**Exhibit10.12**

 

 

**U.S.$80,000,000**

 

 

**CREDITAGREEMENT**

 

**Datedas of December****22,2003**

 

 

**AMONG**

 

 

**DECRANEAIRCRAFT HOLDINGS, INC.,**

 

**asBorrower,**

 

**THELENDERS LISTED HEREIN,**

 

**asLenders,**

 

**CREDITSUISSE FIRST BOSTON,**

 

**Actingthrough its Cayman Islands Branch,**

 

 

**asSyndication Agent,**

 

**and**

 

**asAdministrative Agent,**

 

 

**SOLELEAD ARRANGER AND BOOK RUNNER:**

 

**CREDITSUISSE FIRST BOSTON,**

 

**Actingthrough its Cayman Islands Branch**

 

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**DECRANEAIRCRAFT HOLDINGS, INC.**

**CREDIT AGREEMENT**

 

**TABLEOF CONTENTS**

 
| Section 1. | DEFINITIONS                                 |                                                                                                |
|------------|---------------------------------------------|-----------------------------------------------------------------------------------------------------|
|       | 1.1                                         | Defined Terms.                                                                                      |   |
|       | 1.2                                         | Accounting Terms; Utilization of GAAP  for Purposes of Calculations Under Agreement.                |   |
|       | 1.3                                         | Other Definitional  Provisions and Rules of Construction.                                           |   |
| Section 2. | AMOUNTS AND TERMS OF  COMMITMENTS AND LOANS |                                                                                                |
|       | 2.1                                         | Commitments; Making of  Loans; Notes.                                                               |   |
|       | 2.2                                         | Interest on the Loans.                                                                              |   |
|       | 2.3                                         | Fees.                                                                                               |   |
|       | 2.4                                         | Repayments, Prepayments and Reductions in  Loan Commitments; General Provisions Regarding Payments. |   |
|       | 2.5                                         | Use of Proceeds.                                                                                    |   |
|       | 2.6                                         | Special Provisions Governing  Eurodollar Rate Loans.                                                |   |
|       | 2.7                                         | Increased Costs; Taxes; Capital  Adequacy.                                                          |   |
|       | 2.8                                         | Obligation of Lenders to  Mitigate; Replacement of Lender.                                          |   |
| Section 3. | CONDITIONS TO LOANS                         |                                                                                                |
|       | 3.1                                         | Loan Party Documents.                                                                               |   |
|       | 3.2                                         | Use of Proceeds.                                                                                    |   |
|       | 3.3                                         | Related Agreements.                                                                                 |   |
|       | 3.4                                         | No Material Adverse Change.                                                                         |   |
|       | 3.5                                         | Lien Searches.                                                                                      |   |
|       | 3.6                                         | Solvency Certificate.                                                                               |   |
|       | 3.7                                         | Representations and  Warranties.                                                                    |   |
|       | 3.8                                         | Necessary  Governmental Authorizations and Consents.                                                |   |
|       | 3.9                                         | Financial Statements.                                                                               |   |
|       | 3.10                                        | Fees.                                                                                               |   |
|       | 3.11                                        | Completion of Proceedings.                                                                          |   |
|       | 3.12                                        | Security  Interests in Personal and Mixed Property.                                                 |   |
|       | 3.13                                        | Notice of Borrowing.                                                                                |   |
|       | 3.14                                        | As of the Closing Date:                                                                             |   |
| Section 4. | REPRESENTATIONS AND WARRANTIES              |                                                                                                |
|       | 4.1                                         | Organization, Powers, Qualification, Good Standing,  Business and Subsidiaries.                     |   |
|       | 4.2                                         | Authorization of Borrowing, etc.                                                                    |   |
|       | 4.3                                         | Financial Condition.                                                                                |   |
|       | 4.4                                         | No Material Adverse Change; No  Restricted Junior Payments.                                         |   |
|       | 4.5                                         | Title to Properties; Liens;  Real Property.                                                         |   |
|       | 4.6                                         | Litigation; Adverse Facts.                                                                          |   |
|       | 4.7                                         | Payment of Taxes.                                                                                   |   |
|       | 4.8                                         | Governmental Regulation.                                                                            |   |
|       | 4.9                                         | Securities Activities.                                                                              |   |
|       | 4.10                                        | Employee Benefit Plans.                                                                             |   |
|       | 4.11                                        | Environmental Protection.                                                                           |   |

 

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|       | 4.12                  | Employee Matters.                                                                                                                             |   |
|------------|-----------------------|-----------------------------------------------------------------------------------------------------------------------------------------------|--------|
|       | 4.13                  | Solvency.                                                                                                                                     |   |
|       | 4.14                  | Matters Relating to  Collateral.                                                                                                              |   |
|       | 4.15                  | Disclosure.                                                                                                                                   |   |
| Section 5. | AFFIRMATIVE COVENANTS |                                                                                                                                          |
|       | 5.1                   | Financial  Statements and Other Reports.                                                                                                      |   |
|       | 5.2                   | Legal Existence, etc.                                                                                                                         |   |
|       | 5.3                   | Payment of Taxes and  Claims; Tax Consolidation.                                                                                              |   |
|       | 5.4                   | Maintenance  of Properties; Insurance; Application of Net Insurance/Condemnation Proceeds.                                                    |   |
|       | 5.5                   | Inspection Rights.                                                                                                                            |   |
|       | 5.6                   | Compliance with Laws, etc.                                                                                                                    |   |
|       | 5.7                   | Execution  of Subsidiary Guaranty and Personal Property Collateral Documents by Certain  Subsidiaries and Future Subsidiaries; IP Collateral. |   |
|       | 5.8                   | Future  Leased Property and Future Acquisitions of Real Property; Future Acquisition  of Other Property.                                      |   |
|       | 5.9                   | PTO and CO Cover Sheets, Etc.                                                                                                                 |   |
|       | 5.10                  | Mortgages.                                                                                                                                    |   |
| Section 6. | NEGATIVE  COVENANTS   |                                                                                                                                          |
|       | 6.1                   | Indebtedness.                                                                                                                                 |   |
|       | 6.2                   | Liens and Related Matters.                                                                                                                    |   |
|       | 6.3                   | Investments.                                                                                                                                  |   |
|       | 6.4                   | Contingent Obligations.                                                                                                                       |   |
|       | 6.5                   | Restricted Junior Payments.                                                                                                                   |   |
|       | 6.6                   | Financial Covenants.                                                                                                                          |   |
|       | 6.7                   | Restriction  on Fundamental Changes; Asset Sales and Acquisitions.                                                                            |   |
|       | 6.8                   | Consolidated Capital  Expenditures.                                                                                                           |   |
|       | 6.9                   | Fiscal Year.                                                                                                                                  |   |
|       | 6.10                  | Sales and Lease-Backs.                                                                                                                        |   |
|       | 6.11                  | Sale or Discount of  Receivables.                                                                                                             |   |
|       | 6.12                  | Transactions  with Stockholders and Affiliates.                                                                                               |   |
|       | 6.13                  | Issuance of Subsidiary Equity.                                                                                                                |   |
|       | 6.14                  | Conduct of Business.                                                                                                                          |   |
|       | 6.15                  | Amendments of Documents  Relating to Indebtedness.                                                                                            |   |
| Section 7. | EVENTS OF  DEFAULT    |                                                                                                                                          |
|       | 7.1                   | Failure to Make Payments  When Due.                                                                                                           |   |
|       | 7.2                   | Default in Other  Agreements.                                                                                                                 |   |
|       | 7.3                   | Breach of Certain  Covenants.                                                                                                                 |   |
|       | 7.4                   | Breach of Warranty.                                                                                                                           |   |
|       | 7.5                   | Other Defaults  Under Loan Documents.                                                                                                         |   |
|       | 7.6                   | Involuntary  Bankruptcy; Appointment of Receiver, etc.                                                                                        |   |
|       | 7.7                   | Voluntary  Bankruptcy; Appointment of Receiver, etc.                                                                                          |   |
|       | 7.8                   | Judgments and Attachments.                                                                                                                    |   |
|       | 7.9                   | Dissolution.                                                                                                                                  |   |
|       | 7.10                  | Employee Benefit Plans.                                                                                                                       |   |
|       | 7.11                  | Invalidity of Guaranties;  Failure of Security; Repudiation of Obligations.                                                                   |   |
| Section 8. | THE AGENTS            |                                                                                                                                          |
|       | 8.1                   | Appointment.                                                                                                                                  |   |
|       | 8.2                   | Powers and Duties;  General Immunity.                                                                                                         |   |
|       | 8.3                   | Successor Agents.                                                                                                                             |   |
|       | 8.4                   | Collateral Documents.                                                                                                                         |   |

 

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|       | 8.5           | Non-Reliance on Agents and Other Lenders.                         |   |
|------------|---------------|-------------------------------------------------------------------|--------|
| Section 9. | MISCELLANEOUS |                                                              |
|       | 9.1           | Assignments  and Participations in Loans.                         |   |
|       | 9.2           | Expenses.                                                         |   |
|       | 9.3           | Indemnity.                                                        |   |
|       | 9.4           | Set-Off;  Security Interest in Deposit Accounts.                  |   |
|       | 9.5           | Ratable Sharing.                                                  |   |
|       | 9.6           | Amendments and Waivers.                                           |   |
|       | 9.7           | Independence of Covenants.                                        |   |
|       | 9.8           | Notices.                                                          |   |
|       | 9.9           | Survival of  Representations, Warranties and Agreements.          |   |
|       | 9.10          | Failure or Indulgence Not  Waiver; Remedies Cumulative.           |   |
|       | 9.11          | Marshalling; Payments Set Aside.                                  |   |
|       | 9.12          | Severability.                                                     |   |
|       | 9.13          | Obligations  Several; Independent Nature of Lenders’ Rights. |   |
|       | 9.14          | Headings.                                                         |   |
|       | 9.15          | APPLICABLE LAW.                                                   |   |
|       | 9.16          | Successors and Assigns.                                           |   |
|       | 9.17          | Consent  to Jurisdiction and Service of Process.                  |   |
|       | 9.18          | Waiver of Jury Trial.                                             |   |
|       | 9.19          | Confidentiality.                                                  |   |
|       | 9.20          | Counterparts;  Effectiveness.                                     |   |
|       | 9.21          | Maximum Amount.                                                   |   |

 

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**DECRANE AIRCRAFT HOLDINGS, INC. CREDIT AGREEMENT**

** **

This **CREDIT AGREEMENT** is dated as of December 22, 2003, and entered into by andamong **DECRANE AIRCRAFT HOLDINGS, INC.**,a Delaware corporation (“**Company**”),**THE LENDERS LISTED ON SCHEDULE IATTACHED HERETO**(each individually referred to herein as a “**Lender**” and collectively as “**Lenders**”), and **CREDIT SUISSE FIRST BOSTON**, acting through its Cayman IslandsBranch (“**CSFB**”), as administrativeagent for Lenders (in such capacity, “**AdministrativeAgent**”), and as syndication agent for Lenders (in such capacity, “**Syndication Agent**”).

 

**R E C I T A L S**

** **

**WHEREAS**,Company has requested that Lenders make the Loans referenced herein and hasagreed to secure all of the Obligations hereunder and under the other LoanDocuments by granting to Administrative Agent, on behalf of Lenders, a Lien onsubstantially all of its personal property and its real property, including apledge of all of the capital stock of its Domestic Subsidiaries and a pledge of65% of the capital stock of its Foreign Subsidiaries that are owned by Companyor a Domestic Subsidiary; and

 

**WHEREAS**,Parent has agreed to guarantee the Obligations hereunder and under the otherLoan Documents and secure its guaranty by granting to Administrative Agent, onbehalf of Lenders, a Lien on and a pledge of all of the capital stock ofCompany;

 

**WHEREAS**,each of Company’s Domestic Subsidiaries has agreed to guarantee the Obligationshereunder and under the other Loan Documents and secure its guaranty bygranting to Administrative Agent, on behalf of Lenders, a Lien on substantiallyall of its personal property and real property, including a pledge of all ofthe capital stock of each of its Domestic Subsidiaries and 65% of the capitalstock of each of its direct Foreign Subsidiaries;

 

**NOW, THEREFORE**, inconsideration of the premises and the agreements, provisions and covenantsherein contained, Company, Lenders, Syndication Agent and Administrative Agentagree as follows:

 

**Section 1.**                                          DEFINITIONS

** **

**1.1**                               Defined Terms.

** **

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

 

“**Accreted Amount**” has the meaning assignedto that term in subsection 2.2A.

 

“**Acquired Controlled Person**” means any Person (i) in which Company or anyof its Subsidiaries has made an Investment permitted under subsection 6.3(vii)and (ii) as to which Company or such Subsidiary exercises control.  For purposes hereof, “control” means thepower to appoint a majority of the board of directors (or other equivalentgoverning body) of such Person or to otherwise direct or cause the direction ofthe management or policies of such Person, whether by contractual arrangementor otherwise.

 

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“**Adjusted Eurodollar Rate**” means, with respect to a Eurodollar RateLoan for the relevant Interest Period, the sum of (i) the quotient of (a) theEurodollar Base Rate applicable to such Interest Period, divided by (b) oneminus the Reserve Requirement (expressed as a decimal) applicable to suchInterest Period.  The Eurodollar Rateshall be rounded to the next higher multiple of 1/100 of 1% if the rate is notsuch a multiple.

 

“**Administrative Agent**” has the meaning assigned to that term in theintroduction to this Agreement and also means and includes any successorAdministrative Agent appointed pursuant to subsection 8.3A.

 

“**Administrative Questionnaire**” means an Administrative Questionnaire in aform supplied by Administrative Agent.

 

“**Affected Lender**” has the meaning assigned to that term insubsection 2.6C.

 

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

 

“**Affiliated Fund**” means any Fund that is administered ormanaged by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or anAffiliate of an entity that administers or manages a Lender.

 

“**Agents**” means, collectively, Syndication Agent andAdministrative Agent.

 

“**Agreement**” means this Credit Agreement dated as ofDecember 22, 2003, as it may beamended, restated, supplemented or otherwise modified from time to time.

 

“**Arranger**” means CSFB, as sole lead arranger and asbook runner of the credit facilities described herein.

 

“**Asset Sale**” means the sale, lease, assignment or othertransfer (whether voluntary or involuntary) for value (collectively, a“transfer”) by Company or any of its Subsidiaries to any Person other thanCompany or any of its Wholly-Owned Subsidiaries of (i) any of the equityownership of any of Company’s Subsidiaries, (ii) substantially all of theassets of any division or line of business of Company or any of itsSubsidiaries, or (iii) any other assets (whether tangible or intangible) ofCompany or any of its Subsidiaries (other than (a) inventory and obsolete orworn out equipment sold in the ordinary course of business, (b) CashEquivalents, and (c) any such other assets to the extent that the aggregatevalue of such assets transferred in any single transaction or related series oftransactions is equal to $250,000 or less).

 

“**Assignment Agreement**” means an Assignment Agreement insubstantially the form of Exhibit I annexed hereto.

 

“**Assumed Indebtedness**”****means Indebtedness of a Person which (i) isin existence at the time such Person becomes a Subsidiary of Company, or (ii)is assumed in connection with an Investment in or acquisition of such Person, andhas not been incurred or created by such Person in connection with, or inanticipation or contemplation of, such Person becoming a Subsidiary of Company.

 

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“**Authorized Officer**” means, relative to any Loan Party, its chiefexecutive officer, president, treasurer, chief financial officer or chiefaccounting officer and any of its other officers whose signatures andincumbency shall have been certified to Administrative Agent and Lenders.

 

“**Bankruptcy Code**”****means Title 11 of the United States Codeentitled “Bankruptcy”, as now and hereafter in effect, or any successorstatute.

 

“**Base Rate**” means, for any day, a rate of interest perannum equal to the higher of (i) the Prime Rate for such day and (ii) the sumof the Federal Funds Effective Rate for such day plus 1⁄2% per annum.

 

“**Base Rate Loans**” means Floating Rate Loans bearing interestat rates determined by reference to the Base Rate as provided herein.

 

“**Business Day**” means (i) with respect to any borrowing,payment or rate selection of Eurodollar Base Rate, a day (other than a Saturdayor Sunday) on which banks generally are open in New York and Los Angeles forthe conduct of substantially all of their commercial lending activities and onwhich dealings in United States dollars are carried on in the London interbankmarket and (ii) for all other purposes, a day (other than a Saturday or Sunday)on which banks generally are open in New York and Los Angeles for the conductof substantially all of their commercial lending activities.

 

“**Capital Lease**”, as applied to any Person, means any lease ofany property (whether real, personal or mixed) by that Person as lessee that,in conformity with GAAP, is accounted for as a capital lease on the balancesheet of that Person and the stated maturity thereof shall be the date of thelast payment of rent or any other amount due under such lease prior to thefirst date upon which such lease may be terminated by the lessee withoutpayment of a penalty.

 

“**Cash**” means money, currency or a creditbalance in a Deposit Account.

 

“**Cash Equivalents**” means, as at any date ofdetermination, (i) marketable securities (a) issued or directly andunconditionally guaranteed as to interest and principal by the United StatesGovernment or (b) issued by any agency of the United States the obligations ofwhich are backed by the full faith and credit of the United States, in eachcase maturing within one year after such date; (ii) marketable directobligations issued by any state of the United States of America or anypolitical subdivision of any such state or any public instrumentality thereof,in each case maturing within one year after such date and having, at the timeof the acquisition thereof, the highest rating obtainable from either Standard& Poor’s Ratings Group (“**S&P**”) or Moody’s InvestorsService, Inc. (“**Moody’s**”); (iii) commercial papermaturing no more than 270 days from the date of creation thereof and having, atthe time of the acquisition thereof, a rating of at least A-1 from S&P orat least P-1 from Moody’s; (iv) certificates of deposit or bankers’ acceptancesmaturing within one year after such date and issued or accepted by any Lenderor by any commercial bank (including a U.S. branch of a foreign bank) that is amember of the Federal Reserve and has a combined capital and surplus andundivided profits of at least $500,000,000); (v) repurchase agreements which(a) are entered into with any entity referred to in clauses (iii) or (iv) aboveor any other financial institution whose unsecured long-term debt (or theunsecured long-term debt of whose holding company) is rated at least A- orbetter by S&P or A3 or better by Moody’s and maturing not more than oneyear after such time; and (b) are secured by a fully perfected security interestin securities of a type referred to in clauses (i) or (ii) above and which havea market value at the time such repurchase agreement is entered into of notless than 100% of the repurchase obligation of such counterparty entity withwhom such repurchase agreement has been entered into; (vi) short-term taxexempt securities that are rated not lower than MIG-1/1+ or either Moody’s orS&P with provisions for liquidity or maturity accommodations of 183 days orless; (vii) shares of any money market mutual fund that (a) has at least 95% ofits assets invested continuously in the types of investments referred to in

 

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clauses (i) through (vi) and as to whichwithdrawals are permitted at least every 90 days; and (viii) in the case of anySubsidiary of Company organized or having its principal place of businessoutside the United States, investments denominated in the currency of thejurisdiction in which such Subsidiary is organized or has its principal place ofbusiness which are similar to the items specified in clauses (i) through (vii)above.

 

“**Certificate re Non-Bank Status**” means acertificate substantially in the form of Exhibit II annexed heretodelivered by a Lender to Administrative Agent pursuant to subsection 2.7B(iv).

 

“**Change in Control**” means (i) the failure ofParent at any time to own, directly or indirectly, free and clear of all Liensand encumbrances (other than Liens created under the Loan Documents, Lienssecuring obligations under the First Lien Credit Agreement and obligationsunder Interest Rate Agreements that constitute Hedge Agreements secured on a*pari passu* basis by the collateralsecuring the obligations under the First Lien Credit Agreement and Liensdescribed in clauses (i) and (iv) of the definition of “PermittedEncumbrances”), all right, title and interest in 100% of the capital stock ofCompany, other than the Company Preferred Stock; (ii) the failure of the DLJMBand the Affiliates of any entity included in the definition of “DLJMB” to ownat least 51% (on a fully diluted basis) of the economic and voting interest inthe voting stock of Parent; (iii) the failure of DLJMB and the Affiliates ofany entity included in the definition of “DLJMB” at any time to have the rightto designate or nominate at least 51% of the Board of Directors of Parent; or(iv) the occurrence of a “Change in Control” as defined under the First LienCredit Agreement or any agreement governing any Subordinated Indebtedness orPermitted Indebtedness issued by Company or the PIK Preferred Stock or PIKNotes issued by Parent.

 

“**Change of Control Premium**” shall mean the greater of (i) 1.0% of theaggregate principal amount of the Loans being prepaid and (ii) the prepaymentpremium applicable pursuant to subsection 2.4B(iv).

 

“**Closing Date**” means the date on or before January 15, 2004 on which the Loansare made.

 

“**Closing Date Mortgaged Property**” means the owned property listed on Schedule5.8.

 

“**CO**” means the United States Copyright Office orany successor or substitute office in which filings are necessary or, in theopinion of Administrative Agent, desirable in order to create or perfect Lienson any IP Collateral.

 

“**Collateral**” means, collectively, all of the real,personal and mixed property (including capital stock) in which Liens arepurported to be granted pursuant to the Collateral Documents as security forthe Obligations.

 

“**Collateral Documents**” means the Parent Pledge Agreement, theSecurity Agreement, the Pledge Agreement and the Mortgages, and all otherinstruments or documents delivered by any Loan Party pursuant to this Agreementor any of the other Loan Documents in order to grant to Administrative Agent,on behalf of Lenders, a Lien on any real, personal or mixed property of thatLoan Party as security for the Obligations.

 

“**Commitment**” means the commitment of a Lender to make aLoan to Company on the Closing Date pursuant to subsection 2.1A, and “**Commitments**”means such commitments of all Lenders in the aggregate.

 

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

 

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“**Company Excess Cash Flow Amount**” means, at any date, the portion ofConsolidated Excess Cash Flow for each Fiscal Year ending prior to such datenot required to be applied to prepay the Loans in accordance with subsection2.4B(ii)(d) and not required to prepay Indebtedness under the First Lien CreditAgreement (if a First Lien Credit Agreement is then in effect).

 

“**Company Preferred Stock**” means the Senior Exchangeable PreferredStock, which accrues dividends at the rate of 16.0% per annum and matures in2009, issued by Company.

 

“**Compliance Certificate**” means a certificate substantially in theform of Exhibit III annexed hereto delivered to Agents and Lenders byCompany pursuant to subsection 5.1(iii).

 

“**Consolidated Capital Expenditures**” means, for any period, the sum of theaggregate of all expenditures (whether paid in cash or other consideration oraccrued as a liability and including that portion of Capital Leases which iscapitalized on the consolidated balance sheet of Company and its Subsidiaries)by Company and its Subsidiaries during that period that, in conformity withGAAP, are included in “additions to property, plant or equipment” or comparableitems reflected in the consolidated statement of cash flows of Company and itsSubsidiaries; provided that Consolidated Capital Expenditures shall notinclude any such expenditures (x) made from the proceeds of (i) NetInsurance/Condemnation Proceeds as permitted under subsection 6.7(vii); (ii)proceeds from Asset Sales permitted pursuant to subsection 6.7(ix); or (iii)proceeds from asset dispositions permitted by subsection 6.7(iii), ordispositions of assets excluded from the definition of Asset Sales pursuant toclause (c) of the definition of “Asset Sale”; or (y) that constitute anInvestment made under subsection 6.3 (other than subsection 6.3(vi)).

 

“**Consolidated Current Assets**” means, as at any date of determination, thetotal assets of Company and its Subsidiaries on a consolidated basis which mayproperly be classified as current assets in conformity with GAAP, excludingCash and Cash Equivalents.

 

“**Consolidated Current Liabilities**” means, as at any date of determination, thetotal liabilities of Company and its Subsidiaries on a consolidated basis whichmay properly be classified as current liabilities in conformity with GAAP,excluding the current portion of any Indebtedness that by its terms or by theterms of any instrument or agreement relating thereto matures more than oneyear from, or is renewable or extendable at the option of Company or aSubsidiary from, the date of creation thereof.

 

“**Consolidated EBITDA**” means, for any period, subject to subsection1.2(b), the sum (without duplication) of the amounts for such period of (i)Consolidated Net Income, (ii) any amount deducted on account of minorityinterests in determining Consolidated Net Income, (iii) Consolidated InterestExpense, (iv) any non-capitalized transaction costs incurred in connection withactual or proposed financings, acquisitions or divestitures (including, but notlimited to, financing and refinancing fees and costs incurred in connectionwith the Transaction), (v) all amounts deducted on account of income taxes indetermining Consolidated Net Income, (vi) total depreciation expense, (vii)total amortization expense, (viii) the amount deducted in determiningConsolidated Net Income representing any net loss (or less any net gain)realized in connection with any sale, lease, conveyance or other disposition ofany asset (other than in the ordinary course of business and other than fromCompany or any of its Subsidiaries to Company or any of its Subsidiaries), (ix)the amount deducted in determining Consolidated Net Income representing anyextraordinary or non-recurring loss, (x) foreign currency translation andtransaction losses (or minus foreign currency translation and transactiongains) and (xi) any other non-cash items reducing Consolidated Net Income *less* (a) other items increasingConsolidated Net Income constituting extraordinary gains and (b) RestrictedJunior Payments of the type referred to in clause (iii)(x) of subsection 6.5made during such period, all of the foregoing as determined on a consolidatedbasis for Company and its Subsidiaries in conformity with GAAP.

 

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“**Consolidated Excess Cash Flow**” means, for any period, an amount (ifpositive) equal to (i) the sum, without duplication, of the amounts for suchperiod of (a) Consolidated EBITDA and (b) the Consolidated Working CapitalAdjustment *minus* (ii) the sum,without duplication, of the amounts for such period of (a) mandatory repaymentsof the Loans and scheduled, mandatory and optional repayments of other ConsolidatedTotal Debt (excluding repayments of loans except to the extent the relatedcommitments are permanently reduced in connection with such repayments) in eachcase to the extent actually made during such period, (b) Consolidated CapitalExpenditures paid in cash (without duplication, net of any proceeds of anyrelated financings with respect to such expenditures), (c) ConsolidatedInterest Expense paid in cash, (d) the amount of taxes based on income ofCompany and its Subsidiaries paid or payable in cash during such period, (e)the amount paid for Permitted Acquisitions permitted and actually made undersubsection 6.7(vi) and Investments permitted and actually made under subsection6.3(xii) but only to extent paid in cash from Company’s or its Subsidiaries’cash balances, (f) any payments with respect to Earn-Outs actually paid duringsuch period, (g) gains on any sale, lease, conveyance, or other disposition ofany asset (other than in the ordinary course of business), and (h) anydistributions with respect to minority interests made during such period.

 

“**Consolidated Interest Coverage Ratio**” means, at the end of any Fiscal Quarter,subject to subsection 1.2(b), the ratio computed for the period consisting ofsuch Fiscal Quarter and each of the three immediately preceding Fiscal Quartersof Consolidated EBITDA to the cash portion of Consolidated Interest Expenseother than commitment fees to the extent included therein (net of cash interestincome).

 

“**Consolidated Interest Expense**” means, for any period, total interestexpense (including that portion attributable to Capital Leases in accordancewith GAAP and capitalized interest) of Company and its Subsidiaries on aconsolidated basis with respect to all outstanding Indebtedness of Company andits Subsidiaries, including all commissions, discounts and other fees andcharges owed with respect to letters of credit and bankers’ acceptancefinancing and net costs under Interest Rate Agreements determined in accordancewith GAAP, but excluding, to the extent included in such total interestexpense, up-front fees and expenses and the amortization of all deferredfinancing costs.

 

 “**Consolidated Leverage Ratio**” means, at the end of any Fiscal Quarter,subject to subsection 1.2(b), the ratio of (a) Consolidated Total Debt (*less* Cash and Cash Equivalents) as of thelast day of such Fiscal Quarter to (b) Consolidated EBITDA for the consecutivefour Fiscal Quarters ending on the last day of such Fiscal Quarter.

 

“**Consolidated Net Income**” means, for any period, the net income (orloss) of Company and its Subsidiaries on a consolidated basis for such periodtaken as a single accounting period determined in conformity with GAAP.

 

“**Consolidated Total Debt**” means, as at any date of determination, theaggregate stated balance sheet amount of all Indebtedness and ContingentObligations with respect to letters of credit (other than letters of creditissued in connection with trade payables) of Company and its Subsidiaries,determined on a consolidated basis in accordance with GAAP.

 

“**Consolidated Working Capital**” means, as at any date of determination, theexcess (or deficit) of Consolidated Current Assets over Consolidated CurrentLiabilities.

 

“**Consolidated Working CapitalAdjustment**” means, for any period on a consolidated basis, the amount (which maybe a negative number) by which Consolidated Working Capital as of the beginningof such period exceeds (or is less than) Consolidated Working Capital as of theend of such period.

 

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“**Contingent Obligation**”, as applied to any Person, means any director indirect liability, contingent or otherwise, of that Person (i) with respectto any Indebtedness of another if the primary purpose or intent thereof by thePerson incurring the Contingent Obligation is to provide assurance to theobligee of such Indebtedness of another that such Indebtedness of another willbe paid or discharged, or that any agreements relating thereto will be compliedwith, or that the holders of such Indebtedness will be protected (in whole orin part) against loss in respect thereof, (ii) with respect to any letter ofcredit issued for the account of that Person or as to which that Person isotherwise liable for reimbursement of drawings, or (iii) under Hedge Agreements.  Contingent Obligations shall include (a) thedirect or indirect guaranty, endorsement (otherwise than for collection ordeposit in the ordinary course of business), co-making, discounting withrecourse or sale with recourse by such Person of the obligation of another, (b)the obligation to make take-or-pay or similar payments if required regardlessof non-performance by any other party or parties to an agreement, and (c) anyliability of such Person for the obligation of another through any agreement (contingentor otherwise) (X) to purchase, repurchase or otherwise acquire such obligationor any security therefor, or to provide funds for the payment or discharge ofsuch obligation (whether in the form of loans, advances, stock purchases,capital contributions or otherwise) or (Y) to maintain the solvency or anybalance sheet item, level of income or financial condition of another if, inthe case of any agreement described under subclauses (X) or (Y) of thissentence, the primary purpose or intent thereof is as described in thepreceding sentence.  The amount of anyContingent Obligation shall be equal to the amount of the obligation soguaranteed or otherwise supported or, if less, the amount to which such ContingentObligation is specifically limited.

 

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

 

“**Control Change Notice**” has the meaningassigned to that term in subsection 2.4B(iii).

 

“**Control Change Payment Date**” has themeaning assigned to that term in subsection 2.4B(iii).

 

“**CSFB**” has the meaning assigned to that term in theintroduction to this Agreement.

 

“**Currency Agreement**” means any foreign exchange contract,currency swap agreement, futures contract, option contract, synthetic cap orother similar agreement or arrangement to which Company or any of itsSubsidiaries is a party.

 

“**Declaration Notice**” has the meaningassigned to that term in subsection 2.4B(iii).

 

“**Default Rate Accreted Amount**” has themeaning assigned to that term in subsection 2.2E.

 

“**Deposit Account**” means a demand, time, savings, passbook orlike account with a bank, savings and loan association, credit union or likeorganization, other than an account evidenced by a negotiable certificate ofdeposit.

 

“**DLJMB**” means DLJ Merchant Banking Partners II,L.P., DLJ Offshore Partners II, C.V., DLJ Diversified Partners, L.P., DLJMBFunding II, Inc., DLJ First ESC, L.P., DLJ ESC II, L.P., UK Investment Plan1997 Partners, DLJ Merchant Banking Partners II-A, L.P., DLJ DiversifiedPartners-A, L.P., DLJ EAB Partners, L.P., DLJ Millenium Partners, L.P., DLJMillenium Partners-A, L.P., MBP II Plan Investors, L.P. and Global TechnologyPartners, L.L.C.

 

“**Dollars**” and the sign “**$**” mean the lawfulmoney of the United States of America.

 

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“**Domestic Subsidiary**” means a Subsidiary organized under the lawsof the United States or any state or territory thereof or the District ofColumbia.

 

“**Earn-outs**” means any obligations by Company or any ofits Subsidiaries to pay any amounts constituting the payment of deferredpurchase price with respect to any acquisition of a business (whether throughthe purchase of assets or shares of capital stock), the amount of whichpayments is calculated on the basis of, or by reference to, bona fide financialor other operating performance of such business or specified portion thereof orany other similar arrangement.

 

“**Eligible Assignee**” means (A) (i) a commercial bank organizedunder the laws of the United States or any state thereof; (ii) a savings andloan association or savings bank organized under the laws of the United Statesor any state thereof; (iii) a commercial bank organized under the laws of anyother country or a political subdivision thereof; provided that (x) suchbank is acting through a branch or agency located in the United States or (y)such bank is organized under the laws of a country that is a member of theOrganization for Economic Cooperation and Development or a politicalsubdivision of such country; and (iv) any other entity which extends credit orbuys or invests in loans as one of its businesses including insurancecompanies, mutual funds and lease financing companies; and (B) any Lender, anyAffiliate of any Lender and any Affiliated Fund of any Lender; providedthat no Affiliate of Company (other than DLJMB and its Subsidiaries and CSFB)shall be an Eligible Assignee.

 

“**Employee Benefit Plan**” means any “employee benefit plan” as definedin Section 3(3) of ERISA which is or was maintained or contributed to byCompany, any of its Subsidiaries or any of their respective ERISA Affiliates.

 

“**Environmental Claim**” means any investigation, notice, notice ofviolation, claim, action, suit, proceeding, demand, abatement order or otherorder or directive, by any governmental authority or any other Person, arising(i) pursuant to or in connection with any actual or alleged violation of anyEnvironmental Law, (ii) in connection with any Hazardous Materials or anyactual or alleged Hazardous Materials Activity, or (iii) in connection with anyactual or alleged damage, injury, threat or harm to natural resources or theenvironment.

 

“**Environmental Laws**” means any and all current or futurestatutes, ordinances, orders, rules, regulations, judgments, Governmental Authorizations,or any other requirements of governmental authorities relating to (i)environmental matters, including those relating to any Hazardous MaterialsActivity, (ii) the generation, use, storage, transportation or disposal ofHazardous Materials, or (iii) the effect of the environment on human, plant oranimal health or welfare, in any manner applicable to Company or any of itsSubsidiaries or any Facility, including the Comprehensive EnvironmentalResponse, Compensation, and Liability Act (42 U.S.C. §9601 etseq.),the Hazardous Materials Transportation Act (49 U.S.C. §1801 etseq.),the Resource Conservation and Recovery Act (42 U.S.C. §6901 etseq.),the Federal Water Pollution Control Act (33 U.S.C. §1251 etseq.),the Clean Air Act (42 U.S.C. §7401 etseq.), the Toxic SubstancesControl Act (15 U.S.C. §2601 etseq.), the Federal Insecticide,Fungicide and Rodenticide Act (7 U.S.C. §136 etseq.), the OilPollution Act (33 U.S.C. §2701 etseq.) and the EmergencyPlanning and Community Right-to-Know Act (42 U.S.C. §11001 etseq.),each as amended or supplemented, any analogous present or future state or localstatutes or laws, and any regulations promulgated pursuant to any of theforegoing.

 

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

 

“**ERISA Affiliate**” means, as applied to any Person, (i) anycorporation which is a member of a controlled group of corporations within themeaning of Section 414(b) of the Internal Revenue Code of

 

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which that Person is a member; (ii) any tradeor business (whether or not incorporated) which is a member of a group oftrades or businesses under common control within the meaning of Section 414(c) ofthe Internal Revenue Code of which that Person is a member; and (iii) anymember of an affiliated service group within the meaning of Section 414(m) or(o) of the Internal Revenue Code of which that Person, any corporationdescribed in clause (i) above or any trade or business described in clause (ii)above is a member.  Any former ERISAAffiliate of Company or any of its Subsidiaries shall continue to be consideredan ERISA Affiliate of Company or such Subsidiary within the meaning of thisdefinition with respect to the period such entity was an ERISA Affiliate ofCompany or such Subsidiary and with respect to liabilities arising after suchperiod for which Company or such Subsidiary could be liable under the InternalRevenue Code or ERISA.

