
                    
                      Percentage
      of Ownership Interests of such Class and Series

                    

                  
	           	 
      	 
      	 
      	 
      	 
      
	 	 	 	 	 	 
	 	 	 	 	 	 


          

          


          Partnerships/LLC
Interests:

           

          [None]

           

          



          
            
              
                 

                WINSTON
1762934v1

              

               


            

            
               


              
                

              

            

            
               


            

          




        


        


      

      
        EXHIBIT
J

        to

        Credit
Agreement

        dated as
of December 23, 2005

        by and
among

        CompX
International Inc.,

        as
Borrower,

        the
Lenders party thereto

        and

        Wachovia
Bank, National Association,

        as
Administrative Agent

        


        


        FORM OF JOINDER
AGREEMENT


        
          
            
              


              WINSTON
1676450v4

            

             


          

          
             


            
              

            

          

          
             


          

        


        FORM OF JOINDER AGREEMENT
[MATERIAL DOMESTIC SUBSIDIARY]

        


        THIS
JOINDER AGREEMENT, dated as of the ____________ day of __________, _______ (the
“Agreement”),
to the Subsidiary Guaranty Agreement and the Collateral Agreement referred to
below is entered into by and among CompX International Inc., a corporation
organized under the laws of Delaware (the “Borrower”), ________
a [corporation] [limited liability company] [general partnership] organized
under the laws of ______ (the “New Subsidiary”), and
Wachovia Bank, National Association, a national banking association, as
Administrative Agent (the “Administrative
Agent”) under the Credit Agreement referred to below.

         

        Statement of
Purpose

        


        Reference
is hereby made to the Credit Agreement dated as of December 23, 2005 (as
supplemented hereby and as further amended, restated, supplemented or otherwise
modified, the “Credit
Agreement”) by and among the Borrower, the Lenders who are or may become
party thereto and the Administrative Agent.   In connection with
the Credit Agreement, the Borrower and certain of its Subsidiaries have entered
into the Collateral Agreement referred to therein and certain Subsidiaries of
the Borrower have entered into the Subsidiary Guaranty Agreement referred to
therein.

         

        The New
Subsidiary is a [Wholly-Owned] Material Domestic Subsidiary of the
Borrower.  In connection therewith and pursuant to Section 8.10 of the
Credit Agreement, (i) the New Subsidiary is required to execute, among other
documents, a Joinder Agreement in order (A) to become a Guarantor under the
Subsidiary Guaranty Agreement and (B) to become a Grantor under the Collateral
Agreement and (ii) the Borrower is required to execute, among other things, a
Joinder Agreement, in order to confirm and reaffirm the Security Interests in
the Collateral of the Borrower granted to the Administrative Agent under the
Collateral Agreement.

         

        NOW
THEREFORE, in consideration of the premises and other good and valuable
consideration, the parties hereto hereby agree as follows:

         

        Section
1.01                      Schedules to the Credit
Agreement.  Attached hereto as Annex A are
supplements to Schedules 6.1(a), 6.1(b), 6.1(i), 6.1(1), 6.1(q) and 6.1(r) referenced in
the Credit Agreement (which supplements include as of the date hereof all
information required to be provided therein with respect to the New
Subsidiary).

         

        Section
2.01                      Guaranty Agreement
Supplement.

         

        (a)           The
New Subsidiary hereby agrees that by execution of this Agreement it is a
Guarantor under the Subsidiary Guaranty Agreement as if a signatory thereof on
the Closing Date of the Credit Agreement, and the New Subsidiary (i) shall
comply with, and be subject to, and have the benefit of, all of the terms,
conditions, covenants, agreements and obligations set forth in the Subsidiary
Guaranty Agreement and (ii) hereby makes each representation and warranty set
forth in the Subsidiary Guaranty Agreement.

         

        (b)           The
Borrower, and the New Subsidiary hereby agree that each reference to a
“Guarantor”, the “Guarantors”, a “Subsidiary Guarantor” or the “Subsidiary
Guarantors” in the Credit Agreement, the Subsidiary Guaranty Agreement and other
Loan Documents shall include the New Subsidiary, and each reference to the
“Subsidiary Guaranty Agreement”, “Subsidiary Guaranty” or “Guaranty” as used
therein shall mean the Subsidiary Guaranty Agreement as supplemented
hereby.

