ex10-3.htm


  
    
      
        EXHIBIT
10.3

      

       

      
        

      

    

     

     

     

     

     

     

     

    SCHAWK,
INC.

     

    ______________________________

     

    SECOND
AMENDMENT

    Dated as
of June 11, 2009

     

    to

     

    NOTE
PURCHASE AGREEMENT

    Dated as
of December 23, 2003

     

    ______________________________

     

    Re:
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A,

    Due
December 31, 2013

    and

    $10,000,000
4.98% Series 2003-A Senior Notes, Tranche B,

    Due April
30, 2014

    of

    Schawk,
Inc.

    
       

       

       

       

       

       

      
        
          

        

         

         

        
          
            
            

          

          
            
            

            
              

            

          

          
            
            

          

        

      

    

     

    SECOND
AMENDMENT TO NOTE AGREEMENT

     

    THIS
SECOND AMENDMENT dated as of June 11, 2009 (the or this “Second Amendment”) to
the Note Purchase Agreement dated as of December 23, 2003 is between SCHAWK,
INC., a Delaware corporation (the “Company”), and each of the institutions which
is a signatory to this Second Amendment  (collectively, the
“Noteholders”).

     

    RECITALS:

     

    A.           The
Company and each of the Noteholders have heretofore entered into the Note
Purchase Agreement dated as of December 23, 2003, as amended, modified and
supplemented by that certain first amendment to Note Agreement dated January 28,
2005 (the “Note Agreement”).  The Company has heretofore issued the
$15,000,000 4.90% Series 2003-A Senior Notes, Tranche A, Due December 31, 2013
and the $10,000,000 4.98% Series 2003-A Senior Notes, Tranche B, Due April 30,
2014 (collectively, the “Notes”) pursuant to the Note Agreement.

     

    B.           The
Subsidiary Guarantors have made that certain Subsidiary Guaranty Agreement dated
as of December 23, 2003 in favor of the holders of the Notes (as amended prior
to the date hereof, the “Guaranty
Agreement”).

     

    C.           The
Company, the Subsidiary Guarantors and the Noteholders now desire to amend the
Note Agreement and Guaranty Agreement in the respects, but only in the respects,
hereinafter set forth.

     

    D.           Capitalized
terms used herein shall have the respective meanings ascribed thereto in the
Note Agreement unless herein defined or the context shall otherwise
require.

     

    E.           All
requirements of law have been fully complied with and all other acts and things
necessary to make this Second Amendment  a valid, legal and binding
instrument according to its terms for the purposes herein expressed have been
done or performed.

     

    NOW,
THEREFORE, upon the full and complete satisfaction of the conditions precedent
to the effectiveness of this Second Amendment set forth in Section 5.1 hereof,
and in consideration of good and valuable consideration the receipt and
sufficiency of which is hereby acknowledged, the Company and the Noteholders do
hereby agree as follows:

     

    SECTION
1.    AMENDMENTS TO NOTE AGREEMENT.

     

    Section
1.1.  Section 1 of the Note Agreement is hereby amended by adding the
heading “Section 1.1 Authorization
and Issue of Tranche A Notes and Tranche B Notes” at the beginning of
such section so that the existing text is renumbered as section
1.1.  Such renumbered section 1.1 of the Note Agreement is hereby
amended by adding the following at the end of such section:

     

    “Notwithstanding
anything to the contrary contained in this Agreement, any of the Notes or in any
of the other Note Documents, from and after the Amendment No.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    2
Effective Date, interest on the outstanding principal balance of the Tranche A
Notes shall accrue at the rate of 8.90% per annum and interest on the
outstanding principal balance of the Tranche B Notes shall accrue at the rate of
8.98% per annum, in each case until the principal of the Tranche A Notes or the
Tranche B Notes, as applicable, shall have become due and payable (provided
that, during any period when an Event of Default shall be in existence, at the
election of the Required Holder(s), the outstanding principal balance of the
Tranche A Notes and the outstanding principal balance of the Tranche B Notes
shall bear interest, respectively, from and after the date of such Event of
Default and until such Event of Default ceases to be in existence at the rate
per annum from time to time equal to the applicable Default Rate for the Tranche
A Notes or Tranche B Notes, as applicable) and interest shall accrue on overdue
payments under the Tranche A Notes at the rate per annum from time to time equal
to the applicable Default Rate for the Tranche A Notes and interest shall accrue
on overdue payments under the Tranche B Notes at the rate per annum from time to
time equal to the applicable Default Rate for the Tranche B
Notes.  Each of the Note Documents, including without limitation, the
Notes (and Exhibits 1(a) and 1(b) to the Note Agreement) is hereby amended to
the extent necessary to further evidence the foregoing, and upon any holder’s
request, the Company shall issue a new Note or Notes to such holder reflecting
the same in exchange for the Note or Notes then held by such
holder.”

     

    Section
1.2.  Section 1 of the Note Agreement is hereby amended by adding the
following thereto as new Sections 1.2 and 1.3:

     

    “Section
1.2   Authorization
of Issue of Tranche A PIK Notes.  The Company has authorized
the issue of its senior promissory notes in an aggregate initial principal
amount sufficient to evidence the aggregate amount of Make-Whole Amount that may
be required to be paid with respect to the Tranche A Notes upon the prepayments
of the Tranche A Notes required pursuant to Section 8.8 (the “Tranche A PIK
Notes”).  The Company will issue to each holder of Tranche A Notes on
the Amendment No. 2 Effective Date a Tranche A PIK Note in an initial principal
amount equal to the Make-Whole Amount due with respect to the prepayment of the
Tranche A Notes of such holder being made on the Amendment No. 2 Effective Date,
each such Tranche A PIK Note to be dated the date of issue thereof, to mature on
the PIK Note Maturity Date, to bear interest on the unpaid balance thereof from
the date thereof until the principal thereof shall have become due and payable
at the rate of 8.90% per annum (provided that, during any period when an Event
of Default shall be in existence, at the election of the Required Holder(s), the
outstanding principal balance of the Tranche A PIK Notes shall bear interest
from and after the date of such Event of Default and until such Event of Default
ceases to be in existence at the rate per annum from time to time equal to the
applicable Default Rate for the Tranche A PIK Notes) and on overdue payments at
the rate per annum from time to time equal to the applicable Default Rate for
the Tranche A PIK Notes, and to be substantially in the form of Exhibit 1.2
attached hereto.  Interest accrued on the unpaid balance of any
Tranche A PIK Note due before the date such principal is due (whether on the PIK
Note Maturity Date, by acceleration, optional or mandatory prepayment or
otherwise) shall be paid by adding such interest to the principal

     

     

    
      
        
        

      

      
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    balance
of such Tranche A PIK Note.  Any Make-Whole Amount due and payable
with respect to any prepayment of any Tranche A Note made after the Amendment
No. 2 Effective Date pursuant to Section 8.8 shall be paid by adding the amount
thereof to the outstanding amount of the Related PIK Note and the outstanding
amount of such Related PIK Amount shall be deemed automatically increased by the
amount of such Make-Whole Amount on the date such Make-Whole Amount is otherwise
due.  The terms “Tranche A PIK Note” and “Tranche A PIK Notes” as used
herein shall include each Tranche A PIK Note delivered pursuant to any provision
of this Agreement and each Tranche A PIK Note delivered in substitution or
exchange for any other Tranche A PIK Note pursuant to any such
provision.

     

    Section
1.3     Authorization
of Issue of Tranche B PIK Notes.  The Company has authorized
the issue of its senior promissory notes in an aggregate initial principal
amount sufficient to evidence the aggregate amount of Make-Whole Amount that may
be required to be paid with respect to the Tranche B Notes upon the prepayments
of the Tranche A Notes required pursuant to Section 8.8 (the “Tranche B PIK
Notes”).  The Company will issue to each holder of Tranche B Notes on
the Amendment No. 2 Effective Date a Tranche B PIK Note in an initial principal
amount equal to the Make-Whole Amount due with respect to the prepayment of the
Tranche B Notes of such holder being made on the Amendment No. 2 Effective, each
such Tranche B PIK Note to be dated the date of issue thereof, to mature on the
PIK Note Maturity Date, to bear interest on the unpaid balance thereof from the
date thereof until the principal thereof shall have become due and payable at
the rate of 8.98% per annum (provided that, during any period when an Event of
Default shall be in existence, at the election of the Required Holder(s), the
outstanding principal balance of the Tranche B PIK Notes shall bear interest
from and after the date of such Event of Default and until such Event of Default
ceases to be in existence at the rate per annum from time to time equal to the
applicable Default Rate for the Tranche B PIK Notes) and on overdue payments at
the rate per annum from time to time equal to the applicable Default Rate for
the Tranche B PIK Notes, and to be substantially in the form of Exhibit 1.3
attached hereto.  Interest accrued on the unpaid balance of any
Tranche B PIK Note due before the date such principal is due (whether on the PIK
Note Maturity Date, by acceleration, optional or mandatory prepayment or
otherwise) shall be paid by adding such interest to the principal balance of
such Tranche B PIK Note.  Any Make-Whole Amount due and payable with
respect to any prepayment of any Tranche B Note made after the Amendment No. 2
Effective Date pursuant to Section 8.8 shall be paid by adding the amount
thereof to the outstanding amount of the Related PIK Note and the outstanding
amount of such Related PIK Amount shall be deemed automatically increased by the
amount of such Make-Whole Amount on the date such Make-Whole Amount is otherwise
due.  The terms “Tranche B PIK Note” and “Tranche B PIK Notes” as used
herein shall include each Tranche B PIK Note delivered pursuant to any provision
of this Agreement and each Tranche B PIK Note delivered in substitution or
exchange for any other Tranche B PIK Note pursuant to any such
provision.”

     

    Section
1.3.  The second sentence of Section 1.1 is hereby amended and
restated in its entirety as follows:

     

     

    
      
        
        

      

      
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    “The
Series 2003-A Notes together with any Tranche A PIK Note, any Tranche B PIK Note
and each Series of Additional Notes which may from time to time be issued
pursuant to the provisions of Section 2.2 are collectively referred to as the
“Notes” (such term shall also include any such notes issued in substitution
therefor pursuant to Section 1.3 of this Agreement.)”

     

    Section
1.4.  Section 2.2 of the Note Agreement is hereby amended by deleting
the “and” appearing at the end of clause (vi) thereof, by deleting the period
appearing at the end of clause (vii) thereof and inserting “: and” in place
thereof, and by inserting the following new clause (viii): “(viii) no Additional
Notes shall be issued after the Amendment No. 2 Effective Date.”

     

    Section
1.5.  The reference to “Section 10.4” set forth in Section 5.15(b) of
the Note Agreement is deleted and replaced with a reference to “Section
10.3”.

     

    Section
1.6.  Section 2 of the Note Agreement is hereby amended by adding the
following as a new Section 2.4 thereto:

     

    “Section
2.4.  Security.  Pursuant
to and in accordance with the terms of the Collateral Documents and subject to
the terms of the Intercreditor Agreement, the Notes and the other Note
Obligations shall be secured by and entitled to the benefits of a perfected
first priority Lien in all of each Grantor’s right, title and interest in and to
the Collateral to secure the prompt and complete payment and performance of the
Note Obligations.”

     

    Section
1.7.  Section 5 of the Note Agreement is hereby amended by adding the
following as a new Section 5.20 thereto:

     

    “Section
5.20.  Security
Interest in Collateral.  The provisions of this Agreement and
the Collateral Documents create legal and valid Liens on all the Collateral in
favor of the Collateral Agent, for the benefit of the holders of Note
Obligations and the other holders of the Secured Obligations, and such Liens
constitute perfected and continuing Liens on the Collateral, securing the Note
Obligations and the other Secured Obligations, enforceable against the
applicable Domestic Note Party and all third parties, and having priority over
all other Liens on the Collateral except in the case of (a) Permitted Existing
Liens, to the extent any such Permitted Existing Liens would have priority over
the Liens in favor of the Collateral Agent pursuant to any applicable law and
(b) Liens perfected only by possession (including possession of any certificate
of title) to the extent the Collateral Agent has not obtained or does not
maintain possession of such Collateral.”

     

    Section
1.8.  The reference to “Section 10.1 through Section 10.4 hereof” set
forth in Section 7.2(a) of the Note Agreement is deleted and replaced with a
reference to “Sections 10.1, 10.2, 10.3 and 10.19 hereof”.

     

    Section
1.9.  Section 7.3 of the Note Agreement is hereby amended in its
entirety to read as follows:

     

    “Section
7.3.  Inspection
of Property; Books and Records; Discussions.  The Company shall
permit and cause each of the Company’s Subsidiaries to permit, any

     

     

    
      
        
        

      

      
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    authorized
representative(s) designated by any holder of the Notes to visit and inspect any
of the properties of the Company or any of its Subsidiaries, to examine, audit,
check and make copies of their respective financial and accounting records,
books, journals, orders, receipts and any correspondence and other data relating
to their respective businesses or the transactions contemplated hereby
(including, without limitation, in connection with environmental compliance,
hazard or liability), and to discuss their affairs, finances and accounts with
their officers, all upon reasonable notice and at such reasonable times during
normal business hours, as often as may be reasonably requested.  The
Company shall keep and maintain, and cause each of the Company’s Subsidiaries to
keep and maintain, in all material respects, proper books of record and account
in which entries in conformity with the Agreement Accounting Principles shall be
made of all dealings and transactions in relation to their respective businesses
and activities.  If an Event of Default has occurred and is
continuing, the Company, upon the request of any holder of the Notes, shall
provide copies of such records to a representative of the holders of the
Notes.  The Company acknowledges that the Collateral Agent (or any
other Person having inspection rights), after exercising its rights of
inspection, may prepare and distribute to the Bank Lenders and the holders of
the Notes certain Reports pertaining to the Company and its Subsidiaries’ assets
for internal use by the Bank Lenders and the holders of the Notes.  At
any time after the occurrence and during the continuation of an Event of
Default, that the Collateral Agent, any Bank Lender or any holder of the Notes
requests, the Company and the Subsidiaries will provide, at the sole expense of
the Company, each holder of any Notes with appraisals or updates thereof of
their inventory and other assets from an appraiser selected and engaged by the
Collateral Agent, and prepared on a basis satisfactory to the Required Holders,
such appraisals and updates to include, without limitation, information required
by applicable law and regulations.”

     

    Section
1.10.  Clause (c) of Section 8.1 of the Note Agreement is hereby
amended and restated in its entirety as follows:

     

    “Notwithstanding
anything to the contrary, each scheduled payment and prepayment required to be
made by this Section 8.1 after the Amendment No. 2 Effective Date shall be
reduced to the extent that prepayments are applied to such scheduled payment or
prepayment pursuant to Section 8.3, provided that each scheduled prepayment
required to be made by this Section 8.1 after the Amendment No. 2 Effective Date
and prior to the Normalization Date shall be further reduced to the amount to
which such prepayment would have been reduced if the prepayments made pursuant
to Section 8.8 prior to such prepayment date were applied against each scheduled
payment and prepayment required under this Section 8.1 pro rata in proportion to
the respective amounts of such scheduled payments and prepayments, instead of
being applied as provided in Section 8.3, and the amount by which scheduled
prepayments are reduced pursuant to this proviso clause shall be due instead on
the last date on which scheduled payments or prepayments are otherwise due under
this Section 8.1, after giving effect to the application of prepayments under
Section 8.3.”