 

“**ERISA Event**” means (i) a “reportable event” within themeaning of Section 4043 of ERISA and the regulations issued thereunder withrespect to any Pension Plan (excluding those for which the provision for 30-daynotice to the PBGC has been waived by regulation); (ii) the failure to meet theminimum funding standard of Section 412 of the Internal Revenue Code withrespect to any Pension Plan (whether or not waived in accordance with Section412(d) of the Internal Revenue Code) or the failure to make by its due date a requiredinstallment under Section 412(m) of the Internal Revenue Code with respect toany Pension Plan or the failure to make any required contribution to aMultiemployer Plan; (iii) the provision by the administrator of any PensionPlan pursuant to Section 4041(a)(2) of ERISA of a notice of intent to terminatesuch plan in a distress termination described in Section 4041(c) of ERISA; (iv)the withdrawal by Company, any of its Subsidiaries or any of their respectiveERISA Affiliates from any Pension Plan with two or more contributing sponsorsor the termination of any such Pension Plan resulting in liability pursuant toSection 4063 or 4064 of ERISA; (v) the institution by the PBGC of proceedingsto terminate any Pension Plan, or the occurrence of any event or conditionwhich could reasonably constitute grounds under ERISA for the termination of,or the appointment of a trustee to administer, any Pension Plan; (vi) theimposition of liability on Company, any of its Subsidiaries or any of theirrespective ERISA Affiliates pursuant to Section 4062(e) or 4069 of ERISA or byreason of the application of Section 4212(c) of ERISA; (vii) the withdrawal ofCompany, any of its Subsidiaries or any of their respective ERISA Affiliates ina complete or partial withdrawal (within the meaning of Sections 4203 and 4205of ERISA) from any Multiemployer Plan if there is any potential liabilitytherefor, or the receipt by Company, any of its Subsidiaries or any of theirrespective ERISA Affiliates of notice from any Multiemployer Plan that it is inreorganization or insolvency pursuant to Section 4241 or 4245 of ERISA, or thatit intends to terminate or has terminated under Section 4041A or 4042 of ERISA;(viii) the occurrence of an act or omission which could reasonably give rise tothe imposition on Company, any of its Subsidiaries or any of their respectiveERISA Affiliates of fines, penalties, taxes or related charges under Chapter 43of the Internal Revenue Code or under Section 409, Section 502(c), (i) or (l),or Section 4071 of ERISA in respect of any Employee Benefit Plan; (ix) theassertion of a material claim (other than routine claims for benefits) againstany Employee Benefit Plan other than a Multiemployer Plan or the assetsthereof, or against Company, any of its Subsidiaries or any of their respectiveERISA Affiliates in connection with any Employee Benefit Plan; (x) receipt fromthe Internal Revenue Service of notice of the failure of any Pension Plan (orany other Employee Benefit Plan intended to be qualified under Section 401(a)of the Internal Revenue Code) to qualify under Section 401(a) of the InternalRevenue Code, or the failure of any trust forming part of any Pension Plan toqualify for exemption from taxation under Section 501(a) of the InternalRevenue Code; or (xi) the imposition of a Lien pursuant to Section 401(a)(29)or 412(n) of the Internal Revenue Code or pursuant to ERISA with respect to anyPension Plan.

 

“**Eurodollar Base Rate**” means, with respect to a Eurodollar RateLoan for the relevant Interest Period, the rate per annum determined by Adminis­trativeAgent at approximately 11:00 A.M. (London time) on the date which is two (2)Business Days prior to the beginning of the relevant Interest Period (asspecified in the Notice of Borrowing or the applicable Notice of Continuation)by reference to the British Bankers’ Association Interest Settlement Rates fordeposits in Dollars (as set forth by any service selected

 

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by Administrative Agent which has been nominated by the BritishBankers’ Association as an authorized information vendor for the purpose ofdisplaying such rates) for a period equal to such Interest Period.

 

“**Eurodollar Rate Loans**” means Floating Rate Loans bearing interestat rates determined by reference to the Adjusted Eurodollar Rate as providedherein.

 

“**Event of Default**” means each of the events set forth inSection 7.

 

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

 

“**Excluded Equity Proceeds**” means any proceeds received by Parent,Company or any of its Subsidiaries from the issuance or sale or exercise oftheir respective equity Securities, in each case pursuant to any such sale orissuance or exercise constituting or resulting from (i) capital contributionsto Company, or equity Securities issuances by Parent, Company or any of itsSubsidiaries, including without limitation, the issuance of the PIK PreferredStock and any such issuances as payment of accrued dividends on the PIKPreferred Stock (excluding any such contributions or issuance resulting from apublic offering or a widely distributed private offering of common equityexempted from the registration requirements of Section 5 of the Securities Actof 1933, as amended (“**Section 5**”)other than any such issuances resulting from or in connection with any resaleby DLJMB of the PIK Preferred Stock, or any subsequent registration thereofunder Section 5); (ii) any subscription agreements, incentive plan or similararrangements with any officer, employee or director of Parent, Company or anyof its Subsidiaries; (iii) any loan made by Company or any of its Subsidiariespursuant to subsection 6.3(x); (iv) the sale of any equity Securities of Parentto any officer, director or employee of Parent, Company or any of theirSubsidiaries; provided such proceeds do not exceed $5,000,000 in theaggregate; (v) the exercise of any options or warrants issued to any officer,employee or director of Parent, Company or any of its Subsidiaries or to anypurchasers of the PIK Preferred Stock; or (vi) issuances by any Subsidiary ofCompany to Company or any other Subsidiary of Company or by Company to Parentor any Subsidiary of Company.

 

“**Facilities**” means any and all real property (includingall buildings, fixtures or other improvements located thereon) now, hereafteror heretofore owned, leased, operated or used by Company or any of itsSubsidiaries or any of their respective predecessors.

 

“**Federal Funds Effective Rate**” means, for any day, an interest rate perannum equal to the weighted average of the rates on overnight Federal fundstransactions with members of the Federal Reserve System arranged by Federalfunds brokers on such day, as published for such day (or, if such day is not aBusiness Day, for the immediately preceding Business Day) by the FederalReserve Bank of New York, or, if such rate is not so published for any daywhich is a Business Day, the average of the quotations at approximately 10:00A.M. (New York time) on such day on such transactions received byAdministrative Agent from three Federal funds brokers of recognized standingselected by Administrative Agent in its sole discretion.

 

“**Financial Plan**” has the meaning assigned to that term insubsection 5.1(x).

 

“**First Closing Date**” means August 28, 1998.

 

“**First Lien Collateral Agent**” means the collateral agent under the FirstLien Credit Agreement.

 

“**First Lien Credit Agreement**” means (i) the Third Amended and RestatedCredit Agreement, dated as of May 11, 2000, among Company, the lenders partythereto and Credit Suisse First Boston, as

 

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administrative agent and as syndicationagent, including any related notes, guarantees, collateral documents,instruments and agreements executed in connection therewith, in each case, asthe same has been amended through the Closing Date and as the same mayhereafter be amended, restated, supplemented or otherwise modified from time totime in accordance with the provisions of subsection 6.1(xi) and subsection 6.15, and (ii) any replacement agreementsdesignated by Company as a “First Lien Credit Agreement” existing at any timeto refund, refinance, replace or renew (including subsequent or successiverefinancings, replacements and renewals) any obligations under the documentsdescribed in clause (i) above in accordance with the provisions of subsection6.1(xi) and subsection 6.15,including any related notes, guarantees, collateral documents, instruments andagreements executed in connection therewith; provided that in no eventshall more than two agreements be existing in the aggregate at any one timeunder clauses (i) and (ii).

 

“**First Lien Leverage Ratio**” means, as of any date, the ratio of (a) NetSenior Debt minus Indebtedness under this Agreement and minus (withoutduplication) any Permitted Indebtedness as of the last day of a Fiscal Quarterto (b) Consolidated EBITDA for the consecutive four Fiscal Quarters ending onthe last day of such Fiscal Quarter.

 

“**First Priority**” means, with respect to any Lien purported tobe created in any Collateral pursuant to any Collateral Document, that suchLien is a first priority Lien, subject to no Liens that rank prior to such Lienother than (a) Permitted Encumbrances, (b) Liens securing the obligations underthe First Lien Credit Agreement and obligations under Interest Rate Agreementsthat constitute Hedge Agreements secured on a *paripassu* basis with obligations under the First Lien Credit Agreement,(c) Liens permitted pursuant to subsection 6.2A(iii), (d) Liens permittedpursuant to subsection 6.2A(iv), (e) Liens permitted pursuant to subsection6.2A(vi) or (viii) and (f) Liens permitted under subsection 6.2 that byoperation of law rank prior to such Lien.

 

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

 

“**Fiscal Year**” means the fiscal year of Company and itsSubsidiaries ending on December 31 of each calendar year.

 

“**Fixed Rate Loan Commitment**” means the commitment of a Lender to makeFixed Rate Loans to Company pursuant to subsection 2.1A, and **“Fixed Rate Loan Commitments”** means suchcommitments of all Lenders in the aggregate.

 

“**Fixed Rate Loan Exposure**” means, with respect to any Fixed Rate LoanLender as of any date of determination (i) prior to the funding of theFixed Rate Loans, that Lender’s Fixed Rate Loan Commitment and (ii) afterthe funding of the Fixed Rate Loans, the outstanding principal amount of theFixed Rate Loan of that Lender.

 

“**Fixed Rate Loan Lender**” means any Lender who holds a Fixed Rate LoanCommitment, or who has made a Fixed Rate Loan hereunder and any assignee ofsuch Lender pursuant to subsection 9.1B.

 

“**Fixed Rate Loans**” means the Fixed Rate Loans made by FixedRate Loan Lenders to Company pursuant to subsection 2.1A.

 

“**Fixed Rate Notes**” means (i) the promissory notes ofCompany issued pursuant to subsection 2.1D on the Closing Date and(ii) any promissory notes issued by Company pursuant to the last sentenceof subsection 9.1B(i) in connection with assignments of the Fixed Rate Loans ofany Fixed Rate Loan Lenders, in each case substantially in the form of Exhibit V-1annexed hereto, as they may be amended, supplemented or otherwise modified fromtime to time.

 

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“**Floating Rate Loan Commitment**” means the commitment of a Lender to make aFloating Rate Loan to Company pursuant to subsection 2.1A, and **“Floating Rate Loan Commitments”** means suchcommitments of all Lenders in the aggregate.

 

“**Floating Rate Loan Exposure**” means, with respect to any Floating RateLoan Lender as of any date of determination (i) prior to the funding ofthe Floating Rate Loans, that Lender’s Floating Rate Loan Commitment and(ii) after the funding of the Floating Rate Loans, the outstandingprincipal amount of the Floating Rate Loan of that Lender.

 

“**Floating Rate Loan Lender**” means any Lender who holds a Floating RateLoan Commitment or who has made a Floating Rate Loan hereunder, and anyassignee of such Lender pursuant to subsection 9.1B.

 

“**Floating Rate Loans**” means the Floating Rate Loans made byFloating Rate Loan Lenders to Company pursuant to subsection 2.1A.

 

“**Floating Rate Notes**” means (i) the promissory notes ofCompany issued pursuant to subsection 2.1D on the Closing Date and(ii) any promissory notes issued by Company pursuant to the last sentenceof subsection 9.1B(i) in connection with assignments of the Floating Rate Loansof any Floating Rate Loan Lenders, in each case substantially in the form of Exhibit V-2annexed hereto, as they may be amended, supplemented or otherwise modified fromtime to time.

 

“**Flood Hazard Property**” means a Mortgaged Property located in anarea designated by the Federal Emergency Management Agency as having specialflood or mud slide hazards.

 

“**Foreign Subsidiary**” means any Subsidiary that is not a DomesticSubsidiary.

 

“**Fund**” means any Person (other than a naturalperson) that is (or will be) engaged in making, purchasing, holding orotherwise investing in commercial loans and similar extensions of credit in theordinary course of its business.

 

“**Funding and Payment Office**” means (i) the office of Administrative Agentlocated at 11 Madison Avenue, New York, New York 10010 or (ii) such otheroffice of Administrative Agent as may from time to time hereafter be designatedas such in a written notice delivered by Administrative Agent to Company andeach Lender.

 

“**GAAP**” means, subject to the limitations on theapplication thereof set forth in subsection 1.2, generally accepted accountingprinciples set forth in opinions and pronouncements of the AccountingPrinciples Board of the American Institute of Certified Public Accountants andstatements and pronouncements of the Financial Accounting Standards Board, ineach case as the same are applicable to the circumstances as of the date ofdetermination.

 

“**Governmental Authorization**” means any permit, license, authorization,plan, directive, consent order or consent decree of or from any federal, stateor local governmental authority, agency or court.

 

“**Guaranties**” means the Parent Guaranty and the SubsidiaryGuaranty.

 

“**Hazardous Materials**” means (i) any chemical, material orsubstance at any time defined as or included in the definition of “hazardoussubstances”, “hazardous wastes”, “hazardous materials”, “extremely hazardouswaste”, “acutely hazardous waste”, “radioactive waste”, “biohazardous waste”,

 

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“pollutant”, “toxic pollutant”,“contaminant”, “restricted hazardous waste”, “infectious waste”, “toxicsubstances”,  or any other term orexpression intended to define, list or classify substances by reason ofproperties harmful to health, safety or the indoor or outdoor environment(including harmful properties such as ignitability, corrosivity, reactivity,carcinogenicity, toxicity, reproductive toxicity, “TCLP toxicity” or “EPtoxicity” or words of similar import under any applicable Environmental Laws);(ii) any oil, petroleum, petroleum fraction or petroleum derived substance;(iii) any drilling fluids, produced waters and other wastes associated with theexploration, development or production of crude oil, natural gas or geothermalresources; (iv) any flammable substances or explosives; (v) any radioactivematerials; (vi) any asbestos-containing materials; (vii) urea formaldehyde foaminsulation; (viii) electrical equipment which contains any oil or dielectricfluid containing polychlorinated biphenyls; (ix) pesticides; and (x) any otherchemical, material or substance, exposure to which is prohibited, limited orregulated by any governmental authority or which may or could pose a hazard tothe health and safety of the owners, occupants or any Persons at the Facilitiesor to the indoor or outdoor environment.

 

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

 

“**Hedge Agreement**” means an Interest Rate Agreement or aCurrency Agreement designed to hedge against fluctuations in interest rates orcurrency values, respectively.

 

“**Immaterial Subsidiary**” means each Subsidiary of Company that (a)accounted for no more than 3% of the consolidated gross revenues of Company andits Subsidiaries for the most recently completed Fiscal Quarter with respect towhich, pursuant to subsection 5.1(i) or 5.1(ii), financial statements havebeen, or are required to have been, delivered by Company on or before the dateas of which any such determination is made, as reflected in such financialstatements; and (b) has assets which represent no more than 3% of theconsolidated gross assets of Company and its Subsidiaries as of the last day ofthe most recently completed Fiscal Quarter with respect to which, pursuant tosubsection 5.1(i) or 5.1(ii), financial statements have been, or are required tohave been, delivered by Company on or before the date as of which any suchdetermination is made, as reflected in such financial statements.

 

“**Impermissible Qualification**” means, relative to the opinion orcertification of any independent public accountant as to any  financial statement of Company, anyqualification or exception to such opinion or certification (i) which is of a“going concern” or similar nature, (ii) which relates to the limited scope ofexamination of matters relevant to such financial statement (except, in thecase of matters relating to any acquired business or assets, in respect of theperiod prior to the acquisition by Company of such business or asset), or (iii)which relates to the treatment or classification of any item in such financialstatement and which, as a condition to its removal, would require an adjustmentto such item the effect of which would be to cause Company to be in default ofany of its obligations under subsection 6.6.

 

“**Incremental Facility**” means Permitted Indebtedness (plus any amounts paid in kind or otherwiseaccreted to the original principal amount to satisfy interest obligations)issued under this Agreement pursuant to subsection 6.1(x), which shall providefor (x) no offers to purchase (other than offers to purchase made with respectto all Loans) and (y) no prepayments, amortization, redemptions or repaymentsexcept (i) on a pro rata basis with, and on the same (or later) dates asrequired with respect to, the Loans made on the Closing Date or (ii) only afterthe Loans made on the Closing Date have been paid in full.

 

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“**Indebtedness**”, as applied to any Person, means (i) allindebtedness for borrowed money, (ii) that portion of obligations with respectto Capital Leases that is properly classified as a liability on a balance sheetin conformity with GAAP, (iii) notes payable and drafts accepted representingextensions of credit whether or not representing obligations for borrowedmoney, (iv) any obligation owed for all or any part of the deferred purchaseprice of property or services (excluding any such obligations incurred underERISA), which purchase price is (a) except in the case of accounts payablearising in the ordinary course of business, due more than six months from thedate of incurrence of the obligation in respect thereof or (b) evidenced by anote or similar written instrument (including in respect of Earn-Outs, butsolely to the extent included as liabilities in accordance with GAAP), and (v) allobligations of the types referred to in clauses (i) through (iv) above, securedby any Lien on any property or asset owned or held by that Person regardless ofwhether the indebtedness secured thereby shall have been assumed by that Personor is nonrecourse to the credit of that Person.  Obligations under Interest Rate Agreements and CurrencyAgreements constitute (X) in the case of Hedge Agreements, ContingentObligations, and (Y) in all other cases, Investments, and in neither caseconstitute Indebtedness.

 

“**Indemnitee**” has the meaning assigned to that term insubsection 9.3.

 

“**Intellectual Property**” means all patents,trademarks, tradenames, copyrights, technology, know-how and processes used inor necessary for the conduct of the business of Company and its Subsidiaries ascurrently conducted that are material to the condition (financial orotherwise), business or operations of Company and its Subsidiaries, taken as awhole.

 

“**Intercreditor Agreement**” means theIntercreditor Agreement, dated as of the Closing Date, among AdministrativeAgent, Company and the First Lien Collateral Agent, which shall be satisfactoryin form and substance to Administrative Agent, as amended, restated,supplemented or otherwise modified from time to time.

 

“**Interest Period**” has the meaning assigned to that term insubsection 2.2B.

 

“**Interest Rate Agreement**” means any interestrate swap agreement, interest rate cap agreement, interest rate collaragreement or other similar agreement or arrangement to which Company or any of itsSubsidiaries is a party.

 

**“InterestRate Determination Date”** means, with respect to anyInterest Period, the second Business Day prior to the first day of suchInterest Period.

 

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

 

“**Investment**” means (i) any direct orindirect purchase or other acquisition by Company or any of its Subsidiariesof, or of a beneficial interest in, any Securities of any other Person(including any Subsidiary of Company), (ii) any direct or indirect redemption,retirement, purchase or other acquisition for value, by any Subsidiary ofCompany from any Person other than Company or any of its Subsidiaries, of anyequity Securities of such Subsidiary, or (iii) any direct or indirect loan,advance (other than advances to employees for moving, entertainment and travelexpenses, drawing accounts and similar expenditures in the ordinary course ofbusiness) or capital contribution by Company or any of its Subsidiaries to anyother Person (other than a Wholly-Owned Subsidiary of Company).  The amount of any Investment shall be theoriginal cost of such Investment plus the cost of all additions thereto,without any adjustments for increases or decreases in value, or write-ups,write-downs or write-offs with respect to such Investment.

 

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“**IP Collateral**” means, collectively, theIntellectual Property Collateral under the Security Agreement.

 

“**Leasehold Property**” means any leaseholdinterest of any Loan Party as lessee under any lease of real property.

 

“**Lender**” and “**Lenders**” means the persons identified as “Lenders” and listedon Schedule I attached to this Agreement, together with their successorsand permitted assigns pursuant to subsection 9.1.

 

“**Lien**” means any lien, mortgage, pledge,assignment, security interest, charge or encumbrance of any kind (including anyconditional sale or other title retention agreement, any lease in the naturethereof, and any agreement to give any security interest) and any option, trustor other preferential arrangement having the practical effect of any of theforegoing.

 

“**Loan**” or “**Loans**” means one or more of theFixed Rate Loans or Floating Rate Loans or any combination thereof.

 

“**Loan Documents**” means this Agreement, theNotes, the Guaranties, the Collateral Documents and the IntercreditorAgreement.

 

“**Loan Party**” means each of Parent, Companyand any of Company’s Subsidiaries from time to time executing a Loan Document,and “**Loan Parties**” means all suchPersons, collectively.

 

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

 

“**Material Adverse Effect**” means (i) amaterial adverse effect upon the business, operations, properties, assets,financial condition or prospects of Company and its Subsidiaries taken as awhole or (ii) the material impairment of the ability of the Loan Parties toperform, or of Agents or Lenders to enforce, the Obligations.

 

“**Material Contract**” means any contract orother arrangement to which Company or any of its Subsidiaries is a party (otherthan the Loan Documents) for which breach, nonperformance, cancellation orfailure to renew could reasonably be expected to have a Material AdverseEffect.

 

“**Maturity Date**” means the earlier of (i)June 30, 2008 and (ii) the date that all Loans shall become due and payable infull hereunder, whether by acceleration or otherwise.

 

“**Mortgage**” means (i) a security instrument(whether designated as a deed of trust or a mortgage or by any similar title)executed and delivered by any Loan Party, substantially in such form as may bereasonably approved by Agents in their sole discretion, in each case with suchchanges thereto as may be recommended by Administrative Agent’s local counselbased on local laws or customary local mortgage or deed of trust practices, or(ii) at the option of Administrative Agent, in the case of any future MortgagedProperty, an amendment to an existing Mortgage or a new Mortgage, in formsatisfactory to Administrative Agent, adding such future Mortgaged Property tothe Real Property Assets encumbered by such existing Mortgage, in either caseas such security instrument or amendment may be amended, restated, supplementedor otherwise modified from time to time. “**Mortgages**” means all suchinstruments, including any future Mortgages, collectively.

 

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“**Mortgaged Property**” means the Closing DateMortgaged Property or a property mortgaged in the future pursuant to subsection5.8.

 

“**Multiemployer Plan**” means any EmployeeBenefit Plan which is a “multiemployer plan” as defined in Section 3(37) ofERISA.

 

“**Net Asset Sale Proceeds**” means, withrespect to any Asset Sale, Cash payments (including any Cash received by way ofdeferred payment pursuant to, or by monetization of, a note receivable orotherwise, but only as and when so received) received from such Asset Sale, netof any bona fide direct costs incurred in connection with such Asset Sale,including (i) income taxes and all other governmental costs and expensesreasonably estimated to be actually payable in connection with such Asset Sale(including, in the event of any Asset Sale with respect to non-U.S. assets, anysuch taxes, costs, and expenses resulting from repatriating such proceeds tothe U.S.), (ii) payment of the outstanding principal amount of, premium orpenalty, if any, and interest on any Indebtedness (other than the Loans) thatis secured by a Lien on the stock or assets in question and that is required tobe repaid under the terms thereof as a result of such Asset Sale, (iii) allreasonable and customary fees and expenses with respect to legal, investmentbanking, brokerage, accounting and other professional fees, sales commissionsand disbursements, (iv) reserves for purchase price adjustments and retainedliabilities reasonably expected to be payable by Company and its Subsidiariesin cash in connection therewith and (v) solely with respect to any Asset Saleconsummated by a Subsidiary, the pro rata portion of any such Cash paymentsrequired to be distributed to any shareholders of such Subsidiary or any otherSubsidiary that, directly or indirectly, holds the capital stock of suchSubsidiary (but excluding in each case Company and its Subsidiaries).

 

“**Net Insurance/Condemnation Proceeds**” meansany Cash payments or proceeds received by Company or any of its Subsidiaries(i) under any casualty insurance policy in respect of a covered loss thereunderor (ii) as a result of the taking of any assets of Company or any of itsSubsidiaries by any Person pursuant to the power of eminent domain,condemnation or otherwise, or pursuant to a sale of any such assets to a purchaserwith such power under threat of such a taking, in each case net of any actualand reasonable documented costs incurred by Company or any of its Subsidiariesin connection with the adjustment or settlement of any claims of Company orsuch Subsidiary in respect thereof, but excluding (x) any such payments orproceeds thereunder required to be paid to a creditor (other than the holdersof the Loans) secured by such assets that is required to be repaid under theterms thereof as a result of the relevant covered loss or taking, (y) anyincome taxes and all other taxes, governmental costs and expenses reasonablyestimated to be actually payable in connection with the receipt of such NetInsurance/Condemnation Proceeds and (z) solely with respect to any Net Insurance/CondemnationProceeds received by a Subsidiary, the pro rata portion of any such Cashpayments required to be distributed to any shareholders of such Subsidiary orany other Subsidiary that, directly or indirectly, holds the capital stock ofsuch Subsidiary (but excluding in each case Company and its Subsidiaries).

 

“**Net Securities Proceeds**” has the meaningset forth in subsection 2.4B(ii)(c).

 

“**Net Senior Debt**” means, at any date,Consolidated Total Debt *less*Subordinated Indebtedness *less*Cash and Cash Equivalents held by Company and its Subsidiaries, in each case atsuch date.

 

“**Net Senior Debt Ratio**” means, at the end ofany Fiscal Quarter, subject to subsection 1.2(b), the ratio of (a) Net SeniorDebt as of the last day of such Fiscal Quarter to (b) Consolidated EBITDA forthe consecutive four Fiscal Quarters ending on the last day of such FiscalQuarter.

 

“**Net Senior Debt Ratio Amount**” means anamount of Indebtedness under the First Lien Credit Agreement (not to exceed$10,000,000 in the aggregate during the term of this Agreement) that, at thetime of incurrence, results in the Net Senior Debt Ratio being less than orequal to 2.00:1.00 (calculated

 

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based on the most recently ended four FiscalQuarter period for which financial statements have been delivered pursuant tosubsection 5.1 but giving *pro forma*effect to such incurrence as if it occurred on the last day of such period).

 

“**Net Yield**” has the meaning set forth insubsection 2.2G.

 

“**Non-Consenting Lender**” means any Lenderthat, in response to any request by Company or Administrative Agent to adeparture from, waiver of or amendment to any provision of any Loan Documentthat requires the agreement of all Lenders, which departure, waiver or amendmentreceived the consent of the Requisite Lenders, shall not have given its consentto such departure, waiver or amendment.

 

“**Non-Wholly-Owned Subsidiary**” means anySubsidiary of Company that is not a Wholly-Owned Subsidiary.

 

“**Notes**” means one or more of the Fixed Rate Notes orFloating Rate Notes or any combination thereof.

 

“**Notice of Borrowing**” means a noticesubstantially in the form of Exhibit VI annexed hereto delivered byCompany to Administrative Agent pursuant to subsection 2.1B.

 

“**Notice of Continuation**” means a notice substantially in the form of Exhibit XIVannexed hereto delivered by Company to Administrative Agent pursuant tosubsection 2.2D with respect to a continuation of the applicable basis fordetermining the interest rate with respect to the Floating Rate Loans specifiedtherein.

 

“**Obligations**” means all obligations of everynature of each Loan Party from time to time owed to Agents, Lenders or any ofthem under the Loan Documents, whether for principal, interest (includinginterest which, but for the filing of a petition in bankruptcy with respect tosuch Loan Party, would have accrued on any Obligation, whether or not a claimis allowed against such Loan Party for such interest in the related bankruptcyproceeding), fees, premium, expenses, indemnification or otherwise.

 

“**Officer’s Certificate**” means, as applied toany Person, a certificate executed on behalf of such Person by its chiefexecutive officer, president, treasurer or its chief financial officer (or ifthere is no chief financial officer, its chief accounting officer).

 

“**Operating Lease**” means, as applied to anyPerson, any lease (including leases that may be terminated by the lessee at anytime) of any property (whether real, personal or mixed) that is not a CapitalLease in accordance with GAAP other than any such lease under which that Personis the lessor.

 

“**Organizational Authorizations**” means, withrespect to any Person, resolutions of its Board of Directors, general partnersor members of such Person, and such other Persons, groups or committees(including, without limitation, managers and managing committees), if any,required by the Organizational Certificate or Organizational Documents of suchPerson to authorize or approve the taking of any action or the entering into ofany transaction.

 

“**Organizational Certificate**” means, withrespect to any Person, the certificate or articles of incorporation,partnership or limited liability company or any other similar or equivalentorganizational, charter or constitutional certificate or document filed withthe applicable governmental authority in the jurisdiction of its incorporation,organization or formation, which, if such Person is a partnership or limitedliability company, shall include such certificates, articles or othercertificates or documents in respect of each partner or member of such Person.

 

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“**Organizational Documents**” means, withrespect to any Person, the by-laws, partnership agreement, limited liability companyagreement, operating agreement, management agreement or other similar orequivalent organizational, charter or constitutional agreement or arrangement,which, if such Person is a partnership or limited liability company, shallinclude such by-laws, agreements or arrangements in respect of each partner ormember of such Person.

 

“**Original Closing Date**” means May 11, 2000.

 

“**Parent**” means DeCrane Holdings Co., aDelaware corporation.

 

“**Parent Guaranty**” means the Parent Guarantyexecuted and delivered by Parent on the Closing Date, substantially in the formof Exhibit VII annexed hereto, as such Parent Guaranty may be amended,restated, supplemented or otherwise modified from time to time.

 

“**Parent P-I-K Securities**” means the PIKNotes and the PIK Preferred Stock.

 

“**Parent Pledge Agreement**” means the PledgeAgreement executed and delivered by Parent on the Closing Date, substantiallyin the form of Exhibit VIII annexed hereto, as such Parent PledgeAgreement may be amended, restated, supplemented or otherwise modified fromtime to time.

 

“**PBGC**” means the Pension Benefit GuarantyCorporation or any successor thereto.

 

“**Pension Plan**” means any Employee BenefitPlan, other than a Multiemployer Plan, which is subject to Section 412 of theInternal Revenue Code or Section 302 of ERISA.

 

“**Permitted Acquisition**” means theacquisition of a business (whether through the purchase of assets or of sharesof capital stock) by Company or one of its Subsidiaries (w) which is in a lineof business similar or related to the lines of business of Company and itsSubsidiaries, (x) for total consideration, for acquisitions made after theClosing Date (including without limitation, cash purchase price, deferred orfinanced purchase price and the assumption of Indebtedness, including AssumedIndebtedness, and other liabilities), of not more than $35,000,000 for anysingle acquisition or series of related acquisitions and, which consideration,when aggregated with the consideration for all other acquisitions made afterthe Original Closing Date, does not exceed $50,000,000; provided thatsuch aggregate total consideration for Permitted Acquisitions of or bySubsidiaries that are not Subsidiary Guarantors shall not exceed an aggregateof $30,000,000 *plus* the CompanyExcess Cash Flow Amount; and providedfurther that such aggregatetotal consideration for Permitted Acquisitions of or by Non-Wholly-OwnedSubsidiaries that are not Subsidiary Guarantors shall not exceed an aggregateof $10,000,000*****plus* the Company Excess Cash Flow Amount,(y) at a time at which no Event of Default or Potential Event of Default shallexist or shall occur as a result of giving effect to such proposed acquisition,and (z) after giving effect to such acquisition, including without limitationgiving effect to the incurrence or assumption of any Indebtedness or any othercosts and expenditures or the making of any distributions and other payments inconnection with or otherwise relating to such Permitted Acquisition, Companyshall be in *pro forma* compliancewith each of the financial covenants set forth in subsection 6.6 for theimmediately preceding four Fiscal Quarter period prior to such date ofdetermination.

 

For purposesof calculating on any date usage of each dollar basket set forth in thisdefinition:

 

(i)                                     Earn-outspaid or payable under any agreement entered into on or prior to the ClosingDate shall be excluded from any such calculation on any date; and

 

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(ii)                                  withrespect to any acquisition consummated after the Closing Date, Earn-outs shallbe included in any such calculation on any date on if, and only to the extentthat, such Earn-outs have been actually paid by Company or any of itsSubsidiaries on or prior to such date; provided that if on any date anysuch calculation is made any such dollar basket is exceeded as a result of theinclusion of any Earn-out, any acquisition consummated on or prior to such dateand constituting a “Permitted Acquisition” shall continue to constitute a“Permitted Acquisition”, but such dollar basket shall be deemed to be fullyutilized for purposes of determining whether any proposed new acquisition is a“Permitted Acquisition”; and

 

(iii)                               equity Securities of Parent issued withrespect to any acquisition consummated after April 1, 2003 shall be excludedfrom any such calculation on any date.

 

Notwithstandingthe foregoing, no acquisition otherwise permitted hereby by Company or aSubsidiary shall be a Permitted Acquisition if any consideration thereforconsists of any Cash, Indebtedness or other assets other than equity Securitiesof Parent, Net Securities Proceeds of equity Securities of Parent that are notrequired to be used to prepay the Loans pursuant to subsection 2.4B orEarn-outs unless, after giving effect to such transaction, the First LienLeverage Ratio is equal to or less than 2.5:1.00 for the four Fiscal Quarterperiod for which financial statements have been delivered pursuant tosubsection 5.1 ending immediately prior to the date of closing of suchacquisition, as evidenced by an Officer’s Certificate of Company delivered onsuch date of closing to Syndication Agent showing the calculations therefor.

 

“**Permitted Acquisition ComplianceCertificate**” means an Officer’s Certificate substantially in the form of ExhibitIX annexed hereto delivered to Agents by Company pursuant to subsection6.7(vi).

 

“**Permitted Encumbrances**” means the following types of Liens:

 

(i)                                     Liensfor taxes, assessments or governmental charges or claims the payment of whichis not, at the time, required by subsection 5.3;

 

(ii)                                  Liensof landlords (except as may be waived or released as more particularlydescribed in subsection 5.8), Liens of banks and rights of set-off, statutoryLiens of carriers, warehousemen, mechanics, repairmen, workmen, contractors andmaterialmen, and other Liens imposed by law, in each case incurred in theordinary course of business (a) for amounts not yet overdue or (b) for amountsthat are overdue and that (in the case of any such amounts overdue for a periodin excess of 30 days) are being contested in good faith by appropriateproceedings, so long as such reserves or other appropriate provisions, if any,as shall be required by GAAP shall have been made for any such contestedamounts;

 

(iii)                               Liensincurred or deposits made in the ordinary course of business in connection withworkers’ compensation, unemployment insurance and other types of socialsecurity, or to secure the performance of tenders, statutory obligations,surety and appeal bonds, bids, leases, government contracts, trade contracts,performance and return-of-money bonds and other similar obligations (exclusiveof obligations for the payment of borrowed money), so long as no foreclosure,sale or similar proceedings have been commenced with respect to any portion ofthe Collateral on account thereof;

 

(iv)                              anyattachment or judgment Lien not constituting an Event of Default undersubsection 7.8;

 

(v)                                 leasesor subleases granted to third parties and not interfering in any materialrespect with the ordinary conduct of the business of Company or any of itsSubsidiaries;

 

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(vi)                              easements,rights-of-way, restrictions, encroachments, and other minor defects orirregularities in title, in each case which do not and will not materiallydetract from the value or impair the use by Company or any of its Subsidiariesin the ordinary conduct of the business of Company or any of its Subsidiaries;

 

(vii)                           any (a)interest or title of a lessor or sublessor under any permitted lease, (b)restriction or encumbrance to which the interest or title of such lessor orsublessor may be subject to, or (c) subordination of the interest of the lesseeor sublessee under such lease to any restriction or encumbrance referred to inthe preceding clause (b);

 

(viii)                        Liensarising from filing UCC financing statements relating solely to leases notprohibited by this Agreement;

 

(ix)                                Liensin favor of customs and revenue authorities arising as a matter of law tosecure payment of customs duties in connection with the importation of goods;

 

(x)                                   anyzoning or similar law or right reserved to or vested in any governmental officeor agency to control or regulate the use of any real property;

 

(xi)                                Lienssecuring obligations (other than obligations representing Indebtedness forborrowed money) under operating, reciprocal easement or similar agreementsentered into in the ordinary course of business of Company and itsSubsidiaries;

 

(xii)                             licensesof patents, trademarks and other intellectual property rights granted byCompany or any of its Subsidiaries in the ordinary course of business and notinterfering in any material respect with the ordinary conduct of the businessof Company or such Subsidiary; and

 

(xiii)                          thegeneral and special exceptions approved by Administrative Agent, whichexceptions appear on the mortgagee title insurance policies with respect to theowned and leased properties to be encumbered by a Mortgage, pursuant tosubsections 5.8B, 5.8C and 5.10.

 

“**Permitted Indebtedness**” means up to $20,000,000 in aggregate principal amount of Indebtedness(plus any amounts paid in kind or otherwise accreted to the original principalamount to satisfy interest obligations): (i) constituting the IncrementalFacility or (ii) (a) issued pursuant to documentation containing covenants,defaults, remedies and other material terms no more restrictive than such termsset forth in this Agreement or otherwise in form and substance reasonablysatisfactory to Administrative Agent, (b) which shall provide for no scheduledredemptions, scheduled prepayments (excluding requirements to prepay orpurchase upon asset sales, change of control events, equity contributions andother similar prepayment events and excluding any requirement to prepay upon anacceleration), sinking fund installment payments or maturities prior to theMaturity Date, (c) which shall not bear cash interest in excess of 12%****per annum, and (d) which may be secured byLiens on all or a portion of the Collateral that are junior in priority to theLiens granted under the Loan Documents, pursuant to an intercreditor agreementin form and substance reasonably satisfactory to Administrative Agent.

 

“**Person**” means and includes natural persons,corporations, limited partnerships, general partnerships, limited liabilitycompanies, limited liability partnerships, joint stock companies, associations,companies, trusts, banks, trust companies, land trusts, business trusts orother organizations, whether or not legal entities, and governments (whetherfederal, state or local, domestic or foreign, and including politicalsubdivisions thereof) and agencies or other administrative or regulatory bodiesthereof.

 

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“**PIK Notes**” means Senior Pay-in-Kind Notes, if any, issuedby Parent, in exchange for PIK Preferred Stock which notes shall (i) providefor the payment of interest by accretion of the original face amount thereof orby the issuance of additional PIK Notes for a period of not less than fiveyears after the First Closing Date, (ii) not provide for any scheduledredemptions or prepayments or any sinking fund installment payments ormaturities prior to a date which is seven and one-half years after the FirstClosing Date, and (iii) have terms and conditions not less favorable to Parentand Lenders than those set forth in the draft “Description of ExchangeDebentures” dated August 27, 1998, a copy of which has been distributed toLenders.

