Exhibit
10.13


 


Published CUSIP
Number: 29274PAA0


 





 




 





SECOND-LIEN CREDIT
AGREEMENT


 


among



ENERSYS,


 


ENERSYS CAPITAL
INC.,


 


VARIOUS LENDING
INSTITUTIONS,


 


BANK OF AMERICA,
N.A., 

as Administrative Agent,


 


MORGAN STANLEY
SENIOR FUNDING, INC.,

as Syndication Agent,


 


and


 


LEHMAN COMMERCIAL
PAPER INC., 

as Documentation Agent


 












 


Dated as of
March 17, 2004


 












 


	
  BANC OF AMERICA SECURITIES LLC,

  	
   

  	
  MORGAN STANLEY SENIOR FUNDING, INC.,

  
	
  as
  Joint Lead Arranger and Joint Book Manager

  	
   

  	
  as Joint Lead Arranger
  and Joint Book Manager

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  	
   

  	
  

  
	
   

  	
   

  	
   

  
	
  

  



 

















 


TABLE OF CONTENTS


 


	
  SECTION 1.

  	
   

  	
  AMOUNT AND TERMS OF CREDIT

  	
   

  
	
   

  	
  1.01.

  	
  Commitments

  	
   

  
	
   

  	
  1.02.

  	
  Minimum Borrowing
  Amounts, etc.

  	
   

  
	
   

  	
  1.03.

  	
  Notice of Borrowing

  	
   

  
	
   

  	
  1.04.

  	
  Disbursement of Funds

  	
   

  
	
   

  	
  1.05.

  	
  Second-Lien Loan Notes

  	
   

  
	
   

  	
  1.06.

  	
  Conversions

  	
   

  
	
   

  	
  1.07.

  	
  Pro Rata Borrowings

  	
   

  
	
   

  	
  1.08.

  	
  Interest

  	
   

  
	
   

  	
  1.09.

  	
  Interest Periods

  	
   

  
	
   

  	
  1.10.

  	
  Increased Costs;
  Illegality; etc.

  	
   

  
	
   

  	
  1.11.

  	
  Compensation

  	
   

  
	
   

  	
  1.12.

  	
  Change of Lending Office

  	
   

  
	
   

  	
  1.13.

  	
  Replacement of Lenders

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 2.

  	
  RESERVED

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 3.

  	
  FEES; COMMITMENTS

  	
   

  
	
   

  	
  3.01.

  	
  Fees

  	
   

  
	
   

  	
  3.02.

  	
  Reserved

  	
   

  
	
   

  	
  3.03.

  	
  Mandatory Reduction
  of Commitments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 4.

  	
  PAYMENTS

  	
   

  
	
   

  	
  4.01.

  	
  Voluntary Prepayments

  	
   

  
	
   

  	
  4.02.

  	
  Mandatory
  Repayments and Repurchases

  	
   

  
	
   

  	
  4.03.

  	
  Method and Place of Payment

  	
   

  
	
   

  	
  4.04.

  	
  Net Payments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 5.

  	
  CONDITIONS
  PRECEDENT TO INITIAL CREDIT EVENTS

  	
   

  
	
   

  	
  5.01.

  	
  Execution
  of Agreement; Second-Lien Loan Notes

  	
   

  
	
   

  	
  5.02.

  	
  Officer’s Certificate

  	
   

  
	
   

  	
  5.03.

  	
  Opinions of Counsel

  	
   

  
	
   

  	
  5.04.

  	
  Corporate Documents;
  Proceedings

  	
   

  
	
   

  	
  5.05.

  	
  Adverse Change, etc.

  	
   

  
	
   

  	
  5.06.

  	
  Litigation

  	
   

  
	
   

  	
  5.07.

  	
  Approvals

  	
   

  
	
   

  	
  5.08.

  	
  Recapitalization

  	
   

  
	
   

  	
  5.09.

  	
  First-Lien Credit Agreement

  	
   

  
	
   

  	
  5.10.

  	
  Intercreditor Agreement

  	
   

  
	
   

  	
  5.11.

  	
  Subsidiaries Guaranties

  	
   

  
	
   

  	
  5.12.

  	
  Security Documents; etc.

  	
   

  



 


i

















 


	
   

  	
  5.13.

  	
  Employee
  Benefit Plans; Shareholders’ Agreements; Management Agreements; Collective
  Bargaining Agreements; Existing Indebtedness Agreements; Tax Allocation
  Agreements

  	
   

  
	
   

  	
  5.14.

  	
  Solvency
  Certificate; Insurance Certificates

  	
   

  
	
   

  	
  5.15.

  	
  Financial
  Statements; Pro Forma Financial Statements; Projections

  	
   

  
	
   

  	
  5.16.

  	
  Payment of Fees

  	
   

  
	
   

  	
  5.17.

  	
  No Default;
  Representations and Warranties

  	
   

  
	
   

  	
  5.18.

  	
  Notice of Borrowing

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 6.

  	
  RESERVED

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 7.

  	
  REPRESENTATIONS AND
  WARRANTIES

  	
   

  
	
   

  	
  7.01.

  	
  Company Status

  	
   

  
	
   

  	
  7.02.

  	
  Company Power and Authority

  	
   

  
	
   

  	
  7.03.

  	
  No Violation

  	
   

  
	
   

  	
  7.04.

  	
  Litigation

  	
   

  
	
   

  	
  7.05.

  	
  Use of Proceeds;
  Margin Regulations

  	
   

  
	
   

  	
  7.06.

  	
  Governmental Approvals

  	
   

  
	
   

  	
  7.07.

  	
  Investment Company Act

  	
   

  
	
   

  	
  7.08.

  	
  Public Utility
  Holding Company Act

  	
   

  
	
   

  	
  7.09.

  	
  True and Complete
  Disclosure

  	
   

  
	
   

  	
  7.10.

  	
  Financial
  Condition; Financial Statements

  	
   

  
	
   

  	
  7.11.