     

    Section
1.11.  The cross reference in Section 8.2 of the Note Agreement to
“Section 10.4” is hereby amended to be a cross reference to Section
8.7.

     

     

    
      
        
        

      

      
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    Section
1.12.  Section 8.3 of the Note Agreement is hereby amended and
restated in its entirety as follows:

     

    “In the
case of each partial prepayment of the Notes, other than any partial prepayment
pursuant to section 8.1, the principal amount so prepaid shall be applied first
to any amounts due on the Tranche B Notes under Section 8.1 on April 30, 2014,
next to any amounts due on the Tranche A Notes under Section 8.1 on December 31,
2013, and thereafter to the scheduled prepayments of the Series 2003-A Notes
required under Section 8.1 in inverse order of scheduled date of prepayment so
that the amount prepaid is applied to the last scheduled prepayment before any
earlier scheduled prepayments.  The Company and the Noteholders
recognize that the result of the foregoing application of prepayments may result
in an application of prepayments among the Series 2003-A Notes that is not pro
rata in proportion to their respective principal amounts.”

     

    Section
1.13.  The definition of “Remaining Scheduled Payments” in Section 8.6
of the Note Agreement is hereby amended and restated in its entirety as
follows:

     

    “Remaining
Scheduled Payments” means, with respect to the Called Principal of a Series
2003-A Note of the applicable Tranche, all payments of such Called Principal and
interest thereon that would be due after the Settlement Date with respect to
such Called Principal if no payment of such Called Principal were made prior to
its scheduled due date, provided that if such Settlement Date is not a date on
which interest payments are due to be made under the terms of the Series 2003-A
Note, then the amount of the next succeeding scheduled interest payment will be
reduced by the amount of interest accrued to such Settlement Date and required
to be paid on such Settlement Date pursuant to Section 8.2, 8.8 or 12.1, provided
that solely for purposes of calculating any Make-Whole Amount payable upon a
prepayment required under Section 8.8, the Remaining Scheduled Payments shall be
calculated as if the interest rate on the Tranche A Notes were 4.90% per annum
and as if the interest rate on the Tranche B Notes were 4.98% per
annum.”

     

    Section
1.14.  Section 8.6 of the Note Agreement is hereby further amended by
inserting “or Section 8.8” after each reference to “Section 8.2” appearing in
the respective definitions of “Called Principal” and “Settlement Date” in such
Section 8.6.

     

    Section
1.15.  The references to “Section 10.4(2)” set forth in Sections
8.7(a) and 8.7(c) of the Note Agreement are deleted and replaced with a
reference to “Section 10.2”.

     

    Section
1.16.  Section 8 of the Note Agreement is hereby amended by adding the
following as a new Section 8.8 thereto:

     

    “Section
8.8.     Pro Rata
Prepayments.

     

    (a)           At
all times on or prior to the earlier of the Normalization Date and the Pro Rata
Termination Time, if the aggregate outstanding principal amount of the Debt of
the Company under the Bank Credit Agreement is reduced at any time below the
Threshold Amount in effect at such time (the amount by which the principal
amount of 

     

     

    
      
        
        

      

      
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    the Debt
of the Company under the Bank Credit Agreement is so reduced below such
Threshold Amount, the “Bank Prepayment Amount”), then, on the date of each such
reduction, the Company shall prepay the principal amount of the Series 2003-A
Notes in an amount equal to (i)  such Bank Prepayment Amount
multiplied by (ii) a fraction, the numerator of which is the Noteholder Current
Pro Rata Share and the denominator of which is the Bank Current Pro Rata Share ,
together with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount of each Series 2003-A Note then outstanding that is so
prepaid.

     

    (b)           At
all times on or prior to the earlier of the Normalization Date and the Pro Rata
Termination Time, if the outstanding principal amount of any of the 2005 Notes
(but excluding any 2005 PIK Notes) is paid or prepaid in whole or in part at any
time (but expressly excluding any prepayment of the 2005 Notes pursuant to
Section 8.8 of the 2005 Note Agreement as in effect on the Amendment No. 2
Effective Date) (the amount of such payment or prepayment made on any date, the
“2005 Note Prepayment Amount”), then, on the date of each such payment or
prepayment, the Company shall prepay the principal amount of the Series 2003-A
Notes in an amount equal to (i) such 2005 Note Prepayment Amount multiplied by
(ii) a fraction, the numerator of which is the Noteholder Current Pro Rata Share
and the denominator of which is the 2005 Note Current Pro Rata Share, together
with interest accrued thereon to the date of such prepayment, plus the
Make-Whole Amount determined for the prepayment date with respect to such
principal amount of each Series 2003-A Note then outstanding that is so
prepaid.  In the case of each partial prepayment of the Series 2003-A
Notes pursuant to this Section 8.8, such partial prepayment shall be applied to
the scheduled payments of the Series 2003-A Notes in accordance with Section
8.3.  Notwithstanding anything to the contrary contained in this
Agreement, (i) any Make-Whole Amount due and payable with respect to any
prepayment of any Series 2003-A Note pursuant to this Section 8.8 shall not be
paid in cash on the date such Make-Whole Amount is otherwise due and payable and
shall instead be paid by adding the amount thereof (to the extent not included
in the initial principal amount of the Related PIK Note on the Amendment No. 2
Effective Date).to the outstanding amount of the Related PIK Note, and (ii) the
occurrence of the Normalization Date or the Pro Rata Termination Date shall not
relieve the Company of any of its obligations that arise under this section 8.8
through the Normalization Date or the Pro Rata Termination Time.  For
the avoidance of doubt, the reduction of the Debt under the Bank Credit
Agreement as a result of the satisfaction by the Company of the condition
precedent to the effectiveness of Amendment No. 2 to the Bank Credit Agreement
set forth in Section 3(a)(i) thereof is intended to be covered by this Section
8.8.

     

    For the
purposes of this Section 8.8, the following terms have the respective meanings
set forth below:

     

    “Bank
Current Pro Rata Share “ means 52.59%.

     

    “Normalization
Date” as defined in the Intercreditor Agreement.

     

     

    
      
        
        

      

      
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    “Noteholder
Current Pro Rata Share “ means 12.48%.

     

    “Pro Rata
Termination Time” means the time upon which (a) the sum of, but without
duplication, (i) the aggregate amount of all Reductions as to which there is a
required pro rata prepayment of the Notes pursuant to Section 8.8 or resulting
from required repayments of the Debt under the Bank Credit Agreement under
Section 2.5(B)(iii) thereof as a result of prepayments of the Notes or the 2005
Notes, (ii) the aggregate amount all payments or prepayments of the 2005 Notes
as to which there is a required pro rata prepayment of the Series 2003-A Notes
pursuant to Section 8.8 or made pursuant to Section 8.8 of the 2005 Note
Agreement, and (iii) the aggregate amount of all prepayments of the Series
2003-A Notes pursuant to Section 8.1 or 8.8 of this Agreement, in each case made
at any time on or after the Amendment No. 2 Effective Date (including for the
avoidance of doubt, prepayments made to satisfy the condition precedent to the
effectiveness of Amendment No. 2 to the Bank Credit Agreement set forth in
Section 3(a)(i) thereof and the Reduction resulting therefrom), equals (b)
$20,000,000.

     

    “Reduction”
means, with respect to any reduction of Debt of the Company under the Bank
Credit Agreement made at any time on or after the Amendment No. 2 Effective
Date, an amount equal to, if positive, (a) the Threshold Amount in effect
immediately prior to such reduction minus (b) the aggregate Debt outstanding
under the Bank Credit Agreement after giving effect to such
reduction.

     

    “Threshold
Amount” means, at the time of any determination thereof, $75,283,750, less the
aggregate amount of all Reductions (without duplication) prior to such
time.

     

    “2005
Noteholder Current Pro Rata Share” means 34.93.”

     

    Section
1.17.  Section 9.3 of the Note Agreement is hereby amended in its
entirety to read as follows:

     

    “Section
9.3.  Maintenance
of Property.  The Company shall (i) cause all property used or
useful in the conduct of its business or the business of any Subsidiary to be
maintained and kept in good condition, repair and working order and supplied
with all necessary equipment and shall cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof, all as in the
judgment of the Company may be necessary so that the business carried on in
connection therewith may be properly and advantageously conducted at all times
and (ii) with respect to such property, maintain, or cause to be maintained,
with financially sound and reputable insurance companies, insurance in such
amounts and against such risks as are customarily maintained by companies
engaged in the same or similar businesses operating in the same or similar
locations; provided,
however,
that nothing in this Section
9.3 shall prevent the Company from discontinuing the operation or
maintenance of any of such property if such discontinuance is, in the judgment
of the Company, desirable in the conduct of its business or the business of any
Subsidiary and the Company has concluded that such discontinuance could not,
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    expected
to have a Material Adverse Effect.  The Company will furnish to the
Collateral Agent, upon request of the Collateral Agent or any holder of the
Notes, information in reasonable detail as to the insurance so
maintained.  The Company shall deliver to the Collateral Agent
endorsements (x) to all “All Risk” physical damage insurance policies on all of
the Domestic Note Parties’ tangible personal property and assets and business
interruption insurance policies naming the Collateral Agent as lender loss
payee, and (y) to all general liability and other liability policies naming the
Collateral Agent an additional insured.  In the event any Domestic
Note Party at any time or times hereafter shall fail to obtain or maintain any
of the policies or insurance required herein or to pay any premium in whole or
in part relating thereto, then the Collateral Agent, without waiving or
releasing any obligations or resulting Event of Default hereunder, may at any
time or times thereafter (but shall be under no obligation to do so) obtain and
maintain such policies of insurance and pay such premiums and take any other
action with respect thereto which the Collateral Agent deems
advisable.  All sums so disbursed by the Collateral Agent shall
constitute part of the Secured Obligations, payable as provided in the Bank
Credit Agreement.  The Company will furnish to the Collateral Agent
and each holder of the Notes prompt written notice of any casualty or other
insured damage to any material portion of the Collateral or the commencement of
any action or proceeding for the taking of any material portion of the
Collateral or interest therein under power of eminent domain or by condemnation
or similar proceeding.”

     

    Section
1.18.  The reference to “Section 10.4” set forth in Section 9.4 of the
Note Agreement is deleted and replaced with a reference to “Section
10.3”.

     

    Section
1.19.  The reference to “Sections 10.4 and 10.5” set forth in Section
9.5 of the Note Agreement is deleted and replaced with a reference to “Sections
10.2 and 10.9”.

     

    Section
1.20.  Section 9.8 of the Note Agreement is hereby amended in its
entirety to read as follows:

     

    “Section
9.8.  Notes to
Rank Pari Passu.  The Notes and all other obligations under
this Agreement of the Company are and at all times shall remain direct and
secured obligations of the Company ranking pari passu as against the assets of
the Company with all other Notes from time to time issued and outstanding
hereunder without any preference among themselves and pari passu with all other
present and future secured Debt (actual or contingent) of the Company which is
not expressed to be subordinate or junior in rank to any other secured Debt of
the Company.  Notwithstanding anything to the contrary contained
herein or in any other Note Documents, all references to the Notes herein or in
any other Note Document stating that the Notes are “unsecured” are hereby
amended to state that the Notes are “secured”.”

     

    Section
1.21.  Section 9 of the Note Agreement is hereby amended by adding the
following as a new Sections 9.9 and 9.10 thereto:

     

    “Section
9.9.     Foreign
Pledge Agreements.  If any Foreign Incorporated Subsidiary is
(a) a First Tier Foreign Subsidiary, (b) an Affected Foreign Subsidiary, (c) a
Material Foreign Subsidiary and (d) organized under the laws of any European
nation or 

     

     

    
      
        
        

      

      
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    any state
or other principality or subdivision thereof, the Company shall or shall cause
the applicable parent Domestic Incorporated Subsidiary as promptly as possible
(but in any event within (i) in the case of such Foreign Incorporated
Subsidiaries which are in existence on the date hereof, as promptly as possible
(but in any event within sixty (60) days after the date hereof (or by such later
date as the Required Holders may agree to in their discretion)) and (ii) in the
case of such Foreign Incorporated Subsidiaries which are created or acquired
after the date hereof, as promptly as possible (but in any event within sixty
(60) days following the creation or acquisition thereof (or by such later date
as the Required Holders may agree to in their discretion)) to (A) execute (1) a
Foreign Pledge Agreement and (2) such other Collateral Documents deemed
necessary or desirable in the Collateral Agent’s sole discretion with respect to
65% of the Capital Stock of such Foreign Incorporated Subsidiary, and (B)
deliver and cause each such parent Domestic Incorporated Subsidiary to deliver
such corporate resolutions, opinions of counsel, stock certificates, stock
powers and such other documentation as the Collateral Agent or its counsel may
reasonably request, all in form and substance reasonably satisfactory to the
Collateral Agent and its counsel to effectuate such
pledge.  Notwithstanding the foregoing, no Foreign Pledge Agreement in
respect of a Foreign Incorporated Subsidiary shall be required hereunder to the
extent such Foreign Pledge Agreement is prohibited by applicable law or the
Collateral Agent or its counsel reasonably determines that the pledge of such
Foreign Incorporated Subsidiary’s Capital Stock would not provide material
credit support for the benefit of the holders of the Secured
Obligations.

     

    Section
9.10.  Security
Agreement; Additional Collateral; Further Assurances.

     

    (a)           The
Company will cause, and will cause each other Domestic Incorporated Subsidiary
to cause, all of its owned personal property (whether tangible, intangible, or
mixed) to be subject at all times to first priority, perfected Liens in favor of
the Collateral Agent for the benefit of the holders of the Secured Obligations
to secure the Secured Obligations in accordance with the terms and conditions of
the Collateral Documents, subject in any case to Liens permitted by Section
10.3.  Without limiting the generality of the foregoing, the
Company (i) will cause the issued and outstanding Capital Stock of each Domestic
Incorporated Subsidiary directly owned by the Company or any other Domestic
Incorporated Subsidiary to be subject at all times to a first priority,
perfected Lien in favor of the Collateral Agent to secure the Secured
Obligations in accordance with the terms and conditions of the Collateral
Documents.

     

    (b)           Without
limiting the foregoing, the Company will, and will cause each Domestic
Incorporated Subsidiary to, execute and deliver, or cause to be executed and
delivered, to the Collateral Agent such documents, agreements and instruments,
and will take or cause to be taken such further actions, which may be required
by law or which the Collateral Agent may, from time to time, reasonably request
to carry out the terms and conditions of this Agreement and the other Note
Documents and to ensure perfection and priority of the Liens created or intended
to be created by the Collateral Documents, all at the expense of the
Company.