 

“**PIK Preferred Stock**” means Pay-in-Kind Preferred Stock issued byParent, providing for the payment of dividends thereon by the issuance ofadditional shares of such Pay-in-Kind Preferred Stock or by accretion of theoriginal face amount thereof for a period of not less than five years from theFirst Closing Date, which Pay-in-Kind Preferred Stock is unsecured andunguaranteed, as amended from time to time to the extent permitted under theParent Guaranty.

 

“**Pledge Agreement**” means the Pledge Agreement executed anddelivered by Company and each Subsidiary Guarantor on the Closing Date,substantially in the form of Exhibit IV annexed hereto, as such PledgeAgreement may thereafter be amended, restated, supplemented or otherwisemodified from time to time.

 

 “**Pledged Collateral**” means, collectively, at any time, the“Pledged Collateral” as defined in the Pledge Agreement and the Parent PledgeAgreement.

 

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

 

“**Prime Rate**” means the rate of interest per annumannounced from time to time by CSFB as its prime commercial lending rate ineffect at its principal office in New York City.  The Prime Rate is a reference rate and does not necessarilyrepresent the lowest or best rate actually charged to any customer.  CSFB or any other Lender may make commercialloans or other loans at rates of interest at, above or below the Prime Rate.

 

“**Property Reinvestment Application**” means the application of Net Asset SaleProceeds or Net Insurance/Condemnation Proceeds, as the case may be, to theacquisition by Company or its Subsidiaries of tangible or intangible propertyor assets (other than property or assets that constitute current assets underGAAP, unless the acquisition thereof is incidental to the acquisition of a materiallygreater amount of non-current assets) that is to be used in the business ofCompany and its Subsidiaries.

 

“**Pro Rata Share**” means (i) with respect to all payments,computations and other matters relating to the Fixed Rate Loan Commitments orthe Fixed Rate Loan of any Lender, the percentage obtained by dividing(x) the Fixed Rate Loan Exposure of that Lender by (y) theaggregate Fixed Rate Loan Exposure of all Lenders; (ii) with respect to allpayments, computations and other matters relating to the Floating Rate LoanCommitments or the Floating Rate Loan of any Lender, the percentage obtained bydividing (1) the Floating Rate Loan Exposure of that Lender by(2) the aggregate Floating Rate Loan Exposure of all Lenders; and (iii) for allother purposes with respect to each Lender, the percentage obtained by dividing(x) the sum of the Fixed Rate Loan Exposure of that Lender plus theFloating Rate Loan Exposure of that Lender by (y) the sum of theaggregate Fixed Rate Loan Exposure of all Lenders plus the aggregateFloating Rate Loan Exposure of all Lenders, in any such case as the applicablepercentage may be adjusted by assignments permitted pursuant to subsection 9.1.

 

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“**PTO**” means the United States Patent and TrademarkOffice or any successor or substitute office in which filings are necessary or,in the opinion of Administrative Agent, desirable in order to create or perfectLiens on any IP Collateral.

 

“**Quarterly Date**” means the date which is 30 days after theClosing Date and each three-month anniversary thereof.

 

“**Real Property Asset**” means, at any time of determination, anyinterest then owned by any Loan Party in any real property.

 

“**Regulation D**” means Regulation D of the Board of Governorsof the Federal Reserve System, as in effect from time to time.

 

“**Related Agreements**” means, collectively, the Fourth Amendment tothe First Lien Credit Agreement dated as of December 10, 2003 and allagreements and documents executed in connection therewith.

 

“**Related Parties**” means, with respect to any Person, suchPerson’s Affiliates and the directors, officers, employees, agents and advisorsof such Person and of such Person’s Affiliates.

 

“**Release**” means any release, spill, emission, leaking,pumping, pouring, injection, escaping, deposit, disposal, discharge, dispersal,dumping, leaching or migration of Hazardous Materials into the indoor oroutdoor environment (including the abandonment or disposal of any barrels,containers or other closed receptacles containing any Hazardous Materials),including the movement of any Hazardous Materials through the air, soil,surface water or groundwater.

 

“**Requisite Lenders**” means on any date, Lenders having or holdingmore than 50% of the sum of (i) the aggregate Fixed Rate Loan Exposure ofall Lenders plus (ii) the aggregate Floating Rate Loan Exposure of allLenders, in each case on such date.

 

“**Reserve Requirement**” means, with respect to an Interest Period,the maximum aggregate reserve requirement (including all basic, supplemental,marginal and other reserves) which is imposed under Regulation D onEurocurrency liabilities.

 

“**Response Date**” has the meaning assigned tothat term in subsection 2.4B(iii).

 

“**Restricted Junior Payment**” means (i) any distribution, direct orindirect, on account of any class of stock of Company now or hereafteroutstanding, except a distribution payable solely in shares of that class or ajunior class of stock payable solely to holders of that class, (ii) anyredemption, retirement, sinking fund or similar payment, purchase or otheracquisition for value, direct or indirect, of any class of stock of Company nowor hereafter outstanding, (iii) any payment made to retire, or to obtain thesurrender of, any outstanding warrants, options or other rights to acquireshares of any class of stock of Company now or hereafter outstanding, and (iv)any payment or prepayment of principal of, premium, if any, or interest on, orredemption, purchase, retirement, defeasance (including in-substance or legal defeasance),sinking fund or similar payment with respect to, any Subordinated Indebtedness.

 

“**Securities**” means any stock, shares, partnershipinterests, voting trust certificates, certificates of interest or participationin any profit-sharing agreement or arrangement, options, warrants, bonds,debentures, notes, or other evidences of indebtedness, secured or unsecured,convertible, subordinated or otherwise, or in general any instruments commonlyknown as “securities” or any certificates of interest,

 

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shares or participations in temporary orinterim certificates for the purchase or acquisition of, or any right tosubscribe to, purchase or acquire, any of the foregoing.

 

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

 

“**Security Agreement**” means the Security Agreement executed anddelivered on the Closing Date by Company and each then existing SubsidiaryGuarantor or executed and delivered or supplemented by any additionalSubsidiary Guarantor from time to time thereafter in accordance with subsection5.7, substantially in the form of Exhibit X annexed hereto, as suchSecurity Agreement may thereafter be amended, restated, supplemented orotherwise modified from time to time.

 

“**Senior Subordinated Note Indenture**” means the Indenture, dated as of October 5,1998, executed by Company and State Street Bank and Trust Company, as trustee,pursuant to which the Senior Subordinated Notes are issued, as such Indenturehas been amended through and as of the Closing Date and as such Indenture mayhereafter be amended from time to time to the extent permitted under subsection6.15.

 

“**Senior Subordinated Notes**” means the senior subordinated notes issuedby Company pursuant to the Senior Subordinated Note Indenture, as such notesmay be amended from time to time to the extent permitted under subsection6.15.  “**Senior Subordinated Notes**” shall also refer to the registeredSecurities, if any, having the same terms and conditions as the notes describedabove which are issued by Company in exchange for such notes upon exercise ofthe customary registration rights accompanying such notes.

 

“**Solvency Certificate**” means an Officer’s Certificate substantially in the form of Exhibit XIannexed hereto.

 

“**Solvent**” means, with respect to any Person, that asof the date of determination (i) the then fair value of the property of suchPerson is greater than the total amount of liabilities (including contingentliabilities) of such Person; (ii) the then fair saleable value of the propertyof such Person is not less than the amount that will be required to pay theprobable liabilities on such Person’s then existing debts as they becomeabsolute and matured considering all financing alternatives and potential assetsales reasonably available to such Person; (iii) such Person’s capital is notunreasonably small in relation to its business; and (iv) such Person does notintend to incur, or believe (nor should it reasonably believe) that it willincur, debts beyond its ability to pay such debts as they become due.  For purposes of this definition, the amountof any contingent liability at any time shall be computed as the amount that,in light of all of the facts and circumstances existing at such time,represents the amount that can reasonably be expected to become an actual ormatured liability.

 

“**Subordinated Indebtedness**” means the Senior Subordinated Notes and anyother Indebtedness of Company subordinated in right of payment to the Obligationspursuant to documentation containing maturities, amortization schedules,covenants, defaults, remedies, subordination provisions and other materialterms in form and substance satisfactory to Agents and Requisite Lenders.

 

“**Subsidiary**” means, with respect to any Person, anycorporation, partnership, limited liability company, association, joint ventureor other business entity of which more than 50% of the total voting power ofshares of stock or other ownership interests entitled (without regard to theoccurrence of any contingency) to vote in the election of the Person or Persons(whether directors, managers, trustees or other Persons performing similarfunctions) constituting members of the governing body of such entity is at thetime owned and controlled, directly or indirectly, by that Person or one ormore of the other

 

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Subsidiaries of that Person or a combinationthereof.  For purposes of this Agreementand the other Loan Documents, any Acquired Controlled Person shall be deemed tobe a “Subsidiary” of Company for purposes of subsections 4.1, 4.5, 4.6, 4.7,4.9, 4.10, 5.4A and the first sentence of subsections 5.4B, 5.6, 6.1, 6.2A,6.2C, 6.3, 6.4, 6.5, 6.7, 6.10, 6.11, 6.12 and 6.14 and, to the extent (andonly to the extent) that it relates to any of the foregoing subsections,Section 7.

 

“**Subsidiary Guarantor**” means any Subsidiary of Company thatexecutes and delivers the Subsidiary Guaranty on the Closing Date or executesand delivers a counterpart thereto from time to time thereafter pursuant tosubsection 5.7.

 

“**Subsidiary Guaranty**” means the Subsidiary Guaranty executed anddelivered by existing Subsidiaries of Company on the Closing Date and to beexecuted and delivered by additional Subsidiaries of Company from time to timethereafter in accordance with subsection 5.7, substantially in the form of ExhibitXII annexed hereto, as such Subsidiary Guaranty may hereafter be amended,restated, supplemented or otherwise modified from time to time.

 

“**Supplemental Collateral Agent**” has the meaning assigned to that term insubsection 8.1B.

 

“**Syndication Agent**” has the meaning assigned to that term in theintroduction to this Agreement.

 

“**Tax**” or “**Taxes**” means any present or futuretax, levy, impost, duty, charge, fee, deduction or withholding of any natureand whatever called, imposed by any taxing authority, from or through whichpayments originate or are made or deemed made by or to Company, but excludingany income, excise, stamp or franchise taxes and other similar taxes, fees,duties, withholdings or other charges imposed on any Lender or any Agent as aresult of a present or former connection between the applicable lending office(or, in the case of any Agent, the office through which it performs any of itsactions as Agent) of such Lender or Agent, and the jurisdiction of thegovernmental authority imposing such tax or any political subdivision or taxingauthority thereof or therein (other than any such connection arising solelyfrom such Agent or such Lender having executed, delivered or performed itsobligations or received a payment under, or taken any action to enforce, thisAgreement or the other Loan Documents).

 

“**Title Company**” means one or more title insurance companiesselected by Company and reasonably satisfactory to Agents.

 

“**Transaction**” means, collectively, (i) repayment of aportion of Indebtedness in respect of the First Lien Credit Agreement on theClosing Date, (ii) the making of the Loans on the Closing Date and (iii) anyother transactions contemplated in Section 3 of this Agreement.

 

“**Transaction Costs**” means the fees, costs and expenses payableby any Loan Party in connection with the Transaction.

 

“**UCC**” means the Uniform Commercial Code (or anysimilar or equivalent legislation) as in effect in any applicable jurisdiction.

 

“**Wholly-Owned Subsidiary**” means any Subsidiary of Company all of theequity interests (except directors’ qualifying shares) and voting interests ofwhich are owned by Company and/or one or more of Company’s other Wholly-OwnedSubsidiaries.

 

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

 

(a)                                  Unless otherwise specified, allaccounting terms used herein or in any other Loan Document shall beinterpreted, all accounting determinations and computations hereunder orthereunder shall be made, and all financial statements required to be deliveredhereunder or thereunder (including under subsection 6.6) shall be prepared, inaccordance with GAAP, as in effect in the United States on the Closing Dateand, unless expressly provided herein, shall be computed or determined on aconsolidated basis and without duplication.

 

(b)                                 For purposes of computing theConsolidated Interest Coverage Ratio, the Consolidated Leverage Ratio and theNet Senior Debt Ratio (and any financial calculations required to be made orincluded within such ratios) as of the end of any Fiscal Quarter and forpurposes of computing Consolidated EBITDA (but not for purposes of computingConsolidated Excess Cash Flow for any period), as at the end of any FiscalQuarter, all components of such ratios (other than Consolidated CapitalExpenditures) or Consolidated EBITDA for the period of four Fiscal Quarters endingat the end of such Fiscal Quarter shall include or exclude, as the case may be,without duplication, such components of such ratios or Consolidated EBITDAattributable to any business or assets that have been acquired or disposed ofby Company or any of its Subsidiaries (including through mergers orconsolidations) after the first day of such period of four Fiscal Quarters andprior to the end of such period, as determined in good faith by Company on a *pro forma* basis for such period of fourFiscal Quarters as if such acquisition or disposition had occurred on suchfirst day of such period (including, whether or not such inclusion would bepermitted under GAAP or Regulation S-X of the Securities and ExchangeCommission, cost savings that would have been realized had such acquisitionoccurred on such day).

 

**1.3**                               OtherDefinitional Provisions and Rules of Construction.

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

 

**B.**                                    References to “Sections” and“subsections” shall be to Sections and subsections, respectively, of thisAgreement unless otherwise specifically provided.

 

**C.**                                    The use in any of the Loan Documentsof the word “include” or “including”, when following any general statement,term or matter, shall not be construed to limit such statement, term or matterto the specific items or matters set forth immediately following such word orto similar items or matters, whether or not nonlimiting language (such as “withoutlimitation” or “but not limited to” or words of similar import) is used withreference thereto, but rather shall be deemed to refer to all other items ormatters that fall within the broadest possible scope of such general statement,term or matter.

 

**Section 2.**                                          AMOUNTS AND TERMS OF COMMITMENTS ANDLOANS

** **

**2.1**                               Commitments;Making of Loans;Notes.

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**A.**                                    **Commitments.** Subject to the terms and conditions of this Agreement and inreliance upon the representations and warranties of Company herein set forth,(i) each Fixed Rate Loan Lender having a Fixed Rate Loan Commitment severallyagrees to lend to Company on the Closing Date an amount not exceeding its ProRata Share of the aggregate amount of the Fixed

 

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Rate LoanCommitments, which Pro Rata Share is set forth opposite its name on Schedule2.1 attached hereto, and (ii) each Floating Rate Loan Lender having aFloating Rate Loan Commitment severally agrees to lend to Company on theClosing Date an amount not exceeding its Pro Rata Share of the aggregate amountof the Floating Rate Loan Commitments, in each case to be used for the purposesidentified in subsection 2.5A, which Pro Rata Share is set forth opposite itsname on Schedule 2.1 attached hereto. The amounts of each Fixed RateLoan Lender’s Fixed Rate Loan Commitment and each Floating Rate Loan Lender’sFloating Rate Loan Commitment are set forth opposite such Lender’s name on Schedule2.1 annexed hereto.  The aggregateamount of the Commitments on the Closing Date is $80,000,000.  Each Lender’s Commitment (i) shall expireimmediately and without further action on January 15, 2004, if the Loans are not made on or before thatdate, and (ii) to the extent unused, shall expire on the close of business onthe Closing Date.  Company may make onlyone borrowing under the Commitments on the Closing Date.  Amounts borrowed under this subsection 2.1Aand subsequently repaid or prepaid may not be reborrowed.

 

**B.**                                    **Borrowing Mechanics**. Loans made on the Closing Date shallbe in an aggregate minimum amount of $1,000,000 and multiples of $100,000 inexcess of that amount.  Company shalldeliver to Administrative Agent a Notice of Borrowing no later than 12:00 Noon(New York time) at least one Business Day in advance of the proposed ClosingDate.  The Notice of Borrowing shallspecify (i) the proposed Closing Date (which shall be a Business Day), (ii) theamount and type of Loans requested and (iii) in the case of Floating Rate Loans,the initial Interest Period requested therefor.

 

Company shallnotify Administrative Agent prior to the funding of the Loans in the event thatany of the matters to which Company is required to certify in the Notice ofBorrowing as being true and correct on the Closing Date is not true and correctas of the Closing Date, and the acceptance by Company of the proceeds of theLoans shall constitute a certification by Company, as of the Closing Date, asto the matters to which Company is required to certify in the Notice ofBorrowing as being true and correct on the Closing Date.

 

**C.**                                    **Disbursement ofFunds.** All Loans shall be made by Lenderssimultaneously and proportionately to their respective Pro Rata Shares of theCommitments, it being understood that no Lender shall be responsible for anydefault by any other Lender in that other Lender’s obligation to make a Loanrequested hereunder nor shall the Commitment of any Lender to make the Loanrequested be increased or decreased as a result of a default by any otherLender in that other Lender’s obligation to make a Loan requestedhereunder.  Promptly after receipt byAdministrative Agent of the Notice of Borrowing pursuant to subsection 2.1B,Administrative Agent shall notify each Lender of the proposed borrowing.  Each Lender shall make the amount of itsLoan available to Administrative Agent not later than 1:00 P.M. (New York time)on the Closing Date, in same day funds in Dollars, at the Funding and PaymentOffice.  Upon satisfaction or waiver ofthe conditions precedent specified in Section 3, Administrative Agent shallpromptly make the proceeds of the Loans available to Company on the ClosingDate, by causing an amount of same day funds in Dollars equal to the proceedsof all the Loans received by Administrative Agent from Lenders to be credited tosuch account or accounts as may be designated in writing to AdministrativeAgent by Company.

 

UnlessAdministrative Agent shall have been notified by any Lender prior to theClosing Date for any Loans that such Lender does not intend to make availableto Administrative Agent the amount of such Lender’s Loan requested on theClosing Date, Administrative Agent may assume that such Lender has made suchamount available to Administrative Agent on the Closing Date and AdministrativeAgent may, in its sole discretion, but shall not be obligated to, makeavailable to Company a corresponding

 

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amount on the Closing Date.  If such corresponding amount is not in factmade available to Administrative Agent by such Lender, Administrative Agentshall be entitled to recover such corresponding amount on demand from suchLender together with interest thereon, for each day from the Closing Date untilthe date such amount is paid to Administrative Agent, at the Federal FundsEffective Rate for three Business Days and thereafter at the interest rateapplicable to the Loans.  If such Lenderdoes not pay such corresponding amount forthwith upon Administrative Agent’sdemand therefor, Administrative Agent shall promptly notify Company and Companyshall immediately pay such corresponding amount to Administrative Agenttogether with interest thereon, for each day from the Closing Date until thedate such amount is paid to Administrative Agent, at the rate payable underthis Agreement for Loans of the type made on the Closing Date on which, andwith respect to which, Administrative Agent made available such amount.  Nothing in this subsection 2.1C shall bedeemed to relieve any Lender from its obligation to fulfill its Commitments hereunderor to prejudice any rights that Company may have against any Lender as a resultof any default by such Lender hereunder.

 

UnlessAdministrative Agent shall have been notified by Company prior to the date onwhich it is scheduled to make payment to Administrative Agent of a payment ofprincipal, interest or fees to Administrative Agent for the account of Lendersthat Company does not intend to make available to Administrative Agent suchamount on such date, Administrative Agent may assume that Company has made suchamount available to Administrative Agent on such date and Administrative Agentmay, in its sole discretion, but shall not be obligated to, make available toLenders a corresponding amount on such date. If such corresponding amount is not in fact made available toAdministrative Agent by Company, Administrative Agent shall be entitled torecover such corresponding amount on demand from Company together with interestthereon, for each day from such scheduled payment until the date such amount ispaid to Administrative Agent, at the interest rate applicable to the relevantLoans.  If Company does not pay suchcorresponding amount forthwith upon Administrative Agent’s demand therefor,Administrative Agent shall promptly notify Lenders and Lenders shallimmediately pay such corresponding amount to Administrative Agent together withinterest thereon, for each day from the scheduled payment date until the datesuch amount is paid to Administrative Agent, at the rate payable under thisAgreement for Loans of the type made on such scheduled payment date on which,and with respect to which, Administrative Agent made available such amount.

 

**D.**                                    **Notes.** Company shall execute and deliver on the Closing Date (i) toeach Fixed Rate Loan Lender (or to Administrative Agent for that Lender) thathas so requested at least one Business Day prior to the Closing Date a FixedRate Note substantially in the form of Exhibit V-1 annexed heretoto evidence that Lender’s Fixed Rate Loan, in the principal amount of that Lender’sFixed Rate Loan and with other appropriate insertions, and (ii) to eachFloating Rate Loan Lender (or to Administrative Agent for that Lender) that hasso requested at least one Business Day prior to the Closing Date a FloatingRate Note substantially in the form of Exhibit V-2 annexed heretoto evidence that Lender’s Floating Rate Loan, in the principal amount of thatLender’s Floating Rate Loan and with other appropriate insertions.

 

**E.**                                      **Register.** (a)  Each Lender maymaintain in accordance with its usual practice an account or accountsevidencing the Indebtedness of Company to such Lender resulting from each Loanmade by such Lender to Company, including the amounts of principal and interestpayable and paid (including Accreted Amounts and Default Rate Accreted Amountsand the increase to outstanding principal resulting from Accreted Amounts andDefault Rate Accreted Amounts as provided in subsection 2.2A and subsection2.2E) to such Lender from time to time hereunder.  In the case of a Lender that does not request, pursuant to thepreceding paragraph, execution and delivery of a Note or Notes evidencing theLoans made by such Lender to Company, such account or accounts shall, to theextent not inconsistent with the notations made by Administrative Agent in theRegister (as defined below), be conclusive and binding on

 

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Company absentmanifest error; provided, however, that the failure of any Lenderto maintain such account or accounts shall not limit or otherwise affect anyObligations of Company or any other Loan Party.

 

(b) (i)  Company herebydesignates Administrative Agent to serve as its agent, solely for the purposeof this subsection (b)(i), to maintain a register (the “**Register**”) on which Administrative Agentwill record each Lender’s Commitments, the Loans made by each Lender toCompany, the Interest Period, if any, with respect thereto, the AccretedAmounts and Default Rate Accreted Amounts, if any, with respect thereto and theincrease to outstanding principal resulting from Accreted Amounts and DefaultRate Accreted Amounts as provided in subsection 2.2A and subsection 2.2E, andeach repayment in respect of the principal amount of the Loans of each Lenderto Company and annexed to which Administrative Agent shall retain a copy ofeach Assignment Agreement delivered to Administrative Agent pursuant tosubsection 9.1.  Failure to make anyrecordation, or any error in such recordation, shall not affect Company’sobligations in respect of such Loans. The entries in the Register shall be conclusive, in the absence ofmanifest error, and Company, Administrative Agent and Lenders shall treat eachPerson in whose name a Loan (and as provided in subsection (b)(ii) below, theNote evidencing such Loan, if any) is registered as the owner thereof for allpurposes of this Agreement notwithstanding notice or any provision herein tothe contrary.

 

(ii)                                  Companyagrees that, upon the request by any Lender which becomes a party to thisAgreement after the date hereof to Administrative Agent, Company will executeand deliver to such Lender a Note evidencing the Loans made by such Lender toCompany.  Each Lender agrees that beforeassigning its Loans, or any part thereof (other than by granting participationstherein), that Lender will make a notation on any applicable Note of all Loansevidenced by that Note, all principal payments previously made thereon and ofthe date to which interest thereon has been paid and Accreted Amounts andDefault Rate Accreted Amounts, if any, with respect thereto and the increase tooutstanding principal resulting from Accreted Amounts and Default Rate AccretedAmounts as provided in subsection 2.2A and subsection 2.2E; providedthat the failure to make (or any error in the making of) a notation of any Loanmade under such Note shall not limit or otherwise affect such disposition orthe obligations of Company hereunder or under such Note with respect to anyLoan or any payments of principal or interest on such Note.

 

**2.2**                               Intereston the Loans.

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**A.**                                    **Rate ofInterest. **Subject to the provisions ofsubsection 2.2E, (i) each Fixed Rate Loan shall bear interest on the unpaidprincipal amount thereof (including any Accreted Amounts and Default RateAccreted Amounts as provided below) from the date made through maturity(whether by acceleration or otherwise) at a rate equal to 15.0% per annum and(ii) each Floating Rate Loan shall bear interest on the unpaid principal amountthereof (including any Accreted Amounts and Default Rate Accreted Amounts asprovided below) from the date made through maturity (whether by acceleration orotherwise) at a rate equal to (a) (1) the Adjusted Eurodollar Rate for theInterest Period applicable to such Floating Rate Loan *plus* 8.5% per annum or (2) if required tobe a Base Rate Loan as provided herein, at the sum of the Base Rate *plus* 7.5% per annum, *plus*(b)3.0% per annum.  Untilpayment in full of all obligations under the First Lien Credit Agreementdescribed in clause (i) of the definition thereof, termination of allcommitments to extend credit thereunder and expiration, surrender or cashcollateralization of all letters of credit thereunder, 3.0% per annum of theinterest payable on the Loans****(suchamount being hereinafter referred to as the “**AccretedAmount**” for such period) shall accrete as described below and shallnot be payable in cash; provided that after payment in full of allobligations under the First Lien Credit Agreement described in clause (i) ofthe definition thereof, termination of all commitments to extend creditthereunder and expiration, surrender or cash

 

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collateralization ofall letters of credit thereunder, accretion of up to 3.0% per annum of theinterest payable on the Loans shall be at the option of Company.  Company may exercise such option bydelivering written notice thereof to Administrative Agent (who shall deliversuch notice to each Lender) at least ten Business Days prior to each applicableQuarterly Date and on each other date on which interest is required to be paidon Loans, setting forth notice of such election to accrete interest and thepercentage of such interest shall so accrete. Any such election must be made with respect to all Loans.  On the Quarterly Date which falls in July2004 and on each Quarterly Date thereafter which falls in January and July, andon each other date on which interest is required to be paid on Loans inconnection with any prepayment, any Accreted Amounts (other than AccretedAmounts that have been so added on any prior Quarterly Date or other such date)shall be added to the outstanding principal amount of the Loans.

 

**B.**                                    **Interest Periods.** In connection with each Floating Rate Loan, Company may, pursuant to theNotice of Borrowing or the applicable Notice of Continuation, as the case maybe, select an interest period (each an “**InterestPeriod**”) to be applicable to such Loan, which Interest Period shallbe, at Company’s option, either a three, six, or, if available to each Lender,nine or twelve month period; provided that:

 

(i)                                     the initial Interest Period for each Floating Rate Loan shall commence onthe Closing Date and shall end on the date which is 30 days after the ClosingDate and each Interest Period shall, in any event, end on a Quarterly Date;

 

(ii)                                  in the case of immediately successiveInterest Periods applicable to a FloatingRate Loan, each successive Interest Period shall commence on the day onwhich the next preceding Interest Period expires;

 

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

 

(iv)                              any Interest Period that begins on thelast Business Day of a calendar month (or on a day for which there is nonumerically corresponding day in the calendar month at the end of such InterestPeriod) shall, subject to clause (v) of this subsection 2.2B, end on the lastBusiness Day of a calendar month;

 

(v)                                 no Interest Period with respect to anyportion of the Floating Rate Loans shall extend beyond June 30, 2008;

 

(vi)                              there shall be outstanding at any time nomore than four Interest Periods with respect to the Floating Rate Loans; and

 

(vii)                           in the event Company fails to specify an InterestPeriod for any Floating Rate Loan in the applicable Notice of Continuation,Company shall be deemed to have selected an Interest Period of three months.

 

**C.**                                    **Interest Payments.** Subject to the provisions of subsection 2.2E and the accretion ofinterest in accordance with subsection 2.2A, interest on each Loan shall bepayable in arrears on and to each Quarterly Date, upon any prepayment of thatLoan (to the extent accrued on the amount being prepaid) and at maturity.

 

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**D.**                                    **Continuation.** Subject to the provisions of subsection 2.6,Company shall, upon the expiration of any Interest Period applicable to aEurodollar Rate Loan, continue all of such Loan as a Eurodollar Rate Loan.

 

Company shall deliver a Notice ofContinuation to Administrative Agent no later than 12:00 noon (New York time)at least three Business Days in advance of the proposed continuation date.  Each Notice of Continuation shall specify(i) the proposed continuation date (which shall be a Business Day),(ii) the amount of the Loan to be continued, (iii) the requested InterestPeriod, and (iv) that no Potential Event of Default or Event of Default hasoccurred and is continuing as of the date of the proposed continuation.  In lieu of delivering the above-describedNotice of Continuation, Company may give Administrative Agent telephonic noticeby the required time of any proposed continuation under this subsection 2.2D; providedthat such notice shall be promptly confirmed in writing by delivery of a Noticeof Continuation to Administrative Agent on or before the proposed continuationdate.  Upon receipt of written ortelephonic notice of any proposed continuation under this subsection 2.2D,Administrative Agent shall promptly transmit such notice by telefacsimile ortelephone to each Lender.

 

Neither Administrative Agent nor any Lendershall incur any liability to Company in acting upon any telephonic noticereferred to above that Administrative Agent believes in good faith to have beengiven by a duly authorized officer or other person authorized to act on behalfof Company or for otherwise acting in good faith under this subsection 2.2D,and upon continuation of the applicable basis for determining the interest ratewith respect to any Loans in accordance with this Agreement pursuant to any suchtelephonic notice Company shall have effected a continuation hereunder.

 

Except as otherwise provided in subsections2.6B, 2.6C and 2.6G, a Notice of Continuation for continuation of a EurodollarRate Loan (or telephonic notice in lieu thereof) shall be irrevocable on andafter the related Interest Rate Determination Date, and Company shall be boundto effect a continuation in accordance therewith or to pay the amounts payablepursuant to subsection 2.6D as a result of the failure to effect such continuation.

 

**E.**                                      **Default Rate.**Upon the occurrence and during thecontinuation of any Event of Default, at the request of Administrative Agent,the outstanding principal amount of all Loans and, to the extent permitted byapplicable law, any interest payments thereon not paid when due and any feesand other amounts then due and payable hereunder, shall thereafter bearinterest (including post-petition interest in any proceeding under theBankruptcy Code or other applicable bankruptcy laws) payable upon demand at a ratethat is 2.0% per annum in excess of the interest rate otherwise payable underthis Agreement with respect to the applicable Loans (or, in the case of anysuch fees and other amounts, at a rate which is 2.0% per annum in excess of theinterest rate otherwise payable under this Agreement for Base Rate Loans).  Any such 2.0% per annum payable under thissubsection 2.2E with respect to any applicable Loans (such amount beinghereinafter referred to as the “**Default RateAccreted Amount**” for any applicable period) shall accrete.  On each date on which amounts are requiredto be paid in respect of Loans hereunder, all Default Rate Accreted Amountsunder this subsection 2.2E shall be added to the outstanding principal amountof the Loans.  Payment or acceptance ofthe increased rates of interest provided for in this subsection 2.2E is not apermitted alternative to timely payment and shall not constitute a waiver ofany Event of Default or otherwise prejudice or limit any rights or remedies ofany Agent or any Lender.

 

**F.**                                      **Computation ofInterest.**  Interest on the Loans shall be computed onthe basis of a 360-day year and for the actual number of days elapsed in theperiod during which it accrues.  In computing interest on any Loan, the dateof the making of such Loan or the first day of an Interest Period applicable tosuch Loan or, with respect to a Base Rate Loan required to be

 

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converted from a Eurodollar Rate Loan, the date of conversion of suchEurodollar Rate Loan to such Base Rate Loan, as the case may be, shall beincluded, and the date of payment of such Loan (if payment is received prior to2:00 P.M. (New York time)) or the expiration date of an Interest Periodapplicable to such Loan, as the case may be, shall be excluded, provided thatif a Loan is repaid on the same day on which it is made, one day’s interestshall be paid on that Loan.

 

**G.**                                    **Interest Rate onIncremental Facility.**  In the eventthat the Net Yield applicable to the Incremental Facility is in excess of theper annum rate of interest applicable to Fixed Rate Loans or Floating RateLoans pursuant to subsection 2.2A or the per annum rate of interest payable incash applicable to the Incremental Facility is in excess of the per annum rateof interest payable in cash on the Fixed Rate Loans or the Floating Rate Loanspursuant to subsection 2.2A, then (x) the per annum rate of interest payable incash for all Fixed Rate Loans or Floating Rate Loans, as applicable, shallautomatically be increased to any extent required so that the per annum rate ofinterest payable in cash for all Fixed Rate Loans or Floating Rate Loans, asapplicable, is equal to the per annum rate of interest payable in cash for theIncremental Facility, and (y) the per annum rate of interest for all Fixed RateLoans or Floating Rate Loans, as applicable, shall automatically be increasedto any extent required so that the per annum rate of interest for all FixedRate Loans or Floating Rate Loans, as applicable, is equal to the Net Yield forthe Incremental Facility, in each case without any action or consent ofCompany, any Agent or any Lender.  In noevent will the per annum rate of interest payable in cash in respect of theFixed Rate Loans or the Floating Rate Loans, as applicable, be less than theper annum rate of interest payable in cash in respect of the IncrementalFacility.  “**Net Yield**” for purposes of loans constituting the IncrementalFacility incurred pursuant to subsection 6.1(x) shall mean the sum of (a) theper annum rate of interest applicable to such loans at the date suchIncremental Facility is incurred *plus*(b) any original issue discount offered to lenders in respect of suchIncremental Facility amortized equally over the period from the date suchIncremental Facility is incurred to the maturity date applicable to suchIncremental Facility; *provided*,that such original issue discount shall not be amortized over a period ofgreater than three years.  Alldeterminations by Administrative Agent as to the Net Yield or other matters setforth in this subsection 2.2G shall be conclusive and binding on all partieshereto absent manifest error.

 

**2.3**                               Fees.

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Company agreesto pay to Arranger and Agents such other fees in the amounts and at the timesseparately agreed upon between Company, Agents and Arranger.

 

**2.4**                               Repayments, Prepayments and Reductions in LoanCommitments; General Provisions Regarding Payments.

** **

**A.**                                    **Scheduled Paymentof Loans.**

 

Company shall pay in full the outstanding amount of the Loans and allother Obligations owing hereunder no later than the Maturity Date.

 

**B.**                                    **Prepayments.**

 

(i)  VoluntaryPrepayments.  After payment in fullof all obligations under the First Lien Credit Agreement described in clause(i) of the definition thereof, termination of all commitments to extend creditthereunder and expiration, surrender or cash collateralization of all lettersof credit thereunder, Company may, upon three Business Days’ prior written ortelephonic notice by 12:00 Noon (New York time) on the date required and, if givenby telephone, promptly

 

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confirmedin writing to Administrative Agent (and Administrative Agent will promptlynotify each Lender thereof), at any time and from time to time prepay any Loanson any Business Day in whole or in part in an aggregate minimum amount of$1,000,000 and multiples of $100,000 in excess of that amount, subject in thecase of prepayments of Eurodollar Rate Loans to compliance with subsection 2.6Dif such prepayment is made on a date prior to the expiration of the applicableInterest Period.  Notice of prepaymenthaving been given as aforesaid, the principal amount of the Loans specified insuch notice shall become due and payable on the prepayment date specifiedtherein.  Any such voluntary prepaymentshall be applied as specified in subsection 2.4C.

 

(ii)  MandatoryPrepayments.  After payment in fullof all obligations in respect of the First Lien Credit Agreement, terminationof all commitments to extend credit thereunder and expiration, surrender orcash collateralization of all letters of credit thereunder, the Loans shall beprepaid in the amounts and under the circumstances set forth below, all suchprepayments to be applied as set forth below or as more specifically providedin subsection 2.4C:

 

(a)                                  Prepayments from Net Asset SaleProceeds.  No later than 30 calendar days following thedate of receipt by Company or any of its Subsidiaries of any Net Asset SaleProceeds in respect of any Asset Sale (other than any Asset Sale permittedunder subsections 6.7(iv) and 6.7(viii) or an Asset Sale to Company or aSubsidiary Guarantor), Company shall prepay the Loans in an aggregate amountequal to such Net Asset Sale Proceeds; provided that if Company statesin the Officer’s Certificate delivered pursuant to subsection 2.4B(ii)(e) thatCompany or the applicable Subsidiary intends to apply, within 365 days afterthe receipt of such Net Asset Sale Proceeds, all or a portion (as specified insuch Officer’s Certificate) of such Net Asset Sale Proceeds to a PropertyReinvestment Application Company shall not be required to prepay the Loans bysuch amount to be applied to a Property Reinvestment Application; providedfurther that to the extent such amount of Net Asset Sale Proceeds is notapplied to a Property Reinvestment Application within such 365-day period,Company shall, on the last day of such 365-day period prepay the Loans in anaggregate amount equal to such amount of Net Asset Sale Proceeds not so appliedto a Property Reinvestment Application.

 

(b)                                 Prepayments from NetInsurance/Condemnation Proceeds.  No laterthan the first Business Day following the date of receipt by AdministrativeAgent or by Company or any of its Subsidiaries after the Closing Date of anyNet Insurance/Condemnation Proceeds in excess of $250,000 with respect to anyloss or taking or series of related losses or takings, Company shall prepay theLoans in an aggregate amount equal to the amount of such NetInsurance/Condemnation Proceeds; provided, however, that (i) nosuch prepayment shall be required to the extent under the terms of any lease orother agreement existing on the date hereof such Net Insurance/CondemnationProceeds are required to be used to replace, rebuild or repair the asset sodamaged, destroyed or taken and (ii) if Company states in the Officer’sCertificate delivered pursuant to subsection 2.4B(ii)(e) that Company or theapplicable Subsidiary intends to apply, within 365 days after the receipt ofsuch Net Insurance/Condemnation Proceeds, all or a portion (as specified insuch Officer’s Certificate) of such Net Insurance/Condemnation Proceeds to aProperty Reinvestment Application, Company shall not be required to prepayLoans by such amount to be applied to a Property Reinvestment Application; providedfurther that to the extent such amount of Net

 

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Insurance/CondemnationProceeds is not applied to a Property Reinvestment Application within such365-day period, Company shall, on the last day of such 365-day period prepaythe Loans in an aggregate amount equal to such amount of such NetInsurance/Condemnation Proceeds not so applied to a Property ReinvestmentApplication.