         

        Section
3.01                      Collateral Agreement
Supplement.

         

        (a)           Joinder to the Collateral
Agreement.

         

        (i)           In
order to secure the Credit Agreement in accordance with the terms thereof, and
to secure the payment and performance of all of the Obligations, (A) the New
Subsidiary hereby grants to the Administrative Agent, for the ratable benefit of
itself and the Lenders, a continuing security interest in and to all of the New
Subsidiary’s right, title and interest in and to all Collateral whether now or
hereafter owned or acquired by the New Subsidiary or in which the New Subsidiary
now has or hereafter has or acquires any rights, and wherever located (the
“New
Collateral”) and (B) the Borrower hereby confirms and reaffirms the
Security Interests in and to all of the Collateral of the Borrower granted to
the Administrative Agent, for the ratable benefit of itself and the Lenders,
under the Collateral Agreement.

         

        (ii)           The
Security Interests are granted as security only and shall not subject the
Administrative Agent or any Lender to, or transfer to the Administrative Agent
or any Lender, or in any way affect or modify, any obligation or liability of
the Borrower or the New Subsidiary with respect to any of the New Collateral or
any transaction in connection therewith.

         

        (iii)           The
Borrower and the New Subsidiary hereby agree that by execution of this Agreement
the New Subsidiary is a party to the Collateral Agreement as if a signatory
thereof as a Grantor on the Closing Date of the Credit Agreement, and the New
Subsidiary shall (A) comply with, and be subject to, and have the benefit of,
all of the terms, covenants, conditions, agreements and obligations set forth in
the Collateral Agreement and (B) hereby makes each representation and warranty
set forth in the Collateral Agreement.

         

        (iv)           The
Borrower and the New Subsidiary hereby agree that each reference to a “Grantor”
or the “Grantors” in the Collateral Agreement and other Loan Documents shall
include the New Subsidiary.  Furthermore, the Borrower and the New
Subsidiary hereby agree that “Collateral” as used therein shall include all New
Collateral pledged pursuant hereto and the Collateral Agreement, and “Collateral
Agreement” or “Agreement” as used therein shall mean the Collateral Agreement as
supplemented hereby.

         

        (b)           Filing Information and
Perfection.  The Borrower and the New Subsidiary hereby agree
that they shall deliver to the Administrative Agent such certificates and other
documents (including, without limitation, UCC-1 Financing Statements, stock
certificates and stock powers) and take such action as the Administrative Agent
shall reasonably request in order to effectuate the terms hereof and the
Collateral Agreement.

         

        (c)           Acknowledgement and
Consent.  The New Subsidiary acknowledges receipt of a copy of
the Collateral Agreement and the other Loan Documents and agrees for the benefit
of the Administrative Agent and the Lenders to be bound thereby and to comply
with the terms thereof insofar as such terms are applicable to it.

         

        (d)           Schedules to the Collateral
Agreement.  Attached hereto as Annex B are
supplements to each Schedule referenced in the Collateral Agreement (which
supplements include as of the date hereof all information required to be
provided therein with respect to the New Subsidiary).

         

        Section
4.01                      Effectiveness.  This
Agreement shall become effective upon receipt by the Administrative Agent of (a)
an originally executed counterpart hereof, (b) any UCC-1 Financing Statements
the Administrative Agent reasonably requests be delivered pursuant hereto, (c)
any other agreement or document required to be delivered pursuant to this
Agreement and the Collateral Agreement; and (d) any other agreement or document
required to be delivered in accordance with Section 8.10 of the
Credit Agreement (including, without limitation, any other agreement or document
required to be delivered in connection with the Credit Agreement or any other
Loan Document).

         

        Section
5.01                      General
Provisions.

         

        (a)           Representations and
Warranties.

         

        (i)           The
Borrower hereby confirms that each representation and warranty made under the
Loan Documents is true and correct as of the date hereof (except to the extent
such representations and warranties expressly refer to an earlier date, in which
case they shall be true and correct as of the earlier date) and that no Default
or Event of Default has occurred or is continuing under the Credit
Agreement.

         

        (ii)           The
Borrower hereby represents and warrants that as of the date hereof there are no
claims or offsets against or defenses or counterclaims to the obligations of the
Borrower and its Subsidiaries under the Credit Agreement or any other Loan
Document.