     

    (c)           If
any personal property is acquired by a Domestic Note Party after the Amendment
No. 2 Effective Date (other than assets constituting Collateral under a


     

     

    
      
        
        

      

      
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    Collateral
Document that automatically become subject to the Lien under such Collateral
Document upon acquisition thereof), the Company will notify the Collateral Agent
thereof, and, if requested by the Collateral Agent, the Company will cause such
personal property to be subjected to a Lien securing the Secured Obligations and
will take, and cause the other Domestic Note Parties to take, such actions as
shall be necessary or reasonably requested by the Collateral Agent to grant and
perfect such Liens, including actions described in paragraph (c) of this
Section, all at the expense of the Company.”

     

    Section
1.22.  Section 10.1 of the Note Agreement is hereby amended in its
entirety to read as follows:

     

     “SECTION
10.  NEGATIVE
COVENANTS.

     

    The
Company covenants that so long as any of the Notes are outstanding:

     

    Section
10.1.   Debt.  Neither
the Company nor any of its Subsidiaries shall directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable with
respect to any Debt, except:

     

    (a)           the
Secured Obligations;

     

    (b)           Permitted
Existing Debt and Permitted Refinancing Debt;

     

    (c)           Debt
in respect of obligations secured by Customary Permitted Liens;

     

    (d)           Debt
constituting Contingent Obligations permitted by Section 10.5;

     

    (e)           Debt
arising from intercompany loans and advances (a) from any Subsidiary to the
Company or any wholly-owned Subsidiary or (b) from the Company to any
wholly-owned Domestic Incorporated Subsidiary or (c) from the Company to any
wholly-owned Foreign Incorporated Subsidiary; provided,
that if the Company is the obligor on such Debt, such Debt shall be expressly
subordinate to the payment in full in cash of the Secured Obligations; provided,
further,
that the aggregate of all Foreign Subsidiary Investments does not exceed the
Permitted Foreign Subsidiary Investment Amount at any time;

     

    (f)           Debt
in respect of Hedging Obligations permitted under Section 10.15;

     

    (g)           secured
or unsecured purchase money Debt (including Capital Leases) incurred by the
Company or any of its Subsidiaries after the date hereof to finance the
acquisition of fixed assets or in conjunction with a Permitted Acquisition, if
(1) at the time of such incurrence, no Event of Default or Default has occurred
and is continuing or would result from such incurrence, (2) such Debt has a
scheduled maturity and is not due on demand, (3) such Debt does not exceed the
lower of the fair market value or the cost of the applicable fixed assets on the
date acquired, (4) such Debt does not exceed $30,000,000 in the aggregate
outstanding at any time, and (5) any Lien securing such Debt is permitted under
Section 10.3 (such Debt being referred to herein as “Permitted Purchase Money
Debt”);

     

     

    
      
        
        

      

      
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    (h)           Debt
with respect to surety, appeal and performance bonds obtained by the Company or
any of its Subsidiaries in the ordinary course of business;

     

    (i)           Debt
incurred by the Company to the seller in any Permitted Acquisition as part of
the consideration therefor, provided
that such Debt is unsecured and, if in excess of $15,000,000 in the aggregate,
is subordinated to the Secured Obligations, on terms reasonably acceptable to
the Required Holders;

     

    (j)           Debt
incurred by the Company pursuant to this Agreement and the Notes;
and

     

    (k)           additional
unsecured Debt in an aggregate amount at any time outstanding not exceeding
$25,000,000.

     

    Section
10.2.   Sales of
Assets.  Neither the Company nor any of its Subsidiaries shall
consummate any Asset Sale, except:

     

    (a)           licenses
or sublicenses by the Company or its Subsidiaries of software, customer lists,
trademarks, service marks, patents, trade names and copyrights and other
intellectual property in the ordinary course of business; provided,
that such licenses or sublicenses shall not interfere with the business of the
Company or any such Subsidiary;

     

    (b)           transfers
of assets between the Company and any wholly-owned Subsidiary of the Company or
between wholly-owned Subsidiaries of the Company not otherwise prohibited by
this Agreement; provided,
that the aggregate of all Foreign Subsidiary Investments does not exceed the
Permitted Foreign Subsidiary Investment Amount at any time; and

     

    (c)           sales,
assignments, transfers leases, conveyances or other dispositions of other assets
if such transaction (a) is for not less than fair market value (as determined in
good faith by the Company’s board of directors), and (b) when combined with all
such other transactions (each such transaction being valued at book value) (i)
during the immediately preceding twelve-month period, represents the disposition
of not greater than fifteen percent (15%) of the Company’s Consolidated Tangible
Assets at the end of the fiscal year immediately preceding that in which such
transaction is proposed to be entered into, and (ii) during the period from the
date hereof to the date of such proposed transaction, represents the disposition
of not greater than twenty-five percent (25%) of the Company’s Consolidated
Tangible Assets at the end of the fiscal year immediately preceding that in
which such transaction is proposed to be entered into; and

     

    (d)           sales
in connection with the reorganization, restructuring and rationalization of the
Company and its Subsidiaries; provided
that the non-recurring expenses arising from such reorganization, restructuring
and rationalization which are charged to operating expenses are charged during
the first three (3) fiscal years following any Permitted Acquisition and do not
exceed $5,000,000, on a pre-tax basis, with respect to any Permitted
Acquisition, or $10,000,000, on a pre-tax basis, in the aggregate.

     

     

    
      
        
        

      

      
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    An amount
equal to the Net Proceeds received from any Asset Sale shall be used to prepay
or retire Senior Debt of the Company and/or its Restricted Subsidiaries,
provided that the Company shall comply with the provisions of Section 8.7
hereof.

     

    Section
10.3.   Liens.  Neither
the Company nor any of its Subsidiaries shall directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any of their
respective property or assets except:

     

    (a)           Liens
securing the Secured Obligations to the extent permitted under the Intercreditor
Agreement;

     

    (b)           Permitted
Existing Liens;

     

    (c)           Customary
Permitted Liens;

     

    (d)           purchase
money Liens (including the interest of a lessor under a Capital Lease and Liens
to which any property is subject at the time of the Company’s acquisition
thereof) securing Permitted Purchase Money Debt; provided
that such Liens shall not apply to any property of the Company or its
Subsidiaries other than that purchased or subject to such Capital
Lease.

     

    (e)           Liens
with respect to property acquired by the Company or any of its Subsidiaries
after the date hereof (and not created in contemplation of such acquisition)
pursuant to a Permitted Acquisition; provided,
that such Liens shall extend only to the property so acquired; and

     

    (f)           other
Liens securing Debt not to exceed $5,000,000 in the aggregate.

     

    In
addition, neither the Company nor any of its Subsidiaries shall become a party
to any agreement, note, indenture or other instrument, or take any other action,
which would prohibit the creation of a Lien on any of its properties or other
assets in favor of the Collateral Agent for the benefit of itself and the
holders of Secured Obligations, as collateral for the Secured Obligations; provided
that any agreement, note, indenture or other instrument in connection with
Permitted Purchase Money Debt (including Capital Leases) may prohibit the
creation of a Lien in favor of the Collateral Agent for the benefit of itself
and the Holders of Secured Obligations on the items of property obtained with
the proceeds of such Permitted Purchase Money Debt.

     

    Notwithstanding
the foregoing, other than Liens created under the Collateral Documents and
Customary Permitted Liens, the Company will not, and will not permit any
Subsidiary to, create, incur, assume or permit to exist any Lien on the real
property of the Company and any Subsidiary.

     

    Section
10.4.   Investments.  Except
to the extent permitted pursuant to Section 10.7 below, neither the Company nor
any of its Subsidiaries shall directly or indirectly make or own any Investment
except:

     

    (a)           Investments
in cash and Cash Equivalents;

     

     

    
      
        
        

      

      
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    (b)           Permitted
Existing Investments in an amount not greater than the amount thereof on the
date hereof;

     

    (c)           Investments
in trade receivables or received in connection with the bankruptcy or
reorganization of suppliers and customers and in settlement of delinquent
obligations of, and other disputes with, customers and suppliers arising in the
ordinary course of business;

     

    (d)           Investments
consisting of deposit accounts maintained by the Company;

     

    (e)           Investments
consisting of non-cash consideration from a sale, assignment, transfer, lease,
conveyance or other disposition of property permitted by Section
10.2;

     

    (f)           Investments
consisting of (a) intercompany loans from any Subsidiary of the Company to the
Company or any other Subsidiary permitted by Section 10.1(e) and (b)
intercompany loans from the Company to its Subsidiaries; provided,
that the aggregate of all Foreign Subsidiary Investments shall not exceed the
Permitted Foreign Subsidiary Investment Amount;

     

    (g)           Investments
constituting Permitted Acquisitions;

     

    (h)           Investments
constituting Debt permitted by Section 10.1 or Contingent Obligations permitted
by Section 10.5 or Restricted Payments permitted by Section 10.6 or Capital
Expenditures permitted by Section 10.19(d);

     

    (i)           Investments
consisting of loans or advances made by any party to this Agreement and the
Subsidiary Guaranties to employees and officers of the Company or any of the
Company’s wholly-owned Domestic Incorporated Subsidiaries for travel,
entertainment and relocation expenses in the ordinary course of business in an
aggregate principal amount outstanding at any one time not to exceed
$2,000,000;

     

    (j)           Investments
consisting of any right of the Company or its wholly-owned Domestic Incorporated
Subsidiaries to payment for goods sold or for services rendered, whether or not
it has been earned by performance; and

     

    (k)           Investments
in addition to those referred to elsewhere in this Section 10.4 in an amount not
to exceed $15,000,000 in the aggregate at any time outstanding;

     

    provided,
however,
that the Investments described in clause
(vii) above shall not be permitted to be made at a time when either an
Event of Default or a Default which is not in the process of being cured shall
have occurred and be continuing or would result
therefrom.

     

    Section
10.5.  Contingent
Obligations.  Neither the Company nor any of its Subsidiaries
shall directly or indirectly create or become or be liable with respect to any
Contingent Obligation, except: (a) recourse obligations resulting from
endorsement of negotiable instruments for collection in the ordinary course of
business; (b) Permitted Existing Contingent Obligations; (c) obligations,
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    not
relating to Debt of any Person, which have been or are undertaken or made in the
ordinary course of business and not for the benefit of or in favor of an
Affiliate of the Company or such Subsidiary; (d) Contingent Obligations with
respect to surety, appeal and performance bonds obtained by the Company or any
Subsidiary in the ordinary course of business; (e) Contingent Obligations of the
Subsidiaries of the Company under the Subsidiary Guaranty to which they are a
party; (f) obligations arising under or related to this Agreement or the Notes,
(g) Contingent Obligations in respect to earn-outs or other similar forms of
contingent purchase price payable in respect of Permitted Acquisitions; (h)
Contingent Obligations in respect of representations and warranties customarily
given in respect of Asset Sales otherwise permitted hereunder and (i) Contingent
Obligations consisting of guaranties by Subsidiary Guarantors of Debt of the
Company, which Debt when incurred by the Company did not result in a violation
of Section 10.1.

     

    Section
10.6.   Restricted
Payments.  The Company shall not declare or make any Restricted
Payment, except Restricted Payments constituting dividends in an amount not to
exceed $300,000 in the aggregate during any fiscal quarter of the Company and
except Restricted Payments by a Subsidiary to the Company or another Subsidiary;
provided,
however,
that in no event shall any Restricted Payments (other than Restricted Payments
to the Company) be declared or made if either a Default or an Event of Default
shall have occurred and be continuing at the date of declaration or payment
thereof or would result therefrom.

     

    Section
10.7.   Conduct of
Business; Subsidiaries; Acquisitions.  Neither the Company nor
any of its Subsidiaries shall engage in any business other than the businesses
engaged in by the Company on the date hereof and any business or activities
which are substantially similar, related or incidental thereto or logical
extensions thereof.  The Company shall not create, acquire or
capitalize any Subsidiary after the date hereof unless (i) no Event of Default
or Default which is not being cured shall have occurred and be continuing or
would result therefor; (ii) after such creation, acquisition or capitalization,
all of the representations and warranties contained herein shall be true and
correct in all material respects (unless such representation and warranty is
made as of a specific date, in which case, such representation or warranty shall
be true in all material respects as of such date); and (iii) after such
creation, acquisition or capitalization the Company shall be in compliance with
the terms of Sections 10.6 and 10.9 hereof.  The Company shall not
make any Acquisitions, other than Acquisitions meeting the following
requirements or otherwise approved by the Required Holders (each such
Acquisition constituting a “Permitted Acquisition”):

     

    (a)           no
Default or Event of Default shall have occurred and be continuing or would
result from such Acquisition or the incurrence of any Debt in connection
therewith;

     

    (b)           after
giving effect to such transaction, the aggregate of all Foreign Subsidiary
Investments would not exceed the Permitted Foreign Subsidiary Investment
Amount;

     

     

    
      
        
        

      

      
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    (c)           in
the case of an Acquisition of Capital Stock of an entity, the Acquisition shall
be of at least fifty-one percent (51%) of the Capital Stock of such entity, and
such acquired entity shall be (i) merged with and into the Company immediately
following such Acquisition, with the Company being the surviving corporation
following such merger or (ii) the results of operations of such entity shall be
reported on a consolidated basis with the Company and its consolidated
Subsidiaries;

     

    (d)           the
purchase is consummated pursuant to a negotiated acquisition agreement on a
non-hostile basis;

     

    (e)           the
Company shall deliver to the holders of the Notes a certificate from one of the
Authorized Officers, demonstrating to the satisfaction of the Required Holders
that after giving effect to such Acquisition and the incurrence of any Debt
permitted by Section 10.1 in connection therewith, on a pro
forma
basis using historical audited or reviewed unaudited financial statements
obtained from the seller(s) in respect of each such Acquisition as if the
Acquisition and such incurrence of Debt had occurred on the first day of the
twelve-month period ending on the last day of the Company’s most recently
completed fiscal quarter, the Company would have been in compliance with the
financial covenants in Section 10.19 and that an Event of Default has not
otherwise occurred;

     

    (f)           the
purchase price for the Acquisition shall not exceed, without the prior written
consent of the Required Holders, for any rolling period of twelve consecutive
months, $75,000,000 (including the incurrence or assumption of any Debt in
connection therewith);

     

    (g)           the
businesses being acquired shall be substantially similar, related or incidental
to, or a logical extension of, the businesses or activities engaged in by the
Company on the date hereof; and

     

    (h)           such
Acquisition is approved in writing by the Required Holders.