 

(c)                                  Prepayments Due to Issuance of Debtor Equity Securities.  On the date of receipt byParent, Company or any of its Subsidiaries of the cash proceeds (any such cashproceeds, net of underwriting discounts and commissions and other reasonablecosts and expenses associated therewith, including investment banking, legal,brokerage, accounting fees and expenses, being “**Net Securities Proceeds**”), from the issuance of equitySecurities of Parent, Company or any of its Subsidiaries after the Closing Date(other than Excluded Equity Proceeds) or of debt Securities of Company or anyof its Subsidiaries after the Closing Date (other than the proceeds of theissuance of Indebtedness permitted by subsection 6.1), Company shall prepay theLoans in an aggregate amount equal to such Net Securities Proceeds in the caseof the proceeds of debt Securities and in an aggregate amount equal to 50% ofsuch Net Securities Proceeds in the case of the proceeds of equity Securities; providedthe amount of such prepayment hereunder in respect of Net Securities Proceedsconstituting the proceeds of the issuance and sale of equity Securities shallbe limited to the amount necessary to reduce the amount of Indebtednessincluded in the calculation of the Consolidated Leverage Ratio to the amountthat would result, on a *pro forma*basis after giving effect to such prepayment, in a Consolidated Leverage Ratioof 3.50:1.00 or less at the end of the Fiscal Quarter then most recently endedand (ii) no such prepayment in respect of Net Securities Proceeds constitutingthe proceeds of the issuance and sale of equity Securities shall be required tobe made at such times as the Consolidated Leverage Ratio at the end of the mostrecent Fiscal Quarter (as evidenced by an Officer’s Certificate delivered toAdministrative Agent) is equal to or less than 3.50:1.00.

 

(d)                                 Prepayments from Consolidated ExcessCash Flow.  In the event that there shall beConsolidated Excess Cash Flow for any Fiscal Year, Company shall, no later thanthe fifth Business Day after the delivery of financial statements for suchFiscal Year, prepay the Loans in an aggregate amount equal to 75% of suchConsolidated Excess Cash Flow *less*the aggregate amount of all voluntary prepayments of Loans actually made insuch Fiscal Year pursuant to subsection 2.4B(i); provided that (i) theamount of such prepayment hereunder in respect of Excess Cash Flow shall belimited to the amount necessary to reduce the amount of Indebtedness includedin the calculation of the Consolidated Leverage Ratio to the amount that wouldresult, on a *pro forma* basisafter giving effect to such prepayment, in a Consolidated Leverage Ratio of3.50:1.00 or less at the end of the Fiscal Quarter then most recently ended and(ii) if as of the last day of such Fiscal Year, the Consolidated Leverage Ratio(as evidenced by an Officer’s Certificate delivered to Administrative Agent isequal to or less than 3.50:1.00, no prepayments of any Loans need be made.

 

(e)                                  Calculations of Net ProceedsAmounts; Additional Prepayments Based on Subsequent Calculations. Concurrently with any prepayment of the Loans pursuant to subsections2.4B(ii)(a)-(d) and on the date any such prepayment would have been required tobe made pursuant to subsections

 

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2.4B(ii)(a)or 2.4B(ii)(b) but for the application of the provisos to such subsections,Company shall deliver to Administrative Agent an Officer’s Certificatedemonstrating the calculation of the amount (the “**Net Proceeds Amount**”) of the applicable Net Asset SaleProceeds, Net Insurance/Condemnation Proceeds or Net Securities Proceeds, orthe applicable Consolidated Excess Cash Flow, as the case may be (and which, inthe case of Consolidated Excess Cash Flow, may be the Officer’s Certificatedelivered pursuant to subsection 5.1(iii) with respect to the financial statementsfor the Fiscal Year to which such excess cash flow relates if such Officer’sCertificate contains the required information). In the event that Company shallsubsequently determine that the actual Net Proceeds Amount was greater than theamount set forth in such Officer’s Certificate, Company shall promptly make anadditional prepayment of the Loans in an amount equal to the amount of suchexcess, and Company shall concurrently therewith deliver to AdministrativeAgent an Officer’s Certificate demonstrating the derivation of the additionalNet Proceeds Amount resulting in such excess.

 

(f)                                    Company shall not be required tomake any prepayment of Loans otherwise required by subsections 2.4B(ii)(a),(b), (c) or (d) unless and until the aggregate principal amount of the Loans tobe prepaid is at least equal to $250,000.

 

### **(iii)** Prepaymentupon Change of Control.  Upon theoccurrence of a Change of Control, Company will give written notice (a “Control Change Notice”) of such fact toAdministrative Agent and all Lenders no more than five days after the Change ofControl.  The Control Change Noticeshall (i) describe the facts and circumstances of such Change of Controlin reasonable detail, (ii) make reference to this subsection 2.4B(iii) andstate that, unless such Lender makes a declaration of its intent to have itsLoans prepaid as provided below, the principal amount of such Loans shall notbe prepaid, (iii) specify the date of prepayment, which will be no earlier than5 days nor later than 15 days from the date such notice is mailed (the “Control Change Payment Date”), and(iv) specify the date (the “Response Date”) by which such Lender mustrespond to such Control Change Notice pursuant to this subsection 2.4B(iii) inorder to have its Loans prepaid (which shall not be earlier than 5 BusinessDays after delivery of the Control Change Notice), together with accruedinterest thereon and the Change of Control Premium, on the Control ChangePayment Date.

 

All Loans of such Lender shall be prepaid, togetherwith accrued interest thereon and the Change of Control Premium, on the ControlChange Payment Date if such Lender delivers to Company a written notice (the “**Declaration Notice**”) to prepay suchLender’s Loans (which notice may provide, at such Lender’s option, for apartial prepayment of such Lender’s Loans). Company shall prepay, and shall cause its Subsidiaries to distribute toCompany sufficient funds to prepay, in full on the Control Change Payment Dateall Loans for which a Declaration Notice has been issued, together with accruedinterest and the Change of Control Premium thereon.  Such Declaration Notice shall only be effective if provided toCompany on or prior to the Response Date. In the event that a Control Change Notice is given and any Lender failsto provide a Declaration Notice within the time period set forth above, theLoans of such Lender shall not be prepaid.

 

All prepayments on the Loans pursuant to thissubsection 2.4B(iii) shall be made by the payment in cash of the aggregateprincipal amount remaining unpaid on such Loans, and accrued interest thereonto the date of such prepayment, together with the Change of Control Premium.

 

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(iv)                              Call Protection.  In the event that for any reason the Loansare prepaid in whole or in part prior to the date falling three years after theClosing Date, Company shall pay to Lenders a prepayment premium on theprincipal amount so prepaid as follows:

 
| **Relevant  period**                                                                                            |   | **Prepayment  premium  as a percentage of the  principal amount so  prepaid** |       |
|-----------------------------------------------------------------------------------------------------------------|--------|-------------------------------------------------------------------------------|------------|
|                                                                                                            |   |                                                                          | ** ** |
| On or prior  to the first anniversary of the Closing Date                                                       |   | 3.0                                                                           | %          |
|                                                                                                            |   |                                                                          |       |
| On or prior  to the second anniversary of the Closing Date and after the first anniversary  of the Closing Date |   | 2.0                                                                           | %          |
|                                                                                                            |   |                                                                          |       |
| On or prior  to the third anniversary of the Closing Date and after the second anniversary  of the Closing Date |   | 1.0                                                                           | %          |
|                                                                                                            |   |                                                                          |       |
| After the  third anniversary of the Closing Date                                                                |   | 0.0                                                                           | %          |

 

**C.**                                    **General ProvisionsRegarding Payments.**

 

(i)  Mannerand Time of Payment.  All paymentsby Company of principal, interest, premium, fees and other Obligationshereunder and under the Notes shall be made in Dollars in same day funds,without defense, setoff or counterclaim, free of any restriction or condition,and delivered to Administrative Agent not later than 2:00 P.M. (New York time)on the date due at the Funding and Payment Office for the account of Lenders;funds received by Administrative Agent after that time on such due date shallbe deemed to have been paid by Company on the next succeeding Business Day; providedthat Accreted Amounts and Default Rate Accreted Amounts shall be paid byincreasing the principal amount of the Loans shall be paid as provided insubsection 2.2A or subsection 2.2E, as applicable.

 

(ii)  Applicationof Payments to Principal, Interest and Premium.  All payments in respect of the principal amount of any Loan shallinclude payment of accrued interest and premium, if any is due, on theprincipal amount being repaid or prepaid, and all such payments (and, in anyevent, any payments in respect of any Loan on a date when interest is due andpayable with respect to such Loan) shall be applied to the payment of anypremium and interest before application to principal.  Any mandatory prepayments of the Loans pursuant to subsection2.4B(ii) shall be applied to prepay the Fixed Rate Loans and the Floating RateLoans on a pro rata basis (in accordance with the respective outstandingprincipal amounts thereof).

 

(iii) Apportionment of Payments. Aggregate principal, premium and interest payments in respect of Loansshall be apportioned among all outstanding Loans to which such payments relate,in each case proportionately to Lenders’ respective Pro Rata Shares.  Administrative Agent shall promptlydistribute to each Lender, at its primary address set forth below its name onthe appropriate signature page hereof or at such other address as such Lendermay request, its Pro

 

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RataShare of all such payments received by Administrative Agent when received byAdministrative Agent pursuant to subsection 2.3.

 

(iv)  Paymentson Business Days.  Whenever anypayment to be made hereunder shall be stated to be due on a day that is not aBusiness Day, such payment shall be made on the next succeeding Business Dayand such extension of time shall be included in the computation of the paymentof interest hereunder.

 

**D.**                                    **Application ofProceeds of Collateral and Payments Under Guaranties.**

 

(i)  Applicationof Proceeds of Collateral.  Subjectto the terms of the Intercreditor Agreement (to the extent then in effect), allproceeds received by Administrative Agent in respect of any sale of, collectionfrom, or other realization upon all or any part of the Collateral under anyCollateral Document shall be applied, upon the occurrence and during thecontinuance of an Event of Default (except as otherwise agreed byAdministrative Agent and the Requisite Lenders), against, the applicableSecured Obligations (as defined in such Collateral Document) in the followingorder of priority:

 

(a)                                  tothe payment of all costs and expenses of such sale, collection or otherrealization, including reasonable fees and expenses of Administrative Agent andits agents and counsel, and all other expenses and liabilities made or incurredby Administrative Agent in connection therewith, and all amounts for whichAdministrative Agent is entitled to indemnification under such CollateralDocument and all advances made by Administrative Agent thereunder for theaccount of the applicable Loan Party, and to the payment of all costs andexpenses paid or incurred by Administrative Agent in connection with theexercise of any right or remedy under such Collateral Document, all inaccordance with the terms of this Agreement and such Collateral Document;

 

(b)                                 thereafter,to the extent of any excess such proceeds, to the payment of all other suchSecured Obligations then due and payable for the ratable benefit of the holdersthereof; and

 

(c)                                  thereafter,to the extent of any excess such proceeds, to the payment to or upon the orderof such Loan Party or to whosoever may be lawfully entitled to receive the sameor as a court of competent jurisdiction may direct.

 

(ii)  Applicationof Payments Under Guaranties.  Allpayments received by Administrative Agent under any of the Guaranties at anytime at which an Event of Default has occurred and is continuing, shall (exceptas otherwise agreed by Administrative Agent and the Requisite Lenders) beapplied promptly from time to time by Administrative Agent in the followingorder of priority:

 

(a)                                  tothe payment of the costs and expenses of any collection or other realizationunder the Guaranties, including reasonable fees and expenses of AdministrativeAgent and its agents and counsel, and all expenses, liabilities and advancesmade or incurred by Administrative Agent in connection therewith, all inaccordance with the terms of this Agreement and such Guaranty;

 

(b)                                 thereafter,to the extent of any excess such payments, to the payment of all otherGuarantied Obligations (as defined in such Guaranty) then due and payable forthe ratable benefit of the holders thereof; and

 

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(c)                                  thereafter,to the extent of any excess such payments, to the payment to Parent or to theapplicable Subsidiary Guarantor or to whosoever may be lawfully entitled toreceive the same or as a court of competent jurisdiction may direct.

 

**2.5**                               Use of Proceeds.

** **

**A.**                                    **Loans.** The proceeds of the Loans shall be applied by Company to permanentlyprepay not less than forty percent (40%) of the principal amount of term loanIndebtedness outstanding in respect of the First Lien Credit Agreement on theClosing Date (prior to giving effect to the application of proceeds describedherein), to permanently reduce revolving commitments in respect of the FirstLien Credit Agreement on the Closing Date in an aggregate amount not less than$16,000,000 and to repay revolving loans outstanding on the Closing Date inrespect of the First Lien Credit Agreement after giving effect to theforegoing, and the remaining amount of the proceeds of the Loans shall be usedto pay for fees and expenses relating to the transactions contemplatedhereunder and for working capital and general and other corporate purposes of Companyand its Subsidiaries.

 

**B.**                                    **Margin Regulations.** No borrowing and no portion of the proceeds of any borrowing under thisAgreement shall be used by Company or any of its Subsidiaries in any mannerthat is in violation of Regulation U or Regulation X of the Board of Governorsof the Federal Reserve System in effect on the date or dates of such borrowingand such use of proceeds.

 

**2.6**                               SpecialProvisions GoverningEurodollar Rate Loans.

** **

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

 

**A.**                                    **Determination ofApplicable Interest Rate.** As soon aspracticable after 11:00 A.M. (London time) on each Interest Rate DeterminationDate, Administrative Agent shall determine (which determination shall, absentmanifest error, be final, conclusive and binding upon all parties) the interestrate that shall apply to the Eurodollar Rate Loans for which an interest rateis then being determined for the applicable Interest Period and shall promptlygive notice thereof (in writing or by telephone confirmed in writing) toCompany and each Floating Rate Lender.

 

**B.**                                    **Inability toDetermine Applicable Interest Rate. **In the event that AdministrativeAgent shall have determined (which determination shall be final and conclusiveand binding upon all parties hereto), on any Interest Rate Determination Datewith respect to any Eurodollar Rate Loans, that deposits in U.S. Dollars forthe relevant Interest Period are not available to Administrative Agent in theLondon interbank market or by reason of circumstances affecting the Londoninterbank market adequate and fair means do not exist for ascertaining theinterest rate applicable to such Loans on the basis provided for in thedefinition of Adjusted Eurodollar Rate, Administrative Agent shall on such dategive notice (by telefacsimile or by telephone confirmed in writing) to Companyand each Floating Rate Lender of such determination, whereupon (i) noLoans may be continued as, or converted to, Eurodollar Rate Loans until suchtime as Administrative Agent notifies Company and Floating Rate Lenders thatthe circumstances giving rise to such notice no longer exist and (ii) anyNotice of Continuation given by Company with respect to the Loans in respect ofwhich such determination was made shall be deemed to be rescinded by Company,and the Loans requested to be continued shall instead be converted to Base RateLoans.

 

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**C.**                                    **Illegality orImpracticability of Eurodollar Rate Loans. **Inthe event that on any date any Floating Rate Lender shall have determined(which determination shall be final and conclusive and binding upon all partieshereto but shall be made only after consultation with Company andAdministrative Agent) that the making, maintaining or continuation of itsEurodollar Rate Loans has become unlawful as a result of the introduction of,or any change  in or in the interpretationof, any law, treaty, governmental rule, regulation, guideline or order (whetheror not having the force of law even though the failure to comply therewithwould not be unlawful), in each case after the date hereof, then, and in anysuch event, such Floating Rate Lender shall be an “**Affected Lender**” and it shall on that day give notice (bytelefacsimile or by telephone confirmed in writing) to Company andAdministrative Agent of such determination (which notice Administrative Agentshall promptly transmit to each other Floating Rate Lender).  Thereafter (a) the obligation of theAffected Lender to continue Loans as Eurodollar Rate Loans shall be suspendeduntil such notice shall be withdrawn by the Affected Lender (which suchAffected Lender shall do promptly upon obtaining actual knowledge that thecircumstance giving rise to such suspension no longer exist), (b) to theextent such determination by the Affected Lender relates to a Eurodollar RateLoan then being requested to be continued by Company pursuant to a Notice ofContinuation, the Affected Lender shall convert such Loan to a Base Rate Loan(with interest thereon being payable on the same date or dates on whichinterest is payable in respect of the corresponding Loans of Floating RateLenders that are not Affected Lenders), (c) the Affected Lender’sobligation to maintain its outstanding Eurodollar Rate Loans (the “**Affected Loans**”) shall be terminated at theearlier to occur of the expiration of the Interest Period then in effect withrespect to the Affected Loans or when required by law, and (d) theAffected Loans shall automatically convert into Base Rate Loans on the date ofsuch termination (with interest thereon being payable on the same date or dateson which interest is payable in respect of the corresponding Loans of FloatingRate Lenders that are not Affected Lenders). Nothing in this subsection 2.6C shall affect the obligation of anyFloating Rate Lender other than an Affected Lender to maintain Loans asEurodollar Rate Loans in accordance with the terms of this Agreement.

 

**D.**                                    **Compensation ForBreakage or Non-Commencement of Interest Periods. **Companyshall compensate each Lender, upon written request by that Lender (whichrequest shall set forth the basis for requesting such amounts), for allreasonable losses, expenses and liabilities (including any interest paid bythat Lender to lenders of funds borrowed by it to make or carry its EurodollarRate Loans and any loss, expense or liability sustained by that Lender inconnection with the liquidation or re-employment of such funds but excludingany loss of margin for any period after any failure to borrow, continue orconvert any Eurodollar Loans, or any prepayment of Eurodollar Loans describedbelow) which that Lender may sustain: (i) if for any reason (other than adefault by that Lender) a borrowing of any Eurodollar Rate Loan does not occuron a date specified therefor in the Notice of Borrowing, or a conversion to orcontinuation of any Eurodollar Rate Loan does not occur on a date specifiedtherefor in a Notice of Continuation or a telephonic request for conversion orcontinuation, (ii) if any prepayment (including any prepayment pursuant tosubsection 2.4B(i)) or other principal payment or any conversion of any of itsEurodollar Rate Loans occurs on a date prior to the last day of an InterestPeriod applicable to that Loan, or (iii) if any prepayment of any of itsEurodollar Rate Loans is not made on any date specified in a notice ofprepayment given by Company.

 

**E.**                                      **Booking ofEurodollar Rate Loans.** Any Lender maymake, carry or transfer Eurodollar Rate Loans at, to, or for the account of anyof its branch offices or the office of an Affiliate of that Lender; providedthat Company shall not be liable for any additional amounts pursuant tosubsection 2.7 as a result thereof nor shall any such action, by itself, causesuch Lender to become an Affected Lender.

 

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**F.**                                      **AssumptionsConcerning Funding of Eurodollar Rate Loans. **Calculationof all amounts payable to a Lender under this subsection 2.6 and undersubsection 2.7A shall be made as though that Lender had actually funded each ofits relevant Eurodollar Rate Loans through the purchase of a Eurodollar depositbearing interest at the rate obtained pursuant to clause (i) of the definitionof Adjusted Eurodollar Rate in an amount equal to the amount of such EurodollarRate Loan and having a maturity comparable to the relevant Interest Period andthrough the transfer of such Eurodollar deposit from an offshore office of thatLender to a domestic office of that Lender in the United States of America; provided,however, that each Lender may fund each of its Eurodollar Rate Loans inany manner it sees fit and the foregoing assumptions shall be utilized only forthe purposes of calculating amounts payable under this subsection 2.6 and undersubsection 2.7A.

 

**2.7**                               IncreasedCosts; Taxes;Capital Adequacy.

** **

**A.**                                    **Compensation forIncreased Costs and Taxes.**  Subject tothe provisions of subsection 2.7B (which shall be controlling with respect tothe matters covered thereby), in the event that any Lender shall determine(which determination shall, absent manifest error, be final and conclusive andbinding upon all parties hereto) that any law, treaty or governmental rule,regulation or order, or any change therein or in the interpretation,administration or application thereof (including the introduction of any newlaw, treaty or governmental rule, regulation of order), or any determination ofa court or governmental authority, in each case that becomes effective afterthe date hereof (in the case of each Lender listed on the signature pageshereof and in the case of any other Lender if such change shall have affected aclass of Lenders generally) or after the date of the Assignment Agreementpursuant to which such Lender became a Lender (in the case of any other Lenderif such change shall not have affected a class of Lenders generally), orcompliance by such Lender with any guideline, request or directive issued ormade after the date hereof by any central bank or other governmental orquasi-governmental authority (whether or not having the force of law):

 

(i)                                     imposes, modifies or holdsapplicable any reserve (including any marginal, emergency, supplemental,special or other reserve), special deposit, compulsory loan, FDIC insurance orsimilar requirement against assets held by, or deposits or other liabilities inor for the account of, or advances or loans by, or other credit extended by, orany other acquisition of funds by, any office of such Lender (other than anysuch reserve or other requirements with respect to Eurodollar Rate Loans thatare reflected in the definition of Adjusted Eurodollar Rate); or

 

(ii)                                  imposes any other condition (otherthan with respect to a tax matter) on or affecting such Lender (or itsapplicable lending office) or its obligations hereunder or the London interbankmarket;

 

andthe result of any of the foregoing is to increase the cost to such Lender ofagreeing to make, making or maintaining Eurodollar Rate Loans hereunder or toreduce any amount received or receivable by such Lender (or its applicablelending office) with respect thereto; then, in any such case, Company shall payto such Lender, within 15 days after receipt of the statement referred to inthe next sentence, such additional amount or amounts as may be necessary tocompensate such Lender for any such increased cost or reduction in amountsreceived or receivable hereunder.  SuchLender shall promptly deliver to Company (with a copy to Administrative Agent)a written statement, setting forth in reasonable detail the basis forcalculating the additional amounts owed to such Lender under this subsection2.7A, which statement shall be conclusive and binding upon all parties heretoabsent manifest error.

 

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**B.**                                    **Withholding ofTaxes.**

 

(i)  Paymentsto Be Free and Clear.  All sumspayable by Company under this Agreement and the other Loan Documents shall(except to the extent required by law) be paid free and clear of, and withoutany deduction on account of, any Tax.

 

(ii)  Grossing-upof Payments.  If Company is requiredby law to make any deduction or withholding on account of any such Tax from anysum paid or payable by Company to Administrative Agent or any Lender under anyof the Loan Documents:

 

(a)                                  Companyshall pay any such Tax before the date on which penalties attach thereto, suchpayment to be made for its own account;

 

(b)                                 thesum payable by Company in respect of which the relevant deduction, withholdingor payment is required shall be increased to the extent necessary to ensurethat, after the making of that deduction, withholding or payment,Administrative Agent or such Lender, as the case may be, receives on the duedate a net sum equal to what it would have received had no such deduction,withholding or payment been required or made; and

 

(c)                                  within30 days after paying any sum from which it is required by law to make anydeduction or withholding, or within 30 days after the due date of payment ofany Tax which it is required by clause (a) above to pay (whichever is later),Company shall deliver to Administrative Agent evidence available to Companyreasonably satisfactory to Administrative Agent of such deduction, withholdingor payment and of the remittance thereof to the relevant taxing or otherauthority;

 

provided that no such additional amount shallbe required to be paid to any Lender or Agent under clause (b) above except tothe extent that any change after the date hereof (in the case of each Lender andAgent listed on the signature pages hereof) or after the date of the AssignmentAgreement pursuant to which such Lender became a Lender (in the case of eachother Lender) in any such requirement for a deduction, withholding or paymentas is mentioned therein shall result in an increase in the rate of suchdeduction, withholding or payment from that in effect at the date of thisAgreement or at the date of such Assignment Agreement, as the case may be, inrespect of payments to such Lender or Agent.

 

(iii) If any Taxes are directly asserted against either of Agents or anyLender with respect to any payment received by such Agents or such Lender underthe Agreement, such Agents or such Lender may pay such Taxes and Company willpromptly pay to such Person such additional amount (including any penalties,interest or expenses) as is necessary in order that the net amount received bysuch Person shall equal the amount of such Taxes paid by such Person; provided,however, that Company shall not be obligated to make payment to Lendersor Agents (as the case may be) pursuant to this sentence in respect ofpenalties or interest attributable to any Taxes, if written demand therefor hasnot been made by such Lenders or Agents within 60 days from the date on whichsuch Lenders or Agents knew of the imposition of Taxes by the relevant taxingauthority or for any additional imposition which may arise from the failure ofLenders or Agents to apply payments in accordance with the applicable tax lawafter Company has made the payments required hereunder; provided, further,however, that Company shall not be required to pay any such additional amountsexcept to the extent that any change after the date hereof (in the case of eachLender and Agent listed on the signature pages hereof) or after the date of theAssignment Agreement pursuant to which such Lender became a Lender (in the caseof each other Lender) in any such requirement for the deduction, withholding orpayment of Taxes shall result in an increase in the rate of such deduction,withholding or payment from that in effect at

 

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thedate of this Agreement or at the date of such Assignment Agreement, as the casemay be, in respect of payments to such Lender or Agent.  After a Lender or an Agent (as the case maybe) learns of the imposition of Taxes, such Lender or Agent will act in goodfaith to notify Company of their obligations hereunder as soon as reasonablypossible.

 

(iv)  Evidenceof Exemption from U.S. Withholding Tax.

 

(a)                                  EachLender and Agent that is not (i) a citizen or resident of the United States,(ii) a corporation, partnership or other entity created or organized in orunder the laws of the United States, or any state or other politicalsubdivision thereof, (iii) an estate that is subject to U.S. federal incometaxation regardless of the source of its income or (iv) a trust, if any only if(A) a court within the United States is able to exercise primary supervisionover the administration of the trust and (B) one or more U.S. persons has theauthority to control all substantial decisions of the trust (for purposes ofthis subsection 2.7B(iv), any such Person referred to in clauses (i) through(iv) being a “**Non-US Lender or Agent**”)shall deliver to Administrative Agent and to Company on or prior to the ClosingDate (in the case of each Lender and Agent listed on the signature pageshereof) or on or prior to the date of the Assignment Agreement pursuant towhich it becomes a Lender (in the case of each other Lender), and at such othertimes as may be necessary in the determination of Company or AdministrativeAgent (each in the reasonable exercise of its discretion), (1) two or more (asCompany or Administrative Agent reasonably request) original copies of InternalRevenue Service Form W-8BEN or W-8EC1 (or any successor forms), properlycompleted and duly executed by such Lender, together with any other certificateor statement of exemption required under the Internal Revenue Code or theregulations issued thereunder to establish that such Lender is not subject todeduction or withholding of United States federal income tax with respect toany payments to such Lender of principal, interest, fees or other amountspayable under any of the Loan Documents or (2) if such Lender is not a “bank”or other Person described in Section 881(c)(3) of the Internal Revenue Code andcannot deliver either Internal Revenue Service Form W-8BEN or W-8EC1 pursuantto clause (1) above, a Certificate re Non-Bank Status, together with two ormore (as Company or Administrative Agent reasonably request) original copies ofInternal Revenue Service Form W-8 (or any successor form), properly completedand duly executed by such Lender, together with any other certificate orstatement of exemption required under the Internal Revenue Code or theregulations issued thereunder to establish that such Lender is not subject todeduction or withholding of United States federal income tax with respect toany payments to such Lender of interest payable under any of the LoanDocuments.

 

(b)                                 EachLender required to deliver any forms, certificates or other evidence withrespect to United States federal income tax withholding matters pursuant tosubsection 2.7B(iv)(a) hereby agrees, from time to time after the initialdelivery by such Lender of such forms, certificates or other evidence, whenevera lapse in time or change in circumstances renders such forms, certificates orother evidence obsolete or inaccurate in any material respect, that such Lendershall on or before the date that any such form, certification or other evidencebecomes obsolete or inaccurate (1) deliver to Administrative Agent and toCompany two or more (as Company or Administrative Agent may reasonably request)new original copies of Internal Revenue Service Form W-8BEN or W-8EC1, or aCertificate re Non-Bank Status and two or more (as Company or AdministrativeAgent may reasonably request) new original copies of Internal Revenue ServiceForm W-8, as the case may be, properly completed and duly executed by suchLender, together with any other certificate or statement of exemption requiredin order to confirm or establish that such Lender is not subject to deductionor withholding of United States federal income tax with respect to payments tosuch Lender under the Loan Documents or (2) notify Administrative Agent andCompany of its inability to deliver any such forms, certificates

 

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or otherevidence.  Each Lender and each Agentagrees, to the extent reasonable and without material cost to it, to provide toCompany and Administrative Agent such other applicable forms or certificatesthat would reduce or eliminate any Tax.

 

(c)                                  Companyshall not be required to pay any additional amount to any Non-US Lender orAgent under subsection 2.7B(ii) or 2.7B(iii) if such Lender or Agent shall havefailed to satisfy the requirements of clause (a) or (b)(1) of this subsection2.7B(iv); provided that if such Lender shall have satisfied therequirements of subsection 2.7B(iv)(a) on the Closing Date (in the case of eachLender listed on the signature pages hereof) or on the date of the AssignmentAgreement pursuant to which it became a Lender (in the case of each otherLender), nothing in this subsection 2.7B(iv)(c) shall relieve Company of itsobligation to pay any additional amounts pursuant to subsection 2.7B(ii) in theevent that, as a result of any change in any applicable law, treaty orgovernmental rule, regulation or order, or any change in the interpretation,administration or application thereof, such Lender is no longer properlyentitled to deliver forms, certificates or other evidence at a subsequent dateestablishing the fact that such Lender is not subject to withholding asdescribed in subsection 2.7B(iv)(a).

 

(v) If Company determines in good faith that a reasonable basis exists forcontesting the imposition of a Tax with respect to a Lender or an Agent, ifrequested by Company, the relevant Lender or Agent, as the case may be, shallreasonably cooperate with Company in challenging such Tax at Company’s expense;provided, however, that nothing in this subsection 2.7B(v) shallrequire any Lender to submit to Company or any other Person any tax returns orany part thereof, or to prepare or file any tax returns other than as suchLender in its sole discretion shall determine.

 

(vi) If a Lender or an Agent shall receive a refund (including any offset orcredits) from a taxing authority (as a result of any error in the imposition ofTaxes by such taxing authority) of any Taxes paid by Company pursuant tosubsection 2.7B(ii) and 2.7B(iii) above, such Lender or Agent (as the case maybe) shall promptly pay Company the amount so received, with interest, if any,from the taxing authority with respect to such refund, net of any tax liabilityincurred by such Lender or Agent that is attributable to the receipt of suchrefund and such interest; provided that such Lender or Agent, as thecase may be, shall be entitled to use reasonable methods to calculate the allocationof any such refund payable to Company so long as such method does not result ina materially reduced amount being paid to Company as compared to similarlysituated borrowers.

 

(vii) Each Lender and each Agent agrees, to the extent reasonable and withoutmaterial cost to it, to cooperate with Company to minimize any amounts payableby Company under this subsection 2.7B; provided, however, thatnothing in this subsection 2.7B shall require any Lender to take any actionwhich, in the sole discretion of such Lender, is inconsistent with its internalpolicy and legal and regulatory restrictions.

 

**C.**                                    **Capital AdequacyAdjustment**.  If any Lender shall have determined that theadoption, effectiveness, phase-in or applicability after the date hereof (inthe case of each Lender listed on the signature pages hereof and in the case ofany other Lender if such change shall have affected a class of Lendersgenerally) or after the date of the Assignment Agreement pursuant to which suchLender became a Lender (in the case of any other Lender if such change shallnot have affected a class of Lenders generally) of any law, rule or regulation(or any provision thereof) regarding capital adequacy, or any change after suchdate therein or in the interpretation or administration thereof by anygovernmental authority, central bank or comparable agency charged with theinterpretation or administration thereof, or compliance by any Lender (or itsapplicable lending office) with any guideline, request or directive regarding

 

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capital adequacy(whether or not having the force of law) of any such governmental authority,central bank or comparable agency issued after such date, has or would have theeffect of reducing the rate of return on the capital of such Lender or anycorporation controlling such Lender as a consequence of, or with reference to,such Lender’s Loans or Commitments or other obligations hereunder with respectto the Loans to a level below that which such Lender or such controllingcorporation could have achieved but for such adoption, effectiveness, phase-in,applicability, change or compliance (taking into consideration the policies ofsuch Lender or such controlling corporation with regard to capital adequacy), thenfrom time to time, within 15 days after receipt by Company from such Lender ofthe statement referred to in the next sentence, Company shall pay to suchLender such additional amount or amounts as will compensate such Lender or suchcontrolling corporation for such reduction. Such Lender shall deliver to Company (with a copy to AdministrativeAgent) a written statement, setting forth in reasonable detail the basis of thecalculation of such additional amounts, which statement shall be conclusive andbinding upon all parties hereto absent manifest error; provided thatsuch Lender may not impose materially greater costs on Company than onsimilarly situated borrowers by the virtue of the methodology applied tocalculate such additional amounts.

 

**D.**                                    **Period of Recovery**. Company shall not be obligated to compensate any Lender for any costs oradditional amounts with respect to which such Lender may request compensationpursuant to this subsection 2.7 to the extent such costs have accrued, or havebeen incurred, prior to 180 days prior to the date on which such Lender demandscompensation therefor hereunder.

 

**2.8**                               Obligationof Lenders toMitigate; Replacement of Lender.

** **

**A.**                                    **Mitigation**. Each Lender agrees that, as promptly as practicable after the officer ofsuch Lender responsible for administering the Loans of such Lender, becomesaware of the occurrence of an event or the existence of a condition that wouldcause such Lender to become an Affected Lender or that would entitle suchLender to receive payments under subsection 2.7, it will, to the extent notinconsistent with the internal policies of such Lender and any applicable legalor regulatory restrictions, use reasonable efforts (i) to make, issue, fund ormaintain the Commitments of such Lender or the affected Loans of such Lenderthrough another lending office of such Lender, or (ii) take such other measuresas such Lender may deem reasonable, if as a result thereof the circumstanceswhich would cause such Lender to be an Affected Lender would cease to exist orthe additional amounts which would otherwise be required to be paid to suchLender pursuant to subsection 2.7 would be reduced and if, as determined bysuch Lender in its sole discretion, the making, issuing, funding or maintainingof such Commitments or Loans through such other lending office or in accordancewith such other measures, as the case may be, would not otherwise materiallyadversely affect such Commitments or Loans or the interests of such Lender; providedthat such Lender will not be obligated to utilize such other lending officepursuant to this subsection 2.8 unless Company agrees to pay all incrementalexpenses incurred by such Lender as a result of utilizing such other lendingoffice as described in clause (i) above. A certificate as to the amount of any such expenses payable by Companypursuant to this subsection 2.8 (setting forth in reasonable detail the basisfor requesting such amount) submitted by such Lender to Company (with a copy toAdministrative Agent) shall be conclusive absent manifest error.

 

**B.**                                    **Replacement ofLender**.  If Company receives a notice of amounts duepursuant to subsection 2.7A, subsection 2.7B or subsection 2.7C from a Lenderor a Lender becomes an Affected Lender or a Non-Consenting Lender (any suchLender, a “**Subject Lender**”), solong as Company has obtained a commitment from another Lender or an Eligible

 

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Assignee to purchaseat par the Subject Lender’s Loans and assume all other obligations of the SubjectLender hereunder, upon written notice to the Subject Lender and AdministrativeAgent, Company may require the Subject Lender to assign all of its Loans tosuch other Lender or Eligible Assignee pursuant to the provisions of subsection9.1B; provided that, prior to or concurrently with such replacement (i)Company has paid to the Lender giving such notice all amounts under subsection2.6D and subsection 2.7 (if applicable) through such date of replacement, (ii)Company or the applicable assignee has paid to Administrative Agent theprocessing fee required to be paid by subsection 9.1B(iv) and (iii) all of therequirements for such assignment contained in subsection 9.1B, including,without limitation, the consent of Agents (if required) and the receipt by AdministrativeAgent of an executed Assignment Agreement and other supporting documents, havebeen fulfilled.