         

        (iii)           The
New Subsidiary hereby acknowledges it has received a copy of the Loan Documents
(including, without limitation, the Subsidiary Guaranty Agreement and the
Collateral Agreement) and that it has read and understands the terms
thereof.

         

        (b)           Limited
Effect.  Except as supplemented hereby, the Credit Agreement
and each other Loan Document shall continue to be, and shall remain, in full
force and effect.  This Agreement shall not be deemed (i) to be a
waiver of, or consent to, or a modification or amendment of, any other term or
condition of the Credit Agreement or any other Loan Document or (ii) to
prejudice any right or rights which the Administrative Agent or any Lender may
now have or may have in the future under or in connection with the Credit
Agreement or the other Loan Documents or any of the instruments or agreements
referred to therein, as the same may be amended or modified from time to
time.

         

        (c)           Costs and
Expenses.  The Borrower hereby agrees that it shall pay or
reimburse the Administrative Agent for all of its reasonable and customary
out-of-pocket costs and expenses incurred in connection with the preparation,
negotiation and execution of this Agreement including, without limitation, the
reasonable fees and disbursements of counsel.

         

        (d)           Counterparts.  This
Agreement may be executed by one or more of the parties hereto in any number of
separate counterparts and all of said counterparts taken together shall be
deemed to constitute one and the same instrument.

         

        (e)           Definitions.  All
capitalized terms used and not defined herein shall have the meanings given
thereto in the Credit Agreement or the applicable Security Document referred to
therein.

         

        (f)           Governing
Law.  THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAWS OF THE STATE OF NORTH CAROLINA, WITHOUT REFERENCE TO THE
CONFLICTS OR CHOICE OF LAW PRINCIPLES THEREOF.

         


        
          
            
              


              WINSTON
1676450v4

            

             


          

          
             


            
              

            

          

          
             


          

        


        IN
WITNESS WHEREOF the undersigned hereby causes this Agreement to be executed and
delivered as of the date first above written.

        


        BORROWER:

        


        [CORPORATE
SEAL]                                                                COMPX
INTERNATIONAL INC.

        


        By:           ______________________________

        Name:           ______________________________

        Title:           ______________________________

        


        


        


        NEW
SUBSIDIARY:

        


        [CORPORATE
SEAL]                                                                [NEW
SUBSIDIARY]

        


        By:           ______________________________

        Name:           ______________________________

        Title:           ______________________________


        
          
            
               

              WINSTON
1676450v4

            

             


          

          
             


            
              

            

          

          
             


          

        


        ADMINISTRATIVE
AGENT:

        


        WACHOVIA
BANK, NATIONAL ASSOCIATION, as Administrative Agent

        


        By:           ______________________________

        Name:           ______________________________

        Title:           ______________________________

        


        



        
          
            
               

              WINSTON
1676450v4

            

             


          

          
             


            
              

            

          

          
             


          

        


        Annex
A

        to
Joinder Agreement

        


        Supplement to Schedules
6.1(a), 6.1(b), 6.1(i), 6.1(l), 6.1(q) and 6.1(r)

        to the Credit Agreement
(with respect to the New Subsidiary only)


        
          
            
              


              WINSTON
1676450v4

            

             


          

          
             


            
              

            

          

          
             


          

        


        Annex
B

        to
Joinder Agreement

        


        Supplement to the Schedules
to the Collateral Agreement

        (with
respect to the New Subsidiary only)


        
          
            
              


              WINSTON
1676450v4

            

             


          

          
             


            
              

            

          

          
             


          

        


         

      

       

      
 

      Schedule
1.1(a)

      to

      Credit
Agreement

      


      Lenders and
Commitments

      


      


      
        	
                LENDER

              	
                COMMITMENT

                PERCENTAGE

              	
                COMMITMENT

              
	
                Wachovia
      Bank, National Association

                Charlotte
      Plaza, CP-8

                201
      South College Street

                Charlotte,
      North Carolina 28288-0680

                Attention:  Syndication
      Agency Services

                Telephone
      No.: (704) 374-2698

                Telecopy
      No.: (704) 383-0288

                 

              	
                 

                 

                50.00000%

              	
                 

                 

                $25,000,000.00

              
	