     

    Section
10.8.   Transactions
with Shareholders and Affiliates.  Neither the Company nor any
of its Subsidiaries shall directly or indirectly (a) enter into or permit to
exist any transaction (including, without limitation, the purchase, sale, lease
or exchange of any property or the rendering of any service) with any holder or
holders of any of the Capital Stock of the Company, or with any Affiliate of the
Company which is not its Subsidiary, on terms that are less favorable to the
Company or any of its Subsidiaries, as applicable, than those that might be
obtained in an arm’s length transaction at the time from Persons who are not
such a holder or Affiliate, except for Restricted Payments permitted by Section
10.6 and Investments permitted by Section 10.4 or (b) enter into or permit to
exist any such non-arm’s length transaction between either the Company or any
Domestic Incorporated Subsidiary, on the one hand, and any Foreign Incorporated
Subsidiary, on the other hand, if as a result thereof the aggregate of all
Foreign Subsidiary Investments would at any time exceed the Permitted Foreign
Subsidiary Investment Amount.  The holders of the Notes acknowledge
and consent to the 

     

     

    
      
        
        

      

      
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    transactions
between the Company and its Affiliates described in the Company’s public filings
as of the date hereof.

     

    Section
10.9.   Restriction
on Fundamental Changes.  Neither the Company nor any of its
Subsidiaries shall enter into any merger or consolidation, or liquidate, wind-up
or dissolve (or suffer any liquidation or dissolution); or convey, lease, sell,
transfer or otherwise dispose of, in one transaction or series of transactions,
all or substantially all of the Company’s consolidated business or property,
whether now or hereafter acquired, except (a) transactions permitted under
Sections 10.2, 10.4 or 10.7, (b) a Subsidiary of the Company may be merged into
or consolidated with the Company (in which case the Company shall be the
surviving corporation) or any wholly-owned Subsidiary of the Company, and (c)
any liquidation of any Subsidiary of the Company into the Company or another
Subsidiary of the Company, as applicable.

     

    Section
10.10.  Sales and
Leasebacks.  Neither the Company nor any of its Subsidiaries
shall become liable, directly, by assumption or by Contingent Obligation, with
respect to any lease, whether an operating lease or a Capital Lease, of any
property (whether real or personal or mixed), (a) which it or one of its
Subsidiaries sold or transferred or is to sell or transfer to any other Person,
or (b) which it or one of its Subsidiaries intends to use for substantially the
same purposes as any other property which has been or is to be sold or
transferred by it or one of its Subsidiaries to any other Person in connection
with such lease, unless in either case the sale involved is not prohibited under
Section 10.2 and the lease involved is not prohibited under Section 10.1 and any
related Investment is not prohibited under Section 10.4.

     

    Section
10.11.  ERISA.  The
Company shall not

     

    (a)           engage,
or permit any of its Subsidiaries to engage, in any prohibited transaction
described in Sections 406 of ERISA or 4975 of the Code for which a statutory or
class exemption is not available or a private exemption has not been previously
obtained from the United States Department of Labor and any Person succeeding to
the functions thereof;

     

    (b)           permit
to exist any material accumulated funding deficiency (as defined in Sections 302
of ERISA and 412 of the Code), with respect to any Benefit Plan, whether or not
waived;

     

    (c)           fail,
or permit any ERISA Affiliate to fail, to pay timely required material
contributions or annual installments due with respect to any waived funding
deficiency to any Benefit Plan;

     

    (d)           terminate,
or permit any ERISA Affiliate to terminate, any Benefit Plan which would result
in any material liability of the Company or any ERISA Affiliate under Title IV
of ERISA;

     

    (e)           fail
to make any material contribution or payment to any Multiemployer Plan which the
Company or any ERISA Affiliate may be required to make under any agreement
relating to such Multiemployer Plan, of any law pertaining thereto;

     

     

    
      
        
        

      

      
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    (f)           fail,
or permit any ERISA Affiliate to fail, to pay any required material installment
or any other payment required under Section 412 of the Code on or before the due
date for such installment or other payment; or

     

    (g)           amend,
or permit any ERISA Affiliate to amend, a Plan resulting in a material increase
in current liability for the plan year such that the Company or any ERISA
Affiliate is required to provide security to such Plan under Section 401(a)(29)
of the Code.

     

    For
purposes of this Section 10.11, “material” means any noncompliance or basis for
liability which could reasonably be likely to subject the Company or any of its
Subsidiaries to liability, individually or in the aggregate, in excess of
$5,000,000.

     

    Section
10.12.  Corporate
Documents.  Neither the Company nor any of its Subsidiaries
shall amend, modify or otherwise change any of the terms or provisions in any of
their respective constituent documents as in effect on the date hereof in any
manner materially adverse to the interests of the holders of the Notes, without
the prior written consent of the Required Holders, except in connection with a
Permitted Acquisition.

     

    Section
10.13.  Fiscal
Year.  Neither the Company nor any of its consolidated
Subsidiaries shall change its fiscal year for accounting or tax purposes from a
period consisting of the 12-month period ending on the last day of December of
each year, except as required by Agreement Accounting Principles or by law and
disclosed to the holders of the Notes.

     

    Section
10.14.  Subsidiary
Covenants.  The Company will not, and will not permit any
Subsidiary to, create or otherwise cause to become effective any consensual
encumbrance or restriction of any kind on the ability of any Subsidiary to pay
dividends or make any other distribution on its stock, or make any other
Restricted Payment, pay any Debt or other obligation owed to the Company or any
other Subsidiary, make loans or advances or other Investments in the Company or
any other Subsidiary or sell, transfer or otherwise convey any of its property
to the Company or any other Subsidiary.

     

    Section
10.15.  Hedging
Obligations.  The Company shall not and shall not permit any of
its Subsidiaries to enter into any interest rate, commodity or foreign currency
exchange, swap, collar, cap or similar agreements evidencing Hedging
Obligations, other than interest rate, foreign currency or commodity exchange,
swap, collar, cap or similar, agreements entered into by the Company pursuant to
which the Company has hedged its actual interest rate, foreign currency or
commodity exposure.

     

    Section
10.16.  Issuance of
Disqualified Stock.  From and after the date hereof, neither
the Company, nor any of its Subsidiaries shall issue any Disqualified
Stock.  All issued and outstanding Disqualified Stock shall be treated
as Debt for all purposes of this Agreement, and the amount of such deemed Debt
shall be the aggregate amount of the liquidation preference of such Disqualified
Stock.

     

     

    
      
        
        

      

      
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    Section
10.17.  Amendment
to Bank Credit Agreement and 2005 Note Agreement; Most Favored
Lender.  The Company will not, nor will it permit any
Subsidiary to, enter into (i) any amendment, restatement, supplement, waiver or
modification to the Bank Credit Agreement (or the documents related to any
extension, refinancing, refunding or renewal thereof) or (ii) any document
related to any extension, refinancing, refunding or renewal thereof if, in any
case, the effect thereof is that the Bank Credit Agreement (or such other
documents relating to any extension, refinancing, refunding or renewal thereof)
would not constitute an Acceptable Bank Credit Agreement.  In
addition, if the Company, or any of its Subsidiaries, enters into (i) any
amendment, restatement, supplement, waiver or modification to the Bank Credit
Agreement (or the documents related to any extension, refinancing, refunding or
renewal thereof) or the 2005 Note Agreement that amends, restates, supplements
or modifies any of the covenants, events of default or related definitions used
in the Bank Credit Agreement (or the documents related to any extension,
refinancing, refunding or renewal thereof) or in the 2005 Note Agreement or (ii)
any document related to any extension, refinancing, refunding or renewal thereof
that includes covenants, events of default or related definitions, such that ,
in any case, any of such covenants, events of default or related definitions are
more restrictive than, or in addition to (the “More Restrictive Provisions”),
the covenants, events of default or related definitions contained in this
Agreement, then (a) the Company will give the holders of the Notes prior written
notice thereof, (b) this Agreement shall be deemed to be automatically amended
to add the More Restrictive Provisions hereto and otherwise afford the holders
of the Notes with the benefit thereof without any action by the Company or any
holder of any Note, provided that the Required Holders may elect in writing not
to have any one or more More Restrictive Provisions added to this Agreement, and
(c) the Company shall, upon the request of the holders of the Notes (i) enter
into an amendment to this Agreement, in form and substance satisfactory to the
holders of the Notes, to evidence the addition of such More Restrictive
Provisions (other than any More Restrictive Provisions that the Required Holders
elect in writing to exclude) to this Agreement for the benefit of holders of the
Notes, and (ii) agree to satisfy any conditions precedent to the effectiveness
of such amendment.

     

    Section
10.18.  Prepayments
of 2005 PIK Notes.  The Company shall not make any prepayments
in respect of the 2005 PIK Notes unless the Company concurrently prepays a
proportionate amount of the Tranche A PIK Notes and Tranche B PIK
Notes.

     

    Section
10.19  Financial
Covenants.

     

    (a)           Minimum
Fixed Charge Coverage Ratio.  The Company and its consolidated
Subsidiaries shall maintain a ratio (“Fixed Charge Coverage Ratio”)
of:

     

    (i)           the
sum of (a) EBITDA during such period minus
(b) Capital Expenditures during such period, to

     

    (ii)           the
sum of the amounts, without duplication, of (a) Interest Expense during such
period (net of interest income) plus
(b) scheduled principal payments of Debt (which shall not be deemed to include


     

     

    
      
        
        

      

      
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    payments
pursuant to Section 8.8 of this Agreement, Section 8.8 of the 2005 Note
Agreement or Section  2.5.B of the Current Bank Credit Agreement),
plus
(c) dividend payments on Company’s common and preferred stock plus
(or minus with respect to tax benefits) (d) Company’s income tax provision
calculated in accordance with GAAP for such period plus
(e) Capital Lease Obligations during such period,

     

    which
shall not be less than the applicable ratio set forth below for each
corresponding four (4) fiscal quarter period beginning with the four (4) fiscal
quarter period ending with the end of the applicable fiscal quarter of the
Company set forth below.  In each case, the Fixed Charge Coverage
Ratio shall be determined as of the last day of each fiscal quarter for the four
(4) fiscal quarter period ending on such day (the “Last Twelve-Month Period”),
provided,
that the Fixed Charge Coverage Ratio shall be calculated, with respect to
Permitted Acquisitions, on a pro
forma
basis using historical audited and reviewed unaudited financial statements
obtained from the seller(s) in such Permitted Acquisition, broken down by fiscal
quarter as if such Permitted Acquisition (including the uses and applications of
proceeds in respect thereof and the Debt incurred in conjunction therewith) had
occurred on the first day of the Last Twelve-Month Period (the “Measurement
Period”) (excluding cost savings), provided such pro
forma
statements shall be substantiated by supporting information reasonably
acceptable to the Required Holders.  Interest Expense shall be
calculated for the purpose of clause
(ii) by excluding the effect of amortization of deferred financing fees,
to the extent it is an Interest Expense.

     

    
      
        
          	
                  Last Twelve Month Period
      Ending

                	
                  Minimum Fixed Charge Coverage
      Ratio

                
	
                  March
      31, 2009

                	
                  1.35
      to 1.00

                
	
                  June
      30, 2009

                	
                  1.35
      to 1.00

                
	
                  September
      30, 2009

                	
                  1.35
      to 1.00

                
	
                  December
      31, 2009 and the last day of each fiscal quarter thereafter
      ending

                	
                  1.25
      to 1.00

                


        

      

    

     

     

    (b)           Maximum
Cash Flow Leverage Ratio.  The Company and its consolidated
Subsidiaries shall not permit the ratio (the “Cash Flow Leverage Ratio”) of (i)
Total Funded Debt (excluding the PIK Notes and the 2005 PIK Notes) to (ii)
EBITDA to be greater than the applicable ratio set forth below for each
corresponding four (4) fiscal quarter period ending with the end of the
applicable fiscal quarter of the Company set forth below.  The Cash
Flow Leverage Ratio shall be calculated, in each case, determined as of the last
day of each fiscal quarter based upon (a) for Debt, Debt as of the last day of
each such fiscal quarter; and (b) for EBITDA, the actual amount for Last
Twelve-Month Period, provided,
that the Cash Flow Leverage Ratio shall be calculated, with respect to Permitted
Acquisitions, on a pro
forma
basis using historical audited and reviewed unaudited financial statements
obtained from the seller(s) in such Permitted Acquisition, broken down by fiscal
quarter in the Company’s reasonable judgment as if such 

     

     

    
      
        
        

      

      
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    Permitted
Acquisition (including the uses and applications of proceeds in respect thereof
and the Debt incurred in conjunction therewith) had occurred on the first day of
the Measurement Period (excluding cost savings), provided such pro
forma
statements shall be substantiated by supporting information reasonably
acceptable to the Required Holders.

     

    
      
        
          	
                  Last Twelve-Month Period
      Ending

                	
                  Maximum Cash Flow Leverage
      Ratio

                
	
                  March
      31, 2009

                	
                  5.00
      to 1.00

                
	
                  June
      30, 2009

                	
                  4.80
      to 1.00

                
	
                  September
      30, 2009

                	
                  4.20
      to 1.00

                
	
                  December
      31, 2009 and each

                  fiscal
      quarter thereafter

                	
                  3.00
      to 1.00

                


        

      

    

     

    (c)           Minimum
Consolidated Net Worth. The Company shall not permit its Consolidated Net
Worth at any time to be less than the sum of (a) an amount equal to ninety
percent (90%) of Consolidated Net Worth as of March 31, 2009 (as reported in the Company’s financial
statements contained in its publicly filed Form 10-Q for the period ending March
31, 2009) plus
(b) fifty percent (50%) of Net Income (if positive) calculated separately for
each fiscal quarter commencing with the fiscal quarter ending on June 30, 2009,
plus (c) one hundred percent (100%) of the net cash proceeds resulting from the
issuance by the Company of any Capital Stock other than shares of Capital Stock
issued pursuant to employee stock option or ownership plans commencing with the
fiscal quarter ending on June 30, 2009.

     

    (d)           Maximum
Capital Expenditures.  The Company will not, nor will it permit
any Subsidiary to, expend, or be committed to expend, in excess of an aggregate
of $17,500,000, for Capital Expenditures of the Company and is Subsidiaries
during any fiscal year of the Company.”

     

    Section
1.23.  The reference to “Section 10.1 through Section 10.5,
inclusive,” set forth in Section 11(c) of the Note Agreement is deleted and
replaced with a reference to “Section 10.1 through Section 10.19,
inclusive,”.

     

    Section
1.24.  Section 11 of the Note Agreement shall be and is hereby amended
by (i)
deleting the word “or” at the end of clause (j), (ii)
deleting the “.” at the end of clause (k) and replacing it with “; or” and
(iii)
adding the following new clause (l) after clause (k):

     

    “(l)           any
Collateral Document shall for any reason fail to create a valid and perfected
first priority security interest in any portion of the Collateral purported to
be covered thereby, except as permitted by the terms of any Note
Document.”