  	
  Security Interests

  	
   

  
	
   

  	
  7.12.

  	
  Compliance with ERISA

  	
   

  
	
   

  	
  7.13.

  	
  Capitalization

  	
   

  
	
   

  	
  7.14.

  	
  Subsidiaries

  	
   

  
	
   

  	
  7.15.

  	
  Intellectual Property, etc.

  	
   

  
	
   

  	
  7.16.

  	
  Compliance
  with Statutes; Agreements, etc.

  	
   

  
	
   

  	
  7.17.

  	
  Environmental Matters

  	
   

  
	
   

  	
  7.18.

  	
  Properties

  	
   

  
	
   

  	
  7.19.

  	
  Labor Relations

  	
   

  
	
   

  	
  7.20.

  	
  Tax Returns and Payments

  	
   

  
	
   

  	
  7.21.

  	
  Existing Indebtedness

  	
   

  
	
   

  	
  7.22.

  	
  Insurance

  	
   

  
	
   

  	
  7.23.

  	
  Transaction

  	
   

  
	
   

  	
  7.24.

  	
  Special Purpose Corporation

  	
   

  
	
   

  	
  7.25.

  	
  Subordination

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 8.

  	
  AFFIRMATIVE COVENANTS

  	
   

  
	
   

  	
  8.01.

  	
  Information Covenants

  	
   

  
	
   

  	
  8.02.

  	
  Books, Records and
  Inspections

  	
   

  
	
   

  	
  8.03.

  	
  Insurance

  	
   

  
	
   

  	
  8.04.

  	
  Payment of Taxes

  	
   

  
	
   

  	
  8.05.

  	
  Corporate Franchises

  	
   

  
	
   

  	
  8.06.

  	
  Compliance with
  Statutes; etc.

  	
   

  
	
   

  	
  8.07.

  	
  Compliance with
  Environmental Laws

  	
   

  
	
   

  	
  8.08.

  	
  ERISA

  	
   

  



 


ii

















 


	
   

  	
  8.09.

  	
  Good Repair

  	
   

  
	
   

  	
  8.10.

  	
  End of Fiscal
  Years; Fiscal Quarters

  	
   

  
	
   

  	
  8.11.

  	
  Additional
  Security; Further Assurances

  	
   

  
	
   

  	
  8.12.

  	
  Use of Proceeds

  	
   

  
	
   

  	
  8.13.

  	
  Ownership of Subsidiaries

  	
   

  
	
   

  	
  8.14.

  	
  Permitted Acquisitions

  	
   

  
	
   

  	
  8.15.

  	
  Maintenance of
  Company Separateness

  	
   

  
	
   

  	
  8.16.

  	
  Interest Rate Protection

  	
   

  
	
   

  	
  8.17.

  	
  Performance of Obligations

  	
   

  
	
   

  	
  8.18.

  	
  Margin Regulations

  	
   

  
	
   

  	
  8.19.

  	
  Accounts Receivable
  Facility Transaction

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 9.

  	
  NEGATIVE COVENANTS

  	
   

  
	
   

  	
  9.01.

  	
  Changes in Business; etc.

  	
   

  
	
   

  	
  9.02.

  	
  Consolidation;
  Merger; Sale or Purchase of Assets; etc.

  	
   

  
	
   

  	
  9.03.

  	
  Liens

  	
   

  
	
   

  	
  9.04.

  	
  Indebtedness

  	
   

  
	
   

  	
  9.05.

  	
  Advances; Investments;
  Loans

  	
   

  
	
   

  	
  9.06.

  	
  Dividends; etc.

  	
   

  
	
   

  	
  9.07.

  	
  Transactions with
  Affiliates

  	
   

  
	
   

  	
  9.08.

  	
  Consolidated
  Interest Coverage Ratio

  	
   

  
	
   

  	
  9.09.

  	
  Leverage Ratio

  	
   

  
	
   

  	
  9.10.

  	
  Reserved

  	
   

  
	
   

  	
  9.11.

  	
  Capital Expenditures

  	
   

  
	
   

  	
  9.12.

  	
  Limitation
  on Modifications of Certain Other Agreements; etc.

  	
   

  
	
   

  	
  9.13.

  	
  Limitation
  on Issuance of Capital Stock and Other Equity Interests

  	
   

  
	
   

  	
  9.14.

  	
  Limitation
  on Certain Restrictions on Subsidiaries

  	
   

  
	
   

  	
  9.15.

  	
  Limitation
  on the Creation of Subsidiaries and Joint Ventures

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 10.

  	
  EVENTS OF DEFAULT

  	
   

  
	
   

  	
  10.01.

  	
  Payments

  	
   

  
	
   

  	
  10.02.

  	
  Representations, etc.

  	
   

  
	
   

  	
  10.03.

  	
  Covenants

  	
   

  
	
   

  	
  10.04.

  	
  Default Under Other Agreements

  	
   

  
	
   

  	
  10.05.

  	
  Bankruptcy, etc.

  	
   

  
	
   

  	
  10.06.

  	
  ERISA

  	
   

  
	
   

  	
  10.07.

  	
  Security Documents

  	
   

  
	
   

  	
  10.08.

  	
  Guaranty

  	
   

  
	
   

  	
  10.09.

  	
  Judgments

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 11.

  	
  DEFINITIONS

  	
   

  
	
   

  	
   

  	
   

  
	
  SECTION 12.

  	
  THE AGENTS

  	
   

  
	
   

  	
  12.01.

  	
  Appointment

  	
   

  
	
   

  	
  12.02.

  	
  Delegation of Duties

  	
   

  
	
   

  	
  12.03.

  	
  Liability of Agents

  	
   

  
	
   

  	
  12.04.

  	
  Reliance by
  Administrative Agent

  	
   

  



 


iii

















 


	
   

  	
  12.05.

  	
  Notice of Default

  	
   

  
	
   

  	
  12.06.

  	
  Credit
  Decision; Disclosure of Information by the Agents

  	
   

  
	
   

  	
  12.07.