                Compass
      Bank

                8080
      N. Central Expway, Suite 250

                Dallas,
      Texas  75206

                Attention:  Key
      Coker

                Telephone
      No.: 214-706-8044

                Telecopy
      No.: 214-346-2746

                 

              	
                 

                 

                25.00000%

              	
                 

                 

                $12,500,000

              
	
                Comerica
      Bank

                U.S.
      Banking Department- South

                4100
      Spring Valley Road, Suite 400

                Dallas,
      Texas  75244

                Attention:  Janet
      L. Wheeler

                Telephone
      No.:  972-361-2652

                Telecopy
      No.:   972-361-2550

                 

              	
                 

                 

                25.00000%

              	
                 

                 

                $12,500,000

              
	
                TOTAL:

              	
                100%

              	
                $50,000,000.00

              


      

      


      


      
        
          
            
               
 

              


              WINSTON
1636051v7

            

             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Schedule
1.1(b)

      To

      Credit
Agreement

      


      


      Mandatory Cost
Rate

      


      
        	
                1.

              	
                The
      Mandatory Cost Rate is an addition to the interest rate to compensate
      Lenders for the cost of compliance with (a) the requirements of the Bank
      of England and/or the United Kingdom’s Financial Services Authority (the
      “Financial
      Services Authority”) (or, in either case, any other authority which
      replaces all or any of its functions) or (b) the requirements of the
      European Central Bank.

              


      

      
        	
                 
      

              	 


      

      
        	
                2.

              	
                On
      the first day of each Interest Period (or as soon as possible thereafter),
      the Administrative Agent shall calculate, as a percentage rate, a rate
      (the "Additional
      Cost Rate") for each Lender in accordance with the paragraphs set
      out below.  The Mandatory Cost Rate will be calculated by the
      Administrative Agent as a weighted average of the Lenders' Additional Cost
      Rates (weighted in proportion to the percentage participation of each
      Lender in the relevant Loan) and will be expressed as a percentage rate
      per annum.

              


      

      
        	
                 
      

              	 


      

      
        	
                3.

              	
                The
      Additional Cost Rate for any Lender lending from a Lending Office in a
      Participating Member State will be the percentage notified by that Lender
      to the Administrative Agent.  This percentage will be certified
      by that Lender in its notice to the Administrative Agent to be its
      reasonable determination of the cost (expressed as a percentage of that
      Lender's participation in all Loans made from that Lending Office) of
      complying with the minimum reserve requirements of the European Central
      Bank in respect of loans made from that Lending
  Office.

              


      

      
        	
                 
      

              	 


      

      
        	
                4.

              	
                The
      Additional Cost Rate for any Lender lending from a Lending Office in the
      United Kingdom will be calculated by the Administrative Agent as
      follows:      

              


        
        

      

       

      
        	
                 

              	
                (a)

              	
                in
      relation to a Loan denominated in Pounds
  Sterling:

              


      

       

                              AB + C (B -
D) + E x 0.01percent per
annum

                                   100 - (A+C)

      

      


      


      
        	
                 
      

              	
                (b)

              	
                in
      relation to a Loan in denominated in any Alternative Currency other than
      Pounds Sterling:

              


      

       

       

       

                          E x 0.01 percent per annum.


                            300 


      

      Where:

      
        	
                 
      

              	 


      

      
        	
                 
      

              	
                A

              	
                is
      the percentage of Eligible Liabilities (assuming these to be in excess of any
      stated minimum) which that Lender is from time to time required to
      maintain as an interest free cash ratio deposit with the Bank of
      England to
      comply with cash ratio
requirements.

              


      

      
        	
                 
      

              	 


      

      
        	
                 
      

              	
                B

              	
                is
      LIBOR for the relevant Interest Period on the relevant
    Loan.

              


      

      


      
        	
                 
      

              	
                C

              	
                is
      the percentage (if any) of Eligible Liabilities which that Lender is
      required from time to time to maintain as interest bearing Special
      Deposits with the Bank of England.

              


      

       

      
        	
                 
      

              	
                D

              	
                is
      the percentage rate per annum payable by the Bank of England to the
      Administrative Agent on interest bearing Special
  Deposits.

              


      

       

      
        	
                 
      

              	
                E

              	
                is
      designed to compensate Lenders for amounts payable under the Fees Rules
      and is calculated by the Administrative Agent as being the average of the
      most recent rates of charge supplied by any applicable reference banks
      (the “Reference Banks”) to the Administrative Agent pursuant to paragraph
      7 below and expressed in pounds per
£1,000,000.