 

**Section 3.**                                          CONDITIONSTO LOANS

** **

Theobligations of Lenders to make the Loans on the Closing Date are subject toprior or concurrent satisfaction of the following conditions:

 

**3.1**                               LoanParty Documents.  Onor before the Closing Date, Company shall, and shall cause each other LoanParty to, deliver to Lenders (or to Administrative Agent for Lenders withsufficient originally executed copies, where appropriate, for each Lender) thefollowing with respect to Company or such other Loan Party, as the case may be,each, unless otherwise noted, dated the Closing Date:

** **

(i) Certified copies of the Organizational Certificate of such Person,together with a good standing certificate from the Secretary of State of itsjurisdiction of incorporation, organization or formation, as applicable, andeach other state in which such Person does a material amount of business and isqualified as a foreign entity to do business and, to the extent applicable andgenerally available, a certificate or other evidence of good standing as topayment of any applicable franchise or similar taxes from the appropriatetaxing authority of each of such jurisdictions, each dated a recent date priorto the Closing Date;

 

(ii) Copies of the Organizational Documents of such Person, certified as ofthe Closing Date by an Authorized Officer of such Person or such Person’scorporate secretary or assistant secretary;

 

(iii) Organizational Authorizations of such Person approving and authorizingthe execution, delivery and performance of the Loan Documents to which it is aparty, and the consummation of the transactions contemplated by the foregoing,certified as of the Closing Date by an Authorized Officer of such Person orsuch Person’s corporate secretary or assistant secretary as being in full forceand effect without modification or amendment;

 

(iv) Signature and incumbency certificates with respect to each AuthorizedOfficer of such Person executing any Loan Document or authorized to execute anynotice, request or other document that may be delivered pursuant thereto;

 

(v) Executed originals of the Credit Agreement, any Notes requested by anyLender at least one Business Day prior to the Closing Date, the IntercreditorAgreement, the Parent Guaranty, the Parent Pledge Agreement, the PledgeAgreement, the Security Agreement and the Subsidiary Guaranty, executed byParent, Company and each of Company’s Domestic Subsidiaries, as applicable; and

 

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(vi) Such other documents as Agents may reasonably request.

 

**3.2**                               Use ofProceeds.

** **

(i)  Repaymentof Existing Indebtedness under the First Lien Credit Agreement.Contemporaneously with the application of the proceeds of the Loans to be madeon the Closing Date, Company shall have used the proceeds of such Loans topermanently prepay not less than forty percent (40%) of the principal amount ofterm loan Indebtedness outstanding in respect of the First Lien CreditAgreement on the Closing Date (prior to giving effect to the application ofproceeds described herein), to permanently reduce revolving commitments inrespect of the First Lien Credit Agreement on the Closing Date in an aggregateamount not less than $16,000,000, to repay revolving loans outstanding on theClosing Date in respect of the First Lien Credit Agreement after giving effectto the foregoing, and to pay for Transaction Costs.  There shall be no existing Indebtedness of Company or its Subsidiariesoutstanding after consummation of the Closing Date transactions other thanIndebtedness permitted under subsection 6.1.

 

(ii)  Compliancewith Laws.  The making of the Loansrequested on the Closing Date shall not violate Regulation U or Regulation X ofthe Board of Governors of the Federal Reserve System.

 

**3.3**                               RelatedAgreements.  Agentsshall have received copies of the Related Agreements in effect on the ClosingDate.

** **

**3.4**                               NoMaterial Adverse Change. No material adversechange in the financial condition, operations, assets, business, properties orprospects of Company and its Subsidiaries, taken as a whole, since June 30,2003, shall have occurred.  There shallexist no pending or threatened material litigation, proceedings orinvestigations which could reasonably be expected to have a Material AdverseEffect.

** **

**3.5**                               LienSearches.  Deliveryto Administrative Agent of the results of a recent search of all effective UCCfinancing statements and fixture filings and all judgment and tax lien filingswhich may have been made with respect to any personal or mixed property ofCompany and any of its Domestic Subsidiaries, together with copies of all suchfilings disclosed by such search.

** **

**3.6**                               SolvencyCertificate.  Companyshall have delivered to Arranger and Agents a Solvency Certificate dated theClosing Date.

** **

**3.7**                               Representationsand Warranties.  Companyshall have delivered to Agents an Officer’s Certificate, in form and substancereasonably satisfactory to Agents, to the effect that the representations andwarranties in Section 4 hereof are true, correct and complete in all materialrespects on and as of the Closing Date to the same extent as though made on andas of that date (or, to the extent such representations and warrantiesspecifically relate to an earlier date, that such representations andwarranties were true, correct and complete in all material respects on and asof such earlier date).

** **

**3.8**                               Necessary Governmental Authorizations and Consents.  Company shall have obtained allGovernmental Authorizations and all consents of other Persons, in each casethat are necessary or advisable in connection with all transactionscontemplated by the Loan Documents, and each of the foregoing shall be in fullforce and effect, in each case other than those the failure to obtain ormaintain which, either individually or in the aggregate, would not reasonablybe expected to have a Material Adverse Effect.

** **

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**3.9**                               FinancialStatements.  Lendersshall have received (i) unaudited financial statements of Company and itsSubsidiaries for the Fiscal Quarter ended September 30, 2003, (ii) *pro forma* consolidated balance sheets ofCompany and its Subsidiaries as of September 30, 2003, giving *pro forma* effect to the Closing Datetransactions and (iii) projected financial statements (including balance sheetsand statements of operations and cash flows) of Company and its Subsidiariesthrough and including December 31, 2008.

** **

**3.10**                        Fees. Company shall have paidto Agents, Lenders and Arranger the fees payable on the Closing Date.

** **

**3.11**                        Completionof Proceedings.  Alldocuments executed or submitted pursuant hereto by or on behalf of Company orany of its Subsidiaries or any other Loan Parties shall be reasonablysatisfactory in form and substance to Agents and their counsel; Agents andtheir counsel shall have received all information, approvals, opinions,documents or instruments that Agents or their counsel shall have reasonablyrequested.

** **

**3.12**                        Security Interests in Personal and Mixed Property. Administrative Agentshall have received evidence satisfactory to it that each Loan Party shall havetaken or caused to be taken all such actions, executed and delivered or causedto be executed and delivered all such agreements, documents and instruments,and made or caused to be made all such filings and recordings (other than thefiling or recording of items described in clause (iii) below) that may benecessary or, in the opinion of Agents, desirable in order to create in favor ofAdministrative Agent, for the benefit of Lenders, a valid and (upon such filingand recording) perfected First Priority security interest in the entirepersonal and mixed property Collateral. Such actions shall include the following:

 

(i)  Schedulesto Collateral Documents.  Deliveryto Administrative Agent of accurate and complete schedules to all of theapplicable Collateral Documents;

 

(ii)  StockCertificates and Instruments. Delivery to the First Lien Collateral Agent (pursuant to the terms ofthe Intercreditor Agreement) of (a) certificates (which certificates shall beaccompanied by irrevocable undated stock powers, duly endorsed in blank)representing all capital stock pledged pursuant to the Parent Pledge Agreementand the Pledge Agreement and (b) all promissory notes or other instrumentsevidencing any Collateral;

 

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

 

(iv)  Opinionsof Local Counsel.  Delivery toAgents of an opinion of counsel (which counsel shall be reasonably satisfactoryto Agents) under the laws of the states of****Californiaand Arkansas with respect to the creation and perfection of the securityinterests in favor of Administrative Agent in such Collateral, in each case inform and substance reasonably satisfactory to Agents and dated the ClosingDate.

 

**B.**                                    **Opinions of Counselto Loan Parties.**  Lenders and their respective counsel shallhave received originally executed copies of a written opinion of Davis Polk& Wardwell, special New York counsel for Loan Parties, and Spolin Silverman Cohen &Bartlett LLP, counsel

 

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for Loan Parties,each in form and substance reasonably satisfactory to Agents and dated theClosing Date.

 

**3.13**                        Noticeof Borrowing.  AdministrativeAgent shall have received, in accordance with the provisions of subsection2.1B, an executed Notice of Borrowing signed by an Authorized Officer ofCompany.

** **

**3.14**                        As ofthe Closing Date:

** **

(i) The representations and warranties contained herein and in the otherLoan Documents shall be true, correct and complete in all material respects onand as of the Closing Date to the same extent as though made on and as of thatdate, except to the extent such representations and warranties specificallyrelate to an earlier date, in which case such representations and warrantiesshall have been true, correct and complete in all material respects on and asof such earlier date; and

 

(ii) No event shall have occurred and be continuing or would result from theconsummation of the borrowing contemplated by the Notice of Borrowing thatwould constitute an Event of Default or a Potential Event of Default.

 

**Section 4.**                                          REPRESENTATIONS AND WARRANTIES

** **

In order to induce Lenders and Agents to enter into this Agreement andto make the Loans, Company represents and warrants to each Lender and Agents,on the Closing Date, that the following statements are true, correct andcomplete:

 

**4.1**                               Organization, Powers, Qualification, GoodStanding, Business and Subsidiaries.

** **

**A.**                                    **Organization andPowers.**  Each Loan Party is duly organized, validlyexisting and, to the extent applicable, in good standing under the laws of itsjurisdiction of incorporation, formation or organization as specified in Schedule4.1 annexed hereto except to the extent that the failure to be in goodstanding has not had and will not have a Material Adverse Effect.  Each Loan Party has all requisite power andauthority to own and operate its properties, to carry on its business as nowconducted and as proposed to be conducted, to enter into the Loan Documents andthe Related Agreements to which it is a party and to carry out the transactionscontemplated thereby.

 

**B.**                                    **Qualification andGood Standing.**  Each Loan Party is qualified to do businessand in good standing in every jurisdiction where its assets are located andwherever necessary to carry out its business and operations, except in jurisdictionswhere the failure to be so qualified or in good standing has not had and willnot have a Material Adverse Effect.

 

**C.**                                    **Subsidiaries.** All of the Subsidiaries of Company as of the Closing Date areidentified in Schedule 4.1 annexed hereto. Each of the Subsidiaries ofCompany identified in Schedule 4.1 is duly organized, validly existingand in good standing under the laws of its respective jurisdiction ofincorporation, formation or organization set forth therein, has all requisitepower and authority to own and operate its properties and to carry on itsbusiness as now conducted and as proposed to be conducted, and is qualified todo business and in good standing in every jurisdiction where its assets arelocated and wherever necessary to carry out its business and operations, ineach case except where failure to be so qualified or in good standing or a lack

 

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of such power andauthority has not had and will not have a Material Adverse Effect.  Schedule 4.1 correctly sets forth theownership interest of Company and each of its Subsidiaries, as of the ClosingDate, in each of the Subsidiaries of Company identified therein.

 

**4.2**                               AuthorizationofBorrowing, etc.

** **

**A.**                                    **Authorization ofBorrowing.**  The execution, delivery and performance ofthe Loan Documents and the Related Agreements have been duly authorized by allnecessary actions on the part of each Loan Party that is a party thereto.

 

**B.**                                    **No Conflict.** The execution, delivery and performance by Loan Parties of the LoanDocuments and the Related Agreements and the consummation of the transactionscontemplated by the Loan Documents and the Related Agreements do not and willnot (i) violate any provision of (x) any law or any governmental rule or regulationapplicable to Company or any of its Subsidiaries, (y) the OrganizationalCertificate or Organizational Documents of Company or any of Company’sSubsidiaries or (z) any order, judgment or decree of any court or other agencyof government binding on Company or any of Company’s Subsidiaries, (ii)conflict with, result in a breach of or constitute a default under the FirstLien Credit Agreement in effect on the date hereof or the Senior SubordinatedNote Indenture or any of the documents executed in connection with any of theforegoing, (iii) conflict with, result in a breach of or constitute a defaultunder any Contractual Obligation of Company or any of its Subsidiaries notreferred to in the immediately preceding clause (ii), where such conflict,breach or default in the aggregate have had or could reasonably be expected tohave a Material Adverse Effect, (iv) result in or require the creation orimposition of any Lien upon any of the properties or assets of  Company or any of Company’s Subsidiaries(other than any Liens created under any of the Loan Documents in favor ofAdministrative Agent on behalf of Lenders), or (v) require any approval of orconsent of any Person under any Contractual Obligation of Company or any ofCompany’s Subsidiaries, except for such approvals or consents which will beobtained on or before the Closing Date or such approvals or consents thefailure of which to obtain has not had and could not reasonably be expected tohave a Material Adverse Effect.

 

**C.**                                    **GovernmentalConsents.**  The execution, delivery and performance byLoan Parties of the Loan Documents and the Related Agreements and theconsummation of the transactions contemplated by the Loan Documents and theRelated Agreements do not and will not require any registration with, consentor approval of, or notice to, or other action to, with or by, any federal,state or other governmental authority or regulatory body other than any suchregistrations, consents, approvals, notices or other actions (x) that have beenmade, obtained or taken on or prior to the date on which such registrations,consents, approvals, notices or other actions are required to be made, obtainedor taken, as the case may be, and are in full force and effect or (y) thefailure of which to make, obtain or take has not had and could not reasonablybe expected to have a Material Adverse Effect.

 

**D.**                                    **Binding Obligation.** Each of the Loan Documents and the Related Agreements has been dulyexecuted and delivered by each Loan Party that is a party thereto and is the legallyvalid and binding obligation of such Loan Party, enforceable against such LoanParty in accordance with its terms, subject to bankruptcy, insolvency,fraudulent conveyance, reorganization, moratorium and other similar lawsrelating to or affecting creditors’ rights generally, general equitableprinciples (whether considered in a proceeding in equity or at law) and animplied covenant of good faith and fair dealing.

** **

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**4.3**                               FinancialCondition.

** **

Company hasheretofore delivered to Lenders, at Lenders’ request, the following financialstatements and information:  (i) theaudited consolidated balance sheets of Company and its Subsidiaries as atDecember 31, 2001 and 2002, and the related consolidated statements of income,stockholders’ equity and cash flows of Company and its Subsidiaries for theFiscal Years ended December 31, 2001 and 2002, and (ii) the unauditedconsolidated balance sheet of Company and its Subsidiaries as of September 30,2003 and the related unaudited consolidated statements of income, stockholders’equity and cash flows of Company and its Subsidiaries for the nine months thenended.  All such statements wereprepared in conformity with GAAP and fairly present, in all material respects,the financial position (on a consolidated basis) of the entities described insuch financial statements as at the respective dates thereof and the results ofoperations and cash flows (on a consolidated basis) of the entities describedtherein for each of the periods then ended, subject, in the case of any suchunaudited financial statements, to no footnote disclosure and changes resultingfrom normal year-end adjustments.

 

**4.4**                               NoMaterial Adverse Change;No Restricted Junior Payments.

** **

Since June 30,2003, no event or change has occurred which constitutes, either in any case orin the aggregate, a Material Adverse Effect. Neither Company nor any of its Subsidiaries has directly or indirectlydeclared, ordered, paid or made, or set apart any sum or property for, anyRestricted Junior Payment except as permitted by subsection 6.5.

 

**4.5**                               Titleto Properties; Liens; Real Property.

** **

**A.**                                    **Title toProperties; Liens.**  Except to the extent that failure to do sohas not had and  could not reasonably beexpected to have a Material Adverse Effect, Company and its Subsidiaries have(i) good, sufficient and legal title to (in the case of fee interests in realproperty), (ii) valid leasehold interests in (in the case of leaseholdinterests in real or personal property), or (iii) good title to (in the case ofall other personal property), all of their respective properties andassets.  Except as permitted by thisAgreement, all such properties and assets are free and clear of Liens.

 

**B.**                                    **Real Property.** As of the Closing Date, Schedule 4.5 annexed hereto contains atrue, accurate and complete list of (i) all real property owned by Company orany Domestic Subsidiary and (ii) all material leases, subleases or assignmentsof leases (together with all amendments, modifications, supplements, renewalsor extensions of any thereof) affecting each Real Property Asset of any LoanParty, regardless of whether such Loan Party is the landlord or tenant (whetherdirectly or as an assignee or successor in interest) under such lease, subleaseor assignment.

 

**4.6**                               Litigation;Adverse Facts.

** **

Except as setforth in Schedule 4.6 annexed hereto, there are no actions, suits,proceedings, arbitrations or governmental investigations (whether or notpurportedly on behalf of Company or any of its Subsidiaries) at law or inequity, or before or by any federal, state, municipal or other governmentaldepartment, commission, board, bureau, agency or instrumentality, domestic orforeign (including any Environmental Claims) that are pending or, to theknowledge of Company, threatened against or affecting Company or any of itsSubsidiaries or any property of Company or any of its Subsidiaries and that,individually or in the aggregate, could reasonably be expected to result in aMaterial Adverse Effect.  Neither Companynor any of its Subsidiaries is in violation of any applicable laws (includingEnvironmental Laws) which violations, individually or in the aggregate, couldreasonably be expected to result in a Material Adverse Effect.

 

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**4.7**                               Payment ofTaxes.

** **

Except to theextent permitted by subsection 5.3, all tax returns and reports of Company andits Subsidiaries required to be filed by any of them have been timely filed,and all taxes shown on such tax returns to be due and payable and allassessments, fees and other governmental charges upon Company and itsSubsidiaries and upon their respective properties, assets, income, businessesand franchises which are due and payable have been paid when due and payable,except any such taxes or charges which are being contested in good faith byappropriate proceedings and for which adequate reserves in accordance with GAAPhave been established.

 

**4.8**                               GovernmentalRegulation.

** **

NeitherCompany nor any of its Subsidiaries is subject to regulation under the PublicUtility Holding Company Act of 1935, the Federal Power Act, the InterstateCommerce Act or the Investment Company Act of 1940.

 

**4.9**                               SecuritiesActivities.

** **

NeitherCompany nor any of its Subsidiaries is engaged principally, or as one of itsimportant activities, in the business of extending credit for the purpose ofpurchasing or carrying any Margin Stock.

 

**4.10**                        EmployeeBenefit Plans.

** **

**A.**                                    Company, each of its Subsidiariesand each of their respective ERISA Affiliates are in substantial compliancewith all applicable material provisions and requirements of ERISA and theregulations and published interpretations thereunder with respect to eachEmployee Benefit Plan, and have performed all their obligations under each EmployeeBenefit Plan except to the extent that any such noncompliance or nonperformancecould not reasonably be expected to have a Material Adverse Effect.  Each Employee Benefit Plan which is intendedto qualify under Section 401(a) of the Internal Revenue Code is so qualifiedexcept as could not reasonably be expected to have a Material Adverse Effect.

 

**B.**                                    No ERISA Event has occurred or isreasonably expected to occur that could reasonably be expected to result in aMaterial Adverse Effect.

 

**C.**                                    Except to the extent required underSection 4980B of the Internal Revenue Code, no Employee Benefit Plan provideshealth or welfare benefits (through the purchase of insurance or otherwise) forany retired or former employee of Company, any of its Subsidiaries or any oftheir respective ERISA Affiliates, except as could not reasonably be expectedto result in a Material Adverse Effect.

 

**D.**                                    As of the most recent valuation datefor any Pension Plan, the amount of unfunded benefit liabilities (as defined inSection 4001(a)(18) of ERISA), individually or in the aggregate for all PensionPlans (excluding for purposes of such computation any Pension Plans withrespect to which assets exceed benefit liabilities) could not reasonably beexpected to have a Material Adverse Effect

 

**E.**                                      As of the most recent valuation datefor each Multiemployer Plan for which the actuarial report is available, thepotential liability of Company, its Subsidiaries and their respective ERISAAffiliates for a complete withdrawal from such Multiemployer Plan (within themeaning of Section 4203 of ERISA), when aggregated with such potentialliability for a complete

 

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withdrawal from allMultiemployer Plans, based on information available pursuant to Section 4221(e)of ERISA could not reasonably be expected to have a Material Adverse Effect.

 

**4.11**                        EnvironmentalProtection.

** **

Except as setforth in Schedule 4.11 annexed hereto and except as to matters that, inthe aggregate, would not reasonably be expected to have a Material AdverseEffect:

 

(i) neither Company nor any of its Subsidiaries nor any of their respectiveFacilities or operations are subject to any outstanding written order, consentdecree or settlement agreement with any Person relating to (a) any currentEnvironmental Law, (b) any Environmental Claim, or (c) any Hazardous MaterialsActivity;

 

(ii) neither Company nor any of its Subsidiaries has received any letter orrequest for information under Section 104 of the Comprehensive EnvironmentalResponse, Compensation, and Liability Act (42 U.S.C. § 9604) or any comparablestate law;

 

(iii) there are and, to Company’s knowledge, have been no conditions,occurrences, or Hazardous Materials Activities at the Facilities or otherwiserelating to the operation of Company or any of its Subsidiaries which couldreasonably be expected to form the basis of an Environmental Claim againstCompany or any of its Subsidiaries;

 

(iv) neither Company’s nor its Subsidiaries’ operations involve thetransportation, storage or disposal of Hazardous Materials so as to require apermit for such operations under RCRA Part B (42 U.S.C. §6925 and 40 C.F.R.270.1 et seq.) or involve transporting hazardous materials generated by a thirdparty for disposal; and

 

(v)compliance with all current requirementspursuant to or under Environmental Laws will not, individually or in theaggregate, have a reasonable possibility of giving rise to a  Material Adverse Effect.

 

**4.12**                        EmployeeMatters.

** **

There is nostrike or work stoppage in existence or threatened affecting Company or any ofits Subsidiaries that could reasonably be expected to have a Material AdverseEffect.

 

**4.13**                        Solvency.

** **

On the ClosingDate, after giving effect to the consummation of the Transactions, each LoanParty is Solvent.

 

**4.14**                        MattersRelating to Collateral.

** **

**A.**                                    **Creation,Perfection and Priority of Liens.**  The executionand delivery of the Collateral Documents by Loan Parties, together with actionstaken pursuant to subsections 3.12, 5.8 and 5.9, are effective or, in the caseof subsections 5.8 and 5.9 at the time of taking such actions, will beeffective, once taken, to create in favor of Administrative Agent, for thebenefit of Lenders, as security for the respective Secured Obligations (asdefined in the applicable Collateral Document in respect of any Collateral), avalid and perfected First Priority Lien on the Collateral covered thereby.

 

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**B.**                                    **GovernmentalAuthorizations.**  No authorization, approval or other actionby, and no notice to or filing with, any governmental authority or regulatorybody is required for either (i) the pledge or grant by any Loan Party of theLiens purported to be created in favor of Administrative Agent pursuant to anyof the Collateral Documents or (ii) the exercise by Administrative Agent of anyrights or remedies in respect of any Collateral (whether specifically grantedor created pursuant to any of the Collateral Documents or created or providedfor by applicable law), except for filings or recordings contemplated bysubsection 4.14A and except as may be required, in connection with thedisposition of any Pledged Collateral, by laws generally affecting the offeringand sale of securities.

 

**C.**                                    **Absence ofThird-Party Filings.**  On and after the ClosingDate, except (a) such as may have been filed in favor of Administrative Agentor with respect to Liens permitted by this Agreement (including, withoutlimitation, Liens securing obligations under the First Lien Credit Agreement)or (b) precautionary filings in respect of operating leases, (i) no effectiveUCC financing statement, fixture filing or other instrument similar in effectcovering all or any part of the Collateral is on file in any filing orrecording office and (ii) no effective filing covering all or any part of theIP Collateral is on file in the PTO, in each case other than filings in respectof which Administrative Agent shall have received appropriate terminationstatements or releases.

 

**D.**                                    **Margin Regulations.** The pledge of the Pledged Collateral pursuant to the CollateralDocuments does not violate Regulation U or X of the Board of Governors of theFederal Reserve System.

 

**E.**                                      **InformationRegarding Collateral.**  Allinformation supplied to Administrative Agent by or on behalf of any Loan Partywith respect to any of the Collateral (in each case taken as a whole withrespect to all Collateral) is accurate and complete in all material respects.

 

**4.15**                        Disclosure.

** **

Norepresentation or warranty of any Loan Party contained in any Loan Document orin any other document, certificate or written statement furnished to Lenders byor on behalf of Company or any of its Subsidiaries for use in connection withthe transactions contemplated by this Agreement (including the Confidential InformationMemorandum dated November, 2003) contains any untrue statement of a materialfact or omits to state a material fact (known to Company, in the case of anydocument not furnished by it) necessary in order to make the statementscontained herein or therein not materially misleading in light of thecircumstances in which the same were made. Any term or provision of this Section to the contrary notwithstanding,insofar as any of the representations and warranties described above includesassumptions, estimates, projections or opinions, no representation or warrantyis made herein with respect thereto; provided, however, that tothe extent any such assumptions, estimates, projections or opinions are basedon factual matters, Company has reviewed such factual matters and nothing hascome to its attention in the context of such review which would lead it tobelieve that such factual matters were not or are not true and correct in allmaterial respects or that such factual matters omit to state any material factnecessary to make such assumptions, estimates, projections or opinions notmisleading in any material respect.

 

**Section 5.**                                          AFFIRMATIVE COVENANTS

** **

Companycovenants and agrees that, so long as any of the Commitments hereunder shallremain in effect and until payment in full of all of the Loans and otherObligations, unless Requisite Lenders

 

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shall otherwise give prior written consent,Company shall perform, and shall cause each of its Subsidiaries to perform, allcovenants in this Section 5.

 

**5.1**                               Financial Statements and Other Reports.

** **

Company willmaintain, and cause each of its Subsidiaries to maintain, a system ofaccounting established and administered in accordance with sound businesspractices to permit preparation of financial statements in conformity withGAAP.  Company will deliver toAdministrative Agent (for distribution to Lenders):

 

(i)  QuarterlyFinancials:  as soon as availableand in any event within 60 days after the end of each Fiscal Quarter, theconsolidated balance sheet of Company and its Subsidiaries as at the end ofsuch Fiscal Quarter and the related consolidated statements of income andstockholders’ equity of Company and its Subsidiaries for such Fiscal Quarterand statements of income, stockholders’ equity and cash flows for the periodfrom the beginning of the then current Fiscal Year to the end of such FiscalQuarter, setting forth in each case in comparative form the correspondingfigures for the corresponding periods of the previous Fiscal Year (it beingunderstood that the foregoing requirement may be satisfied by delivery ofCompany’s report as filed with the Securities and Exchange Commission on Form10-Q, if any) together with, if any pro forma financial information has beenused in connection with determining compliance with this Agreement, areconciliation of such pro forma financial information with the financialinformation contained in such financial statements, all in reasonable detailand certified by the president, chief executive officer, treasurer, or chieffinancial officer of Company that they fairly present, in all materialrespects, the financial condition of Company and its Subsidiaries as at thedates indicated and the results of their operations and their cash flows forthe periods indicated, subject to changes resulting from audit and normalyear-end adjustments;

 

(ii)  Year-EndFinancials:  as soon as availableand in any event within 105 days after the end of each Fiscal Year, (a) theconsolidated balance sheet of Company and its Subsidiaries as at the end ofsuch Fiscal Year and the related consolidated statements of income,stockholders equity and cash flows of Company and its Subsidiaries for suchFiscal Year, setting forth in each case in comparative form the correspondingfigures for the previous Fiscal Year (it being understood that the foregoingrequirement may be satisfied by delivery of Company’s report to the Securitiesand Exchange Commission on Form 10-K, if any) together with, if any *pro forma* financial information has beenused in connection with determining compliance with this Agreement, areconciliation of such *pro forma*financial information with the financial information contained in suchfinancial statements, all in reasonable detail and reported on by independentcertified public accountants of recognized national standing selected byCompany and satisfactory to Agents, which report shall state (withoutImpermissible Qualification) that such consolidated financial statements fairlypresent, in all material respects, the consolidated financial position ofCompany and its Subsidiaries as at the dates indicated and the results of theiroperations and their cash flows for the periods indicated in conformity withGAAP applied on a basis consistent with prior years (except as otherwisedisclosed in such financial statements) and that the examination by suchaccountants in connection with such consolidated financial statements has beenmade in accordance with generally accepted auditing standards;

 

(iii) Officer’s and Compliance Certificates:  together with each delivery of financial statements pursuant tosubdivisions (i) and (ii) above, (a) an Officer’s Certificate of Companystating that the signers have reviewed the relevant terms of this Agreement andthat no condition or event that constitutes an Event of Default or PotentialEvent of Default exists, or, if any such condition or event existed or exists,specifying the nature and period of existence thereof and

 

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whataction Company has taken, is taking and proposes to take with respect theretoand (b) a Compliance Certificate executed by the president, chief executiveofficer, treasurer, or chief financial officer of Company;

 

(iv)  Accountants’Certification:  together with eachdelivery of consolidated financial statements of Company and its Subsidiariespursuant to subdivision (ii) above, a written statement by the independentcertified public accountants giving the report thereon (a) stating that theiraudit examination has included a review of the terms of subsections 6.1, 6.2,6.3, 6.4, 6.5, 6.6, 6.7 and 6.8 of this Agreement as they relate to accountingmatters, and (b) stating whether, in connection with their audit examination,any condition or event that constitutes an Event of Default or Potential Eventof Default has come to their attention and, if such a condition or event hascome to their attention, specifying the nature and period of existence thereof;provided that such accountants shall not be liable by reason of anyfailure to obtain knowledge of any such Event of Default or Potential Event ofDefault that would not be disclosed in the course of their audit examination;

 

(v)  SECFilings and Press Releases: promptly upon their becoming available, copies of (a) all financialstatements, reports, notices and proxy statements sent or made availablegenerally by Parent or Company to its security holders (other than DLJMB orParent, respectively), and (b) all regular and periodic reports and allregistration statements (other than on Form S-8 or a similar form) andprospectuses, if any, filed by Parent or any of its Subsidiaries with anynational securities exchange or with the Securities and Exchange Commission;

 

(vi)  Eventsof Default, etc.: promptly and in any event within seven Business Daysafter the president, chief executive officer, treasurer, assistant treasurer,controller, chief financial officer or any other Authorized Officer of Companyobtains knowledge of any condition or event that constitutes an Event ofDefault or Potential Event of Default, an Officer’s Certificate specifying thenature and period of existence of such Event of Default or Potential Event ofDefault and what action Company has taken, is taking and proposes to take withrespect thereto;

 

(vii) Litigation or Other Proceedings: (a) promptly upon the president, chief executive officer, treasurer,assistant treasurer, controller, chief financial officer or any otherAuthorized Officer of Company obtaining knowledge of (X) the institution of, ornon-frivolous threat of, any action, suit, proceeding (whether administrative,judicial or otherwise), governmental investigation or arbitration against oraffecting Company or any of its Subsidiaries or any property of Company or anyof its Subsidiaries (collectively, “**Proceedings**”)not previously disclosed in writing by Company to Lenders or (Y) any materialdevelopment in any Proceeding that, in any case:

 

(1)                                  hasa reasonable possibility of giving rise to a Material Adverse Effect; or

 

(2)                                  seeksto enjoin or otherwise prevent the consummation of, or to recover any damagesor obtain relief as a result of, the transactions contemplated hereby,

 

written noticethereof and (b) promptly after request by Agents, such other information as maybe reasonably requested by Agents to enable Agents and their respective counselto evaluate any of such Proceedings;

 

(viii) ERISA Events:  promptlyupon becoming aware of the occurrence of or forthcoming occurrence of any ERISAEvent that could reasonably be expected to result in a

 

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MaterialAdverse Effect, a written notice specifying the nature thereof, what actionCompany, any of its Subsidiaries or any of their respective ERISA Affiliateshas taken, is taking or proposes to take with respect thereto and, when known,any action taken or threatened by the Internal Revenue Service, the Departmentof Labor or the PBGC with respect thereto;

 

(ix)  ERISANotices:  with reasonable promptness,copies of all notices received by Company, any of its Subsidiaries or any oftheir respective ERISA Affiliates from a Multiemployer Plan sponsor concerningan ERISA Event that could reasonably be expected to result in a MaterialAdverse Effect;

 

(x)  FinancialPlans:  as soon as practicable andin any event no later than 30 days after the beginning of each Fiscal Year, aconsolidated budget for such Fiscal Year, in the form prepared by Companyconsistent with its past practices (the “**FinancialPlan**”);

 

(xi)  NewSubsidiaries:  promptly upon anyPerson becoming a Subsidiary of Company, a written notice setting forth withrespect to such Person (a) the date on which such Person became a Subsidiary ofCompany and (b) all of the data required to be set forth in Schedule 4.1with respect to all Subsidiaries of Company (it being understood that suchwritten notice shall be deemed to supplement Schedule 4.1 for allpurposes of this Agreement);

 

(xii) UCC Search Report:  aspromptly as practicable after the date of delivery to Administrative Agent ofany UCC financing statement delivered by any Loan Party pursuant to subsection3.12****or5.8A, copies of completed UCC searches evidencing the proper filing, recordingand indexing of all such UCC financing statements and listing all othereffective financing statements that name such Loan Party as debtor, togetherwith copies of all such other financing statements not previously delivered toAdministrative Agent by or on behalf of Company or such Loan Party; and

 

(xiii) Other Information:  withreasonable promptness, such other information and data with respect to Companyor any of its Subsidiaries as from time to time may be reasonably requested byany Lender.

 

**5.2**                               LegalExistence,etc.

** **

Except aspermitted under subsection 6.7, Company will, and will cause each of itsSubsidiaries to, at all times preserve and keep in full force and effect itslegal existence and all rights and franchises material to its business exceptwhere failure to keep in full force and effect such rights and franchises couldnot reasonably be expected to have a Material Adverse Effect; provided, howeverthat neither Company nor any of its Subsidiaries shall be required to preservethe existence of any Subsidiary if Company shall determine that thepreservation thereof is no longer desirable in the conduct of the business ofCompany and its Subsidiaries, and that the loss thereof is not disadvantageousin any material respect to Company or Lenders.

 

**5.3**                               Paymentof Taxes and Claims; Tax Consolidation.

** **

Company will,and will cause each of its Subsidiaries to, pay all material taxes, assessmentsand other governmental charges imposed upon it or any of its properties orassets or in respect of any of its income, businesses or franchises before anypenalty accrues thereon, and all material claims (including claims for labor,services, materials and supplies) for sums that have become due and payable andthat by law have or may become a Lien upon any of its properties or assets,prior to the time when any penalty or fine shall be incurred with respectthereto; provided that no such charge or claim need be paid if it is

 

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being contested in good faith by appropriateproceedings promptly instituted and diligently conducted, so long as suchreserve or other appropriate provision, if any, as shall be required inconformity with GAAP shall have been made therefor.

 

**5.4**                               Maintenance of Properties; Insurance; Application ofNet Insurance/CondemnationProceeds.

** **

**A.**                                    **Maintenance ofProperties.**  Except to the extent that the failure to doso would not reasonably be expected to have a Material Adverse Effect, Companywill, and will cause each of its Subsidiaries to, maintain or cause to bemaintained in good repair, working order and condition, ordinary wear and tearexcepted, all material properties used or useful in the business of Company andits Subsidiaries (including all Intellectual Property) and from time to timewill make or cause to be made all appropriate repairs, renewals andreplacements thereof unless Company determines in good faith that the continuedmaintenance of any of its Properties is no longer economically desirable.

 

**B.**                                    **Insurance.** Company will maintain or cause to be maintained, with financially soundand reputable insurers, such public liability insurance, third party propertydamage insurance, business interruption insurance and casualty insurance withrespect to liabilities, losses or damage in respect of the assets, propertiesand businesses of Company and its Subsidiaries as may customarily be carried ormaintained under similar circumstances by corporations of establishedreputation engaged in similar businesses, in each case in such amounts (givingeffect to self-insurance), with such deductibles, covering such risks andotherwise on such terms and conditions as shall be customary for corporationssimilarly situated in the industry. Without limiting the generality of the foregoing, Company will maintainor cause to be maintained (i) flood insurance with respect to each Flood HazardProperty that is located in a community that participates in the National FloodInsurance Program, in each case in compliance with any applicable regulationsof the Board of Governors of the Federal Reserve System, and (ii) replacementvalue casualty insurance on the Collateral under such policies of insurance,with such insurance companies, in such amounts, with such deductibles, andcovering such risks as are at all times satisfactory to Agents in their commerciallyreasonable judgment.  Each such policyof insurance shall (a) as soon as practicable after the Closing Date but in noevent later than thirty (30) days after the Closing Date (or such longer periodas Administrative Agent shall agree) name Administrative Agent for the benefitof Lenders as an additional insured thereunder as its interests may appear and(b) in the case of each casualty insurance policy, contain a loss payableclause or endorsement, satisfactory in form and substance to AdministrativeAgent, that names Administrative Agent for the benefit of Lenders as a losspayee thereunder for any covered loss in excess of $250,000 and provides for atleast 30 days prior written notice to Administrative Agent of any modificationor cancellation of such policy unless, in the case of this clause (b), if anyFirst Lien Credit Agreement is then in effect, the insurer will not issue suchloss payable clauses or endorsements naming Administrative Agent for thebenefit of Lenders as a loss payee, in which case Company shall deliver toAdministrative Agent such loss payable clauses or endorsements namingAdministrative Agent for the benefit of Lenders as a loss payee promptly uponpayment in full of all obligations under the First Lien Credit Agreement, terminationof all commitments to extend credit thereunder and expiration, surrender orcash collateralization of all letters of credit thereunder.

 

**C.**                                    **Evidence ofInsurance.**  Upon request of Administrative Agent,Company shall deliver to Administrative Agent a certificate from Company’sinsurance broker or other evidence satisfactory to it that all insurancerequired to be maintained pursuant to subsection 5.4B

 

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is in full force andeffect and that Administrative Agent on behalf of Lenders has been named as anadditional insured and/or a loss payee thereunder to the extent required undersubsection 5.4B.

 

**5.5**                               InspectionRights.

** **

Company shall,and shall cause each of its Subsidiaries to, permit any authorizedrepresentatives designated by any Lender to visit and inspect any of theproperties of Company or of any of its Subsidiaries, to inspect, copy and takeextracts from its and their financial and accounting records, and to discussits and their affairs, finances and accounts with its and their officers and,after notice to Company and provision of an opportunity to participate in suchdiscussions, independent public accountants, all upon reasonable notice and atsuch reasonable times and intervals during normal business hours and as oftenas may reasonably be requested, but, unless an Event of Default shall haveoccurred and be continuing, not more frequently than once in each Fiscal Year,unless otherwise consented to by Company. Subject to subsection 9.2, the cost and expenses of each such visitshall be borne by the applicable Lender.