  	
  Indemnification

  	
   

  
	
   

  	
  12.08.

  	
  Agents in their
  Individual Capacities

  	
   

  
	
   

  	
  12.09.

  	
  Successor Agents

  	
   

  
	
   

  	
  12.10.

  	
  Administrative
  Agent May File Proofs of Claim

  	
   

  
	
   

  	
  12.11.

  	
  Collateral and Guaranty
  Matters

  	
   

  
	
   

  	
  12.12.

  	
  Other Agents;
  Arrangers and Managers

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 13.

  	
  MISCELLANEOUS

  	
   

  
	
   

  	
  13.01.

  	
  Amendment or Waiver

  	
   

  
	
   

  	
  13.02.

  	
  Notices
  and Other Communications; Facsimile Copies

  	
   

  
	
   

  	
  13.03.

  	
  No Waiver; Cumulative
  Remedies

  	
   

  
	
   

  	
  13.04.

  	
  Attorney Costs,
  Expenses and Taxes

  	
   

  
	
   

  	
  13.05.

  	
  Indemnification by the
  Borrower

  	
   

  
	
   

  	
  13.06.

  	
  Payments Set Aside

  	
   

  
	
   

  	
  13.07.

  	
  Successors and Assigns

  	
   

  
	
   

  	
  13.08.

  	
  Confidentiality

  	
   

  
	
   

  	
  13.09.

  	
  Set-off

  	
   

  
	
   

  	
  13.10.

  	
  Interest Rate Limitation

  	
   

  
	
   

  	
  13.11.

  	
  Counterparts

  	
   

  
	
   

  	
  13.12.

  	
  Integration

  	
   

  
	
   

  	
  13.13.

  	
  Survival

  	
   

  
	
   

  	
  13.14.

  	
  Severability

  	
   

  
	
   

  	
  13.15.

  	
  Governing Law

  	
   

  
	
   

  	
  13.16.

  	
  Waiver of Right to
  Trial by Jury

  	
   

  
	
   

  	
  13.17.

  	
  USA PATRIOT Act Notice

  	
   

  
	
   

  	
  13.18.

  	
  Limitation
  on Additional Amounts; Cash Collateral, etc.

  	
   

  
	
   

  	
  13.19.

  	
  Payments Pro
  Rata; Sharing of Payments

  	
   

  
	
   

  	
  13.20.

  	
  Judgment Currency

  	
   

  
	
   

  	
  13.21.

  	
  Calculations; Computations

  	
   

  
	
   

  	
  13.22.

  	
  Effectiveness

  	
   

  
	
   

  	
  13.23.

  	
  Headings Descriptive

  	
   

  
	
   

  	
  13.24.

  	
  Domicile
  of Second-Lien Loans and Commitments

  	
   

  
	
   

  	
  13.25.

  	
  Special
  Provisions Regarding Pledges of Equity Interests in, and Promissory Notes
  Owed by, Foreign Persons

  	
   

  
	
   

  	
  13.26.

  	
  Post-Closing Actions

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  SECTION 14.

  	
  HOLDINGS GUARANTY.

  	
   

  
	
   

  	
  14.01.

  	
  Holdings Guaranty

  	
   

  
	
   

  	
  14.02.

  	
  Bankruptcy

  	
   

  
	
   

  	
  14.03.

  	
  Nature of Liability

  	
   

  
	
   

  	
  14.04.

  	
  Independent Obligation

  	
   

  
	
   

  	
  14.05.

  	
  Authorization

  	
   

  
	
   

  	
  14.06.

  	
  Reliance

  	
   

  
	
   

  	
  14.07.

  	
  Subordination

  	
   

  
	
   

  	
  14.08.

  	
  Waiver

  	
   

  
	
   

  	
  14.09.

  	
  Payments

  	
   

  



 


iv

















 


	
  SCHEDULE I

  	
  List of Lenders and
  Commitments

  	
   

  
	
  SCHEDULE II

  	
  Lender Addresses

  	
   

  
	
  SCHEDULE III

  	
  Real Properties

  	
   

  
	
  SCHEDULE IV

  	
  Existing
  Indebtedness/Existing Overdraft Facilities

  	
   

  
	
  SCHEDULE V

  	
  Pension Plans

  	
   

  
	
  SCHEDULE VI

  	
  Existing Investments

  	
   

  
	
  SCHEDULE VII

  	
  Subsidiaries

  	
   

  
	
  SCHEDULE VIII

  	
  Insurance

  	
   

  
	
  SCHEDULE IX

  	
  Existing Liens

  	
   

  
	
  SCHEDULE X

  	
  Capitalization

  	
   

  
	
  SCHEDULE XI

  	
  Post-Closing Matters

  	
   

  
	
  SCHEDULE XII

  	
  [Reserved]

  	
   

  
	
  SCHEDULE XIII

  	
  Designated Asset Sales

  	
   

  
	
  SCHEDULE XIV

  	
  Existing Letters of
  Credit

  	
   

  
	
  SCHEDULE XV

  	
  EBITDA Add-Backs

  	
   

  
	
   

  	
   

  	
   

  
	
  EXHIBIT A-1

  	
  -

  	
  Form of Notice of
  Borrowing

  	
   

  
	
  EXHIBIT A-2

  	
  -

  	
  Form of Notice of
  Conversion/Continuation

  	
   

  
	
  EXHIBIT B

  	
  -

  	
  Form of Second-Lien
  Loan Note

  	
   

  
	
  EXHIBIT C

  	
  -

  	
  Reserved

  	
   

  
	
  EXHIBIT D

  	
  -

  	
  Form of
  Section 4.04(b)(ii) Certificate

  	
   

  
	
  EXHIBIT E

  	
  -

  	
  Form of Opinion of
  Gibson, Dunn & Crutcher LLP

  	
   

  
	
  EXHIBIT F

  	
  -

  	
  Form of Officers’
  Certificate

  	
   

  
	