              


      

       

      
        
        

        
        



      
        	
                5.

              	
                For
      the purposes of this Schedule
1.1(b):

              


      

      
      

      
        	
                 
      

              	
                (a)

              	
                "Eligible
      Liabilities" has the meaning given to it from time to time under or
      pursuant to the Bank of England Act 1998 or (as may be appropriate) by the
      Bank of England;

              


      

      
        	
                 
      

              	 


      

      
        	
                 
      

              	
                (b)

              	
                "Fees
      Rules" means the rules on periodic fees contained in the FSA Supervision
      Manual or such other law or regulation as may be in force from time to
      time in respect of the payment of fees for the acceptance of
      deposits;

              


      

      
        	
                 
      

              	 


      

      
        	
                 
      

              	
                (c)

              	
                "Fee
      Tariffs" means the fee tariffs specified in the Fees Rules under the
      activity group A.1 Deposit acceptors (ignoring any minimum fee or zero
      rated fee required pursuant to the Fees Rules but taking into account any
      applicable discount rate); and

              


      

      
        	
                 
      

              	 


      

      
        	
                 
      

              	
                (d)

              	
                "Special
      Deposits" has the meanings given to it from time to time under or pursuant
      to the Bank of England Act 1998 or (as may be appropriate) by the Bank of
      England;

              


      

      


      
        	
                 
      

              	
                (e)

              	
                "Tariff
      Base" has the meaning given to it in, and will be calculated in accordance
      with, the Fees Rules.

              


      

      
        	
                 
      

              	 


      

      
        	
                6.

              	
                In
      application of the above formulae, A, B, C and D will be included in the
      formulae as percentages (i.e.
      5 percent will be included in the formula as 5 and not as
      0.05).  A negative result obtained by subtracting D from B shall
      be taken as zero.  The resulting figures shall be rounded to
      four decimal places.

              


      

      
        	
                 
      

              	 


      

      
        	
                7.

              	
                If
      requested by the Administrative Agent, each Reference Bank shall, as soon
      as practicable after publication by the Financial Services Authority,
      supply to the Administrative Agent the rate of charge payable by that
      Reference Bank to the Financial Services Authority pursuant to the Fees
      Rules in respect of the relevant financial year of the Financial Services
      Authority (calculated for this purpose by that Reference Bank as being the
      average of the Fee Tariffs applicable to that Reference Bank for that
      financial year) and expressed in pounds per £1,000,000 of the Tariff Base
      of that Reference Bank.

              


      

      
        	
                 
      

              	 


      

      
        	
                8.

              	
                Each
      Lender shall supply any information required by the Administrative Agent
      for the purpose of calculating its Additional Cost Rate.  In
      particular, but without limitation, each Lender shall supply the following
      information on or prior to the date on which it becomes a Lender:   

              


      

      
        	
              	 


      

      
        	
                 
      

              	
                (a) 

              	
                the
      jurisdiction of its Lending Office;
and

              


      

       

      
      

      
        	
                 
      

              	
                (b)

              	
                any
      other information that the Administrative Agent may reasonably require for
      such purpose.

              


      

      
      

       

      
        
          	 	
                  Each
      Lender shall promptly notify the Administrative Agent of any change to the
      information provided by it pursuant to this
    paragraph.

                


        

      

       

      
        	
                9.

              	
                The
      percentages of each Lender for the purpose of A and C above and the rates
      of charge of each Reference Bank for the purpose of E above shall be
      determined by the Administrative Agent based upon the information supplied
      to it pursuant to paragraphs 7 and 8 above and on the assumption that,
      unless a Lender notifies the Administrative Agent to the contrary, each
      Lender's obligations in relation to cash ratio deposits and Special
      Deposits are the same as those of a typical bank from its jurisdiction of
      incorporation with a Lending Office in the same jurisdiction as its
      Lending Office.

              


      

      
        	
                 
      

              	 


      

      
        	
                10.

              	
                The
      Administrative Agent shall have no liability to any person if such
      determination results in an Additional Cost Rate which over or under
      compensates any Lender and shall be entitled to assume that the
      information provided by any Lender or Reference Bank pursuant to
      paragraphs 3, 7 and 8 above is true and correct in all
      respects.