     

    Section
1.25.  Section 12.2 of the Note Agreement shall be and is hereby
amended in its entirety to read as follows:

     

     

    
      
        
        

      

      
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    “Section
12.2.  Other
Remedies.  If any Default or Event of Default has occurred and
is continuing, and irrespective of whether any Notes have become or have been
declared immediately due and payable under Section 12.1, (a) subject to the
terms of the Intercreditor Agreement, the holder of any Note at the time
outstanding may proceed to protect and enforce the rights of such holder by an
action at law, suit in equity or other appropriate proceeding, whether for the
specific performance of any agreement contained herein or in any Note, or for an
injunction against a violation of any of the terms hereof or thereof, or in aid
of the exercise of any power granted hereby or thereby or by law or otherwise
and (b) the Collateral Agent may, in accordance with the terms of the
Intercreditor Agreement, exercise any rights and remedies provided to the
Collateral Agent under the Note Documents or at law or equity, including all
remedies provided under the UCC.”

     

    Section
1.26.  Section 15.1 of the Note Agreement shall be and is hereby
amended by adding the following new sentence at the end thereof:

     

    “Expenses
being reimbursed by the Company under this Section include, without limiting the
generality of the foregoing, costs and expenses incurred in connection with
(x)
appraisals (subject to the limitations contained in Section
7.3) and insurance reviews and (y)
field examinations and the preparation of Reports based on the fees charged by a
third party retained by the Collateral Agent or the internally allocated fees
for each Person employed by the Collateral Agent with respect to each field
examination; provided that so long as no Event of Default has occurred and is
continuing, the Company shall not be required to reimburse the Collateral Agent
for the costs of more than one field exam and consequent preparation of Reports
per fiscal year.”

     

    Section
1.27.  Section 22 of the Note Agreement shall be and is hereby amended
by adding the following as a new Sections 22.7, 22.8 and 22.9
thereto:

     

    “Section
22.7  Appointment
for Perfection.  Each holder of the Notes hereby appoints each
other holder of the Notes as its agent for the purpose of perfecting Liens, for
the benefit of the Collateral Agent and the holders of Secured Obligations, in
assets which, in accordance with Article 9 of the UCC or any other applicable
law can be perfected only by possession.  Should any holder of any
Notes obtain possession of any such Collateral, such holder shall notify the
Collateral Agent thereof, and, promptly upon the Collateral Agent’s request
therefor shall deliver such Collateral to the Collateral Agent or otherwise deal
with such Collateral in accordance with the Collateral Agent’s
instructions.

     

    Section
22.8  Payment of
Fees.  If at any time after the Amendment No. 2 Effective Date,
the Company or any of its Subsidiaries agrees to pay the Administrative Agent,
the Bank Lenders or any holder of the 2005 Notes, any fee, compensation or any
other payment in connection with the Bank Credit Agreement or the 2005 Note
Agreement, including but not limited to any termination, exit or amendment fees,
the Company shall notify the holders of the Notes in writing and make an equal
payment to 

     

     

    
      
        
        

      

      
        22

        
          

        

      

      
        
        

      

    

     

    the
holders the Notes to be distributed pro-rata to such holders based upon the
principal amount of the Notes then outstanding.”

     

    Section
22.9  Interpretation
of “Debt”.  Notwithstanding any provision of this Agreement
providing for any amount to be determined in accordance with Agreement
Accounting Principles, for all purposes of this Agreement the outstanding
principal amount of any Debt of the Company or any of its Subsidiaries (other
than, to the extent such obligations are included in the definition of “Debt”,
Hedging Obligations) shall be equal to the actual outstanding principal amount
thereof irrespective of the amount that might otherwise be accounted for under
Agreement Accounting Principles as the amount of the liability of the Company or
any of its Subsidiaries with respect thereto, and any determination of the net
income (or net loss), equity or assets of the Company or any of its Subsidiaries
shall not take into account any effect of marking any such outstanding Debt of
the Company or any of its Subsidiaries to market value.”

     

    Section
1.28.  The following Defined Terms in Schedule B to the Note Agreement
shall be and are hereby amended as follows:

     

    “Bank
Credit Agreement” means the Credit Agreement dated as of January 28, 2005 by and
among the Company, certain Subsidiaries of the Company named therein, JPMorgan
Chase Bank, N.A., as agent and collateral agent, and the other financial
institutions party thereto, as amended, restated, joined, supplemented or
otherwise modified from time to time, and any renewals, extensions or
replacements thereof, in each case (x)
in accordance with the terms of Section 10.17 of this Agreement and (y)
which constitute the primary bank credit facility of the Company and its
Subsidiaries.

     

    “Collateral
Agent” shall have the meaning set forth in the Pledge and Security
Agreement.

     

    “Consolidated
Net Worth” means, at a particular date, all amounts which would be included
under shareholders' equity on the consolidated balance sheet for the Company and
its consolidated Subsidiaries determined in accordance with Agreement Accounting
Principles.

     

    “Debt” of
a person means, without duplication, such person’s (a) obligations for borrowed
money, including, without limitation, subordinated indebtedness, (b) obligations
representing the deferred purchase price of property or services (other than
accounts payable arising in the ordinary course of such person’s business
payable on terms customary in the trade and other than earn-outs or other
similar forms of contingent purchase prices), (c) obligations, whether or not
assumed, secured by liens on or payable out of the proceeds or production from
property now or hereafter owned or acquired by such person, (d) obligations
which are evidenced by notes, acceptances, or other instruments, (e) Capital
Lease Obligations, (f) outstanding principal balances (representing securitized
but unliquidated assets) under asset securitization agreements (including,
without limitation, the outstanding principal balance of accounts receivable
under receivables transactions) and (g) the implied debt component of synthetic
leases of which such person is lessee or any other off-balance sheet financing
arrangements 

     

     

    
      
        
        

      

      
        23

        
          

        

      

      
        
        

      

    

     

    (including,
without limitation, any such arrangements giving rise to any Off-Balance Sheet
Liabilities).

     

    “Default
Rate” means (i) with respect to the Tranche A Notes and the Tranche A PIK Notes
that per annum rate of interest that is the greater of (i) 10.90% and (ii) 2.00%
over the rate of interest publicly announced by The Bank of New York from time
to time in New York City as its Prime Rate, and (ii) with respect to the Tranche
B Notes and the Tranche B PIK Notes that per annum rate of interest that is the
greater of (i) 10.98% and (ii) 2.00% over the rate of interest publicly
announced by The Bank of New York from time to time in New York City as its
Prime Rate.

     

    “Foreign
Incorporated Subsidiary” means a Subsidiary of the Company which is not a
Domestic Incorporated Subsidiary.

     

    “GAAP”
means Agreement Accounting Principles.

     

    “Intercreditor
Agreement” means the Amended and Restated Intercreditor Agreement dated as of
Amendment No. 2 Effective Date among the Administrative Agent, the Collateral
Agent and the holders of the Notes and the holders of the 2003 Notes, as the
same may be amended, restated, supplemented or otherwise modified from time to
time.

     

    “Investments”
means, with respect to any Person, (a) any purchase or other acquisition by that
Person of any Debt, Capital Stock or other securities, or of a beneficial
interest in any Debt, Capital Stock or other securities, issued by any other
Person, (b) any purchase by that Person of all or substantially all of the
assets of a business (whether of a division, branch, unit operation, or
otherwise) conducted by another Person, and (c) any loan, advance (other than
deposits with financial institutions available for withdrawal on demand, prepaid
expenses, accounts receivable, advances to employees and similar items made or
incurred in the ordinary course of business) or capital contribution by that
Person to any other Person, including all Debt to such Person arising from a
sale of property by such Person other than in the ordinary course of its
business.

     

    “Restricted
Payment” means (a) any dividend or other distribution, direct or indirect, on
account of any Capital Stock of the Company now or hereafter outstanding, except
a dividend payable solely in the Company’s Capital Stock (other than
Disqualified Stock) or in options, warrants or other rights to purchase such
Capital Stock, (b) any redemption, retirement, purchase or other acquisition for
value, direct or indirect, of any Capital Stock of the Company or any of its
Subsidiaries now or hereafter outstanding, other than in exchange for, or out of
the proceeds of, the substantially concurrent sale (other than to a Subsidiary
of the Company) of other Capital Stock of the Company (other than Disqualified
Stock) or any transaction that has a substantially similar effect, (c) any
redemption, purchase, retirement, defeasance, prepayment or other acquisition
for value, direct or indirect, of any Debt subordinated to the Secured
Obligations or any transaction that has a substantially similar effect, and (d)
any payment of a claim for the rescission of the purchase or sale of, or for
material damages arising from the purchase or sale of, any Debt (other than the
Secured Obligations) or any Capital Stock of the 

     

     

    
      
        
        

      

      
        24

        
          

        

      

      
        
        

      

    

     

    Company,
or any of its Subsidiaries, or of a claim for reimbursement, indemnification or
contribution arising out of or related to any such claim for damages or
rescission.

     

    “Subsidiary
Guarantor” means each Subsidiary (other than any Foreign Incorporated Subsidiary
to the extent that the designation of such Foreign Incorporated Subsidiary as a
Subsidiary Guarantor would (a) be prohibited by applicable law or (b) cause such
Foreign Incorporated Subsidiary’s accumulated earnings and profits to be
repatriated to the Company or such Foreign Incorporated Subsidiary’s parent
Domestic Incorporated Subsidiary, in each case under Section 956 of the Code
(each such Foreign Incorporated Subsidiary, an “Affected Foreign
Subsidiary”)).

     

    “2005
Note Agreement” means the Note Purchase and Private Shelf Agreement dated as of
January 28, 2005 between the Company and the Initial Purchasers named therein,
as amended through the Amendment No. 2 Effective Date and as further amended
from time to time.

     

    “2005
Notes” means the Notes, as that term is defined in the First Amendment to the
2005 Note Agreement dated as of the Amendment No. 2 Effective Date, as such
notes may be further amended from time to time.”

     

    Section
1.29.  The following shall be added as new definitions in alphabetical
order to the Defined Terms in Schedule B to the Note Agreement:

     

    “Acceptable
Bank Credit Agreement” shall mean:

     

    (a)           Prior
to the Normalization Date, the Bank Credit Agreement which is in effect on the
Amendment No. 2 Effective Date (the “Existing Bank Credit Agreement”);
and

     

    (b)           at
any time on and after the Normalization Date, a Replacement Credit Agreement (as
defined in the Intercreditor Agreement) that goes into effect on the
Normalization Date and meets the conditions set forth in the definition of
“Normalization Date” in the Intercreditor Agreement;

     

    (c)           at
any time after the Normalization Date, any loan or credit agreement which
refinances in whole the Debt under the Acceptable Bank Credit Agreement in
effect immediately prior to such refinancing, but only if (i) such loan or
credit agreement meets the conditions set forth in the definition of
“Normalization Date” set forth in the Intercreditor Agreement, except for (x)
the requirement that the term end not earlier than January 28, 2011 and (y) the
requirement in clause (h) of the definition of “Normalization” set forth in the
Intercreditor Agreement, and (ii) the scheduled final maturity date thereof is
not earlier than 364 days after the date of the initial closing under such loan
or credit agreement.

     

    “Acquisition”
means any transaction, or any series of related transactions, consummated on or
after the date of this Agreement, by which the Company or any of its
Subsidiaries (a) acquires any going business or all or substantially all of the
assets of any 

     

     

    
      
        
        

      

      
        25

        
          

        

      

      
        
        

      

    

     

    firm,
corporation or division thereof, whether through purchase of assets, merger or
otherwise or (b) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
of voting power) of the outstanding Capital Stock of another
Person.

     

    “Affected
Foreign Subsidiary” is defined in the definition of “Subsidiary
Guarantor”.

     

    “Agreement
Accounting Principles” means, with respect to the calculation of financial
ratios and other financial tests required by this Agreement, generally accepted
accounting principles as in effect in the United States as of January 28, 2005,
applied in a manner consistent with that used in preparing the financial
statements of the Company referred to in Section 6.4(B) of the Bank Credit
Agreement; provided, further, however, all pro forma financial statements
reflecting Acquisitions shall be prepared in accordance with the requirements
established by the Commission for acquisition accounting for reporting
acquisitions by public companies (whether or not such Acquisitions are required
to be publicly reported); provided, further, that no change in accounting
principles shall be made from those used in preparing the financial statements
referred to in Section 6.4(B) of the Bank Credit Agreement, including, without
limitation, with respect to the nature or classification of accounts, closing
proceedings, levels of reserves, or levels of accruals other than as a result of
objective changes in the underlying business; provided, further, that for
purposes of the preceding clauses, “changes in accounting principles” or
“changes in Agreement Accounting Principles” includes all changes in accounting
principles, policies, practices, procedures, or methodologies with respect to
financial statements, their classification, or their display, as well as all
changes in practices, methods, conventions, or assumptions used in making
accounting estimates.

     

    “Amendment
No. 2” shall mean that certain Second Amendment to Note Purchase Agreement dated
as of June 11, 2009 by and among the Company, each of the holders of the Notes
and the other parties a signatory thereto.

     

    “Amendment
No. 2 Effective Date” shall have the meaning set forth in Section 5 of Amendment
No. 2.

     

    “Asset
Sale” means, with respect to any Person, the sale, lease, conveyance,
disposition or other transfer by such Person of any of its assets (including by
way of a sale-leaseback transaction, and including the sale or other transfer of
any of the Capital Stock of any Subsidiary of such Person) to any Person other
than the Company or any of its wholly-owned Subsidiaries other than (a) the sale
of Inventory in the ordinary course of business, (b) the sale or other
disposition of any obsolete, redundant, excess, damaged or worn-out Equipment
disposed of in the ordinary course of business and (c) leases of personal
property (including leases or licenses of intellectual property) and leases of
surplus or redundant real property.

     

     

    
      
        
        

      

      
        26

        
          

        

      

      
        
        

      

    

     

    “Benefit
Plan” means a defined benefit plan as defined in Section 3(35) of ERISA (other
than a Multiemployer Plan) in respect of which the Company or any ERISA
Affiliate is, or within the immediately preceding six (6) years was, an
“employer” as defined in Section 3(5) of ERISA.

     

    “Capital
Expenditures” means, for any period, the aggregate of all expenditures (whether
or not paid in cash and including Capital Leases and purchase money
indebtedness) by the Company and its consolidated Subsidiaries during that
period that, in conformity with Agreement Accounting Principles, are required to
be included in or reflected by the property, plant, equipment or similar fixed
asset accounts reflected in the consolidated balance sheet of the Company and
its Subsidiaries; provided,
however,
that the term “Capital Expenditures” shall not include (a) expenditures made in
connection with the replacement, substitution or restoration of assets (i) to
the extent financed from insurance proceeds paid on account of the loss of or
damage to the assets being replaced or restored or (ii) with awards of
compensation arising from the taking by eminent domain or condemnation of the
assets being replaced; (b) the purchase price of equipment that is purchased
simultaneously with the trade-in of existing equipment to the extent that the
gross amount of such purchase price is reduced by the credit granted by the
seller of such equipment for the equipment being traded in at such time; (c) the
purchase of plant, property or equipment made within one year of the sale of any
asset to the extent purchased with the proceeds of such sale; (d) the portion of
the purchase price in connection with any acquisition that would otherwise be
included as additions to property, plant or equipment; and (e) expenditures made
in connection with any acquisition.