  EXHIBIT G

  	
  -

  	
  Form of Subsidiaries
  Guaranty

  	
   

  
	
  EXHIBIT H

  	
  -

  	
  Form of Pledge
  Agreement

  	
   

  
	
  EXHIBIT I

  	
  -

  	
  Form of Security
  Agreement

  	
   

  
	
  EXHIBIT J

  	
  -

  	
  Form of Solvency
  Certificate

  	
   

  
	
  EXHIBIT K

  	
  -

  	
  Form of Assignment and
  Assumption Agreement

  	
   

  
	
  EXHIBIT L

  	
  -

  	
  Form of Intercompany
  Note

  	
   

  
	
  EXHIBIT M

  	
  -

  	
  Form of Shareholder
  Subordinated Note

  	
   

  
	
  EXHIBIT N

  	
  -

  	
  Form of Intercreditor
  Agreement

  	
   

  



 


v

















 


CREDIT AGREEMENT, dated
as of March 17, 2004, among ENERSYS, a Delaware corporation (“Holdings”),
ENERSYS CAPITAL INC., a Delaware corporation (the “Borrower”), the
Lenders from time to time party hereto, Bank of America, N.A., as
Administrative Agent (in such capacity, the “Administrative Agent”),
Morgan Stanley Senior Funding, Inc., as Syndication Agent (in such capacity,
the “Syndication Agent”), and Lehman Commercial Paper Inc., as
Documentation Agent (in such capacity, the “Documentation Agent”).  Unless otherwise defined herein, all
capitalized terms used herein and defined in Section 11 are used herein as
so defined.


 


W
I  T  N  E  S  S  E  T  H:


 


WHEREAS, subject to and
upon the terms and conditions herein set forth, the Lenders are willing to make
available to the Borrower the credit facility provided for herein;


 


NOW, THEREFORE, IT IS
AGREED:


 


SECTION 1. 
Amount and Terms of Credit.


 


1.01.  Commitments.  Subject to and upon the terms and conditions
set forth herein, each Lender with a Commitment severally agrees to make a term
loan (each, a “Second-Lien Loan” and, collectively, the “Second-Lien
Loans”) to the Borrower, which Second-Lien Loans:


 


(i)                                     shall
be incurred by the Borrower pursuant to a single drawing on the Initial
Borrowing Date for the purposes described in Section 7.05(a);


 


(ii)                                  shall
be denominated in U.S. Dollars;


 


(iii)                               except
as hereafter provided, shall, at the option of the Borrower, be incurred and
maintained as, and/or converted into, Base Rate Loans or Eurodollar Loans, provided
that (x) except as otherwise specifically provided in Section 1.10(b), all
Second-Lien Loans made as part of the same Borrowing shall at all times consist
of Second-Lien Loans of the same Type and (y) unless the Administrative Agent
has determined that the Syndication Date has occurred (at which time this
clause (y) shall no longer be applicable), (I) Second-Lien Loans may not be
incurred or maintained as Eurodollar Loans on or prior to the fourth Business
Day following the Initial Borrowing Date and (II) each Borrowing of Second-Lien
Loans to be incurred or maintained as Eurodollar Loans after such fourth
Business Day following the Initial Borrowing Date shall have an Interest Period
of one-week; and


 


(iv)  shall be made by each Lender in that initial
aggregate principal amount as is equal to the Commitment of such Lender on the
Initial Borrowing Date (before giving effect to the termination thereof on such
date pursuant to Section 3.03(b)).


 


Once repaid, Second-Lien
Loans incurred hereunder may not be reborrowed.


 


1

















 


1.02.  Minimum Borrowing Amounts, etc.  The aggregate principal amount of each
Borrowing of Second-Lien Loans shall not be less than the Minimum Borrowing
Amount.  More than one Borrowing may be
incurred on any day, provided that at no time shall there be outstanding
more than five Borrowings of Eurodollar Loans.


 


1.03.  Notice of Borrowing.  Whenever the Borrower desires to make a
Borrowing of Second-Lien Loans hereunder, it shall give the Administrative
Agent at its Notice Office, prior to 12:00 Noon (New York time), at least three
Business Days’ prior written notice (or telephonic notice promptly confirmed in
writing) of each Borrowing of Eurodollar Loans and at least one Business Day’s
prior written notice (or telephonic notice promptly confirmed in writing) of
each Borrowing of Base Rate Loans to be made hereunder.  Each such written notice or written
confirmation of telephonic notice (each, a “Notice of Borrowing”) shall,
except as otherwise expressly provided in Section 1.10, be irrevocable,
and, in the case of each written notice and each confirmation of telephonic
notice, shall be given by an Authorized Officer of the Borrower in the form of
Exhibit A, appropriately completed to specify: (i) the aggregate principal
amount of the Second-Lien Loans to be made pursuant to such Borrowing, (ii) the
date of such Borrowing (which shall be a Business Day) and (iii) whether the
respective Borrowing shall consist of Base Rate Loans or, to the extent
permitted hereunder, Eurodollar Loans and, if Eurodollar Loans, the Interest
Period to be initially applicable thereto. 
The Administrative Agent shall promptly give each Lender which is
required to make Second-Lien Loans written notice (or telephonic notice
promptly confirmed in writing) of each proposed Borrowing, of such Lender’s
proportionate share thereof and of the other matters required by the
immediately preceding sentence to be specified in the Notice of Borrowing.