              


      

      
        	
                 
      

              	 


      

      
        	
                11.

              	
                The
      Administrative Agent shall distribute the additional amounts received as a
      result of the Mandatory Cost Rate to the Lenders on the basis of the
      Additional Cost Rate for each Lender based on the information provided by
      each Lender and each Reference Bank pursuant to paragraphs 3, 7 and 8
      above.

              


      

      
        	
                 
      

              	 


      

      
        	
                12.

              	
                Any
      determination by the Administrative Agent pursuant to this Schedule 1.1(b)
      in relation to a formula, the Mandatory Cost Rate, an Additional Cost Rate
      or any amount payable to a Lender shall, in the absence of manifest error,
      be conclusive and binding on all
parties.

              


      

      
        	
                 
      

              	 


      

      
        	
                13.

              	
                The
      Administrative Agent may from time to time, after consultation with the
      Borrower and the Lenders, determine and notify to all parties of any
      amendments which are required to be made to this Schedule 1.1(b) in order
      to comply with any change in law, regulation or any requirements from time
      to time imposed by the Bank of England, the Financial Services Authority
      or the European Central Bank (or, in any case, any other authority which
      replaces all or any of its functions) and any such determination shall, in
      the absence of manifest error, be conclusive and binding on all
      parties.

              


      

      


      


      
        
          
            
              


              WINSTON
1636051v7

            

             


          

          
             


            
              

            

          

          
             


          

        

      

      


      Schedule
1.1(c)

      To

      Credit
Agreement

      


      


      Existing Bond
Documentation

      


      


      [Attached
hereto]

       

       

       

       

       

       

       

      


      
        
          
            
              


              WINSTON
1636051v7

            

             


          

          
             


            
              

            

          

          
             


          

        

      

      

        Schedule 1.1(c)

      

       

       

          Includes existing
bond documentation related to outstanding bonds totaling $2.0 million dollars
with the City of Neenah, Winnebago county, Wisconsin.  These are Industrial
Development Revenue Bonds - (Custom Marine
Project) 
 "Custom Marine 1998 Bonds".

       

       

      
        


        
          
            
              
                


                WINSTON
1636051v7

              

               


            

            
               


              
                

              

            

            
               


            

          

        

      

       

    

     

    


    CREDIT
AGREEMENT

    


    By
and Among CompX International, Inc.

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
6.1(a)

    


    Organization &
Qualification

    


    


    
      	
              
                Name

              

            	
              
                Organization

              

            	
              
                Qualification(s)

              

            
	 
      	 
      	 
      
	
              CompX
      International Inc.

            	
              Delaware

            	
              Michigan

              Ohio

              South
      Carolina

              Texas

            
	 
      	 
      	 
      
	
              CompX
      Asia Holding Corporation

            	
              Malaysia

            	 
      
	 
      	 
      	 
      
	
              CompX
      (H.K.) Corp.

            	
              British
      Virgin Islands

            	 
      
	 
      	 
      	 
      
	
              Custom
      Marine Acquisition Inc.

            	
              Delaware

            	
              Wisconsin

            
	 
      	 
      	 
      
	
              CompX
      Marine Inc.

            	
              Delaware

            	
              South
      Carolina

            
	 
      	 
      	 
      
	
              CompX
      Precision Slides

            	
              Michigan

            	
              Texas

            
	 
      	 
      	 
      
	
              CompX
      Security Products Inc.

            	
              Delaware

            	
              California

              Illinois

              Michigan

              New
      Jersey

              North
      Carolina

              South
      Carolina

              Texas

            
	 
      	 
      	 
      
	
              CompX
      SFC, Inc.

            	
              Delaware

            	
              None

            
	 
      	 
      	 
      
	
              Dynaslide
      Corporation

            	
              Taiwan

            	 
      
	 
      	 
      	 
      
	
              JZTB
      Realty LLC

            	
              Wisconsin

            	 
      
	 
      	 
      	 
      
	
              Walterloo
      Furniture Components Limited

            	
              Canada

            	 
      


    

    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    By
and Among CompX International, Inc.