     

    “Cash
Equivalents” means (a) marketable direct obligations issued or unconditionally
guaranteed by the governments of the United States and backed by the full faith
and credit of the United States government; (b) domestic and Eurocurrency
certificates of deposit and time deposits, bankers’ acceptances and floating
rate certificates of deposit issued by any commercial bank organized under the
laws of the United States, any state thereof, the District of Columbia, any
foreign bank, or its branches or agencies (fully protected against currency
fluctuations for any such deposits with a term of more than ninety (90) days);
(c) shares of money market, mutual or similar funds having assets in excess of
$100,000,000 and the investments of which are limited to investment grade
securities (i.e., securities rated at least Baa by Moody’s Investors Service,
Inc. or at least BBB by Standard & Poor’s Ratings Group, a division of The
McGraw-Hill Companies, Inc.); and (d) commercial paper of United States and
foreign banks and bank holding companies and their subsidiaries and United
States and foreign finance, commercial industrial or utility companies which, at
the time of acquisition, are rated A-1 (or better) by Standard & Poor’s
Ratings Group, a division of The McGraw-Hill Companies, Inc., or P-1 (or better)
by Moody’s Investors Services, Inc.; provided
that the maturities of such Cash Equivalents shall not exceed three hundred
sixty-five (365) days from the date of acquisition thereof.

     

    “Cash
Flow Leverage Ratio” is defined in Section 10.19.

     

     

    
      
        
        

      

      
        27

        
          

        

      

      
        
        

      

    

     

    “Collateral”
means all pledged Capital Stock, and any and all owned or leased personal
property, in or upon which a security interest or Lien is from time to time
granted to the Collateral Agent, for the benefit of the holders of the Secured
Obligations, whether under the Foreign Pledge Agreements, under the Pledge and
Security Agreement, under any of the other Collateral Documents or under any of
the other Note Documents.

     

    “Collateral
Documents” means all agreements, instruments and documents executed in
connection with this Agreement pursuant to which the Collateral Agent is granted
a security interest in Collateral, including, without limitation, the Pledge and
Security Agreement, the Foreign Pledge Agreements and all other security
agreements, loan agreements, notes, guarantees, subordination agreements,
pledges, powers of attorney, consents, assignments, contracts, fee letters,
notices, leases, financing statements and all other written matter whether
heretofore, now, or hereafter executed by or on behalf of the Company or any of
its Subsidiaries and delivered to the Collateral Agent, any of the Bank Lenders
or any of the holders of the Notes, together with all agreements and documents
referred to therein or contemplated thereby.

     

    “Commission”
means the Securities and Exchange Commission of the United States of America and
any Person succeeding to the functions thereof.

     

    “Consolidated
Tangible Assets” means
the total assets of the Company and its Subsidiaries on a consolidated basis
(determined in accordance with Agreement Accounting Principles), but excluding
therefrom all items that are treated as intangibles under Agreement Accounting
Principles.

     

    “Contingent
Obligation”, as applied to any Person, means any Contractual Obligation,
contingent or otherwise, of that Person with respect to any Debt of another or
other obligation or liability of another, including, without limitation, any
such Debt, obligation or liability of another directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase, or otherwise acquire such Debt, obligation or
liability or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received.  The amount of any Contingent Obligation shall be equal to
the present value of the portion of the obligation so guaranteed or otherwise
supported, in the case of known recurring obligations, and the maximum
reasonably anticipated liability in respect of the portion of the obligation so
guaranteed or otherwise supported assuming such Person is required to perform
thereunder, in all other cases.

     

    “Contractual
Obligation”, as applied to any Person, means any provision of any equity or debt
securities issued by that Person or any indenture, mortgage, deed of trust,
security agreement, pledge agreement, guaranty, contract, undertaking, agreement
or 

     

     

    
      
        
        

      

      
        28

        
          

        

      

      
        
        

      

    

     

    instrument,
in any case in writing, to which that Person is a party or by which it or any of
its properties is bound, or to which it or any of its properties is
subject.

     

    “Customary
Permitted Liens” means:

     

    (a)           Liens
(other than Environmental Liens and Liens in favor of the Internal Revenue
Service or the PBGC) with respect to the payment of taxes, assessments or
governmental charges in all cases which are not yet due or (if foreclosure,
distrait, sale or other similar proceedings shall not have been commenced or any
such proceeding after being commenced is stayed) which are being contested in
good faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;

     

    (b)           statutory
Liens of landlords and Liens of suppliers, mechanics, carriers, materialmen,
warehousemen or workmen and other similar Liens imposed by law created in the
ordinary course of business for amounts not yet due or which are being contested
in good faith by appropriate proceedings properly instituted and diligently
conducted and with respect to which adequate reserves or other appropriate
provisions are being maintained in accordance with Agreement Accounting
Principles;

     

    (c)           Liens
(other than Environmental Liens and Liens in favor of the Internal Revenue
Service or the PBGC) incurred or deposits made in the ordinary course of
business in connection with workers’ compensation, unemployment insurance or
other types of social security benefits or to secure the performance of bids,
tenders, sales, contracts (other than for the repayment of borrowed money),
surety, appeal and performance bonds; provided
that (i) all such Liens do not in the aggregate materially detract from the
value of the Company’s or such Subsidiary’s assets or property taken as a whole
or materially impair the use thereof in the operation of the businesses taken as
a whole, and (ii) all Liens securing bonds to stay judgments or in connection
with appeals do not secure at any time an aggregate amount exceeding
$10,000,000;

     

    (d)           Liens
arising with respect to zoning restrictions, easements, encroachments, licenses,
reservations, covenants, rights-of-way, utility easements, building restrictions
and other similar charges, restrictions or encumbrances on the use of real
property which do not in any case materially detract from the value of the
property subject thereto or materially interfere with the ordinary use or
occupancy of the real property or with the ordinary conduct of the business of
the Company or any of its Subsidiaries;

     

    (e)           Liens
of attachment or judgment with respect to judgments, writs or warrants of
attachment, or similar process against the Company or any of its Subsidiaries
which do not constitute an Event of Default under Section 11(j) hereof;
and

     

    (f)           any
interest or title of the lessor in the property subject to any operating lease
entered into by the Company or any of its Subsidiaries in the ordinary course of
business.

     

     

    
      
        
        

      

      
        29

        
          

        

      

      
        
        

      

    

     

    “Dollar
Amount” of any currency at any date shall mean (a) the amount of such currency
if such currency is Dollars or (b) the Equivalent Amount of Dollars if such
currency is any currency other than Dollars.

     

    “Dollar”
and “$” means dollars in the lawful currency of the United States.

     

    “Domestic
Incorporated Subsidiary” means a Subsidiary of the Company organized under the
laws of a jurisdiction located in the United States of America.

     

    “Domestic
Note Parties” means
the Company and the Domestic Incorporated Subsidiaries.

     

    “Disqualified
Stock” means any Capital Stock that, by its terms (or by the terms of any
security into which it is convertible or for which it is exchangeable), or upon
the happening of any event, matures or is mandatorily redeemable, pursuant to a
sinking fund obligation or otherwise, or redeemable at the option of the holder
thereof, in whole or in part, on or prior to the date that is ninety-one (91)
days after the latest maturity date of the Notes.

     

    “EBITDA”
means, for any period, on a consolidated basis for the Company and its
Subsidiaries, the sum of the amounts for such period, without duplication, of
(a) Net Income, plus
(b) Interest Expense to the extent deducted in computing Net Income, plus
(c) charges against income for foreign, federal, state and local taxes to the
extent deducted in computing Net Income, plus
(d) depreciation expense to the extent deducted in computing Net Income, plus
(e) amortization expense, including, without limitation, amortization of
goodwill and other intangible assets to the extent deducted in computing Net
Income, plus
(f) acquisition, integration and restructuring charges incurred in the Company’s
2009 fiscal year and in an aggregate amount not to exceed $3,000,000, all in
accordance with Agreement Accounting Principles to the extent deducted in
computing Net Income, plus
(g) other extraordinary non-cash charges to the extent deducted in computing Net
Income, minus
(h) other extraordinary non-cash credits to the extent added in computing Net
Income, plus
(i) non-cash expenses related to stock based compensation to the extent deducted
in computing Net Income, plus
(j) charges incurred as a result of impairment of fixed assets, intangible
assets and goodwill, all to the extent deducted in computing Net
Income.  EBITDA shall be calculated on a pro
forma
basis giving effect to acquisitions and Asset Sales on a last twelve (12)
months’ basis.  Notwithstanding the foregoing, EBITDA shall be deemed
to be (1) $13,900,000 for the Company’s fiscal quarter ended on or about June
30, 2008, (2) $13,800,000 for the Company’s fiscal quarter ended on or about
September 30, 2008 and (3) $2,243,000 for the Company’s fiscal quarter ended on
or about December 31, 2008.

     

    “Environmental
Lien” means a lien in favor of any Governmental Authority for (a) any liability
under Environmental Laws, or (b) damages arising from, or costs incurred by such
Governmental Authority in response to, a Release (as defined in the Bank Credit
Agreement) or threatened Release of a Contaminant (as defined in the Bank Credit
Agreement) into the environment.

     

     

    
      
        
        

      

      
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    “Equipment”
shall have the meaning set forth in the Bank Credit Agreement.

     

    “Equivalent
Amount” shall have the meaning set forth in the Bank Credit
Agreement.

     

    “First
Tier Foreign Subsidiary” means each Foreign Incorporated Subsidiary with respect
to which any one or more of the Company and its Domestic Incorporated
Subsidiaries directly owns or controls more than 50% of such Foreign
Incorporated Subsidiary’s Capital Stock.

     

    “Fixed
Charge Coverage Ratio” is defined in Section 10.19.

     

    “Foreign
Pledge Agreement” means a pledge agreement in form and substance satisfactory to
the Required Holders and their counsel, duly executed and delivered by the
Company and/or any applicable Subsidiary of the Company to and in favor of the
Collateral Agent (for the benefit of itself and the other holders of the Secured
Obligations), as it may from time to time be amended, restated, supplemented or
otherwise modified, with respect to 65% of the outstanding Capital Stock of the
relevant Foreign Incorporated Subsidiary in accordance with Section 9.9
hereof.

     

     “Foreign
Subsidiary Investment” means the sum of (a) all intercompany loans made on or
after the date hereof from either the Company or any Domestic Incorporated
Subsidiary to any Foreign Incorporated Subsidiary; (b) all Investments made on
or after the date hereof by either the Company or any Domestic Incorporated
Subsidiary in any Foreign Incorporated Subsidiary; and (c) an amount equal to
the net benefit derived by the Foreign Incorporated Subsidiaries resulting from
any non-arms length transactions, or any other transfer of assets conducted
other than in the ordinary course of business, between the Company and/or any
Domestic Incorporated Subsidiary, on the one hand, and such Foreign Incorporated
Subsidiaries, on the other hand.

     

    “Grantor”
shall have the meaning set forth in the Pledge and Security
Agreement.

     

    “Hedging
Obligations” of a Person means any and all obligations of such Person, whether
absolute or contingent and howsoever and whensoever created, arising, evidenced
or acquired (including all renewals, extensions and modifications thereof and
substitutions therefor), under (a) any and all agreements, devices or
arrangements designed to protect at least one of the parties thereto from the
fluctuations of interest rates, commodity prices, exchange rates or forward
rates applicable to such party’s assets, liabilities or exchange transactions,
including, but not limited to, dollar-denominated or cross-currency interest
rate exchange agreements, forward currency exchange agreements, interest rate
cap or collar protection agreements, forward rate currency or interest rate
options, puts and warrants, and (b) any and all cancellations, buy backs,
reversals, terminations or assignments of any of the foregoing.

     

    “Interest
Expense” means, for any period, the total interest expense of the Company and
its consolidated Subsidiaries, whether paid or accrued (including the interest
component of Capital Leases, commitment fees and fees for stand-by letters of
credit, the discount with respect to asset securitization agreements and the
implied 

     

     

    
      
        
        

      

      
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    interest
component of synthetic leases), all as determined in conformity with Agreement
Accounting Principles.  Interest Expense shall not include any
interest which in accordance with Agreement Accounting Principals has been
capitalized.

     

    “Inventory”
shall have the meaning set forth in the Bank Credit Agreement.

     

    “Last
Twelve-Month Period” is defined in Section 10.19.

     

    “Material
Foreign Subsidiary” means
any Foreign Incorporated Subsidiary (a) which, as of the most recent fiscal
quarter of the Company for the period of four consecutive fiscal quarters then
ended, contributes greater than five percent (5%) of EBITDA for such period or
(b) the consolidated total assets of which as of the end of such fiscal quarter
were greater than five percent (5%) of the Company’s Consolidated Tangible
Assets as of such date; provided
that,
if at any time the aggregate amount of EBITDA contributed by, or consolidated
total assets of, all Foreign Incorporated Subsidiaries that are not Material
Foreign Subsidiaries exceeds ten percent (10%) of EBITDA for any such period or
ten percent (10%) of the Company’s Consolidated Tangible Assets as of the end of
any such fiscal quarter, the Company (or, in the event the Company has failed to
do so within ten days, the Agent) shall designate sufficient Foreign
Incorporated Subsidiaries as “Material Foreign Subsidiaries” to eliminate such
excess, and such designated Foreign Incorporated Subsidiaries shall for all
purposes of this Agreement constitute Material Foreign
Subsidiaries.

     

     “Measurement
Period” is defined in Section 10.19.

     

    “Net
Income” means, for any period, the net income (or loss) after taxes of the
Company and its Subsidiaries on a consolidated basis for such period taken as a
single accounting period determined in conformity with Agreement Accounting
Principles.

     

    “Normalization
Date” is defined in Section 8.8.

     

    “Note
Documents” means this Agreement, the Notes, the Collateral Documents, the
Intercreditor Agreement, the Subsidiary Guaranty and each of the other
agreements, documents and instruments executed in connection herewith and
therewith or pursuant thereto, each as it may from time to time be amended,
modified or supplemented.

     

    “Note
Obligations” shall have the meaning set forth in the Pledge and Security
Agreement.

     

    “Off-Balance
Sheet Liabilities” of a Person means (a) any repurchase obligation or liability
of such Person or any of its Subsidiaries with respect to accounts or notes
receivable sold by such Person or any of its Subsidiaries, (b) any liability of
such Person or any of its Subsidiaries under any sale and leaseback transactions
which do not create a liability on the consolidated balance sheet of such
Person, (c) any liability of such Person of any of its Subsidiaries under any
financing lease or so-called “synthetic” lease transaction, or (d) any
obligations of such Person or any of its Subsidiaries arising with respect to
any other transaction which is the functional equivalent of or takes the place
of 

     

     

    
      
        
        

      

      
        32

        
          

        

      

      
        
        

      

    

     

    borrowing
but which does not constitute a liability on the consolidated balance sheets of
such Person and its Subsidiaries.