 

**5.6**                               Compliancewith Laws,etc.

** **

**A.**                                    **General.** Company shall comply, and shall cause each of its Subsidiaries tocomply, in all material respects, with the requirements of all applicable laws,rules, regulations and orders of any governmental authority (including allEnvironmental Laws), noncompliance with which could reasonably be expected tocause, individually or in the aggregate, a Material Adverse Effect.

 

**B.**                                    **EnvironmentalCovenant.**

 

Company willand will cause each of its Subsidiaries to:

 

(i) Use and operate all of its Facilities and properties in compliance withall Environmental Laws, keep all necessary permits, approvals, certificates,licenses and other Governmental Authorizations relating to environmentalmatters in effect and remain in compliance therewith, and handle all HazardousMaterials in compliance with all applicable Environmental Laws, in each caseexcept where the failure to comply with the terms of this clause would notreasonably be expected to have a Material Adverse Effect;

 

(ii) Promptly notify Agents and provide copies of all written claims,complaints, notices or inquiries relating to the condition of its Facilities orrelating to compliance with Environmental Laws which relate to environmentalmatters which would have, or would reasonably be expected to have, a MaterialAdverse Effect, and promptly cure and have dismissed with prejudice anymaterial actions and proceedings relating to compliance with EnvironmentalLaws, except to the extent being diligently contested in good faith byappropriate proceedings and for which adequate reserves in accordance with GAAPhave been set aside on its books; and

 

(iii) Provide such information and certificates which Agents may reasonablyrequest from time to time to evidence compliance with this Section 5.6.

 

**5.7**                               Execution of Subsidiary Guaranty and Personal PropertyCollateral Documentsby Certain Subsidiaries and Future Subsidiaries; IP Collateral.

** **

**A.**                                    **Execution ofSubsidiary Guaranty and Personal Property Collateral Documents.** In the event that any Personbecomes a Subsidiary of Company after the Closing

 

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Date (other than aForeign Subsidiary and other than a Domestic Subsidiary that is aNon-Wholly-Owned Subsidiary), Company will promptly notify Administrative Agentof that fact and cause such Subsidiary to execute and deliver to AdministrativeAgent a supplement to the Pledge Agreement, a counterpart of the SubsidiaryGuaranty and an acknowledgement to the Security Agreement and to take all suchfurther actions and execute all such further documents and instruments(including actions, documents and instruments comparable to those described insubsection 3.12) as may benecessary or, in the opinion of Agents, desirable to create in favor ofAdministrative Agent, for the benefit of Lenders, a valid and perfected FirstPriority Lien on all of the personal and mixed property assets of suchSubsidiary described in the applicable forms of Collateral Documents; providedthat no such Subsidiary shall be required to pledge pursuant to the PledgeAgreement more than 65% of the total combined voting power of all classes ofsecurities of any Foreign Subsidiary held by such Subsidiary entitled to vote.

 

**B.**                                    **Subsidiary CharterDocuments, Legal Opinions, Etc.**  Company shalldeliver to Administrative Agent, together with such Loan Documents, (i)certified copies of such Subsidiary’s Organizational Certificate, together witha good standing certificate from the Secretary of State of the jurisdiction ofits incorporation, organization or formation, as applicable, and each otherstate in which such Person is qualified as a foreign entity to do business and,to the extent generally available, a certificate or other evidence of goodstanding as to payment of any applicable franchise or similar taxes from theappropriate taxing authority of each of such jurisdictions, each to be dated arecent date prior to their delivery to Administrative Agent, (ii) a copy ofsuch Subsidiary’s Organizational Document, certified by its secretary or anassistant secretary as of a recent date prior to their delivery toAdministrative Agent, (iii) a certificate executed by the secretary or anassistant secretary of such Subsidiary as to (a) the fact that the attachedOrganizational Authorizations of such Subsidiary approving and authorizing theexecution, delivery and performance of such Loan Documents are in full forceand effect and have not been modified or amended and (b) the incumbency andsignatures of the officers of such Subsidiary executing such Loan Documents,and (iv) a favorable opinion of counsel to such Subsidiary, in form andsubstance satisfactory to Agents and their respective counsel, as to (a) thedue organization and good standing of such Subsidiary, (b) the dueauthorization, execution and delivery by such Subsidiary of such LoanDocuments, (c) the enforceability of such Loan Documents against suchSubsidiary and (d) such other matters (including matters relating to thecreation and perfection of Liens in any Collateral pursuant to such LoanDocuments) as Agents may reasonably request, all of the foregoing to besatisfactory in form and substance to Agents and their respective counsel.

 

**C.**                                    **IP Collateral.** If any Subsidiary (other than a Foreign Subsidiary and DomesticSubsidiaries that are Non-Wholly-Owned Subsidiaries) becomes an owner of anyIntellectual Property after the Closing Date, Company shall cause such Subsidiaryto promptly execute and deliver to Administrative Agent an acknowledgement tothe Security Agreement and all cover sheets and executed grants of trademarksecurity interest, grants of patent security interest and grants of copyrightsecurity interest and such other documents or instruments required to be filedwith the PTO and the CO as Administrative Agent shall deem appropriate and takesuch further action and execute such further documents and instruments as maybe necessary, or in the opinion of Administrative Agent, desirable to create infavor of Administrative Agent, for the benefit of Lenders, a valid andperfected First Priority Lien on such Intellectual Property.

 

**5.8**                               Future Leased Property and Future Acquisitions of RealProperty; FutureAcquisition of Other Property.

** **

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**A.**                                    In connection with any LeaseholdProperty, Company shall, and shall cause each of its Subsidiaries (other thanForeign Subsidiaries and Domestic Subsidiaries that are Non-Wholly-OwnedSubsidiaries) to use its (and their) commercially reasonable efforts (whichshall not require the expenditure of cash (other than the payment of therespective attorneys fees of Company and the lessor) or the making of anymaterial concessions under the relevant lease) to deliver to AdministrativeAgent a waiver for the benefit of Administrative Agent in form and substancereasonably satisfactory to Administrative Agent executed by the lessor of anyreal property that is to be leased by Company or such Subsidiary for a term inexcess of one year in any state which by statute grants such lessor a“landlord’s” (or similar) Lien which is superior to Administrative Agent’s andwhich grants to Administrative Agent a license to enter the leased property andremove any and all personal property, if the value of such personal property ofCompany or its Subsidiaries to be held at such leased property exceeds (or itis anticipated that the value of such personal property will, at any point intime during the term of such leasehold term, exceed) $2,000,000.

 

**B.**                                    In the event that Company or any ofits Subsidiaries (other than Foreign Subsidiaries or Domestic Subsidiaries thatare Non-Wholly-Owned Subsidiaries) shall acquire any real property having avalue as determined in good faith by Administrative Agent in excess of$2,000,000 (or in the case of leased property, in the event that Company isable to deliver the waivers and consents described in subsection 5.8C inconnection with the leases described therein), Company or the applicableSubsidiary shall, promptly after such acquisition or consent, execute aMortgage and provide Administrative Agent with (i) evidence of the completion(or satisfactory arrangements for the completion) of all recordings and filingsof such Mortgage as may be necessary or, in the reasonable opinion ofAdministrative Agent, desirable effectively to create a valid, perfected FirstPriority Lien, subject to the Liens permitted by subsection 6.2, against theproperty purported to be covered thereby, (ii) mortgagee’s title insurancepolicy or policies in favor of Administrative Agent and Lenders in amounts andin form and substance and issued by insurers, reasonably satisfactory toAgents, with respect to the property purported to be covered by such Mortgage,insuring that title to such property is indefeasible and that the interestscreated by the Mortgage constitute valid First Priority Liens thereon free andclear of all defects and encumbrances other than as permitted by subsection 6.2or as approved by Agents, and such policies shall include, to the extentavailable, such endorsements as Agents shall reasonably request and shall beaccompanied by evidence of the payment in full of all premiums thereon, and(iii) such other approvals, opinions, or documents as Agents may reasonablyrequest.

 

**C.**                                    As soon as reasonably practicalafter the Closing Date, Company or its applicable Subsidiary shall, in theevent Company or any of its Subsidiaries (other than Foreign Subsidiaries orDomestic Subsidiaries that are Non-Wholly-Owned Subsidiaries) shall become alessee under any lease of real property covering 10,000 square feet of buildingspace and having an unexpired lease term (including options to extend suchlease term) of three years or longer, Company or the applicable Subsidiaryshall, use its commercially reasonable efforts (which shall not require theexpenditure of cash (other than the payment of the respective attorneys fees ofCompany and the lessor) or the making of any material concessions under therelevant lease) to cause the lessor to agree (during the negotiation of suchlease if such lease is entered into after the Closing Date), for the benefit ofAdministrative Agent (i) to the matters set forth in subsection 5.8A, (ii) thatwithout any further consent of such lessor or any further action on the part ofthe Loan Party holding the lessee’s interest in such property, such lessee’sinterest in such property may be encumbered pursuant to a Mortgage and may beassigned to the purchaser at a foreclosure sale or in a transfer in lieu ofsuch a sale (and to a subsequent third party assignee if any Agent, any Lender,or an Affiliate of either so acquires such lessee’s interest in such property),and (iii) that such lessor shall not terminate such lease as a result of adefault by such Loan Party

 

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thereunder withoutfirst giving Agents notice of such default and at least 60 days (or, if suchdefault cannot reasonably be cured by Agents within such period, such longerperiod as may reasonably be required) to cure such default.

 

**5.9**                               PTOand CO Cover Sheets,Etc.

** **

Company willdeliver to Administrative Agent no later than ten (10) days after the ClosingDate (or such longer period as Administrative Agent shall agree) instruments ordocuments, in appropriate form for filing with the PTO and/or the CO,sufficient to create and perfect a security interest in all IP Collateral ownedas of the Closing Date by Company and its Subsidiaries (other than ForeignSubsidiaries and Domestic Subsidiaries that are Non-Wholly-Owned Subsidiaries),which instruments or documents shall reflect that such security interest isjunior in priority to the security interest granted in such IP Collateral underthe First Lien Credit Agreement while any First Lien Credit Agreement is thenin effect.

 

**5.10**                        Mortgages.

** **

**A.**                                    With respect to the Closing DateMortgaged Property, as soon as practicable after the Closing Date but in noevent later than thirty (30) days after the Closing Date (or such longer periodas Administrative Agent shall agree), Company shall deliver to AdministrativeAgent counterparts of the Mortgage covering the Closing Date MortgagedProperty, dated as of the date of such delivery, duly executed by theapplicable Subsidiary in appropriate form for recording, together with suchother documents and instruments in appropriate form for filing of such Mortgageas may be necessary or, in the reasonable opinion of Administrative Agent,desirable effectively to create a valid, perfected, First Priority Lien,subject to Liens permitted by subsection 6.2, against the properties purportedto be covered thereby.

 

**B.**                                    As soon as practicable afterdelivery of the Mortgage pursuant to subsection 5.10A, Company shall deliver toAdministrative Agent (i) mortgagee’s title insurance policies in favor ofAgents and Lenders in amounts and in form and substance and issued by insurers,reasonably satisfactory to Administrative Agent, with respect to the propertypurported to be covered by such Mortgage, insuring that title to such propertyis indefeasible and that the interests created by such Mortgage constitutevalid First Priority Liens thereon free and clear of all defects andencumbrances other than as permitted by subsection 6.2 or as approved by AdministrativeAgent, and such policies shall also include, to the extent available, suchendorsements as Administrative Agent shall reasonably request and shall beaccompanied by evidence of the payment in full of all premiums thereon, unless,in the case of this clause (i), if any First Lien Credit Agreement is then ineffect, the insurer will not issue such title insurance policies in favor ofAgents and Lenders described above, in which case Company shall deliver toAdministrative Agent such title insurance policies and other items describedabove promptly upon payment in full of all obligations under the First LienCredit Agreement, termination of all commitments to extend credit thereunderand expiration, surrender or cash collateralization of all letters of creditthereunder, and (ii) such other approvals, opinions or documents asAdministrative Agent may reasonably request.

 

**Section 6.**                                          NEGATIVE COVENANTS

** **

Companycovenants and agrees that, so long as any of the Commitments hereunder shallremain in effect and until payment in full of all of the Loans and otherObligations, unless Requisite Lenders shall otherwise give prior writtenconsent, Company shall perform, and shall cause each of its Subsidiaries toperform, all covenants in this Section 6.

 

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**6.1**                               Indebtedness.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,create, incur, assume or otherwise become or remain liable with respect to, anyIndebtedness, except:

 

(i) Company may become and remain liable with respect to the Obligations;

 

(ii) Company and its Subsidiaries may become and remain liable with respectto any obligations constituting Indebtedness and actually arising pursuant toContingent Obligations permitted pursuant to subsection 6.4;

 

(iii) Company and its Subsidiaries may become and remain liable with respectto Indebtedness in respect of Capital Leases and other purchase moneyIndebtedness incurred to finance the acquisition or improvement of fixedassets, in an aggregate amount not exceeding $7,500,000;

 

(iv) Intercompany Indebtedness (i) of Company or any Domestic Subsidiary ofCompany owing to Company or any Subsidiary of Company, and (ii) of any ForeignSubsidiary of Company owing to (x) any other Foreign Subsidiary or (y) Companyor any Domestic Subsidiary of Company; provided that in respect of anysuch Indebtedness (other than any such Indebtedness incurred to finance aPermitted Acquisition) described in this clause (ii)(y), the aggregateprincipal amount of such Indebtedness, when taken together with the aggregateamount at such time of all outstanding Investments in Foreign Subsidiaries madepursuant to subsection 6.3(xii), shall not exceed at any time outstanding$10,000,000; providedfurther that (x) if requested byAdministrative Agent, all intercompany Indebtedness shall be evidenced bypromissory notes which shall be delivered to the First Lien Collateral Agentpursuant to the Intercreditor Agreement (to the extent then in effect) or theapplicable intercreditor agreement then in effect (if any) or, if no First LienCredit Agreement is then in effect, to Administrative Agent, as Collateralhereunder, and (y) all intercompany Indebtedness owed by Company or by aSubsidiary Guarantor to any Subsidiary of Company that is not a SubsidiaryGuarantor shall be subordinated in right of payment to the payment in full ofthe Obligations pursuant to the terms of an intercompany subordinationagreement in the form of Exhibit XIII attached hereto;

 

(v) Company and its Subsidiaries, as applicable, may remain liable withrespect to Indebtedness described in Schedule 6.1 annexed hereto andrefinancings and replacements thereof in a principal amount not exceeding theprincipal amount of the indebtedness so refinanced or replaced and with anaverage life to maturity of not less than the then average life to maturity ofthe Indebtedness so refinanced or replaced;

 

(vi) Company may become and remain liable with respect to up to $100,000,000in aggregate principal amount of Indebtedness evidenced by the SeniorSubordinated Notes;

 

(vii) Indebtedness of Tri-Star Electronics Europe SA incurred pursuant to aworking capital facility not to exceed U.S.$2,000,000 (or the equivalentthereof in Swiss Francs) at any time outstanding (except if such excess iscaused solely by changes in exchange rates and is eliminated within fiveBusiness Days of its occurrence) and other Indebtedness of Foreign Subsidiariesin an aggregate outstanding principal amount which does not exceed $10,000,000at any time outstanding;

 

(viii) Assumed Indebtedness of Company and its Subsidiaries in an aggregateprincipal amount at any time outstanding not to exceed $5,000,000;

 

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(ix) Company and its Subsidiaries may become and remain liable with respectto other Indebtedness in an aggregate principal amount not to exceed$10,000,000 at any time outstanding;

 

(x)** **Company may become and remain liable withrespect to Permitted Indebtedness; provided that Company causes an opinion ofcounsel in form and substance reasonably satisfactory to Administrative Agentto be delivered to Administrative Agent to the effect that the incurrence andperformance of the terms of the Permitted Indebtedness do not conflict with orviolate the terms of this Agreement, the First Lien Credit Agreement or theSenior Subordinated Note Indenture at or prior to the incurrence of thePermitted Indebtedness; provided further that (A) after giving effect to theincurrence of Permitted Indebtedness, Company and its Subsidiaries shall be inpro forma compliance with the provisions of Section 6 of this Agreement; (B) anaggregate amount equal to (I) at least 80% of Net Securities Proceeds from theissuance of Permitted Indebtedness shall be applied to the permanent prepaymentof term Indebtedness under the First Lien Credit Agreement (and, if necessary,after all such term Indebtedness has been repaid in full, to the permanentreduction of revolving Indebtedness thereunder) and an aggregate amount equalto the remaining Net Securities Proceeds from the issuance of PermittedIndebtedness shall be applied to the repayment of outstanding revolving loansunder the First Lien Credit Agreement (to the extent any First Lien Credit Agreementis then in effect) no later than the first Business Day following the receiptthereof (but with no concurrent commitment reduction), or (II) if no First LienCredit Agreement is then in effect, the Net Securities Proceeds shall be usedfor working capital and general and other corporate purposes of Company and itsSubsidiaries; (C) Permitted Indebtedness in respect of the Incremental Facilityshall be incurred not more than one time during the term of this Agreement, andother Permitted Indebtedness shall be incurred not more than one time duringthe term of this Agreement; and (D), in the case of Permitted Indebtednessissued pursuant to the Incremental Facility, such Permitted Indebtedness shallbe issued on terms to be agreed upon by Company, Agents and the lenders undersuch Incremental Facility (which may be Lenders and/or other EligibleAssignees), and the Incremental Facility may be implemented and conformingamendments made to this Agreement and other Loan Documents to reflect itsimplementation and the terms thereof without the consent of any Lender not alender under such Incremental Facility, including, without limitation,conforming amendments: (w) to provide for the Incremental Facility to shareratably in the Collateral and in the other benefits of this Agreement and theother Loan Documents (including the accrued interest in respect thereof) withthe Loans made on the Closing Date, (x) to Sections 1 and 2 to provide, amongother things, for the Incremental Facility to share ratably with the Loans madeon the Closing Date in the application of prepayments, (y) to provide anamortization schedule for the Incremental Facility (provided that noamortization shall be paid in respect of the Incremental Facility prior to theMaturity Date), and (z) to include appropriately the Lenders holding theIncremental Facility in any determination of Lenders, Requisite Lenders and Pro Rata Share and theloans constituting the Incremental Facility as Loans, it being understood thatno Lender or Agent is committed or obligated to participate in such IncrementalFacility unless it agrees to do so in the document or agreement implementingsuch Incremental Facility; notwithstanding anything in this Agreement expressedor implied to the contrary (including, without limitation in subsection 9.6),nothing herein shall be construed to require consent from Lenders that are notlenders under such Incremental Facility to the incurrence of Indebtedness underthe Incremental Facility in compliance with this subsection 6.1(x), and thissubsection 6.1(x) shall supersede any provisions in subsection 9.6 to thecontrary; and

 

(xi) Company and the Subsidiary Guarantors may become and remain liable withrespect to obligations owed under the First Lien Credit Agreement; providedthat the aggregate outstanding principal amount of Indebtedness under thisclause (xi) *plus* the aggregateamount of letters of credit outstanding under subsection 6.4(ii)(A) (andundrawn) shall not exceed the lesser

 

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of(a) the then aggregate amount of outstanding principal amounts of Indebtednessand unutilized commitments in respect of the First Lien Credit Agreement, *plus* $10,000,000, *plus* the Net Senior Debt Ratio Amount, and(b) $**[**81,000,000**]***plus*$10,000,000 *plus* the Net SeniorDebt Ratio Amount, *minus*  the aggregate amount of all repayments andprepayments of any term Indebtedness thereunder, and the aggregate amount ofall permanent reductions of revolving credit commitments thereunder.

 

**6.2**                               Liensand Related Matters.

** **

**A.**                                    **Prohibition onLiens.** Company shall not, and shall not permit anyof its Subsidiaries to, directly or indirectly, create, incur, assume or permitto exist any Lien on or with respect to any property or asset of any kind(including any document or instrument in respect of goods or accountsreceivable) of Company or any of its Subsidiaries, whether now owned orhereafter acquired, or any income or profits therefrom, except:

 

(i) Permitted Encumbrances;

 

(ii) Liens granted pursuant to the Collateral Documents, and Liens createdunder the First Lien Credit Agreement securing payment of any obligations inrespect of Hedge Agreements owed to any Person that, at the time such HedgeAgreement was entered into, was a lender or an Affiliate of a lender under theFirst Lien Credit Agreement;

 

(iii) Liens existing as of the Original Closing Date and described in Schedule6.2 annexed hereto and Liens securing extensions, renewals or replacementsof the Indebtedness or other obligations which such identified Liens secure; providedthat no such extension, renewal or replacement shall increase the obligationssecured by such Lien or extend such Lien to additional assets;

 

(iv) Liens securing Indebtedness permitted pursuant to subsection 6.1(iii); providedthat the principal amount of such Indebtedness does not exceed at the time ofacquisition or leasing of the related asset the fair market value of the assetso acquired or leased and that such Lien is limited solely to the asset soacquired or leased in connection with the incurrence of such Indebtedness;

 

(v) Liens on the assets of any Foreign Subsidiary securing the repayment ofthe Indebtedness permitted pursuant to subsection 6.1(iv)(ii), 6.1(vii) or6.1(ix);

 

(vi) Liens in the nature of trustees’ Liens granted pursuant to any indenturegoverning any Indebtedness permitted by subsection 6.1, in each case in favorof the trustee under such indenture and securing only obligations to paycompensation to such trustee, to reimburse its expenses and to indemnify itunder the terms thereof;

 

(vii) Liens of sellers of goods to Company and any of its Subsidiaries arisingsolely under Article 2 of the UCC or similar provisions of applicable law inthe ordinary course of business, covering only the goods sold and securing onlythe unpaid purchase price for such goods and related expenses;

 

(viii) Liens securing Assumed Indebtedness of Company and its Subsidiariespermitted pursuant to subsection 6.1(viii), provided, however,that (i) any such Liens attach only to the property of the Subsidiary acquired,or the property acquired, in connection with such Assumed Indebtedness andshall not attach to any assets of Company or any of its Subsidiariestheretofore

 

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existingand (ii) the Assumed Indebtedness and other secured Indebtedness of Company andits Subsidiaries secured by any such Lien shall not exceed 100% of the fairmarket value of the assets being acquired in connection with such AssumedIndebtedness;

 

(ix) Liens securing reimbursement obligations in respect of trade letters ofcredit, which Liens are limited to the goods purchased with, or whose purchasewas supported by, such letters of credit;

 

(x) Other Liens securing Indebtedness and other obligations in an aggregateamount not to exceed $7,500,000 at any time outstanding;

 

(xi)Liens securing Permitted Indebtedness notincurred pursuant to the Incremental Facility, such Liens to be subordinated tothe Liens securing the Obligations subject to an intercreditor agreement inform and substance reasonably satisfactory to Administrative Agent; and

 

(xii)Liens securing obligations under theFirst Lien Credit Agreement, such Liens to be subject to the IntercreditorAgreement or, in the case of any First Lien Credit Agreement described inclause (ii) of the definition thereof, an intercreditor agreement substantiallysimilar to the Intercreditor Agreement or otherwise reasonably satisfactory toAdministrative Agent; provided that such Liens shall also secure theObligations.

 

Nothing inthis subsection 6.2 shall prohibit the sale, assignment, transfer, conveyanceor other disposition of any Margin Stock owned by Company or any of itsSubsidiaries at its fair value (as determined in good faith by its Board ofDirectors) so long as proceeds are held as Cash or Cash Equivalents or thecreation, incurrence, assumption or existence of any Lien on or with respect toany Margin Stock.

 

**B.**                                    **No Further NegativePledges.**  Except (x) with respect to specific propertyencumbered to secure payment of particular Indebtedness or to be sold pursuantto an executed agreement with respect to an Asset Sale and (y) customarylimitations in respect of Company and its Subsidiaries contained in anyagreement with respect to Indebtedness incurred in reliance on subsection6.1(ii), (iv), (vi), (vii), (viii), (x) or (xi), and (z) restrictions orlimitations contained in any partnership agreement or joint venture agreementto which Company or any of its Subsidiaries are a party on the ability tocreate or assume Liens on any assets of the relevant partnership or jointventure, neither Company nor any of its Subsidiaries shall enter into anyagreement (other than an agreement prohibiting only the creation of Lienssecuring Subordinated Indebtedness) prohibiting the creation or assumption ofany Lien upon any of its properties or assets, whether now owned or hereafteracquired.

 

**C.**                                    **No Restrictions onSubsidiary Distributions to Company or Other Subsidiaries.** Except (x) as provided herein, (y) customary limitations andprohibitions in any agreement with respect to Indebtedness incurred in relianceon subsection 6.1(iv)(ii)(x), (vi), (vii), (viii), (x) or (xi) and (z) any suchencumbrance or restriction contained in any partnership or joint ventureagreement to which Company or any of its Subsidiaries is a party, Company willnot, and will not permit any of its Subsidiaries to, create or otherwise causeor suffer to exist or become effective any consensual encumbrance orrestriction of any kind on the ability of any such Subsidiary to (i) paydividends or make any other distributions on any of such Subsidiary’s capitalstock owned by Company or any other Subsidiary of Company, (ii) repay or prepayany Indebtedness owed by such Subsidiary to Company or any other Subsidiary ofCompany, or (iii) make loans or advances to Company or any other Subsidiary ofCompany.

 

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**6.3**                               Investments.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,make or own any Investment in any Person, except:

 

(i) Company and its Subsidiaries may make and own Investments in CashEquivalents (as determined on the date of acquisition thereof);

 

(ii) (a) Company and its Subsidiaries may continue to own the Investmentsowned by them as of the Closing Date in any Subsidiaries of Company; (b)Company and its Domestic Subsidiaries may make additional Investments inCompany or Subsidiary Guarantors subject to compliance with subsections 5.7 and5.8; and (c) any Foreign Subsidiary may make additional Investments in anyother Foreign Subsidiary;

 

(iii) Company and its Subsidiaries may make intercompany loans to the extentpermitted under subsection 6.1(iv) and incur Contingent Obligations permittedby subsection 6.4;

 

(iv) Company and its Subsidiaries may continue to own the Investments ownedby them as of the Original Closing Date and described in Schedule 6.3annexed hereto and extensions or renewals thereof, provided that no suchextension or renewal shall be made in reliance on this clause (v) if it would(x) increase the amount of such Investment at the time of such renewal orextension or (y) result in a Potential Event of Default or an Event of Defaulthereunder;

 

(v) Company and its Subsidiaries may make and own Investments received inconnection with Asset Sales permitted pursuant to subsection 6.7(x);

 

(vi) Investments constituting Consolidated Capital Expenditures (and anycapital expenditures excluded from the definition of Consolidated CapitalExpenditures pursuant to clause (y) thereof);

 

(vii) Investments made by Company or any of its Subsidiaries in PermittedAcquisitions in accordance with subsection 6.7(vi);

 

(viii) Investments arising under or in connection with Interest Rate Agreementsand Currency Agreements entered into in the ordinary course of business and notfor speculative purposes;

 

(ix) Company and its Subsidiaries may make and own Investments received inconnection with the bankruptcy or reorganization or suppliers and customers andin settlement of delinquent obligations of and other disputes with customersand suppliers arising in the ordinary course of business;

 

(x) Company and its Subsidiaries may (x) continue to own Investments in theform of loans made prior to the Closing Date to officers, directors andemployees of Company and its Subsidiaries for the sole purpose of purchasingcommon stock of Parent (or purchases of such loans made by others), and (y)make and own Investments in the form of loans to Global Technology Partnersmade after the First Closing Date in an aggregate principal amount not toexceed $1,000,000 for the sole purpose of purchasing common stock of Parent;

 

(xi) Company and its Subsidiaries may make and own Investments solely from theproceeds of capital contributions by Parent to Company or sales of equitySecurities by Company

 

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toParent, in each case only to the extent proceeds from such capital contributionor sale (x) are not required to be applied to repay the Loans pursuant tosubsection 2.4(B)(ii)(c), (y) arise from the issuance by Parent of its equitySecurities, and (z) are received after the Closing Date for the purpose ofmaking an Investment identified in a notice delivered to Agents on or prior tothe date such capital contribution or sale or repayment is made, so long asimmediately before and after giving effect to any such Investment, no PotentialEvent of Default or Event of Default has occurred and is continuing; and

 

(xii) Company and its Subsidiaries may make and own other Investments in anaggregate amount not to exceed at any time $5,000,000; provided that suchInvestments are with respect to businesses similar or related to the businessesengaged in by Company and its Subsidiaries.

 

**6.4**                               ContingentObligations.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,create or become or remain liable with respect to any Contingent Obligation,except:

 

(i) Company and its Subsidiaries of Company may become and remain liablewith respect to Contingent Obligations in respect of the Obligations;

 

(ii) Company and its Subsidiaries may become and remain liable with respectto Contingent Obligations in respect of (A) letters of credit issued under theFirst Lien Credit Agreement and (B) other letters of credit in an aggregateamount at any time not to exceed $2,000,000 for Company and its DomesticSubsidiaries and $2,000,000 for Company’s Foreign Subsidiaries;

 

(iii) Company and its Subsidiaries may become and remain liable with respectto Contingent Obligations under Interest Rate Agreements and CurrencyAgreements entered into in the ordinary course of business and not forspeculative purposes;

 

(iv) Company and its Domestic Subsidiaries may become and remain liable withrespect to Contingent Obligations in respect of any Indebtedness of Company orany of its Domestic Subsidiaries permitted by subsection 6.1; providedthat any such Contingent Obligations in respect of the SubordinatedIndebtedness permitted pursuant to subsection 6.1(vi) are subordinated to thepayment of the Obligations to the same extent as such SubordinatedIndebtedness;

 

(v) Company and its Subsidiaries, as applicable, may remain liable withrespect to Contingent Obligations described in Schedule 6.4 annexedhereto and extensions or renewals thereof, so long as such extension or renewaldoes not increase the amount of the Contingent Obligation being renewed orextended, as the case may be;

 

(vi) Company and its Subsidiaries may become and remain liable with respectto other Contingent Obligations; provided that the maximum aggregateliability, contingent or otherwise, of Company and its Subsidiaries in respectof all such Contingent Obligations shall at no time exceed $2,000,000.

 

**6.5**                               RestrictedJunior Payments.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,declare, order, pay, make or set apart any sum for any Restricted JuniorPayment; provided that so long as no

 

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Potential Event of Default or Event ofDefault shall have occurred and be continuing or would occur as a resultthereof (except in the case of Restricted Junior Payments permitted bysubsections 6.5(i) and (iii) below):

 

(i) Company may (a) make payments of regularly scheduled interest in respectof the Senior Subordinated Notes, in each case in accordance with the terms ofand to the extent required by (and subject to the subordination provisionscontained therein) the Senior Subordinated Indenture, and (b) to make paymentsto the holders of the Senior Subordinated Notes in the form of equitySecurities that the subordination provisions applicable thereto permit suchholders to accept prior to the repayment in full of the Obligations;

 

(ii) Company may make dividend payments to Parent to the extent necessary topermit Parent to (x) pay corporate and other general administrative expenses(including fees in respect of advisory services) in an aggregate amount whichdoes not exceed $1,000,000 in any Fiscal Year and (y) make payments in respectof taxes imposed on Company and its Subsidiaries; and

 

(iii) Company may purchase, redeem, or otherwise acquire or retireSubordinated Indebtedness in an amount up to but not exceeding $20,000,000 (ascalculated from the First Closing Date) with proceeds from the issuance ofSubordinated Indebtedness permitted by subsection 6.1 or equity Securities ofCompany.

 

**6.6**                               FinancialCovenants.

** **

**A.**                                    **Maximum Net SeniorDebt Ratio.** Company shall not permit the Net Senior DebtRatio as of the last day of any Fiscal Quarter, beginning with the FiscalQuarter ending March 31, 2004,occurring during any period set forth below to exceed the correlative ratioindicated:

 
| **Period**                               |   | **Maximum Net  Senior  Debt Ratio** |   |
|------------------------------------------|--------|-------------------------------------|--------|
|                                     |   |                                |   |
| 1st Fiscal  Quarter, 2004                |   | 7.75                                | x      |
|                                     |   |                                |   |
| 2nd Fiscal  Quarter, 2004                |   | 8.45                                | x      |
|                                     |   |                                |   |
| 3rd Fiscal  Quarter, 2004                |   | 8.25                                | x      |
|                                     |   |                                |   |
| 4th Fiscal  Quarter, 2004                |   | 7.10                                | x      |
|                                     |   |                                |   |
| 1st Fiscal  Quarter, 2005                |   | 6.65                                | x      |
|                                     |   |                                |   |
| 2nd Fiscal  Quarter, 2005                |   | 6.30                                | x      |
|                                     |   |                                |   |
| 3rd Fiscal  Quarter, 2005                |   | 6.05                                | x      |
|                                     |   |                                |   |
| 4th Fiscal  Quarter, 2005                |   | 6.00                                | x      |
|                                     |   |                                |   |
| 1st Fiscal  Quarter, 2006                |   | 5.80                                | x      |
|                                     |   |                                |   |
| 2nd Fiscal  Quarter, 2006                |   | 5.60                                | x      |
|                                     |   |                                |   |
| 3rd Fiscal  Quarter, 2006                |   | 5.30                                | x      |
|                                     |   |                                |   |
| 4th Fiscal  Quarter, 2006                |   | 5.10                                | x      |
|                                     |   |                                |   |
| 1st Fiscal  Quarter, 2007 and thereafter |   | 5.00                                | x      |

 

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**B.**                                    **Minimum InterestCoverage Ratio.** Company shall not permit the ConsolidatedInterest Coverage Ratio as of the last day of any Fiscal Quarter, beginningwith the Fiscal Quarter ending March31, 2004, occurring during any period set forth below to be less than thecorrelative ratio indicated:

 
| **Period**                                                 |   | **Minimum  Consolidated  Interest Coverage Ratio** |   |
|------------------------------------------------------------|--------|----------------------------------------------------|--------|
|                                                       |   |                                               |   |
| 1st Fiscal Quarter, 2004                                   |   | 0.85                                               | x      |
|                                                       |   |                                               |   |
| 2nd Fiscal Quarter, 2004 through  3rd Fiscal Quarter, 2004 |   | 0.80                                               | x      |
|                                                       |   |                                               |   |
| 4th Fiscal Quarter, 2004                                   |   | 0.85                                               | x      |
|                                                       |   |                                               |   |
| 1st Fiscal Quarter, 2005                                   |   | 0.90                                               | x      |
|                                                       |   |                                               |   |
| 2nd Fiscal Quarter, 2005                                   |   | 0.95                                               | x      |
|                                                       |   |                                               |   |
| 3rd Fiscal Quarter, 2005 through  1st Fiscal Quarter, 2006 |   | 1.00                                               | x      |
|                                                       |   |                                               |   |
| 2nd Fiscal Quarter, 2006 through  3rd Fiscal Quarter, 2006 |   | 1.05                                               | x      |
|                                                       |   |                                               |   |
| 4th Fiscal Quarter, 2006 and thereafter                    |   | 1.10                                               | x      |

 

**6.7**                               Restriction on Fundamental Changes; Asset Sales and Acquisitions.

** **

Company shallnot, and shall not permit any of Company’s Subsidiaries to, enter into anytransaction of merger or consolidation, or liquidate, wind-up or dissolveitself (or suffer any liquidation or dissolution), or convey, sell, lease orsub-lease (as lessor or sublessor), transfer or otherwise dispose of, in onetransaction or a series of transactions, all or any part of its business,property or assets, whether now owned or hereafter acquired, or acquire bypurchase or otherwise all or substantially all the business, property or fixedassets of, or stock or other evidence of beneficial ownership of, any Person orany division or line of business of any Person, except:

 

(i) (a) any Domestic Subsidiary of Company may be merged with or intoCompany or any Subsidiary Guarantor, or be liquidated, wound up or dissolved,or all or any part of its business, property or assets may be conveyed, sold,leased, transferred or otherwise disposed of, in one transaction or a series oftransactions, to Company or any Subsidiary Guarantor; provided that, inthe case of such a merger, Company or such Subsidiary Guarantor shall be thecontinuing or surviving corporation and (b) any Foreign Subsidiary may bemerged with or into another

 

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ForeignSubsidiary or, so long as the surviving corporation of such merger is Companyor a Domestic Subsidiary, with or into Company or any Domestic Subsidiary, orbe liquidated, wound up or dissolved, or all or any part of its business,property or assets may be conveyed, sold, leased, transferred or otherwisedisposed of in one transaction or a series of transactions, to Company, aSubsidiary Guarantor or another Foreign Subsidiary; provided that,notwithstanding the above, a Subsidiary may only liquidate or dissolve into, ormerge with and into, another Subsidiary if, after giving effect to suchcombination or merger, Company continues to own (directly or indirectly), andAdministrative Agent continues to have pledged to it pursuant to the PledgeAgreement, a percentage of the issued and outstanding equity Securities (on afully diluted basis) of the Subsidiary surviving such combinations or mergerthat is equal to or in excess of the percentage of the issued and outstandingshares of equity Securities (on a fully diluted basis) of the Subsidiary thatdoes not survive such combinations or merger that was (immediately prior to thecombination or merger) owned by Company or pledged to Administrative Agent;

 

(ii) Company and its Subsidiaries may make Consolidated Capital Expenditurespermitted under subsection 6.8;

 

(iii) Company and its Subsidiaries may dispose of obsolete, worn out orsurplus property in the ordinary course of business;

 

(iv) Company and its Subsidiaries may consummate any transfer, conveyance orother disposal that constitutes (a) an Investment permitted under subsection6.3, (b) a Lien permitted under subsection 6.2, (c) a Restricted Junior Paymentpermitted under subsection 6.5 or (d) a sale and leaseback transactionpermitted by subsection 6.10;

 

(v) Company and its Subsidiaries may sell or otherwise dispose of assets intransactions that do not constitute Asset Sales;

 

(vi) (x) Company and its Subsidiaries may make Permitted Acquisitions; providedthat such Permitted Acquisitions result in Company or the relevant Subsidiaryacquiring a majority controlling interest in the Person (or its assets andbusinesses) acquired, or increasing any such controlling interest maintained byit in such Person or result in the Person acquired becoming an AcquiredControlled Person with respect to Company and its Subsidiaries; and (y) nolater than five Business Days prior to the consummation thereof, Companydelivers to Administrative Agent a Permitted Acquisition Compliance Certificatedemonstrating compliance with the requirements of the definition of “PermittedAcquisition” and copies of all acquisition agreements executed and delivered inconnection therewith to the extent available and requested by AdministrativeAgent; and provided,further, that reasonably promptly followingthe consummation of such Permitted Acquisition, Company shall have compliedwith the provisions of subsections 5.7 and 5.8 with respect thereto to theextent applicable;

 

(vii) Company and its Subsidiaries may sell or otherwise dispose of assets asa result of any taking of assets described in clause (ii) of the definition of“Net Insurance/Condemnation Proceeds”, so long as the NetInsurance/Condemnation Proceeds resulting therefrom are applied or reinvestedas required by subsection 2.4B(ii)(b);

 

(viii) Company and its Subsidiaries may sell or discount overdue accountsreceivable in the ordinary course of business, but only in connection with thecompromise or collection thereof;

 

(ix) Company and its Subsidiaries may make Asset Sales to Non-Wholly-OwnedSubsidiaries that are not Subsidiary Guarantors of assets having a fair marketvalue of not in

 

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excessof $10,000,000 in the aggregate for all such Asset Sales made after the FirstClosing Date; provided that (x) the consideration for such assets shallbe in an amount at least equal to the fair market value thereof, and (y) anyInvestment in such Non-Wholly-Owned Subsidiaries resulting from such Asset Saleshall be permitted by subsection 6.3(xii) or as a Permitted Acquisitionpursuant to subsection 6.3(vii); and

 

(x) Company and its Subsidiaries may makeAsset Sales not permitted by the foregoing clauses (i) through (ix) to theextent the Asset Sales under this clause (x) do not constitute a sale of all orsubstantially all of Company’s assets or all or substantially all of itsSubsidiaries’ assets on a consolidated basis; provided that (x) theconsideration received for such assets shall be in an amount at least equal tothe fair market value thereof; (y) at least 90% of the consideration receivedtherefor is in the form of cash or Cash Equivalents; and (z) the proceeds ofsuch Asset Sale are (1) applied or reinvested as and within the times requiredby subsection 2.4B(ii)(a), (2) applied to permanent repayment of Indebtednessin respect of the First Lien Credit Agreement no later than 365 days afterreceipt thereof or (3) reinvested no later than 365 days after receipt thereofin tangible or intangible property or assets (other than property or assetsthat constitute current assets under GAAP, unless the acquisition thereof isincidental to the acquisition of a materially greater amount of non-currentassets) that is to be used in the business of Company and its Subsidiaries.