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
6.1(b)

    


    Subsidiaries

    


    


    
      	
              
                Name
      & Subsidiary

              

            	 	
              
                Authorized

                Shares

              

            	 	 	
              
                Issued
      &

                Outstanding

              

            	 	
              
                Sole
      Shareholder

              

            
	 
      	 	 	 	 	 	 	 
      
	
              CompX
      Asia Holding Corporation (2)

            	 	 	13,000	 	 	 	100	 	
              CompX
      International Inc.

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              CompX
      (H.K.) Corp.

            	 	 	50,000	 	 	 	50,000	 	
              Dynaslide
      Corporation

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              Custom
      Marine Acquisition Inc. (1)

            	 	 	1,000	 	 	 	1,000	 	
              CompX
      Marine Inc.

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              CompX
      Marine Inc. (1)

            	 	 	1,000	 	 	 	1,000	 	
              CompX
      International Inc.

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              CompX
      Precision Slides Inc. (1)

            	 	 	60,000	 	 	 	14,000	 	
              CompX
      International Inc

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              CompX
      Security Products (1)

            	 	 	1,000	 	 	 	1,000	 	
              CompX
      International Inc

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              CompX
      SFC, Inc.

            	 	 	1,000	 	 	 	1,000	 	
              CompX
      International Inc.

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              Dynaslide
      Corporation

            	 	 	14,200,000	 	 	 	14,200,000	 	
              CompX
      Asia Holdings Corporation

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              JZTB
      Realty LLC

            	 	 	N/A	 	 	 	N/A	 	
              Custom
      Marine Acquisition Inc.

            
	 
      	 	 	 	 	 	 	 	 	 
      
	
              Waterloo
      Furniture Components Ltd. (2)

            	 	 	20,000	 	 	 	19,800	 	
              CompX
      International Inc.

            


    

    


    (1)  Material Docmestic
Subsidiary

    (2)  Material Foreign
Subsidiary


    (1)   

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    By
and Among CompX International, Inc.

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
6.1(i)

    


    Employee
Benefit Plans

    


    
      	
              1.  

            	
              Excludes
      all employee benefit and welfare plans maintained by any Foreign
      Subsidiary for employees residing outside of United
  States.

            


    

    


    
      	
              2.  

            	
              CompX
      Contributory Retirement Plan.

            


    

    


    
      	
              3.  

            	
              CompX
      Capital Accumulation Pension Plan.

            


    

    


    
      	
              4.  

            	
              CompX
      International Inc. Welfare Benefit
Plan.

            


    

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    By
and Among CompX International, Inc.

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
6.1(l)

    


    Labor
and Collective Bargaining Agreements

    


    


    


    Hourly
employees in Canada are represented by the USWA (United States Steel Workers of
America) local 7155.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    By
and Among CompX International, Inc.

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
6.1(q)

    


    Debt
& Guaranty Obligations of the

    Borrower
& its Subsidiaries

    


    


    


    None in
excess of US$3,000,000, except for (i) the Existing Credit Agreement, such debt,
to be discharged upon the Closing of the transactions contemplated hereby, and
(ii) Debt and Guaranty obligations created pursuant to the Credit
Agreement

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    By
and Among CompX International, Inc.

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
6.1(r)

    


    Litigation,
Pending or Threatened

    


    


    None

    


    


    


    


    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    




    CREDIT
AGREEMENT

    


    by
and Among CompX International, Inc.,

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
10.2

    


    Liens

    


    
      	
              1.  

            	
              Liens
      not otherwise permitted by Section 10.2 and in existence on the Closing
      Date.

            


    

    


    None.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    by
and Among CompX International, Inc.,

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
10.3

    


    Existing
Loans, Advances and Investments

    


    None.

    


    
      
        
           


        

        
           


          
            

          

        

        
           


        

      

    

    


    CREDIT
AGREEMENT

    


    by
and Among CompX International, Inc.,

    Wachovia
Bank, N.A. and the Lenders who become a party thereto

    


    Schedule
10.8

    


    Transactions
with Affiliates

    


    
      	
              1.  

            	
              All
      related property transactions described in the Notes to the Borrower’s
      Consolidated Financial Statements for the year ended December 31, 2004 and
      for the nine months ended September 30,
2005.

            


    

    
      	
              2.  

            	
              All
      other transactions described or set forth under “Certain Relationships and
      Transactions” in the Borrower’s Definitive Proxy Statement dated April 13,
      2005 relating to its annual meeting of stockholders held on May 10,
      2005.