     

    “Permitted
Acquisition” shall have the meaning set forth in Section 10.7
hereof.

     

    “Permitted
Existing Contingent Obligations” means the Contingent Obligations of the Company
and its Subsidiaries identified as such on Schedule
10.5 to this Agreement.

     

    “Permitted
Existing Debt” means the Debt of the Company and its Subsidiaries identified as
such on Schedule
10.1 to this Agreement.

     

    “Permitted
Existing Investments” means
the Investments of the Company and its Subsidiaries identified as such on Schedule
10.4 to this Agreement.

     

    “Permitted
Existing Liens” means the Liens on assets of the Company and its Subsidiaries
identified as such on Schedule
10.3 to this Agreement.

     

    “Permitted
Foreign Subsidiary Investment Amount” means $120,000,000.

     

    “Permitted
Purchase Money Debt” shall have the meaning set forth in Section 10.1
hereof.

     

    “Permitted
Refinancing Debt” means (a) any replacement, renewal, refinancing or extension
of any Debt (other than the Debt evidenced by the Bank Credit Agreement)
permitted by this Agreement that (i) does not exceed the aggregate principal
amount (plus accrued interest and any applicable premium and associated fees and
expenses) of the Debt being replaced, renewed, refinanced or extended, (ii) does
not have a Weighted Average Life to Maturity at the time of such replacement,
renewal, refinancing or extension that is less than the Weighted Average Life to
Maturity of the Debt being replaced, renewed, refinanced or extended, (iii) does
not rank at the time of such replacement, renewal, refinancing or extension
senior to the Debt being replaced, renewed, refinanced or extended, and (iv)
does not contain terms (including, without limitation, terms relating to
security, amortization, interest rate, premiums, fees, covenants, event of
default and remedies) materially less favorable to the Company or to the holders
of the Notes than those applicable to the Debt being replaced, renewed,
refinanced or extended, or (b) any replacement, renewal, refinancing or
extension of the Debt evidenced by the Bank Credit Agreement, so long as such
replaced, renewed, refinanced or extended Debt is evidenced by an Acceptable
Bank Credit Agreement.

     

    “PIK Note
Maturity Date” means the earlier of the Normalization Date and January 28,
2010.

     

    “PIK
Notes” means,
collectively, the Tranche A PIK Notes and the Tranche B PIK Notes.

     

    “Pledge
and Security Agreement” means that certain Pledge and Security Agreement
(including any and all supplements thereto) dated as of the Amendment No. 2


     

     

    
      
        
        

      

      
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    Effective
Date by and among the Domestic Note Parties and the Collateral Agent, for the
benefit of the Collateral Agent and the other holders of the Secured
Obligations.

     

    “Related
PIK Notes” means,
with respect to any Notes of any Tranche, the PIK Note of the Tranche with the
same alphabetical designation as such Note issued with respect to such
Note.

     

    “Report”
means reports prepared by the Collateral Agent or another Person showing the
results of appraisals, field examinations or audits pertaining to the assets of
the Company or any Subsidiary from information furnished by or on behalf of the
Company or any of its Subsidiaries, after the Collateral Agent or any other
Person has exercised its rights of inspection pursuant to the Bank Credit
Agreement, this Agreement or any other Note Document, which Reports may be
distributed to holders of the Notes by the Collateral Agent or such other
Person.

     

    “Secured
Obligations” shall have the meaning set forth in the Pledge and Security
Agreement.

     

    “Total
Funded Debt” means, at any time, the aggregate Dollar Amount of Debt of the
Company and its Subsidiaries which has actually been funded and is outstanding
at such time, whether or not such amount is due or payable at such
time.

     

    “Tranche
A PIK Note(s)” shall have the meaning given in Section 1.2 hereof.

     

    “Tranche
B PIK Note(s)” shall have the meaning given in Section 1.3 hereof.

     

    “2005 PIK
Notes” shall mean the PIK Notes, as that term is defined in the First Amendment
to the 2005 Note Agreement dated as of the Amendment No. 2 Effective
Date.

     

    “UCC”
means the Uniform Commercial Code as in effect from time to time in the State of
Illinois or any other state the laws of which are required to be applied in
connection with the issue of perfection of security interests.

     

    “Weighted
Average Life to Maturity” means when applied to any Debt at any date, the number
of years obtained by dividing (a) the sum of the products obtained by
multiplying (i the amount of each then remaining installment, sinking fund,
serial maturity or other required payments of principal, including payment at
final maturity, in respect thereof, by (ii) the number of years (calculated to
the nearest one-twelfth) that will elapse between such date and the making of
such payment, by (b) the then outstanding principal amount of such
Debt.

     

    Section
1.30.  The following Defined Terms in Schedule B to the Note Agreement
shall be and are hereby deleted in their entirety: “Consolidated Debt”,
“Consolidated EBITDA”, “Consolidated Interest Expense”, “Consolidated Net
Income”, “Consolidated Total Assets”, “Consolidated Total Capitalization”,
“Priority Debt” and “Restricted Investments”.

     

     

    
      
        
        

      

      
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    Section
1.31.  The Note Agreement is amended by adding Exhibits 1.2 and 1.3
thereto in the forms of Exhibit 1.2 and 1.3 respectively, attached
hereto.

     

    SECTION
2.  AMENDMENT TO GUARANTY AGREEMENT.

     

    Section
2.1.  The last sentence of recital B to the Guaranty Agreement is
amended and restated in its entirety to read as follows: “The Series 2003-A
Notes and the PIK Notes, together with the Additional Notes, if any, from time
to time outstanding under the Note Purchase Agreement (together with any such
notes issued in substitution therefor pursuant to Section 13 of the Note
Purchase Agreement) are hereinafter collectively referred to as the “Notes”.”

     

    SECTION
3.  WAIVERS AND CONSENTS.

     

    Section
3.1.  Each of the holders of the Notes hereby (i)
waives the Company’s breaches of the covenants contained in (w)
the failure of the Company to comply with Sections 10.2, 10.3 and 10.4 of the
Note Agreement (as in effect prior to the Amendment No. 2 Effective Date) as of
its fiscal year ended December 31, 2008, (x)
Section 7.1(a) of the Note Agreement resulting from the Company’s failure to
deliver to holders of the Notes the quarterly reports for the fiscal quarter
ended March 31, 2009 within the time required by said Section 7.1(a) (so long as
such quarterly reports are delivered by July 15, 2009 and (y)
Section 7.1(b) of the Note Agreement resulting from the Company’s failure to
deliver to deliver to holders of the Notes the annual reports and related
financial statements required by Section 7.1(b) of the Note Agreement for the
fiscal year ended December 31, 2008 within the time required by said Section
7.1(b) (so long as such annual reports and related financial statements are so
delivered by two Business Days after the Amendment No. 2 Effective Date), (ii)
consents to the payment by the Company of a Restricted Payment in the form of a
dividend on its Capital Stock made on or prior to April 15, 2009 in an amount in
excess of $810,000 and (iii)
subject to the Company’s obligation to make the prepayment of the Notes required
by Section 8.8 of the Note Agreement (as amended by this Second Amendment) ,
waives the failure of the Company to offer to prepay the Notes as required by
Section 8.7 of the Note Agreement with respect to the Asset Sale of the real
property commonly known as 114 S. Racine, Chicago, Illinois within the time
period required by said Section 8.7, and agrees that such actions, subject to
the conditions set forth in this Section 3 and in Section 4 of this Second
Amendment, do not and will not constitute a Default or an Event of Default under
the Note Agreement, notwithstanding any term or provision thereof to the
contrary.  The foregoing waivers and consents are expressly subject to
the condition that the Company acknowledges, by its execution of this Second
Amendment, that (i) except to the extent specifically set forth in this Second
Amendment, the Note Agreement and the other Note Documents shall be otherwise
unaffected by these waivers and consents and shall remain in full force and
effect, (ii) except to the extent specifically set forth in this Second
Amendment, the holders of the Notes shall be under no obligation to waive any
future breach of any provision of the Note Agreement or any Default or Event of
Default and (iii) no course of dealing or course of performance shall be deemed
to have occurred as a result of these waivers and consents.

     

     

    
      
        
        

      

      
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    SECTION
4.  REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

     

    Section
4.1.  To induce the Noteholders to execute and deliver this Second
Amendment  (which representations shall survive the execution and
delivery of this Second Amendment ), the Company represents and warrants to the
Noteholders that:

     

    (a)           this
Second Amendment  has been duly authorized, executed and delivered by
it and this Second Amendment  constitutes the legal, valid and binding
obligation, contract and agreement of the Company enforceable against the
Company in accordance with its terms, except as enforcement may be limited by
bankruptcy, insolvency, reorganization, moratorium or similar laws or equitable
principles relating to or limiting creditors’ rights generally;

     

    (b)           each
of the Note Agreement and the Guaranty Agreement, in each case as amended by
this Second Amendment, constitutes the legal, valid and binding obligation,
contract and agreement of the Company and the Subsidiary Guarantors,
respectively, enforceable against it and them, respectively, in accordance with
its terms, except as enforcement may be limited by bankruptcy, insolvency,
reorganization, moratorium or similar laws or equitable principles relating to
or limiting creditors’ rights generally;

     

    (c)           the
execution, delivery and performance by the Company of this Second
Amendment  (i) has been duly authorized by all requisite corporate
action and, if required, shareholder action, (ii) does not require the consent
or approval of any governmental or regulatory body or agency, and (iii) will not
(A) violate (1) any provision of law, statute, rule or regulation or its
certificate of incorporation or bylaws, (2) any order of any court or any rule,
regulation or order of any other agency or government binding upon it, or (3)
any provision of any material indenture, agreement or other instrument to which
it is a party or by which its properties or assets are or may be bound, or (B)
result in a breach or constitute (alone or with due notice or lapse of time or
both) a default under any indenture, agreement or other instrument referred to
in clause (iii)(A)(3) of this Section 41(c);

     

    (d)           as
of the date hereof and after giving effect to this Second Amendment, no Default
or Event of Default has occurred which is continuing and no condition exists
which has resulted in, or could reasonably be expected to have, a Material
Adverse Effect;

     

    (e)           all
the representations and warranties contained in Section 5 of the Note Agreement
and in Section 5 of the Guaranty Agreement are true and correct in all material
respects with the same force and effect as if made by the Company and the
Subsidiary Guarantors, respectively, on and as of the date hereof;

     

    (f)           the
Company represents that it does not have any Subsidiaries (direct or indirect)
other than those that have executed and delivered Subsidiary Guarantees to the
holders of the Notes and are listed on the signature pages to this Second
Amendment as Subsidiary Guarantors; and

     

    (g)           other
than as expressly set forth in the Amendment No. 2 to the Bank Credit Agreement
referred to in Section 5.1(c) of this Second Amendment and the 2005 Note
Agreement Amendment, neither the Company nor any of its Subsidiaries has paid or
agreed to 

     

     

    
      
        
        

      

      
        36

        
          

        

      

      
        
        

      

    

     

    pay, nor
will the Company or any of its Subsidiaries pay or agree to pay, any fees or
other compensation to the Administrative Agent, any Bank Lender or any holder of
the 2005 Notes for or with respect to such Amendment No. 2 to the Bank Credit
Agreement or such 2005 Note Agreement Amendment (other than for the
reimbursement of out of pocket expenses in connection therewith).

     

    SECTION
5.  CONDITIONS TO EFFECTIVENESS OF THIS SECOND AMENDMENT.

     

    Section
5.1.  This Second Amendment  shall not become effective
until, and shall become effective when, each and every one of the following
conditions shall have been satisfied:

     

    (a)           executed
counterparts of this Second Amendment, duly executed by the Company and the
holders of the Notes, shall have been delivered to the Noteholders;

     

    (b)           the
Company shall have delivered to each Noteholder the PIK Notes to be issued to
such Noteholder pursuant to the Agreement;

     

    (c)           the
Company shall have delivered to the Noteholders executed copies of (i) the
Pledge and Security Agreement, (ii) Amendment No. 2 to the Bank Credit
Agreement, (iii) the First Amendment to Note Purchase and Private Shelf
Agreement dated as of the date hereof among the Company and the holders of the
2005 Notes (the “2005 Note Agreement Amendment”), (iv) the Amended and Restated
Intercreditor Agreement dated as of the date hereof by and among the holders of
the Secured Obligations and acknowledged by the Company and (v) a joinder to the
Subsidiary Guaranty Agreement from Kedzie Aircraft LLC, and all related
agreements, documents and instruments, in each case, in connection therewith,
all of which shall be in form and substance satisfactory to the
Noteholders;

     

    (d)           the
Company shall have prepaid the principal of the Notes required to be prepaid
pursuant to Section 8.8 of the Note Agreement, as amended hereby, as a result of
repayments of Debt required to satisfy the condition precedent to the
effectiveness of Amendment No. 2 to the Bank Credit Agreement set forth in
Section 3(a)(i) thereof;

     

    (e)           for
the account of each Noteholder, the Company shall have paid an amendment fee in
an amount equal to 0.50% of the principal amount of the Notes outstanding as of
the Amendment No. 2 Effective Date held by such Noteholders;

     

    (f)           the
representations and warranties of the Company set forth in Section 3 hereof are
true and correct on and with respect to the date hereof;

     

    (g)           the
Noteholders shall have received the favorable opinion of counsel to the Company
as to the matters set forth in Sections 4.1(a), 4.1(b) and 4.1(c) hereof, which
opinion shall be in form and substance satisfactory to the Noteholders;
and

     

    (h)           the
Company agrees to pay upon demand, the reasonable fees and expenses of Choate,
Hall & Stewart, LLP, special counsel to the Noteholders, in connection with
the negotiation, preparation, approval, execution and delivery of this Second
Amendment .

     

     

    
      
        
        

      

      
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    Upon
receipt of all of the foregoing, this Second Amendment shall become
effective (the “Amendment No. 2 Effective Date”).

     

    SECTION
6.  MISCELLANEOUS.

     

    Section
6.1.  This Second Amendment  shall be construed in
connection with and as part of the Note Agreement and the Guaranty Agreement,
and except as modified and expressly amended by this Second Amendment, all
terms, conditions and covenants contained in the Note Agreement, the Guaranty
Agreement and the Notes are hereby ratified and shall be and remain in full
force and effect.

     

    Section
6.2.  Except as modified and expressly amended by this Second
Amendment, the execution, delivery and effectiveness of this Second Amendment
shall not (a) amend the Note Agreement, the Guaranty Agreement or any Note, (b)
operate as a waiver of any right, power or remedy of any Noteholder, or (c)
constitute a waiver of, or consent to any departure from, any provision of the
Note Agreement, the Guaranty Agreement or any Note at any time.  At
all times on and after the Amendment No. 2 Effective Date, each reference to the
Note Agreement or the Guaranty Agreement in any other document, instrument or
agreement shall mean and be a reference to the Note Agreement or the Guaranty
Agreement, respectively, as modified by this Second Amendment.