 

**6.8**                               ConsolidatedCapital Expenditures.

** **

(i) Company will not, and will not permit any of its Subsidiaries to, makeor commit to make Consolidated Capital Expenditures in any Fiscal Year,beginning with the Fiscal Year ending December 31, 2003, except ConsolidatedCapital Expenditures which do not aggregate in excess of the correspondingamount set forth below opposite such Fiscal Year:

 
| **Fiscal  Year**                                                      |   | **Consolidated  Capital Expenditures** |      |
|-----------------------------------------------------------------------|--------|----------------------------------------|-----------|
|                                                                  |   |                                   |      |
| Fiscal Year  ending December 31, 2003                                 |   | $                                      | 5,000,000 |   |
|                                                                  |   |                                   |      |
| Fiscal Year  ending December 31, 2004                                 |   | $                                      | 5,000,000 |   |
|                                                                  |   |                                   |      |
| Fiscal Year  ending December 31, 2005 and each Fiscal Year thereafter |   | $                                      | 7,000,000 |   |

 

 

providedthat (a) if the aggregate amount of Consolidated Capital Expenditures actuallymade in any such Fiscal Year shall be less than the limit with respect theretoset forth above (before giving effect to any increase therein pursuant to thisproviso) (the “**Base Amount**”), thenthe amount of such shortfall (up to an amount equal to 50% of the Base Amountfor such Fiscal Year, without giving effect to this proviso) may be added tothe amount of such Consolidated Capital Expenditures permitted for theimmediately succeeding Fiscal Year and any such amount carried forward to asucceeding Fiscal Year shall be deemed to be used prior to Company and itsSubsidiaries using the amount of capital expenditures permitted by this sectionin such succeeding Fiscal Year, without giving effect to such carryforward and(b) for any Fiscal Year (or portion thereof) following any acquisition of abusiness (whether through the purchase of assets or of shares of capital stock)permitted under subsection 6.7, the Base Amount for such Fiscal Year (orportion) shall be increased, for each such acquisition, by an amount equal tothe product of (A) the lesser of (x) $5,000,000 and (y)****4% of revenues of the business acquired insuch acquisition for the period of four Fiscal Quarters most recently ended onor prior to the date of such business acquisition *multiplied by*(B) (x) in the case of any partial FiscalYear, a fraction, the numerator of which is the number of days

 

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remaining insuch Fiscal Year after the date of such business acquisition and thedenominator of which is 365 (or 366 in a leap year), and (y) in the case of anyfull Fiscal Year, 1.

 

(ii) The parties acknowledge and agree that the permitted ConsolidatedCapital Expenditure level set forth in clause (i) above shall be exclusive ofthe amount of Consolidated Capital Expenditures actually made with the proceedsof a cash capital contribution to Company (including the proceeds of issuanceof equity securities) made by Parent from the issuance by Parent of its equitySecurities after the Closing Date and specifically identified in a certificatedelivered by an Authorized Officer of Company to Administrative Agent on orabout the time such capital contribution is made; provided that, to theextent any such cash capital contributions constitute Net Securities Proceedsafter the Closing Date, only that portion of such Net Securities Proceeds whichis not required to be applied as a prepayment pursuant to Section 2.4B(ii)(c)(or pursuant to the First Lien Credit Agreement) may be used for ConsolidatedCapital Expenditures pursuant to this clause (ii).

 

**6.9**                               Fiscal Year.

** **

Company shallnot change its Fiscal Year-end from December 31 of each calendar year.

 

**6.10**                        Salesand Lease-Backs.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,become or remain liable as lessee or as a guarantor or other surety withrespect to any lease, whether an Operating Lease or a Capital Lease, of anyproperty (whether real, personal or mixed), whether now owned or hereafteracquired, (i) which Company or any of its Subsidiaries has sold or transferredor is to sell or transfer to any other Person (other than Company or any of itsSubsidiaries) or (ii) which Company or any of its Subsidiaries intends to usefor substantially the same purpose as any other property which has been or isto be sold or transferred by Company or any of its Subsidiaries to any Person(other than Company or any of its Subsidiaries) in connection with such lease; providedthat Company and its Subsidiaries may become and remain liable as lessee,guarantor or other surety with respect to any such lease if the property whichis subject to such lease was acquired by Company or any of its Subsidiarieswithin 180 days of such sale or transfer of such property by Company or any ofits Subsidiaries.

 

**6.11**                        Saleor Discount of Receivables.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,sell with recourse, or discount or otherwise sell for less than the face valuethereof, any of its notes or accounts receivable; provided that Companyand its Subsidiaries may sell or discount overdue accounts receivable in theordinary course business, but only in connection with the compromise orcollection thereof.

 

**6.12**                        Transactions with Stockholders and Affiliates.

** **

Company shallnot, and shall not permit any of its Subsidiaries to, directly or indirectly,enter into or permit to exist any transaction (including the purchase, sale,lease or exchange of any property or the rendering of any service) with anyholder of 5% or more of the voting Securities of Parent or Company or with anyAffiliate of Parent or Company on terms that are less favorable to Company orthat Subsidiary, as the case may be, than those that might be obtained at thetime from Persons who are not such a holder or Affiliate; provided thatthe foregoing restriction shall not apply to (i) any transaction betweenCompany and any of its Wholly-Owned Subsidiaries or between any of itsWholly-Owned Subsidiaries; (ii) reasonable and customary fees paid to membersof the Boards of Directors of Company and its Subsidiaries consistent with past practice; (iii) anyRestricted Junior Payment permitted under subsection

 

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6.5; (iv) the entry into and performance ofobligations under arrangements with CSFB and its Affiliates for underwriting,investment banking and advisory services on usual and customary terms(including payments of the fee in respect of advisory services contemplated insubsection 6.5(ii)); (v) the payment of reasonable and customary fees andreimbursement of expenses payable to directors of Parent consistent with past practice; (vi)employment arrangements with respect to the procurement of services ofdirectors, officers and employees in the ordinary course of business and thepayment of reasonable fees in connection therewith; (vii) the issuance ofequity Securities to Global Technology Partners, L.L.C. described in subsection6.3; and (viii) the execution, delivery and performance of the agreementslisted on Schedule 6.12 or any intercreditor agreement executed inconnection with any Permitted Indebtedness not incurred pursuant to theIncremental Facility.

 

**6.13**                        Issuanceof Subsidiary Equity.

** **

Company shallnot permit any of its Subsidiaries directly or indirectly to issue any sharesof its capital stock or other equity Securities except to Company, anotherSubsidiary of Company, to qualify directors if required by applicable law or inproportion to its existing equity Securities of any class.

 

**6.14**                        Conduct of Business.

** **

From and afterthe Closing Date, Company shall not, and shall not permit any of itsSubsidiaries to, engage in any business other than (i) the businesses engagedin by Company and its Subsidiaries on the Closing Date and similar or relatedbusinesses and (ii) such other lines of business as may be consented to by RequisiteLenders.

 

**6.15**                        Amendmentsof Documents Relatingto Indebtedness.

** **

**A.**                                    Company shall not, and shall notpermit any of its Subsidiaries to, amend or otherwise change the terms of anySubordinated Indebtedness, or make any payment consistent with an amendmentthereof or change thereto, if the effect of such amendment or change is toincrease the interest rate on such Subordinated Indebtedness, change (toearlier dates) any dates upon which payments of principal or interest are duethereon, change any event of default or condition to an event of default withrespect thereto (other than to eliminate any such event of default or increaseany grace period related thereto), change the redemption, prepayment ordefeasance provisions thereof, change the subordination provisions thereof (orof any guaranty thereof), or change any collateral therefor (other than torelease such collateral), or if the effect of such amendment or change,together with all other amendments or changes made, is to increase materially theobligations of the obligor thereunder to the detriment of Lenders or to conferany additional rights on the holders of such Subordinated Indebtedness (or atrustee or other representative on their behalf)****which would be adverse to Lenders.

 

**B.**                                    Company shall not, and shall notpermit any of its Subsidiaries to, designate any Indebtedness (other than anyIndebtedness in respect of the Loan Documents and Indebtedness in respect ofthe First Lien Credit Agreement) as “Designated Senior Debt” (as defined in theSenior Subordinated Note Indenture) without the prior written consent ofRequisite Lenders.

 

**C.**                                    Company shall not, and shall notpermit any of its Subsidiaries to, amend or otherwise change the terms of anyPermitted Indebtedness that does not constitute the Incremental Facility, ormake any amendment thereof or change thereto, if the effect of such amendmentor change is to increase the interest rate on such Permitted Indebtedness,change (to earlier dates) any dates upon which payments of principal or interestare due thereon, change any

 

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event of default orcondition to an event of default with respect thereto (other than to eliminateany such event of default or increase any grace period related thereto), changethe redemption, prepayment or defeasance provisions thereof, change thesubordination provisions thereof (or of any guaranty thereof), or change anycollateral therefor (other than to release such collateral or to includecollateral in which a security interest is granted to secure the Obligations),or if the effect of such amendment or change, together with all otheramendments or changes made, is to increase materially the obligations of theobligor thereunder to the detriment of Lenders or to confer any additionalrights on the holders of such Permitted Indebtedness (or a trustee or otherrepresentative on their behalf) which would be adverse to Lenders.

 

**D.**                                    Company shall not, and shall notpermit any of its Subsidiaries to, amend or otherwise change the terms of theFirst Lien Credit Agreement or documents related thereto or entered into inconnection therewith to (i) increase the maximum stated principal amount ofIndebtedness or commitments permitted to remain outstanding thereunder other thanin connection with Indebtedness permitted to be incurred pursuant to subsection6.1(xi) or (ii) restrict Company’s ability to make interest payments requiredhereunder.

 

**Section 7.**                                          EVENTS OF DEFAULT

** **

If any of thefollowing conditions or events (each, an “**Event of Default**”)shall occur:

 

**7.1**                               Failureto Make Payments When Due.

** **

Failure byCompany to pay any installment of principal of any Loan when due, whether atstated maturity, by acceleration, by notice of voluntary prepayment, bymandatory prepayment or otherwise; or failure by Company to pay any interest orpremium on any Loan or any fee or any other amount due under this Agreementwithin five days after the date due; or

 

**7.2**                               Defaultin Other Agreements.

** **

(i)Failure of Company or any of its Subsidiariesto pay when due any principal of or interest on or any other amount payable inrespect of one or more items of Indebtedness (other than Indebtedness referredto in subsection 7.1) or Contingent Obligations in either an individual or anaggregate principal amount of $5,000,000 or more, in each case beyond the endof any grace period provided therefor (other than pursuant to a Change ofControl); or (ii) breach or default by Company or any of its Subsidiaries withrespect to any other material term of (a) one or more items of Indebtedness orContingent Obligations in the individual or aggregate principal amountsreferred to in clause (i) above or (b) any loan agreement, mortgage, indentureor other agreement relating to such item(s) of Indebtedness or ContingentObligation(s), if the effect of such breach or default is to cause, or topermit the holder or holders of that Indebtedness or Contingent Obligation(s)(or a trustee on behalf of such holder or holders) to cause, that Indebtednessor Contingent Obligation(s) to become or be declared due and payable prior toits stated maturity or the stated maturity of any underlying obligation, as thecase may be; provided that, with respect to any breach or default underthe First Lien Credit Agreement (other than any breach or default resultingfrom failure to pay amounts due thereunder), (x) if such breach or default is aChange of Control, such event shall not constitute an Event of Default underthis Agreement, and (y) any other breach or default thereunder shall onlyconstitute an Event of Default under this clause (ii) of subsection 7.2 if suchbreach or default occurs and is not cured or waived upon the earlier of (I) 45days after the occurrence of such breach or default or (II) Indebtedness undera First Lien Credit Agreement becoming due and payable prior to its statedmaturity; or

 

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**7.3**                               Breachof Certain Covenants.

** **

Failure ofCompany to perform or comply with any term or condition contained in subsection2.4B(iii), 2.5, 5.2 (solely with respect to the continued existence of Company)or 5.1(vi) or Section 6 of this Agreement; or

 

**7.4**                               Breachof Warranty.

** **

Anyrepresentation, warranty, certification or other statement made by Company orany of its Subsidiaries in any Loan Document or in any statement or certificateat any time given by Company or any of its Subsidiaries in writing pursuanthereto or thereto or in connection herewith or therewith shall be false in anymaterial respect on the date as of which made; or

 

**7.5**                               OtherDefaults Under Loan Documents.

** **

Any Loan Partyshall default in the performance of or compliance with any term contained inthis Agreement or any of the other Loan Documents, other than any such termreferred to in any other subsection of this Section 7, and such default shallnot have been remedied or waived within 30 days after receipt by Company andsuch Loan Party of notice from Administrative Agent at the direction of theRequisite Lenders of such default; or

 

**7.6**                               Involuntary Bankruptcy; Appointment of Receiver, etc.

** **

(i)  Acourt having jurisdiction in the premises shall enter a decree or order forrelief in respect of Company or any of its Subsidiaries (other than anyImmaterial Subsidiary) in an involuntary case under the Bankruptcy Code orunder any other applicable bankruptcy, insolvency or similar law now orhereafter in effect, which decree or order is not stayed; or any other similarrelief shall be granted under any applicable federal or state law; or (ii) aninvoluntary case shall be commenced against Company or any of its Subsidiaries(other than any Immaterial Subsidiary) under the Bankruptcy Code or under anyother applicable bankruptcy, insolvency or similar law now or hereafter ineffect; or a decree or order of a court having jurisdiction in the premises forthe appointment of a receiver, liquidator, sequestrator, trustee, custodian orother officer having similar powers over Company or any of its Subsidiaries(other than any Immaterial Subsidiary), or over all or a substantial part ofits property, shall have been entered; or there shall have occurred theinvoluntary appointment of an interim receiver, trustee or other custodian ofCompany or any of its Subsidiaries (other than any Immaterial Subsidiary) forall or a substantial part of its property; or a warrant of attachment,execution or similar process shall have been issued against any substantialpart of the property of Company or any of its Subsidiaries (other than anyImmaterial Subsidiary), and any such event described in clauses (i) or (ii)shall continue for 60 days unless dismissed, bonded or discharged; or

 

**7.7**                               VoluntaryBankruptcy; Appointment of Receiver, etc.

** **

(i) Company or any of its Subsidiaries (other than any ImmaterialSubsidiary) shall have an order for relief entered with respect to it orcommence a voluntary case under the Bankruptcy Code or under any otherapplicable bankruptcy, insolvency or similar law now or hereafter in effect, orshall consent to the entry of an order for relief in an involuntary case, or tothe conversion of an involuntary case to a voluntary case, under any such law,or shall consent to the appointment of or taking possession by a receiver,trustee or other custodian for all or a substantial part of its property; orCompany or any of its Subsidiaries (other than any Immaterial Subsidiary) shallmake any assignment for the benefit of creditors; or (ii) Company or any of its

 

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Subsidiaries(other than any Immaterial Subsidiary) shall be unable, or shall failgenerally, or shall admit in writing its inability, to pay its debts as suchdebts become due; or the Board of Directors of Company or any of itsSubsidiaries (other than any Immaterial Subsidiary) (or any committee thereof) shalladopt any resolution or otherwise authorize any action to approve any of theactions referred to in clause (i) above or this clause (ii); or

 

**7.8**                               Judgmentsand Attachments.

** **

Any moneyjudgment, writ or warrant of attachment involving either in any individual caseor in the aggregate at any time an amount in excess of $5,000,000 (in eithercase not adequately covered by insurance as to which a responsible insurancecompany is not denying its liability with respect thereto) shall be entered orfiled against Company or any of its Subsidiaries or any of their respectiveassets and shall remain undischarged, unvacated, unbonded or unstayed for aperiod of 60 days; or

 

**7.9**                               Dissolution.

** **

Any order,judgment or decree shall be entered against Company or any of its Subsidiaries(other than any Immaterial Subsidiary) decreeing the dissolution or split up ofCompany or that Subsidiary (except as permitted under subsections 5.2 and 6.7)and such order shall remain undischarged or unstayed for a period in excess of 60days; or

 

**7.10**                        Employee Benefit Plans.

** **

There shalloccur one or more ERISA Events which individually or in the aggregate resultsin or might reasonably be expected to result in liability of Company, any ofits Subsidiaries or any of their respective ERISA Affiliates in excess of$5,000,000 since the First Closing Date; or there shall exist an amount ofunfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA),individually or in the aggregate for all Pension Plans (excluding for purposesof such computation any Pension Plans with respect to which assets exceedbenefit liabilities), which exceeds $5,000,000; or

 

**7.11**                        Invalidityof Guaranties;Failure of Security; Repudiation of Obligations.

** **

At any timeafter the execution and delivery thereof, (i) any Guaranty for any reason,other than the satisfaction in full of all Obligations, shall cease to be infull force and effect (other than in accordance with its terms) or shall bedeclared to be null and void, (ii) any Collateral Document shall cease to be infull force and effect (other than by reason of a release of Collateralthereunder in accordance with the terms hereof or thereof, the satisfaction infull of the Obligations or any other termination of such Collateral Document inaccordance with the terms hereof or thereof) or shall be declared null andvoid, or Administrative Agent shall not have or shall cease to have a valid andperfected Lien in any Collateral purported to be covered thereby, in each casefor any reason other than the failure of any Agent or any Lender to take anyaction within its control or except to the extent that any such event iscovered by a lender’s title insurance policy and the relevant insurer promptlyafter the occurrence thereof shall have acknowledged in writing that the sameis covered by such title insurance policy, or (iii) any Loan Party shallcontest the validity or enforceability of any Loan Document in writing;

 

THEN (i) uponthe occurrence of any Event of Default described in subsection 7.6 or 7.7 (withrespect to Company or any Subsidiary Guarantor), each of (a) the unpaidprincipal amount of and accrued interest on the Loans (including AccretedAmounts and any Default Rate Accreted Amounts), (b) an amount as liquidateddamages for the loss of the bargain evidenced hereby (and not as a penalty)equal to the amount that would be payable as a prepayment premium by Company(in the event of a prepayment of all outstanding Loans) pursuant to subsection2.4B(iv) determined as of the date of the occurrence of

 

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any Event of Default, and (c) all otherObligations shall automatically become immediately due and payable, withoutpresentment, demand, protest or other requirements of any kind, all of whichare hereby expressly waived by Company, and (ii) upon the occurrence and duringthe continuation of any other Event of Default, Administrative Agent shall,upon the written request or with the written consent of Requisite Lenders, bywritten notice to Company, declare all or any portion of the amounts describedin clauses (a) through (c) above to be, and the same shall forthwith become,immediately due and payable.

 

Notwithstandinganything contained in the preceding paragraph, if at any time within 60 daysafter an acceleration of the Loans pursuant to clause (ii) of such paragraphCompany shall pay all arrears of interest and all payments on account ofprincipal which shall have become due otherwise than as a result of suchacceleration (with interest on principal and, to the extent permitted by law,on overdue interest, at the rates specified in this Agreement) and all Eventsof Default and Potential Events of Default (other than non-payment of theprincipal of and accrued interest on the Loans, in each case which is due andpayable solely by virtue of acceleration) shall be remedied or waived pursuantto subsection 9.6, then Requisite Lenders, by written notice to Company, may attheir option rescind and annul such acceleration and its consequences; but suchaction shall not affect any subsequent Event of Default or Potential Event ofDefault or impair any right consequent thereon.  The provisions of this paragraph are intended merely to bindLenders to a decision which may be made at the election of Requisite Lendersand are not intended, directly or indirectly, to benefit Company, and suchprovisions shall not at any time be construed so as to grant Company the rightto require Lenders to rescind or annul any acceleration hereunder or topreclude Administrative Agent or Lenders from exercising any of the rights orremedies available to them under any of the Loan Documents, even if theconditions set forth in this paragraph are met.

 

**Section 8.**                                          THE AGENTS

** **

**8.1**                               Appointment.

** **

**A.**                                    **Appointment ofAgents.**  Each Lender hereby irrevocably appoints CSFBas the Administrative Agent and Syndication Agent hereunder and under the otherLoan Documents and authorizes CSFB, in such capacities, to take such actions onits behalf and to exercise such powers as are delegated to CSFB in suchcapacities by the terms hereof or thereof, together with such actions andpowers as are reasonably incidental thereto. Each Agent agrees to act upon the express conditions contained in thisAgreement and the other Loan Documents, as applicable.  In performing its functions and duties underthis Agreement, each Agent shall act solely as an agent of the Lenders and doesnot assume and shall not be deemed to have assumed any obligation towards orrelationship of agency or trust with or for Company or any of itsSubsidiaries.  The provisions of thisSection are solely for the benefit of Agents and Lenders, and Company shall nothave rights as a third party beneficiary of any of such provisions.

 

**B.**                                    **Appointment ofSupplemental Collateral Agents.**  It is thepurpose of this Agreement and the other Loan Documents that there shall be noviolation of any law of any jurisdiction denying or restricting the right ofbanking corporations or associations to transact business as agent or trusteein such jurisdiction.  It is recognizedthat in case of litigation under this Agreement or any of the other LoanDocuments, and in particular in case of the enforcement of any of the LoanDocuments, or in case Administrative Agent deems that by reason of any presentor future law of any jurisdiction Administrative Agent may not exercise any ofthe rights, powers or remedies granted herein or in any of the other LoanDocuments or take any other action which may be desirable or necessary inconnection therewith, it may be necessary that Administrative Agent appoint anadditional individual or institution as a separate trustee, co-trustee,collateral agent or collateral co-agent (any such additional individual orinstitution

 

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being referred toherein individually as a “**SupplementalCollateral Agent**” and collectively as “**Supplemental Collateral Agents**”).

 

In the eventthat Administrative Agent appoints a Supplemental Collateral Agent with respectto any Collateral, (i) each and every right, power, privilege or duty expressedor intended by this Agreement or any of the other Loan Documents to beexercised by or vested in or conveyed to Administrative Agent with respect tosuch Collateral shall be exercisable by and vest in such SupplementalCollateral Agent to the extent, and only to the extent, necessary to enablesuch Supplemental Collateral Agent to exercise such rights, powers andprivileges with respect to such Collateral and to perform such duties withrespect to such Collateral, and every covenant and obligation contained in theLoan Documents and necessary to the exercise or performance thereof by suchSupplemental Collateral Agent shall run to and be enforceable by eitherAdministrative Agent or such Supplemental Collateral Agent, and (ii) theprovisions of this Section 8 and of subsection 9.2 that refer to AdministrativeAgent shall inure to the benefit of such Supplemental Collateral Agent and allreferences therein to Administrative Agent shall be deemed to be references toAdministrative Agent and/or such Supplemental Collateral Agent, as the contextmay require.

 

Should anyinstrument in writing from Company or any other Loan Party be required by anySupplemental Collateral Agent so appointed by Administrative Agent for morefully and certainly vesting in and confirming to him or it such rights, powers,privileges and duties, Company shall, or shall cause such Loan Party to,execute, acknowledge and deliver any and all such instruments promptly uponrequest by Administrative Agent.  Incase any Supplemental Collateral Agent, or a successor thereto, shall die,become incapable of acting, resign or be removed, all the rights, powers,privileges and duties of such Supplemental Collateral Agent, to the extentpermitted by law, shall vest in and be exercised by Administrative Agent untilthe appointment of a new Supplemental Collateral Agent.

 

**8.2**                               Powersand Duties; General Immunity.

** **

**A.**                                    **ExculpatoryProvisions.**  Agents shall not have any duties orobligations except those expressly set forth herein and in the other LoanDocuments.  Without limiting thegenerality of the foregoing, Agents (i) shall not be subject to anyfiduciary or other implied duties, regardless of whether a Default or an Eventof Default has occurred and is continuing, (ii) shall not have any duty totake any discretionary action or exercise any discretionary powers, exceptdiscretionary rights and powers expressly contemplated hereby or by the otherLoan Documents that the Agents are required to exercise as directed in writingby the Requisite Lenders (or such other number or percentage of the relevantLenders as shall be necessary under the circumstances as provided in subsection9.6), provided that no Agent shall be required to take any action that,in its opinion or the opinion of its counsel, may expose such Agent toliability or that is contrary to any Loan Document or applicable law, and (iii)shall not, except as expressly set forth herein and in the other Loan Documentshave any duty to disclose, and shall not be liable for the failure to disclose,any information relating to Company or any of its Affiliates that iscommunicated to or obtained by the person serving as an Agent or any of itsAffiliates in any capacity.  No Agentshall be liable for any action taken or not taken by it with the consent or atthe request of the Requisite Lenders (or such other number or percentage ofLenders as shall be necessary under the circumstances as provided in subsection9.6) or in the absence of its own gross negligence or willful misconduct asdetermined by a final, non-appealable judgment of a court of competentjurisdiction.  No Agent shall be deemedto have knowledge of any Default or Event of Default unless and until noticethereof is given to such Agent by Company or a Lender.  Agents shall not be responsible for or haveany duty to ascertain or inquire into (i) any statement, warranty orrepresentation made in or in connection with this Agreement or any other LoanDocument, (ii) the contents of any certificate, report or other documentdelivered hereunder or thereunder or in

 

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connection herewithor therewith, (iii) the performance or observance of any of the covenants,agreements or other terms or conditions set forth herein or therein or theoccurrence of any Default or Event of Default, (iv) the validity,enforceability, effectiveness or genuineness of this Agreement or any otherLoan Document or any other agreement, instrument or document or (v) the satisfactionof any condition set forth in Section 3 or elsewhere herein, other than toconfirm receipt of items expressly required to be delivered to Agents.

 

**B.**                                    **Action onInstructions of Lender.**  Each Agentshall in all cases be fully protected in acting, or in refraining from acting,hereunder and under any other Loan Document in accordance with writteninstructions signed by the Requisite Lenders (or if required by the terms ofsubsection 9.6, all Lenders), and such instructions and any action taken orfailure to act pursuant thereto shall be binding on all Lenders.  Lenders hereby acknowledge that each Agentshall be under no duty to take any discretionary action permitted to be takenby it pursuant to the provisions of this Agreement or any other Loan Documentunless it shall be requested in writing to do so by the Requisite Lenders.  Each Agent shall be fully justified infailing or refusing to take any action hereunder and under any other LoanDocument unless it shall first be indemnified to its satisfaction by Lenders inproportion to their Pro Rata Share against any and all liability, cost andexpense that it may incur by reason of taking or continuing to take any suchaction.

 

**C.**                                    **Employment ofAgents and Counsel.**  Each Agent may execute any of its duties asAdministrative Agent or Syndication Agent, as the case may be, hereunder andunder any other Loan Document by or through employees, agents, andattorneys-in-fact and shall not be answerable to Lenders, except as to money orsecurities received by it or its authorized agents, for the default ormisconduct of any such agents or attorneys-in-fact selected by it withreasonable care.  Each Agent shall beentitled to advice of counsel concerning the contractual arrangement betweenAgents and Lenders and all matters pertaining to each Agent’s duties hereunderand under any other Loan Document.

 

**D.**                                    **Reliance by Agents.** Agents shall be entitled to rely upon, and shall not incur any liabilityfor relying upon, any notice, request, certificate, consent, statement,instrument, document or other writing (including any electronic message,posting or other distribution) believed by it to be genuine and to have beensigned, sent or otherwise authenticated by the proper Person.  Agents also may rely upon any statement madeto it orally or by telephone and believed by it to have been made by the properPerson, and shall not incur any liability for relying thereon.  In determining compliance with any conditionhereunder to the making of such Loan that by its terms must be fulfilled to thesatisfaction of a Lender, Agents may presume that such condition issatisfactory to such Lender unless Agents shall have received notice to thecontrary from such Lender prior to the making of such Loan.  Agents may consult with legal counsel (who maybe counsel for Company), independent accountants and other experts selected byit, and shall not be liable for any action taken or not taken by it inaccordance with the advice of any such counsel, accountants or experts.

 

**E.**                                      **Agents’Reimbursement and Indemnification.**  Lenders agreeto reimburse and indemnify each Agent ratably in proportion to the outstandingLoans held by them (or, if the Loans have been repaid, in proportion to theoutstanding Loans held by them immediately prior to such repayment) (i) for anyamounts not reimbursed by Company for which any Agent is entitled toreimbursement by Company under the Loan Documents, (ii) for any other expensesincurred by any Agent on behalf of Lenders, in connection with the preparation,execution, delivery, administration and enforcement of the Loan Documents(including, without limitation, for any expenses incurred  by any Agent in connection with any disputebetween Agents, Agents  and any Lenderor between two or more of Lenders) and (iii) for any liabilities, obligations,losses,

 

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damages, penalties,actions, judgments, suits, costs, expenses or disbursements of any kind andnature whatsoever which may be imposed on, incurred by or asserted against anyAgent in any way relating to or arising out of the Loan Documents or any otherdocument delivered in connection therewith or the transactions contemplatedthereby (including, without limitation, for any such amounts incurred by orasserted against any Agent in connection with any dispute between Agents,Agents and any Lender or between two or more of Lenders), or the enforcement ofany of the terms of the Loan Documents or of any such other documents; providedthat (i) no Lender shall be liable for any of the foregoing to the extent anyof the foregoing is found in a final non-appealable judgment by a court ofcompetent jurisdiction to have resulted from the gross negligence or willfulmisconduct of any Agent and (ii) any indemnification required pursuant tosubsection 2.7 shall, notwithstanding the provisions of this subsection, bepaid by the relevant Lender in accordance with the provisions thereof.  The obligations of Lenders under thissubsection shall survive payment of the Obligations and termination of thisAgreement.

 

**F.**                                      **Rights as a Lender.** The Persons serving as Agents hereunder shall have the same rights andpowers in its capacity as a Lender as any other Lender and may exercise thesame as though it were not an Agent and the term “Lender” or “Lenders” shall,unless otherwise expressly indicated or unless the context otherwise requires,include the Persons serving as the Agents hereunder in their individualcapacity.  Such Persons and theirAffiliates may accept deposits from, lend money to, act as the financialadvisor or in any other advisory capacity for and generally engage in any kindof business with Company or any Subsidiary or other Affiliate thereof as ifsuch Persons were not Agents hereunder and without any duty to account thereforto the Lenders.

 

**G.**                                    **Delegation ofDuties.**  Each Agent may perform any and all of itsduties and exercise its rights and powers hereunder or under any other LoanDocument by or through any one or more sub-agents appointed by such Agent.  Agents and any such sub-agent may performany and all of its duties and exercise its rights and powers by or throughtheir respective Related Parties.  Theexculpatory provisions of subsection 8.2 shall apply to any such sub-agent andto the Related Parties of such Agent and any such sub-agent, and shallapply to their respective activities in connection with the syndication of thecredit facilities provided for herein as well as activities as such Agent.

 

**8.3**                               SuccessorAgents.

** **

**A.**                                    **Successor Agents.** Administrative Agent and/or Syndication Agent may at any time givenotice of its resignation to Lenders and Company.  Upon receipt of any such notice of resignation, the RequisiteLenders shall have the right, subject, so long as no Event of Default hasoccurred and is continuing, to the consent of Company, in consultation withCompany, to appoint a successor Administrative Agent and/or Syndication Agent,as applicable, which shall be a bank with an office in New York, or anAffiliate of any such bank with an office in New York.  If no such successor shall have been soappointed by the Requisite Lenders and shall have accepted such appointmentwithin 10 days after the retiring Administrative Agent and/or SyndicationAgent as the case may be, gives notice of its resignation, then the retiringAdministrative Agent may on behalf of the Lenders, appoint a successorAdministrative Agent and/or Syndication Agent, as applicable, meeting thequalifications set forth above and subject, so long as no Event of Default hasoccurred and is continuing, to the consent of Company, provided that ifAdministrative Agent and/or Syndication Agent, as applicable, shall notifyCompany and Lenders that no such successor is willing to accept suchappointment, then such resignation shall nonetheless become effective inaccordance with such notice and (1) the retiring Administrative Agentand/or Syndication Agent, as applicable, shall be discharged from its dutiesand obligations

 

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hereunder and underthe other Loan Documents and (2) all payments, communications anddeterminations provided to be made by, to or through Administrative Agentand/or Syndication Agent, as applicable, shall instead be made by or to eachLender directly, until such time as the Requisite Lenders appoint a successorAdministrative Agent and/or Syndication Agent, as applicable, as provided forabove in this paragraph.  Upon theacceptance of a successor’s appointment as Administrative Agent and/or SyndicationAgent, as applicable hereunder, such successor shall succeed to and becomevested with all of the rights, powers, privileges and duties of the retiring(or retired) Administrative Agent and/or Syndication Agent, as applicable, andthe retiring Administrative Agent and/or Syndication Agent, as applicable shallbe discharged from all of its duties and obligations hereunder or under theLoan Documents.  The fees payable byCompany to a successor Administrative Agent and/or Syndication Agent, as applicable,shall be the same as those payable to its predecessor unless otherwise agreedbetween Company and such successor. After the retiring Administrative Agent’s and/or Syndication Agent’sresignation hereunder and under the other Loan Documents, the provisions ofthis Section 8 and subsection 9.2 shall continue in effect for the benefitof such retiring Administrative Agent and/or Syndication Agent, as applicable,its sub-agents and their respective Related Parties in respect of any actionstaken or omitted to be taken by any of them while the retiring AdministrativeAgent and/or Syndication Agent, as applicable was acting in such capacity.