 


1.04.  Disbursement of Funds.  (a) 
Not later than 1:00 P.M. (New York time) on the date specified in each
Notice of Borrowing, each Lender with a Commitment will make available its pro
rata share (determined in accordance with Section 1.07), if any, of
each Borrowing requested to be made on such date in the manner provided
below.  All amounts shall be made
available to the Administrative Agent in U.S. Dollars and in immediately
available funds at the Payment Office and the Administrative Agent promptly
will make available to the Borrower by depositing to its account at the Payment
Office the aggregate of the amounts so made available in the type of funds
received.  Unless the Administrative
Agent shall have been notified by any Lender prior to the date of Borrowing
that such Lender does not intend to make available to the Administrative Agent
its portion of the Borrowing or Borrowings to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date of Borrowing, and the Administrative
Agent, in reliance upon such assumption, may (in its sole discretion and
without any obligation to do so) make available to the Borrower a corresponding
amount.  If such corresponding amount is
not in fact made available to the Administrative Agent by such Lender and the
Administrative Agent has made available same to the Borrower, the
Administrative Agent shall be entitled to recover such corresponding amount on
demand from such Lender.  If such Lender
does not pay such corresponding amount forthwith upon the Administrative
Agent’s demand therefor, the Administrative Agent shall promptly notify the
Borrower, and the Borrower shall immediately pay such corresponding amount to
the Administrative Agent.  The
Administrative Agent shall also be entitled to recover on demand from such
Lender or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount was made
available by the Administrative Agent to the Borrower to the date such


 


2

















 


corresponding amount is
recovered by the Administrative Agent, at a rate per annum equal to (x) if paid
by such Lender, the overnight Federal Funds Rate or (y) if paid by the
Borrower, the then applicable rate of interest, calculated in accordance with
Section 1.08.


 


(b)                                 Nothing
in this Agreement shall be deemed to relieve any Lender from its obligation to
fulfill its commitments hereunder or to prejudice any rights which the Borrower
may have against any Lender as a result of any default by such Lender
hereunder.


 


1.05.  Second-Lien Loan Notes.  (a) 
The Borrower’s obligation to pay the principal of, and interest on, all
the Second-Lien Loans made to it by each Lender shall be set forth on the
Register maintained by the Administrative Agent pursuant to
Section 13.07(c) and, subject to the provisions of Section 1.05(d),
shall be evidenced by a promissory note substantially in the form of Exhibit B
with blanks appropriately completed in conformity herewith (each, a “Second-Lien
Loan Note” and, collectively, the “Second-Lien Loan Notes”).


 


(b)                                 The
Second-Lien Loan Note issued to each Lender with a Commitment shall (i) be
executed by the Borrower, (ii) be payable to such Lender or its registered
assigns and be dated the Initial Borrowing Date (or, in the case of any
Second-Lien Loan Note issued after the Initial Borrowing Date, the date of
issuance thereof), (iii) be in a stated principal amount equal to the
Commitment of such Lender on the Initial Borrowing Date (or, in the case of any
Second-Lien Loan Note issued after the Initial Borrowing Date, in a stated
principal amount equal to the outstanding principal amount of the Second-Lien
Loan of such Lender on the date of the issuance thereof) and be payable in the
principal amount of Second-Lien Loans evidenced thereby from time to time, (iv)
mature on the Maturity Date, (v) bear interest as provided in the appropriate
clause of Section 1.08 in respect of the Base Rate Loans and Eurodollar
Loans, as the case may be, evidenced thereby, (vi) be subject to voluntary
repayment as provided in Section 4.01 and mandatory repayment as provided
in Section 4.02 and (vii) be entitled to the benefits of this Agreement
and the other Credit Documents.


 


(c)                                  Each
Lender will note on its internal records the amount of each Second-Lien Loan
made by it and each payment in respect thereof and will prior to any transfer
of any of its Second-Lien Loan Notes endorse on the reverse side thereof the
outstanding principal amount of Second-Lien Loans evidenced thereby.  Failure to make any such notation or any
error in such notation shall not affect the Borrower’s obligations in respect
of such Second-Lien Loans.


 


(d)                                 Notwithstanding
anything to the contrary contained above or elsewhere in this Agreement,
Second-Lien Loan Notes shall only be delivered to Lenders which at any time
specifically request the delivery of such Second-Lien Loan Notes.  No failure of any Lender to request or
obtain a Second-Lien Loan Note evidencing its Second-Lien Loans to the Borrower
shall affect or in any manner impair the obligations of the Borrower to pay the
Second-Lien Loans (and all related Obligations) which would otherwise be
evidenced thereby in accordance with the requirements of this Agreement, and
shall not in any way affect the security or guaranties therefor provided
pursuant to the various Credit Documents. 
Any Lender which does not have a Second-Lien Loan Note evidencing its
outstanding Second-Lien Loans shall in no event be required to make the notations
otherwise described in preceding clause (e). 
At any time when any Lender requests the delivery of a Second-Lien Loan
Note to evidence any of its Second-Lien Loans, the Borrower shall promptly
execute and deliver to the respective Lender


 


3

















 


the requested Second-Lien
Loan Note in the appropriate amount or amounts to evidence such Second-Lien
Loans.


 


1.06.  Conversions.  The Borrower shall have the option to
convert on any Business Day occurring on or after the Initial Borrowing Date,
all or a portion at least equal to the applicable Minimum Borrowing Amount of
the outstanding principal amount of Second-Lien Loans made pursuant to one or
more Borrowings of one or more Types of Second-Lien Loans into a Borrowing or
Borrowings of another Type of Second-Lien Loan; provided that (i) except
as otherwise provided in Section 1.10(b) or unless the Borrower pays all
breakage costs and other amounts owing to each Lender pursuant to
Section 1.11 concurrently with any such conversion, Eurodollar Loans may
be converted into Base Rate Loans only on the last day of an Interest Period
applicable to the Second-Lien Loans being converted, and no partial conversion
of a Borrowing of Eurodollar Loans shall reduce the outstanding principal
amount of the Eurodollar Loans made pursuant to such Borrowing to less than the
Minimum Borrowing Amount applicable thereto, (ii) unless the Required Lenders
otherwise agree, Base Rate Loans may only be converted into Eurodollar Loans if
no Default or Event of Default is in existence on the date of the conversion,
(iii) unless the Administrative Agent has determined that the Syndication Date
has occurred (at which time this clause (iii) shall no longer be applicable), a
conversion of a Base Rate Loan into a Eurodollar Loan may only be made (x)
after the fourth Business Day following the Initial Borrowing Date and (y) if
the Interest Period of the Eurodollar Loan into which such Base Rate Loan is
converted is one week and (iv) Borrowings of Eurodollar Loans resulting from
this Section 1.06 shall be limited in number as provided in
Section 1.02.  Each such conversion
shall be effected by the Borrower by giving the Administrative Agent at its
Notice Office, prior to 12:00 Noon (New York time), at least three Business
Days’ (or one Business Day’s in the case of a conversion into Base Rate Loans)
prior written notice (or telephonic notice promptly confirmed in writing)
(each, a “Notice of Conversion/Continuation”) in the form of Exhibit
A-2, appropriately completed to specify the Second-Lien Loans to be so
converted, the Borrowing(s) pursuant to which the Second-Lien Loans were made
and, if to be converted into a Borrowing of Eurodollar Loans, the Interest
Period to be initially applicable thereto. 
The Administrative Agent shall give each Lender prompt notice of any
such proposed conversion affecting any of its Second-Lien Loans.  Upon any such conversion, the proceeds
thereof will be deemed to be applied directly on the day of such conversion to
prepay the outstanding principal amount of the Second-Lien Loans being
converted.