     

    Section
6.3.  Any and all notices, requests, certificates and other
instruments executed and delivered after the execution and delivery of this
Second Amendment may refer to the Note Agreement or the Guaranty Agreement
without making specific reference to this Second Amendment  but
nevertheless all such references shall include this Second
Amendment  unless the context otherwise requires.

     

    Section
6.4.  The descriptive headings of the various Sections or parts of
this Second Amendment  are for convenience only and shall not affect
the meaning or construction of any of the provisions hereof.

     

    Section
6.5.  This Second Amendment shall be governed by and construed in
accordance with the laws of the State of New York excluding choice-of-law
principles of the law of such State that would require the application of the
laws of a jurisdiction other than such State.

     

    [Signatures
on Following Page]

     

     

    
      
        
        

      

      
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    The
execution hereof by you shall constitute a contract between us for the uses and
purposes hereinabove set forth, and this Second Amendment  may be
executed in any number of counterparts, each executed counterpart constituting
an original, but all together only one agreement.

     

    
      
        
          	 	
                   Very truly
      yours,

                   

                	 
	 	
                  SCHAWK,
      INC.

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/Timothy J. Cunningham 	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


        

      

    

     

     

    Each of
the Subsidiary Guarantors hereby (i) consents to the foregoing Second Amendment
and ratifies the amendments contained therein, (ii) ratifies and reaffirms all
of its obligations and liabilities under each Subsidiary Guaranty (as defined in
the Note Agreement referred to in the Second Amendment) notwithstanding the
Second Amendment or otherwise, (iii) confirms that each Subsidiary Guaranty
remains in full force and effect after giving effect to the Second Amendment,
(iv) represents and warrants that there is no defense, counterclaim or offset of
any type or nature under any Subsidiary Guaranty, (v) agrees that nothing in any
Subsidiary Guaranty, the Note Agreement, the Second Amendment or any other
agreement or instrument relating thereto requires the consent of any Subsidiary
Guarantor or shall be deemed to require the consent of any Subsidiary Guarantor
to any future amendment or other modification to the Note Agreement, (vi) waives
acceptance and notice of acceptance hereof, and (vii) agrees to the amendment to
the Guaranty Agreement set forth in Section 2 of the foregoing Second
Amendment.

     

    
      
        	 	
                SCHAWK
      USA, INC.

              	 
	 	 	 	 
	
                 

              	
                By:
      

              	/s/Timothy
      J. Cunningham 	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


      

    

     

    
       

      
        
          	 	
                  
                    SCHAWK
      WORLDWIDE HOLDINGS INC.

                  

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


        

      

       

      
         

        
          
            	 	
                    
                      SCHAWK
      HOLDINGS INC.

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


          

        

         

      

       

       

      
        
          
          

        

        
          39

          
            

          

        

        
          
          

        

      

    

     

     

    
       

      
        
          	 	
                  
                    SEVEN
      SEATTLE, INC.

                  

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


        

      

       

      
         

        
          
            	 	
                    
                      
                        SCHAWK
      LLC

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


          

        

         

        
           

          
            
              	 	
                      
                        
                          MIRAMAR
      EQUIPMENT, INC.

                        

                      

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


            

          

           

        

      

    

     

    
      
         

        
          
            	 	
                    
                      
                        
                          SCHAWK
      DIGITAL SOLUTIONS INC.

                        

                      

                    

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


          

        

         

        
           

          
            
              	 	
                      
                        
                          
                            KEDZIE
      AIRCRAFT LLC

                          

                        

                      

                    	 
	 	 	 	 
	
                       

                    	
                      By:
      

                    	/s/Timothy
      J. Cunningham  	 
	 	 	Name: Timothy
      J. Cunningham	 
	 	 	Title: Chief
      Financial Officer	 
	 	 	 	 


            

          

           

        

      

    

     

    
      
        
        

      

      
        40

        
          

        

      

      
        
        

      

    

     

    Accepted
as of the date first written above.

     

    
       

    

    
      
        
          
            
              
                
                  
                    
                      	 	
                              
                                
                                  MASSACHUSETTS
      MUTUAL LIFE INSURANCE COMPANY

                                

                              

                            	 
	 	 	 	 
	 	By:	Babson Capital Management LLC,
      

                              as
      Investment Adviser

                            	 
	 	 	 	 
	
                               

                            	
                              By:
      

                            	/s/MaryAnn
      Spencer 	 
	 	 	Name: MaryAnn
      Spencer	 
	 	 	Title: Managing
      Director	 
	 	 	 	 


                    

                  

                

              

            

          

        

         

      

       

      
        
          
            
               

            

            
              
                
                  
                    
                      
                        
                          
                            
                              	 	
                                      
                                        
                                          C.M.
      LIFE INSURANCE COMPANY

                                        

                                      

                                    	 
	 	 	 	 
	 	By:	Babson Capital Management LLC,
      

                                      as
      Investment Adviser

                                    	 
	 	 	 	 
	
                                       

                                    	
                                      By:
      

                                    	/s/MaryAnn
      Spencer 	 
	 	 	Name: MaryAnn
      Spencer	 
	 	 	Title: Managing
      Director	 
	 	 	 	 


                            

                          

                        

                      

                    

                  

                

                
                   

                   

                  
                    
                      
                        
                           

                        

                        
                          
                            
                              
                                
                                  
                                    
                                      
                                        
                                          	 	
                                                  
                                                    
                                                      MASS
      MUTUAL ASIA LIMITED

                                                    

                                                  

                                                	 
	 	 	 	 
	 	By:	Babson Capital Management LLC,
      

                                                  as
      Investment Adviser

                                                	 
	 	 	 	 
	
                                                   

                                                	
                                                  By:
      

                                                	/s/MaryAnn
      Spencer 	 
	 	 	Name: MaryAnn
      Spencer	 
	 	 	Title: Managing
      Director	 
	 


                                        

                                      

                                    

                                  

                                

                              

                            

                          

                        

                      

                    

                  

                

              

            

          

        

      

    

     

     

    
      
        
        

      

      
        41

        
          

        

      

      
        
        

      

    

     

    Exhibit
1.2

     

    [FORM OF
TRANCHE A PIK NOTE]

     

     

     

    SCHAWK,
INC.

     

     

     

    8.90%
TRANCHE A SENIOR PIK NOTE

     

    
      
        	
                No.
      _____

              	
                [Date]

              
	
                $________

              	
                PPN:
      _________

              


      

       

    

    FOR VALUE
RECEIVED, the undersigned, Schawk, Inc., a corporation organized and existing
under the laws of the State of Delaware (herein called the “Company”), hereby
promises to pay to ______________________, or registered assigns, the principal
sum of (i) _______________ DOLLARS, plus (ii) the amount of interest on this
Note added to the principal of this Note pursuant to Section 1.2 of the
Agreement, plus (iii) all Make-Whole Amounts (as defined in the Agreement) added
to the principal of this Note pursuant to the Agreement, on the PIK Note
Maturity Date (as defined in the Agreement), with interest (computed on the
basis of a 360-day year—30-day month) (a) on the unpaid balance thereof at the
rate of 8.90% per annum (or during any period when an Event of Default shall be
in existence, at the election of the Required Holder(s) of the Tranche A PIK
Notes, at the Default Rate (as defined below)) from the date hereof, payable
quarterly on the 28th day of
April, July, October and January in each year, commencing with the April 28,
July 28, October 28, or January 28 next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
Make-Whole Amount and, to the extent permitted by applicable law, any overdue
payment of interest, payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the Default Rate.  The “Default Rate” shall mean a rate per
annum from time to time equal to the greater of (i) 10.90% or (ii) 2.00% over
the rate of interest publicly announced by The Bank of New York from time to
time in New York City as its Prime Rate.

     

    Except to
the extent payment of interest and Make-Whole Amount is payable by adding such
payments to the principal of this Note pursuant to the terms of the Agreement,
payments of principal of, interest on and any Make-Whole Amount payable with
respect to this Note are to be made at the principal office of Banc of America
Securities LLC in New York City or at such other place as the holder hereof
shall designate to the Company in writing, in lawful money of the United States
of America.

     

    This Note
is one of a series of Tranche A Senior PIK Notes (herein called the “Notes”)
issued pursuant to a Note Purchase Agreement, dated as of December 23, 2003 (as
amended through the date hereof and as further amended from time to time, the
“Agreement”), between the Company, on the one hand, and the Noteholders named in
the Purchaser Schedule attached thereto and each affiliate of any Noteholder
which becomes party thereto, on the other hand, and is entitled to the benefits
thereof.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This Note
is a registered Note and, as provided in the Agreement, upon surrender of this
Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such
holder’s attorney duly authorized in writing, a new Note for a like principal
amount will be issued to, and registered in the name of, the
transferee.  Prior to due presentment for registration of transfer,
the Company may treat the person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment and for all other purposes,
and the Company shall not be affected by any notice to the
contrary.

     

    This Note
is subject to optional prepayment, in whole or from time to time in part, on the
terms specified in the Agreement.

     

    The
Company and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor or default, notice of
intent to accelerate, notice of acceleration (except to the extent required in
the Agreement), protest and diligence in collecting in connection with this
Note, whether now or hereafter required by applicable law.

     

    In case
an Event of Default shall occur and be continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner and with the
effect provided in the Agreement.

     

    Capitalized
terms used herein which are defined in the Agreement and not otherwise defined
herein shall have the meanings as defined in the Agreement.

     

    THIS
NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE (EXCLUDING ANY CONFLICTS
OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO BE CONSTRUED OR ENFORCED
IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).

     

    
      
        
          	 	
                  SCHAWK,
      INC.

                	 
	 	 	 	 
	
                   

                	
                  By:
      

                	 	 
	 	
                  Title: 

                	 	 
	 	 	 	 
	 	 	 	 


        

      

    

     

     

    
      
        
        

      

      
        Exhibit
A-1

        
          

        

      

      
        
        

      

    

     

    Exhibit
1.3

     

    [FORM OF
TRANCHE B PIK NOTE]

     

     

     

    SCHAWK,
INC.

     

     

     

    8.98%
TRANCHE B SENIOR PIK NOTE

     

    
       

      
        
          	
                  No.
      _____

                	
                  [Date]

                
	
                  $________

                	
                  PPN:
      _________

                


        

         

      

    

    FOR VALUE
RECEIVED, the undersigned, Schawk, Inc., a corporation organized and existing
under the laws of the State of Delaware (herein called the “Company”), hereby
promises to pay to ______________________, or registered assigns, the principal
sum of (i) _______________ DOLLARS, plus (ii) the amount of interest on this
Note added to the principal of this Note pursuant to Section 1.3 of the
Agreement plus (iii) all Make-Whole Amounts (as defined in the Agreement) added
to the principal of this Note pursuant to the Agreement, on the PIK Note
Maturity Date (as defined in the Agreement), with interest (computed on the
basis of a 360-day year—30-day month) (a) on the unpaid balance thereof at the
rate of 8.98% per annum (or during any period when an Event of Default shall be
in existence, at the election of the Required Holder(s) of the Tranche B PIK
Notes, at the Default Rate (as defined below)) from the date hereof, payable
quarterly on the 28th day of
April, July, October and January in each year, commencing with the April 28,
July 28, October 28, or January 28 next succeeding the date hereof, until the
principal hereof shall have become due and payable, and (b) on any overdue
payment (including any overdue prepayment) of principal, any overdue payment of
Make-Whole Amount and, to the extent permitted by applicable law, any overdue
payment of interest, payable quarterly as aforesaid (or, at the option of the
registered holder hereof, on demand), at a rate per annum from time to time
equal to the Default Rate.  The “Default Rate” shall mean a rate per
annum from time to time equal to the greater of (i) 10.98% or (ii) 2.00% over
the rate of interest publicly announced by The Bank of New York from time to
time in New York City as its Prime Rate.

     

    Except to
the extent payment of interest and Make-Whole Amount is payable by adding such
payments to the principal of this Note pursuant to the terms of the Agreement,
payments of principal of, interest on and any Make-Whole Amount payable with
respect to this Note are to be made at the principal office of Banc of America
Securities LLC in New York City or at such other place as the holder hereof
shall designate to the Company in writing, in lawful money of the United States
of America.

     

    This Note
is one of a series of Tranche B Senior PIK Notes (herein called the “Notes”)
issued pursuant to a Note Purchase Agreement, dated as of December 23, 2003 (as
amended through the date hereof and as further amended from time to time, the
“Agreement”), between the Company, on the one hand, and the Noteholders named in
the Purchaser Schedule attached thereto and each affiliate of any Noteholder
which becomes party thereto, on the other hand, and is entitled to the benefits
thereof.

     

     

    
      
        
        

      

      
        
        

        
          

        

      

      
        
        

      

    

     

    This Note
is a registered Note and, as provided in the Agreement, upon surrender of this
Note for registration of transfer, duly endorsed, or accompanied by a written
instrument of transfer duly executed, by the registered holder hereof or such
holder’s attorney duly authorized in writing, a new Note for a like principal
amount will be issued to, and registered in the name of, the
transferee.  Prior to due presentment for registration of transfer,
the Company may treat the person in whose name this Note is registered as the
owner hereof for the purpose of receiving payment and for all other purposes,
and the Company shall not be affected by any notice to the
contrary.

     

    This Note
is subject to optional prepayment, in whole or from time to time in part, on the
terms specified in the Agreement.

     

    The
Company and any and all endorsers, guarantors and sureties severally waive
grace, demand, presentment for payment, notice of dishonor or default, notice of
intent to accelerate, notice of acceleration (except to the extent required in
the Agreement), protest and diligence in collecting in connection with this
Note, whether now or hereafter required by applicable law.

     

    In case
an Event of Default shall occur and be continuing, the principal of this Note
may be declared or otherwise become due and payable in the manner and with the
effect provided in the Agreement.

     

    Capitalized
terms used herein which are defined in the Agreement and not otherwise defined
herein shall have the meanings as defined in the Agreement.

     

    THIS
NOTE IS INTENDED TO BE PERFORMED IN THE STATE OF NEW YORK AND SHALL BE CONSTRUED
AND ENFORCED IN ACCORDANCE WITH THE LAW OF SUCH STATE (EXCLUDING ANY CONFLICTS
OF LAW RULES WHICH WOULD OTHERWISE CAUSE THIS NOTE TO BE CONSTRUED OR ENFORCED
IN ACCORDANCE WITH THE LAWS OF ANY OTHER JURISDICTION).

     

    
       

      
        
          
            	 	
                    SCHAWK,
      INC.

                  	 
	 	 	 	 
	
                     

                  	
                    By:
      

                  	 	 
	 	
                    Title: 

                  	 	 
	 	 	 	 
	 	 	 	 


          

        

      

       

       

      
        
          
          

        

        
          Exhibit
A-2