 

**8.4**                               CollateralDocuments.

** **

EachLender hereby further authorizes Administrative Agent to enter into eachCollateral Document as secured party on behalf of and for the benefit ofLenders and the other beneficiaries named therein and agrees to be bound by theterms of each Collateral Document; provided that Administrative Agentshall not enter into or consent to any amendment, modification, termination orwaiver of any provision contained in any Collateral Document without the priorconsent of the Requisite Lenders (or, if required pursuant to subsection 9.6,all Lenders); providedfurther, however, that, withoutfurther written consent or authorization from any Lender, Administrative Agentmay execute any documents or instruments necessary to effect the release of anyasset constituting Collateral from the Lien of the applicable CollateralDocument in the event that such asset is sold or otherwise disposed of in atransaction effected in accordance with subsection 6.7 or to the extentotherwise required by any Collateral Document or the IntercreditorAgreement.  Anything contained in any ofthe Loan Documents to the contrary notwithstanding, each Lender agrees that noLender shall have any right individually to realize upon any of the Collateralunder any Collateral Document, it being understood and agreed that all rightsand remedies under the Collateral Documents may be exercised solely byAdministrative Agent for the benefit of Lenders and the other beneficiariesnamed therein in accordance with the terms thereof and subject to the terms ofthe Intercreditor Agreement.  EachLender hereby further authorizes Administrative Agent to enter into suchamendments to and amendments and restatements of and any other modifications toeach Collateral Document, the Intercreditor Agreement, any other applicableintercreditor agreement relating to any First Lien Credit Agreement orPermitted Indebtedness and any other documents and instruments as secured partyon behalf of and for the benefit of Lenders and the other beneficiaries namedtherein, in each case as shall be necessary or advisable in connection with theIntercreditor Agreement and the incurrence of Permitted Indebtedness toeffectuate the terms thereof and hereof, and each Lender hereby agrees to bebound by the terms thereof.

 

**8.5**                               Non-Reliance on Agents and Other Lenders.

** **

EachLender acknowledges that it has, independently and without reliance upon anyAgent or any other Lender or any of their Related Parties and based on suchdocuments and information as it

 

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hasdeemed appropriate, made its own credit analysis and decision to enter intothis Agreement.  Each Lender alsoacknowledges that it will, independently and without reliance upon the anyAgent or any other Lender or any of their Related Parties and based on suchdocuments and information as it shall from time to time deem appropriate,continue to make its own decisions in taking or not taking action under orbased upon this Agreement, any other Loan Document or any related agreement orany document furnished hereunder or thereunder.

 

**Section 9.**                                          MISCELLANEOUS

** **

**9.1**                               Assignments and Participations in Loans.

** **

**A.**                                    **General.** The provisions of this Agreement shall be binding upon and inure to thebenefit of the parties hereto and their respective successors and assignspermitted hereby, except that Company may not assign or otherwise transfer anyof its rights or obligations hereunder without the prior written consent ofeach Lender and Administrative Agent and no Lender may assign or otherwisetransfer any of its rights or obligations hereunder except (i) to anEligible Assignee in accordance with the provisions of subsection 9.1B,(ii) by way of participation in accordance with the provisions ofsubsection 9.1C or (iii) by way of pledge or assignment of a securityinterest subject to the restrictions of subsection 9.1E (and any otherattempted assignment or transfer by any party hereto shall be null andvoid).  Nothing in this Agreement,expressed or implied, shall be construed to confer upon any Person (other thanthe parties hereto, their respective successors and assigns permitted hereby,Participants to the extent provided in subsection 9.1C and, to the extentexpressly contemplated hereby, the Related Parties of each of AdministrativeAgent and the Lenders) any legal or equitable right, remedy or claim under orby reason of this Agreement.

 

**B.**                                    **Assignments.**

 

Any Lender may at any time assign to one ormore Eligible Assignees all or a portion of its rights and obligations underthis Agreement; provided that:

 

(i)except in the case of an assignment of allthe Loans at the time owing to it or in the case of an assignment to a thenexisting Lender or an Affiliate of a then existing Lender or an Approved Fundwith respect to the assigning Lender, the aggregate amount of Loans subject toeach such assignment (determined as of the date the Assignment Agreement withrespect to such assignment is delivered to Administrative Agent or, if “TradeDate” is specified in the Assignment Agreement, as of the Trade Date) shall notbe less than $1,000,000 or an integral multiple of $1,000,000 in excessthereof, unless each of Administrative Agent and, so long as no Event ofDefault has occurred and is continuing, Company otherwise consent (each suchconsent not to be unreasonably withheld or delayed and such approval to bedeemed to have been given if a response is not received within five BusinessDays from the date on which request for approval was received by the applicablePerson);

 

(ii)(A) except in the case of assignmentsmade in connection with the primary syndication of the Loans by Agents withinfive Business Days of the Closing Date and except in the case of an assignmentof Loans to a then existing Lender or an Affiliate of a then existing Lender oran Approved Fund with respect to the assigning Lender, the consent of Company(which consent shall only be required if no Event of Default has occurred andis continuing and which consent shall not be unreasonably withheld or delayed)shall be required; and (B) the consent of Administrative Agent (which consentshall not be unreasonably withheld or delayed) shall be required;

 

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(iii)each partial assignment shall be made asan assignment of a proportionate part of all the assigning Lender’s rights andobligations under this Agreement with respect to the Loans assigned; and

 

(iv)the parties to each assignment shall(1) electronically execute and deliver to Administrative Agent anAssignment Agreement via an electronic settlement system acceptable toAdministrative Agent (which initially shall be ClearPar, LLC) or (2) manuallyexecute and deliver to Administrative Agent an Assignment Agreement, togetherwith a processing and recordation fee of $3,500 (for which Company shall not beliable); and the Eligible Assignee, if it shall not be a Lender, shall deliverto Administrative Agent an Administrative Questionnaire and if required,applicable tax forms.

 

Subject toacceptance and recording thereof by Administrative Agent, from and after theeffective date specified in each Assignment Agreement, the Eligible Assigneethereunder shall be a party to this Agreement and, to the extent of theinterest assigned by such Assignment Agreement, have the rights and obligationsof a Lender under this Agreement, and the assigning Lender thereunder shall, tothe extent of the interest assigned by such Assignment Agreement, be releasedfrom its obligations under this Agreement (and, in the case of an AssignmentAgreement covering all of the assigning Lender’s rights and obligations underthis Agreement, such Lender shall cease to be a party hereto) but shallcontinue to be entitled to the benefits of subsection 2.7 with respect tofacts and circumstances occurring prior to the effective date of suchassignment.  Any assignment or transferby a Lender of rights or obligations under this Agreement that does not complywith this paragraph shall be treated for purposes of this Agreement as a saleby such Lender of a participation in such rights and obligations in accordancewith subsection 9.1C.

 

**C.**                                    **Participations.** Any Lender may at any time, without the consent of, or notice to,Company or Administrative Agent, sell participations to any Person (other thana natural person or Company or any of Company’s Subsidiaries) (each, a “**Participant**”) in all or a portion of suchLender’s rights and/or obligations under this Agreement (including all or aportion of the Loans owing to it); provided that

 

(i)such Lender’s obligations under thisAgreement shall remain unchanged;

 

(ii)such Lender shall remain solelyresponsible to the other parties hereto for the performance of suchobligations; and

 

(iii)Company, Administrative Agent and theother Lenders shall continue to deal solely and directly with such Lender inconnection with such Lender’s rights and obligations under this Agreement.

 

Any agreement or instrument pursuant to whicha Lender sells such a participation shall provide that such Lender shall retainthe sole right to enforce this Agreement and to approve any amendment,modification or waiver of any  provisionof this Agreement; provided that such agreement or instrument mayprovide that such Lender will not, without the consent of the Participant,agree to any amendment, modification or waiver with respect to any action (i)effecting the extension of the final maturity of the Loan allocated to suchparticipation, (ii) effecting a reduction of the principal amount of oraffecting the rate of interest payable on any Loan allocated to suchparticipation, (iii) releasing all or substantially all of the Collateral, or(iv) releasing all or substantially all of the guarantors from theirobligations under the Guaranties, and all amounts payable by Companyhereunder.  Subject to subsection 9.1D,Company agrees that each Participant shall be entitled to the benefits ofsubsection 2.7 to the same extent as if it were a

 

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Lender and hadacquired its interest by assignment pursuant to subsection 9.1B.  To the extent permitted by law, eachParticipant also shall be entitled to the benefits of subsection 9.4 asthough it were a Lender, provided such Participant agrees to be subject tosubsection 9.5 as though it were a Lender.

 

**D.**                                    **Limitations UponParticipant Rights.** A Participant shall not beentitled to receive any greater payment under subsection 2.7 than theapplicable Lender would have been entitled to receive with respect to theparticipation sold to such Participant, unless the sale of the participation tosuch Participant is made with Company’s prior written consent.

 

**E.**                                      **Certain Pledges.** Any Lender may at any time pledge or assign a security interest in allor any portion of its rights under this Agreement to secure obligations of suchLender, including without limitation any pledge or assignment to secureobligations to a Federal Reserve Bank; provided that no such pledge orassignment shall release such Lender from any of its obligations hereunder orsubstitute any such pledgee or assignee for such Lender as a party hereto.  Notwithstanding anything to the contrarycontained herein, any Lender that is a Fund may create a security interest inall or any portion of the Loans owing to it and the Notes, if any, held by itto the trustee for holders of obligations owed, or securities issued, by suchFund as security for such obligations or securities, provided thatunless and until such trustee actually becomes a Lender in compliance with theother provisions of this subsection 9.1, (i) no such pledge shall release thepledging Lender from any of its obligations under this Agreement and (ii) suchtrustee shall not be entitled to exercise any of the rights of a Lender underthis Agreement and the Notes even though such trustee may have acquiredownership rights with respect to the pledged interest through foreclosure orotherwise.

 

**F.**                                      **Information.** Each Lender may furnish any information concerning Company and itsSubsidiaries in the possession of that Lender from time to time to assigneesand participants (including prospective assignees and participants), subject tosubsection 9.19.

 

**G.**                                    **Representations ofLenders.**  Each Lender listed on the signature pageshereof hereby represents and warrants (i) that it is an Eligible Assigneedescribed in clause (A) of the definition thereof; (ii) that it has experienceand expertise in the making of loans such as the Loans; and (iii) that it willmake its Loans for its own account in the ordinary course of its business andwithout a view to distribution of such Loans within the meaning of theSecurities Act or the Exchange Act or other federal securities laws (it beingunderstood that, subject to the provisions of this subsection 9.1, thedisposition of such Loans or any interests therein shall at all times remainwithin its exclusive control).  EachLender that becomes a party hereto pursuant to an Assignment Agreement shall bedeemed to agree that the representations and warranties of such Lendercontained in Section 2(c) of such Assignment Agreement are incorporated hereinby this reference.

 

**9.2**                               Expenses.

** **

Whether or notthe transactions contemplated hereby shall be consummated, Company agrees topay promptly (i) all the actual and reasonable costs and expenses of Agentswith respect to the preparation of the Loan Documents and any consents,amendments, waivers or other modifications thereto; (ii) the reasonable fees,expenses and disbursements of a single counsel to Agents and Arranger(including the costs of local or foreign counsel, to the extent required) inconnection with the negotiation, preparation, execution and administration ofthe Loan Documents and any consents, amendments, waivers or other modificationsthereto and any other documents or matters requested by Company; (iii) all theactual costs and reasonable expenses of creating and perfecting Liens in favorof Administrative Agent on behalf of

 

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Lenders pursuant to any Collateral Document,including filing and recording fees, expenses and taxes, stamp or documentarytaxes, search fees, title insurance premiums, and reasonable fees, expenses anddisbursements of counsel to Agents and of counsel providing any opinions thatSyndication Agent, Administrative Agent or Requisite Lenders may request inrespect of the Collateral Documents or the Liens created pursuant thereto; (iv)the custody or preservation of any of the Collateral; (v) all other actual andreasonable costs and expenses incurred by Arranger, Syndication Agent orAdministrative Agent (including the reasonable fees, expenses and disbursementsof any auditors, accountants or appraisers and any environmental or other consultants,advisors and agents  employed orretained by Syndication Agent, Administrative Agent or their respectivecounsel) in connection with the syndication of the Commitments and thenegotiation, preparation and execution of the Loan Documents and any consents,amendments, waivers or other modifications thereto and the transactionscontemplated thereby; and (vi) after the occurrence of an Event of Default, allcosts and expenses, including reasonable attorneys’ fees and costs ofsettlement, incurred by Agents and Lenders in enforcing any Obligations of orin collecting any payments due from any Loan Party hereunder or under the otherLoan Documents by reason of such Event of Default (including in connection withthe sale of, collection from, or other realization upon any of the Collateralor the enforcement of the Guaranties or in connection with any refinancing orrestructuring of the credit arrangements provided under this Agreement in thenature of a “work-out” or pursuant to any insolvency or bankruptcy proceedings).

 

**9.3**                               Indemnity.

** **

In addition tothe payment of expenses pursuant to subsection 9.2, whether or not thetransactions contemplated hereby shall be consummated, Company agrees to defend(subject to Indemnitees’ selection of counsel), indemnify, pay and holdharmless Arranger, Agents and Lenders, and the officers, directors, trustees,employees, agents and affiliates of Arranger, Agents and Lenders (collectivelycalled the “**Indemnitees**”), fromand against any and all Indemnified Liabilities (as hereinafter defined); providedthat Company shall not have any obligation to any Indemnitee hereunder withrespect to any Indemnified Liabilities to the extent such IndemnifiedLiabilities arise from the gross negligence or willful misconduct of thatIndemnitee as determined by a final judgment of a court of competentjurisdiction or to the extent that such Indemnified Liabilities areEnvironmental Liabilities that arise solely out of the actions ofAdministrative Agent or Lenders occurring after Administrative Agent or Lendersshall have foreclosed on, or otherwise dispossessed Company and itsSubsidiaries of, the applicable Facility.

 

As usedherein, “**Indemnified Liabilities**”means, collectively, any and all liabilities, obligations, losses, damages(including natural resource damages), penalties, actions, judgments, suits,claims (including Environmental Claims), costs (including the costs of anyinvestigation, study, sampling, testing, abatement, cleanup, removal,remediation or other response action necessary to remove, remediate, clean upor abate any Hazardous Materials Activity), expenses and disbursements of anykind or nature whatsoever (including the reasonable fees and disbursements ofcounsel for Indemnitees in connection with any investigative, administrative orjudicial proceeding commenced or threatened by any Person, whether or not anysuch Indemnitee shall be designated as a party or a potential party thereto,and any fees or expenses incurred by Indemnitees in enforcing this indemnity),whether direct, indirect or consequential and whether based on any federal,state or foreign laws, statutes, rules or regulations (including securities andcommercial laws, statutes, rules or regulations and Environmental Laws), oncommon law or equitable cause or on contract or otherwise, that may be imposedon, incurred by, or asserted against any such Indemnitee, in any mannerrelating to or arising out of (i) this Agreement or the other Loan Documents orthe transactions contemplated hereby or thereby (including Lenders’ agreementto make the Loans hereunder or the use or intended use of the proceeds thereof,or any enforcement of any of the Loan Documents (including any sale of,collection from, or other realization upon any of the Collateral or theenforcement of the Guaranties) or (ii) any Environmental Claim or any Hazardous

 

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Materials Activity relating to or arisingfrom, directly or indirectly, any past or present activity, operation, landownership, or practice of Company or any of its Subsidiaries.

 

To the extentthat the undertakings to defend, indemnify, pay and hold harmless set forth inthis subsection 9.3 may be unenforceable in whole or in part because they areviolative of any law or public policy, Company shall contribute the maximumportion that it is permitted to pay and satisfy under applicable law to thepayment and satisfaction of all Indemnified Liabilities incurred by Indemniteesor any of them.

 

**9.4**                               Set-Off; Security Interest in Deposit Accounts.

** **

In addition toany rights now or hereafter granted under applicable law and not by way oflimitation of any such rights, upon the occurrence of any Event of Defaultreferred to in subsections 7.6 or 7.7 or, with the consent of the RequisiteLenders, upon the occurrence of any other Event of Default, each Lender is, tothe fullest extent permitted by applicable law, hereby authorized by Company atany time or from time to time, without notice to Company or to any otherPerson, any such notice being hereby expressly waived, subject to the terms ofthe Intercreditor Agreement, to set off and to appropriate and to apply any andall deposits (general or special, including Indebtedness evidenced bycertificates of deposit, whether matured or unmatured, but not including trustaccounts) and any other Indebtedness at any time held or owing by that Lenderto or for the credit or the account of Company against and on account of theobligations and liabilities then due of Company to that Lender under this Agreementand the other Loan Documents, including all claims of any nature or descriptionarising out of or connected with this Agreement or any other Loan Document,irrespective of whether or not that Lender shall have made any demandhereunder.  Company hereby furthergrants to each Agent and each Lender a security interest in all deposits andaccounts maintained with such Agent or such Lender as security for theObligations.

 

**9.5**                               RatableSharing.

** **

Lenders herebyagree among themselves that if any of them shall, whether by voluntary payment(other than a voluntary prepayment of Loans made and applied in accordance withthe terms of this Agreement), by realization upon security, through theexercise of any right of set-off or banker’s lien, by counterclaim or crossaction or by the enforcement of any right under the Loan Documents orotherwise, or as adequate protection of a deposit treated as cash collateralunder the Bankruptcy Code, receive payment or reduction of a proportion of theaggregate amount of principal, interest, premium, fees and other amounts thendue and owing to that Lender hereunder or under the other Loan Documents(collectively, the “**Aggregate Amounts Due**”to such Lender) which is greater than the proportion received by any otherLender in respect of the Aggregate Amounts Due to such other Lender, then theLender receiving such proportionately greater payment shall (i) notifyAdministrative Agent and each other Lender of the receipt of such payment and(ii) apply a portion of such payment to purchase participations (which it shallbe deemed to have purchased from each seller of a participation simultaneouslyupon the receipt by such seller of its portion of such payment) in theAggregate Amounts Due to the other Lenders so that all such recoveries ofAggregate Amounts Due shall be shared by all Lenders in proportion to theAggregate Amounts Due to them; provided that if all or part of suchproportionately greater payment received by such purchasing Lender isthereafter recovered from such Lender upon the bankruptcy or reorganization ofCompany or otherwise, those purchases shall be rescinded and the purchaseprices paid for such participations shall be returned to such purchasing Lenderratably to the extent of such recovery, but without interest.  Company expressly consents to the foregoingarrangement and agrees, to the fullest extent that it may do so underapplicable law, that any holder of a participation so purchased may exerciseany and all rights of banker’s lien, set-off or counterclaim with respect toany and all monies owing by Company to that holder with respect thereto asfully as if that holder were owed the amount of the participation held by thatholder.

 

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**9.6**                               Amendmentsand Waivers.

** **

No amendment,modification, termination or waiver of any provision of this Agreement or ofthe Notes, and no consent to any departure by Company therefrom, shall in anyevent be effective without the written concurrence of Requisite Lenders; providedthat no such amendment, modification, termination, waiver or consent whichwould:

 

(a)                                  modify any requirement hereunderthat any particular action be taken by all Lenders or by Requisite Lendersshall be effective unless consented to by each Lender;

 

(b)                                 modify this subsection 9.6, changethe definitions of “Requisite Lenders” or “Pro Rata Share” (except inaccordance with subsection 6.1(x)(B)), increase any Commitments (except inaccordance with subsection 6.1(x)(B)), reduce any fees described in subsection2.3 (other than the fees to Agents referred to in subsection 2.3), release anymaterial Subsidiary Guarantor from its obligations under the Guaranty, Parentfrom its obligations under the Parent Guaranty, or all or substantially all ofthe collateral security (except in each case as otherwise specifically providedfor in the Loan Documents), or extend the Maturity Date, shall be made withoutthe consent of each Lender adversely affected thereby;

 

(c)                                  extend the time of payment of, orreduce the amount of, any interest on or premium payable in respect of any Loanor reduce the principal amount of or rate of interest on or any premium payablein respect of any Loan (which shall in each case include the conversion of allor any part of the Obligations into equity of any Loan Party), shall be madewithout the consent of the Lender which has made such Loan; or

 

(d)                                 affect adversely the interests,rights or obligations of any Agent, unless consented to by such Agent.

 

AdministrativeAgent may, but shall have no obligation to, with the concurrence of any Lender,execute amendments, modifications, waivers or consents on behalf of thatLender.  Any waiver or consent shall beeffective only in the specific instance and for the specific purpose for whichit was given.  No notice to or demand onCompany in any case shall entitle Company to any other or further notice ordemand in similar or other circumstances. Any amendment, modification, termination, waiver or consent effected in accordancewith this subsection 9.6 shall be binding upon each Lender at the timeoutstanding, each future Lender and, if signed by Company, on Company.

 

Notwithstandinganything in this subsection 9.6 to the contrary, this Agreement and the otherLoan Documents may be amended (or amended and restated) with the writtenapproval of Administrative Agent, Company and the lenders under the IncrementalFacility (and no other Lenders) to implement the Incremental Facility pursuantto and in accordance with subsection 6.1(x).

 

**9.7**                               Independenceof Covenants.

** **

All covenantshereunder shall be given independent effect so that if a particular action orcondition is not permitted by any of such covenants, the fact that it would bepermitted by an exception to, or would otherwise be within the limitations of,another covenant shall not avoid the occurrence of an Event of Default orPotential Event of Default if such action is taken or condition exists.

 

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**9.8**                               Notices.

** **

Unlessotherwise specifically provided herein, any notice or other communicationherein required or permitted to be given shall be in writing and may bepersonally served, telexed or sent by telefacsimile or United States mail orcourier service and shall be deemed to have been given when delivered in personor by courier service, upon receipt of telefacsimile, or three Business Daysafter depositing it in the United States mail with postage prepaid and properlyaddressed; provided that notices to Agents shall not be effective untilreceived.  For the purposes hereof, theaddress of each party hereto shall be as set forth under such party’s name onthe signature pages hereof or (i) as to Company and Agents, such other addressas shall be designated by such Person in a written notice delivered to theother parties hereto and (ii) as to each other party, such other address asshall be designated by such party in a written notice delivered toAdministrative Agent.

 

**9.9**                               Survivalof Representations,Warranties and Agreements.

** **

**A.**                                    All representations, warranties andagreements made herein shall survive the execution and delivery of thisAgreement and the making of the Loans hereunder.

 

**B.**                                    Notwithstanding anything in thisAgreement or implied by law to the contrary, the agreements of Company setforth in subsections 2.6D, 2.7, 9.2, 9.3 and 9.4 and the agreements of Lendersset forth in subsections 8.2C, 8.4 and 9.5 shall survive the payment of theLoans and the termination of this Agreement.

 

**9.10**                        Failureor Indulgence Not Waiver;Remedies Cumulative.

** **

No failure ordelay on the part of any Agent or any Lender in the exercise of any power,right or privilege hereunder or under any other Loan Document shall impair suchpower, right or privilege or be construed to be a waiver of any default oracquiescence therein, nor shall any single or partial exercise of any suchpower, right or privilege preclude other or further exercise thereof or of anyother power, right or privilege.  Allrights and remedies existing under this Agreement and the other Loan Documents arecumulative to, and not exclusive of, any rights or remedies otherwiseavailable.

 

**9.11**                        Marshalling;Payments SetAside.

** **

None of Agentsor Lenders shall be under any obligation to marshal any assets in favor ofCompany or any other party or against or in payment of any or all of theObligations.  To the extent that Companymakes a payment or payments to Administrative Agent or Lenders (or toAdministrative Agent for the benefit of Lenders), or any of Agents or Lendersenforce any security interests or exercise their rights of setoff, and suchpayment or payments or the proceeds of such enforcement or setoff or any partthereof are subsequently invalidated, declared to be fraudulent orpreferential, set aside and/or required to be repaid to a trustee, receiver orany other party under any bankruptcy law, any other state or federal law,common law or any equitable cause, then, to the extent of such recovery, theobligation or part thereof originally intended to be satisfied, and all Liens,rights and remedies therefor or related thereto, shall be revived and continuedin full force and effect as if such payment or payments had not been made orsuch enforcement or setoff had not occurred.

 

**9.12**                        Severability.

** **

In case anyprovision in or obligation under this Agreement or the Notes shall be invalid,illegal or unenforceable in any jurisdiction, the validity, legality andenforceability of the remaining provisions

 

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or obligations, or of such provision or obligationin any other jurisdiction, shall not in any way be affected or impairedthereby.

 

**9.13**                        Obligations Several; Independent Nature of Lenders’ Rights.

** **

Theobligations of Lenders hereunder are several and no Lender shall be responsiblefor the obligations or Commitments of any other Lender hereunder.  Nothing contained herein or in any otherLoan Document, and no action taken by Lenders pursuant hereto or thereto, shallbe deemed to constitute Lenders as a partnership, an association, a jointventure or any other kind of entity. The amounts payable at any time hereunderto each Lender shall be a separate and independent debt, and each Lender shallbe entitled to protect and enforce its rights arising out of this Agreement andit shall not be necessary for any other Lender to be joined as an additionalparty in any proceeding for such purpose.

 

**9.14**                        Headings.

** **

Section andsubsection headings in this Agreement are included herein for convenience ofreference only and shall not constitute a part of this Agreement for any otherpurpose or be given any substantive effect.

 

**9.15**                        APPLICABLELAW.

** **

**THISAGREEMENT AND THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BEGOVERNED BY, AND SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THEINTERNAL LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION 5-1401 OF THE GENERALOBLIGATIONS LAW OF THE STATE OF NEW YORK), WITHOUT REGARD TO CONFLICTS OF LAWSPRINCIPLES.**

 

**9.16**                        Successorsand Assigns.

** **

This Agreementshall be binding upon the parties hereto and their respective successors andassigns and shall inure to the benefit of the parties hereto and the successorsand assigns of Lenders (it being understood that Lenders’ rights of assignmentare subject to subsection 9.1).  NeitherCompany’s rights or obligations hereunder nor any interest therein may beassigned or delegated by Company without the prior written consent of allLenders.

 

**9.17**                        Consent to Jurisdiction and Service of Process.

** **

**ALLJUDICIAL PROCEEDINGS BROUGHT AGAINST COMPANY ARISING OUT OF OR RELATING TO THISAGREEMENT OR ANY OTHER LOAN DOCUMENT, OR ANY OBLIGATIONS THEREUNDER, MAY, TOTHE EXTENT PERMITTED UNDER APPLICABLE LAW, BE BROUGHT IN ANY STATE OR FEDERALCOURT OF COMPETENT JURISDICTION IN THE STATE, COUNTY AND CITY OF NEW YORK.  BY EXECUTING AND DELIVERING THIS AGREEMENT,COMPANY, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, IRREVOCABLY:**

 

**(I)**                                    **ACCEPTS GENERALLY AND UNCONDITIONALLY THE NONEXCLUSIVEJURISDICTION AND TO THE EXTENT PERMITTED UNDER APPLICABLE LAW VENUE OF SUCHCOURTS;**

 

**(II)**                                **TO THE EXTENT PERMITTED UNDER APPLICABLE LAW, WAIVESANY DEFENSE OF FORUM NON CONVENIENS;**

 

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**(III)**                            **AGREES THAT SERVICE OF ALL PROCESS IN ANY SUCHPROCEEDING IN ANY SUCH COURT MAY BE MADE BY REGISTERED OR CERTIFIED MAIL,RETURN RECEIPT REQUESTED, TO COMPANY AT ITS ADDRESS PROVIDED IN ACCORDANCE WITHSUBSECTION 9.8;**

 

**(IV)**                           **AGREES THAT SERVICE AS PROVIDED IN CLAUSE (III) ABOVEIS SUFFICIENT TO CONFER PERSONAL JURISDICTION OVER COMPANY IN ANY SUCHPROCEEDING IN ANY SUCH COURT, AND OTHERWISE CONSTITUTES EFFECTIVE AND BINDINGSERVICE IN EVERY RESPECT;**

 

**(V)**                               **AGREES THAT LENDERS RETAIN THE RIGHT TO SERVE PROCESSIN ANY OTHER MANNER PERMITTED BY LAW OR TO BRING PROCEEDINGS AGAINST COMPANY INTHE COURTS OF ANY OTHER JURISDICTION; AND**

 

**(VI)**                           **AGREES THAT THE PROVISIONS OF THIS SUBSECTION 9.17RELATING TO JURISDICTION AND VENUE SHALL BE BINDING AND ENFORCEABLE TO THEFULLEST EXTENT PERMISSIBLE UNDER NEW YORK GENERAL OBLIGATIONS LAW SECTION5-1402 OR OTHERWISE.**

 

**9.18**                        Waiverof Jury Trial.

** **

**EACHOF THE PARTIES TO THIS AGREEMENT HEREBY AGREES TO WAIVE ITS RESPECTIVE RIGHTSTO A JURY TRIAL OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR ARISING OUT OFTHIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR ANY DEALINGS BETWEEN THEMRELATING TO THE SUBJECT MATTER OF THIS LOAN TRANSACTION OR THE LENDER/BORROWERRELATIONSHIP THAT IS BEING ESTABLISHED. The scope of this waiver is intended to be all-encompassing of any andall disputes that may be filed in any court and that relate to the subjectmatter of this transaction, including contract claims, tort claims, breach ofduty claims and all other common law and statutory claims.  Each party hereto acknowledges that thiswaiver is a material inducement to enter into a business relationship, that eachhas already relied on this waiver in entering into this Agreement, and thateach will continue to rely on this waiver in their related futuredealings.  Each party hereto furtherwarrants and represents that it has reviewed this waiver with its legal counseland that it knowingly and voluntarily waives its jury trial rights followingconsultation with legal counsel.  THISWAIVER IS IRREVOCABLE, MEANING THAT IT MAY NOT BE MODIFIED EITHER ORALLY OR INWRITING (OTHER THAN BY A MUTUAL WRITTEN WAIVER SPECIFICALLY REFERRING TO THISSUBSECTION 9.18 AND EXECUTED BY EACH OF THE PARTIES HERETO), AND THIS WAIVERSHALL APPLY TO ANY SUBSEQUENT AMENDMENTS, RENEWALS, SUPPLEMENTS ORMODIFICATIONS TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR TO ANYOTHER DOCUMENTS OR AGREEMENTS RELATING TO THE LOANS MADE HEREUNDER.  In the event of litigation, this Agreementmay be filed as a written consent to a trial by the court.**

 

**9.19**                        Confidentiality.

** **

Each Lender,Agent and Arranger shall hold all non-public information obtained in connectionwith this Agreement or obtained by it based on a review of the books andrecords of Company or any of its Subsidiaries in accordance with such Lender’s,Agent’s or Arranger’s customary procedures for handling confidential informationof this nature and in accordance with safe and sound banking practices, or ifthe lender is not a bank, in accordance with safe and sound financial servicesindustry practices, it being understood and agreed by Company that in any eventa Lender may make disclosures to Affiliates

 

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and professional advisors of such Lender ordisclosures reasonably required by (a) any bona fide assignee, transferee orparticipant in connection with the contemplated assignment or transfer by suchLender of any Loans or any participations therein or (b) by any direct orindirect contractual counterparties in swap agreements or such contractualcounterparties’ professional advisors; provided that such contractualcounterparty or professional advisor to such contractual counterparty agrees inwriting to keep such information confidential to the same extent required ofLenders hereunder, or disclosures required or requested by any governmentalagency or representative thereof or pursuant to legal process; providedfurther that, (x) unless specifically prohibited by applicable law or courtorder, each Lender, Agent and Arranger shall promptly notify Company of anyrequest by any governmental agency or representative thereof (other than anyrequest by the National Association of Insurance Commissioners or any requestin connection with any examination of the financial condition of such Lender byany governmental agency) for disclosure of any such non-public informationprior to disclosure of such information and (y) prior to any such disclosurepursuant to this subsection 9.19 each Lender, each Agent and Arranger, as thecase may be, shall require any such bona fide transferee, participant andassignee to agree to be bound by this subsection 9.19 and to require suchPerson to require any other Person to whom such Person discloses any suchnon-public information to be similarly bound by this subsection 9.19; and providedfurther that in no event shall any Lender be obligated or required to returnany materials furnished by Company or any of its Subsidiaries except as may berequired by an order of a court of competent jurisdiction and to the extent setforth therein.

 

Notwithstandinganything herein to the contrary, each Agent, Arranger and each Lender maydisclose to any and all persons, without limitation of any kind, anyinformation with respect to the U.S. federal income tax treatment and U.S.federal income tax structure of the transactions contemplated hereby and allmaterials of any kind (including opinions or other tax analyses) that areprovided to such Agent, Arranger or such Lender relating to such tax treatmentand tax structure.

 

**9.20**                        Counterparts;Effectiveness.

** **

This Agreementand any amendments, waivers, consents or supplements hereto or in connectionherewith may be executed in any number of counterparts and by different partieshereto in separate counterparts, each of which when so executed and deliveredshall be deemed an original, but all such counterparts together shall constitutebut one and the same instrument; signature pages may be detached from multipleseparate counterparts and attached to a single counterpart so that allsignature pages are physically attached to the same document.  This Agreement shall become effective uponthe execution of a counterpart hereof by each of the parties hereto and receiptby Company and Agents of written or telephonic notification of such executionand authorization of delivery thereof.

 

**9.21**                        MaximumAmount.

** **

**A.**                                    It is the intention of Company andLenders to conform strictly to the usury and similar laws relating to interestfrom time to time in force, and all agreements between the Loan Parties andtheir respective Subsidiaries and Lenders, whether now existing or hereafterarising and whether oral or written, are hereby expressly limited so that in nocontingency or event whatsoever, whether by acceleration of maturity hereof orotherwise, shall the amount paid or agreed to be paid in the aggregate toLenders as interest (whether or not designated as interest, and including anyamount otherwise designated but deemed to constitute interest by a court ofcompetent jurisdiction) hereunder or under the other Loan Documents or in anyother agreement given to secure the Indebtedness or obligations of Company toLenders, or in any other document evidencing, securing or pertaining to theIndebtedness evidenced hereby, exceed the maximum amount permissible underapplicable usury or such other laws (the “**MaximumAmount**”).  If under anycircumstances whatsoever fulfillment of any provision hereof, or any of theother Loan

 

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Documents, at thetime performance of such provision shall be due, shall involve exceeding theMaximum Amount, then, *ipso facto*,the obligation to be fulfilled shall be reduced to the Maximum Amount.  For the purposes of calculating the actualamount of interest paid and/or payable hereunder in respect of laws pertainingto usury or such other laws, all sums paid or agreed to be paid to the holderhereof for the use, forbearance or detention of the Indebtedness of Companyevidenced hereby, outstanding from time to time shall, to the extent permittedby applicable law, be amortized, pro-rated, allocated and spread from thedate of disbursement of the proceeds of the Notes until payment in full of allof such Indebtedness, so that the actual rate of interest on account of suchIndebtedness is uniform through the term hereof.  The terms and provisions of this subsection shall control andsupersede every other provision of all agreements between Company or anyendorser of the Notes and Lenders.

 

**B.**                                    If under any circumstances anyLender shall ever receive an amount which would exceed the Maximum Amount, suchamount shall be deemed a payment in reduction of the principal amount of theLoans and shall be treated as a voluntary prepayment under subsection 2.4B(i)and shall be so applied in accordance with subsection 2.4 hereof or if suchexcessive interest exceeds the unpaid balance of the Loans and any otherIndebtedness of Company in favor of such Lender, the excess shall be deemed tohave been a payment made by mistake and shall be refunded to Company.

 

[*Remainder of pageintentionally left blank*]

 

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**INWITNESS WHEREOF**, the parties hereto have caused thisAgreement to be duly executed and delivered by their respective officersthereunto duly authorized as of the date first written above.

 
|   | **DECRANE AIRCRAFT HOLDINGS, INC.** |
|--------|-------------------------------------|
|   |                                |   |
|   | By:                                 |   |   |   |
|   |                                | Name: | Richard J. Kaplan |
|   |                                | Title: | Senior Vice President, Chief Financial  Officer, Secretary and Treasurer |
|   |                                |   |
|   |                                |   |
|   |                                |   |
|   | Notice Address:                     | 2361 Rosecrans Avenue, Suite 180 |
|   |                                | El Segundo, CA  90245 |
|   |                                | Tel: 310.725.9123 |
|   |                                | Fax: 310.643.0746 |
|   |                                | Attention: Richard. J Kaplan |
|        |                                     |  |  |  |  |

 

S-1

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|   | **CREDIT SUISSE FIRST BOSTON,**                                                                            |
|--------|------------------------------------------------------------------------------------------------------------|
|   | Acting through its Cayman Islands Branch,  as a Lender and as Administrative Agent and  Syndication Agents |
|   |                                                                                                       |
|   |                                                                                                       |
|   | By:                                                                                                        |   |   |
|   |                                                                                                       | Name: |
|   |                                                                                                       | Title: |
|   |                                                                                                       |
|   | By:                                                                                                        |   |   |
|   |                                                                                                       | Name: |
|   |                                                                                                       | Title: |
|   |                                                                                                       |
|   | Notice Address:                                                                                            | Eleven Madison Avenue |
|   |                                                                                                       | New York, New York 10010 |
|   |                                                                                                       | Tel: 212.325.9936 |
|   |                                                                                                       | Fax: 212.325.8304 |
|   |                                                                                                       | Attn:  Agency Group |
|        |                                                                                                            |  |  |  |

 

S-2

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|   | **[Name of Lender]** |
|--------|----------------------|
|   |                 |
|   | By:                  |   |   |
|   |                 | Name: |
|   |                 | Title: |
|   |                 |
|   | Notice Address:      |

 

S-2

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