 


1.07.  Pro Rata Borrowings.  All Borrowings of Second-Lien Loans under
this Agreement shall be incurred by the Borrower from the Lenders pro  rata
on the basis of such Lenders’ Commitments as in effect on the date of the respective
Borrowing.  It is understood that no
Lender shall be responsible for any default by any other Lender of its
obligation to make Second-Lien Loans hereunder and that each Lender shall be
obligated to make the Second-Lien Loans to be made by it hereunder, regardless
of the failure of any other Lender to fulfill its commitments hereunder.


 


1.08.  Interest.  (a)  The unpaid principal
amount of each Base Rate Loan shall bear interest from the date of the
Borrowing thereof until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Base Rate Loan and (ii) the conversion of
such Base Rate


 


4

















 


Loan to a Eurodollar Loan
pursuant to Section 1.06, at a rate per annum which shall at all times be
the relevant Applicable Margin plus the Base Rate, each as in effect
from time to time.


 


(b)                                 The
unpaid principal amount of each Eurodollar Loan shall bear interest from the
date of the Borrowing thereof until the earlier of (i) the maturity (whether by
acceleration or otherwise) of such Eurodollar Loan and (ii) the conversion of
such Eurodollar Loan to a Base Rate Loan pursuant to Section 1.06, 1.09 or
1.10(b), as applicable, at a rate per annum which shall at all times be the
relevant Applicable Margin plus the Eurodollar Rate for such Interest
Period, each as in effect from time to time.


 


(c)                                  Overdue
principal and, to the extent permitted by law, overdue interest in respect of
each Loan shall bear interest at a rate per annum equal to the greater of (x)
the rate which is 2% in excess of the rate borne by such Second-Lien Loans
immediately prior to the respective payment default and (y) the rate which is
2% in excess of the rate otherwise applicable to Base Rate Loans from time to
time.  Interest which accrues under this
Section 1.08(c) shall be payable on demand.


 


(d)                                 Interest
shall accrue from and including the date of any Borrowing to but excluding the
date of any repayment thereof and shall be payable (i) in respect of each Base
Rate Loan, quarterly in arrears on each Quarterly Payment Date, (ii) in respect
of each Eurodollar Loan, on (x) the date of any conversion into a Base Rate
Loan pursuant to Section 1.06, 1.09 or 1.10(b), as applicable (on the
amount converted) and (y) the last day of each Interest Period applicable
thereto and, in the case of an Interest Period in excess of three months, on
each date occurring at three month intervals after the first day of such
Interest Period and (iii) in respect of each Loan, on (x) the date of any prepayment
or repayment thereof (on the amount prepaid or repaid), (y) at maturity
(whether by acceleration or otherwise) and (z) after such maturity, on demand.


 


(e)                                  All
computations of interest hereunder shall be made in accordance with
Section 13.21(b).


 


(f)                                    Upon
each Interest Determination Date, the Administrative Agent shall determine the
Eurodollar Rate for the respective Interest Period or Interest Periods and
shall promptly notify the Borrower and the Lenders thereof.  Each such determination shall, absent
manifest error, be final and conclusive and binding on all parties hereto.


 


1.09.  Interest Periods.  At the time the Borrower gives a Notice of
Borrowing or Notice of Conversion/Continuation in respect of the making of, or
conversion into, a Borrowing of Eurodollar Loans (in the case of the initial
Interest Period applicable thereto) or prior to 12:00 Noon (New York time) on
the third Business Day prior to the expiration of an Interest Period applicable
to a Borrowing of Eurodollar Loans (in the case of any subsequent Interest
Period), the Borrower shall have the right to elect by giving the
Administrative Agent written notice (or telephonic notice promptly confirmed in
writing) of the Interest Period applicable to such Borrowing, which Interest
Period shall, at the option of the Borrower (but otherwise subject to clause
(y) of the proviso to Section 1.01(iii) and to clause (iii) of the proviso
to Section 1.06), be (x) a one, two, three, six or, to the extent approved
by each Lender, nine or twelve month period or (y) at all times prior to the
Syndication Date (as determined by the Administrative Agent) or


 


5

















 


to the extent approved by
the Administrative Agent in its reasonable discretion, a one-week period.  Notwithstanding anything to the contrary
contained above:


 


(i)                                     all
Eurodollar Loans comprising a Borrowing shall at all times have the same
Interest Period;


 


(ii)                                  the
initial Interest Period for any Borrowing of Eurodollar Loans shall commence on
the date of such Borrowing (including the date of any conversion from a
Borrowing of Base Rate Loans) and each Interest Period occurring thereafter in
respect of such Borrowing shall commence on the day on which the next preceding
Interest Period applicable thereto expires;


 


(iii)                               if
any Interest Period for any Borrowing of Eurodollar Loans begins on a day for
which there is no numerically corresponding day in the calendar month at the
end of such Interest Period, such Interest Period shall end on the last
Business Day of such calendar month;


 


(iv)                              if
any Interest Period would otherwise expire on a day which is not a Business
Day, such Interest Period shall expire on the next succeeding Business Day, provided
that if any Interest Period for any Borrowing of Eurodollar Loans would
otherwise expire on a day which is not a Business Day but is a day of the month
after which no further Business Day occurs in such month, such Interest Period
shall expire on the next preceding Business Day;


 


(v)                                 no
Interest Period for a Borrowing of Second-Lien Loans shall be selected which
would extend beyond the Maturity Date; and


 


(vi)                              no
Interest Period may be elected at any time when a Default or an Event of
Default is then in existence.


 


If upon the expiration of
any Interest Period applicable to a Borrowing of Eurodollar Loans, the Borrower
has failed to elect, or is not permitted to elect, a new Interest Period to be
applicable to the respective Borrowing of Eurodollar Loans as provided above,
the Borrower shall be deemed to have elected to convert such Borrowing into a
Borrowing of Base Rate Loans effective as of the expiration date of such
current Interest Period.


 


1.10.  Increased Costs; Illegality; etc.  (a) 
In the event that (x) in the case of clause (i) below, the
Administrative Agent or (y) in the case of clauses (ii) and (iii) below, any
Lender, shall have determined in good faith (which determination shall, absent
manifest error, be final and conclusive and binding upon all parties hereto):


 


(i)                                     on
any Interest Determination Date, that, by reason of any changes arising after
the Effective Date affecting the interbank Eurodollar market, adequate and fair
means do not exist for ascertaining the applicable interest rate on the basis
provided for in the definition of Eurodollar Rate; or


 


(ii)                                  at
any time, that such Lender shall incur increased costs or reductions in the
amounts received or receivable hereunder with respect to any Eurodollar


 


6

















 


Loans because of (x) any
change since the date of this Agreement in any applicable law, governmental
rule, regulation, guideline, order or request (whether or not having the force
of law), or in the interpretation or administration thereof and including the
introduction of any new law or governmental rule, regulation, guideline, order
or request, such as, for example, but not limited to, (A) a change in the basis
of taxation of payment to any Lender of the principal of or interest on such
Eurodollar Loans or any other amounts payable hereunder (except for changes
with respect to any tax imposed on, measured by or determined by reference to,
the net income, net profits of such Lender or any franchise tax imposed in lieu
thereof pursuant to the laws of the jurisdiction in which such Lender is organized,
or in which such Lender’s principal office or applicable lending office is
located or any subdivision thereof or therein), provided, however,
that the Borrower’s obligations to pay any additional amounts claimed under
this Section 1.10(a)(ii)(x)(A) shall be subject to the provisions
contained in Section 4.04(c); provided  further that taxes
that are otherwise addressed by Section 4.04 are not subject to a claim
under this Section 1.10 or (B) a change in official reserve requirements,
but, in all events, excluding reserves required under Regulation D to the
extent included in the computation of the Eurodollar Rate and/or (y) other
circumstances arising since the date of this Agreement affecting such Lender,
the interbank Eurodollar market or the position of such Lender in such market
(whether or not such Lender was a Lender at the time of such occurrence, but
subject to the last sentence of Section 13.07(j)); or


 


(iii)                               at
any time since the Effective Date, that the making or continuance of any
Eurodollar Loan has become unlawful by compliance by such Lender with any law,
governmental rule, regulation, guideline or order (or would conflict with any
governmental rule, regulation, guideline, request or order not having the force
of law but with which such Lender customarily complies even though the failure
to comply therewith would not be unlawful), or has become impracticable as a
result of a change or contingency occurring after the Effective Date which
materially and adversely affects the interbank Eurodollar market;


 


then, and in any such
event, such Lender (or the Administrative Agent in the case of clause (i)
above) shall promptly give notice (by telephone confirmed in writing) to the
Borrower, which written notice shall set forth such Lender’s (or the Administrative
Agent’s, as the case may be) basis for asserting its rights under this
Section 1.10(a) and the calculation, in reasonable detail, of any such
additional amounts claimed hereunder, and (except in the case of clause (i)) to
the Administrative Agent of such determination (which notice the Administrative
Agent shall promptly transmit to each of the other Lenders).  Thereafter, (x) in the case of clause (i)
above, Eurodollar Loans shall no longer be available until such time as the
Administrative Agent notifies the Borrower and the Lenders that the
circumstances giving rise to such notice by the Administrative Agent no longer
exist, and any Notice of Borrowing or Notice of Conversion/Continuation given
by the Borrower with respect to Eurodollar Loans which have not yet been
incurred (including by way of conversion) shall be deemed rescinded by the
Borrower, (y) in the case of clause (ii) above, the Borrower agrees, subject to
the provisions of Section 13.18 (to the extent applicable), to pay to such
Lender, upon written demand therefor, such additional amounts (in the form of
an increased rate of, or a different method of calculating, interest or
otherwise as such Lender in its sole discretion shall determine) as shall be
required to compensate such Lender for such increased costs or reductions in
amounts received or receivable


 


7

















 


hereunder but without
duplication of any payments due under Section 4.04 (with the written
notice as to the additional amounts owed to such Lender, submitted to the
Borrower by such Lender in accordance with the foregoing to be, absent manifest
error, final, conclusive and binding upon all parties hereto, although the
failure to give any such notice shall not release or diminish any of the
Borrower’s obligations to pay additional amounts pursuant to this
Section 1.10(a) upon the subsequent receipt of such notice) and (z) in the
case of clause (iii) above, the Borrower shall take one of the actions
specified in Section 1.10(b) as promptly as possible and, in any event,
within the time period required by law.


 


(b)                                 At
any time that any Eurodollar Loan is affected by the circumstances described in
Section 1.10(a)(ii) or (iii), the Borrower may at its sole option (and in
the case of a Eurodollar Loan affected pursuant to Section 1.10(a)(iii),
the Borrower shall) either (i) if the affected Eurodollar Loan is then being
made pursuant to a Borrowing, cancel said Borrowing by giving the
Administrative Agent telephonic notice (confirmed promptly in writing) thereof
on the same date that the Borrower was notified by a Lender pursuant to
Section 1.10(a)(ii) or (iii)), or (ii) if the affected Eurodollar Loan is
then outstanding, upon at least three Business Days’ notice to the Administrative
Agent, require the affected Lender to convert each such Eurodollar Loan into a
Base Rate Loan (which conversion, in the case of the circumstance described in
Section 1.10(a)(iii), shall occur no later than the last day of the
Interest Period then applicable to such Eurodollar Loan or such earlier day as
shall be required by applicable law); provided that if more than one
Lender is affected at any time, then all affected Lenders must be treated the
same pursuant to this Section 1.10(b).


 


(c)                                  If
any Lender shall have determined after the Effective Date that the adoption or
effectiveness after the Effective Date of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change
after the Effective Date in the interpretation or administration thereof by any
governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by such Lender or any
corporation controlling such Lender with any request or directive regarding
capital adequacy (whether or not having the force of law) of any such
authority, central bank or comparable agency, has or would have the effect of
reducing the rate of return on such Lender’s or such other corporation’s
capital or assets as a consequence of such Lender’s Commitment or Commitments
hereunder or its obligations hereunder to a level below that which such Lender
or such other corporation could have achieved but for such adoption,
effectiveness, change or compliance (taking into consideration such Lender’s or
such other corporation’s policies with respect to capital adequacy), then from
time to time, upon written demand by such Lender (with a copy to the
Administrative Agent), accompanied by the notice referred to in the last
sentence of this clause (c), the Borrower agrees, subject to the provisions of
Section 13.18 (to the extent applicable), to pay to such Lender such
additional amount or amounts as will compensate such Lender or such other
corporation for such reduction in the rate of return to such Lender or such
other corporation.  Each Lender, upon
determining in good faith that any additional amounts will be payable pursuant
to this Section 1.10(c), will give prompt written notice thereof to the
Borrower (a copy of which shall be sent by such Lender to the Administrative
Agent), which notice shall set forth such Lender’s basis for asserting its
rights under this Section 1.10(c) and the calculation, in reasonable
detail, of such additional amounts claimed hereunder, although the failure to
give any such notice shall not release or diminish the Borrower’s obligations
to pay additional amounts pursuant to this Section 1.10(c) upon the
subsequent receipt of such notice.


 


8

















 


A Lender’s reasonable
good faith determination of compensation owing under this Section 1.10(c)
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto.


 


1.11.  Compensation.  The Borrower shall, subject to the
provisions of Section 13.18 (to the extent applicable), compensate each
Lender, promptly upon its written request (which request shall set forth in
reasonable detail the basis for requesting such compensation), for all losses,
expenses and liabilities (including, without limitation, any loss, expense or
liability incurred by reason of the liquidation or reemployment of deposits or
other funds required by such Lender to fund its Eurodollar Loans) which such
Lender may sustain:  (i) if for any reason
(other than a default by such Lender or any Agent) a Borrowing of, or
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion/Continuation given by
the Borrower (whether or not withdrawn by the Borrower or deemed withdrawn
pursuant to Section 1.10(a)); (ii) if any repayment (including any
repayment made pursuant to Section 4.01 or 4.02 or as a result of an
acceleration of the Second-Lien Loans pursuant to Section 10 or as a
result of the replacement of a Lender (other than a Defaulting Lender) pursuant
to Section 1.13 or 13.01(b)) or conversion of any Eurodollar Loans of the
Borrower occurs on a date which is not the last day of an Interest Period
applicable thereto; (iii) if any prepayment of any Eurodollar Loans is not made
on any date specified in a notice of prepayment given by the Borrower; or (iv)
as a consequence of (x) any other default by the Borrower to repay its
Eurodollar Loans when required by the terms of this Agreement or (y) an
election made by the Borrower pursuant to Section 1.10(b).  Each Lender’s calculation of the amount of
compensation owing pursuant to this Section 1.11 shall be made in good
faith.  A Lender’s basis for requesting
compensation pursuant to this Section 1.11 and a Lender’s calculation of
the amount thereof, shall, absent manifest error, be final and conclusive and
binding on all parties hereto.


 


1.12.  Change of Lending Office.  Each Lender agrees that upon the occurrence
of any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c) or Section 4.04 with respect to such Lender, it will,
if requested by the applicable Borrower, use reasonable efforts (subject to
overall policy considerations of such Lender) to designate another lending
office for any Second-Lien Loans affected by such event, provided that
such designation is made on such terms that such Lender and its lending office
suffer no economic, legal or regulatory disadvantage, with the object of
avoiding the consequence of the event giving rise to the operation of such
Section.  Nothing in this
Section 1.12 shall affect or postpone any of the obligations of the
Borrower or the rights of any Lender provided in Sections 1.10 and 4.04.


 


1.13.  Replacement of Lenders.  (x) 
If any Lender becomes a Defaulting Lender, (y) upon the occurrence of
any event giving rise to the operation of Section 1.10(a)(ii) or (iii),
Section 1.10(c) or Section 4.04 with respect to any Lender which
results in such Lender charging to the Borrower increased costs materially in excess
of the average costs being charged by the other Lenders in respect of such
contingency or (z) in the case of a refusal by a Lender to consent to a
proposed change, waiver, discharge or termination with respect to this
Agreement which has been approved by the Required Lenders as provided in
Section 13.01(b), the Borrower shall have the right, in accordance with
Section 13.07(b), if no Default or Event of Default then exists or would
exist after giving effect to such replacement, to replace such Lender (the “Replaced
Lender”) with one or more other Eligible Assignee or Assignees, none of
whom shall constitute a


 


9

















 


Defaulting Lender at the
time of such replacement (collectively, the “Replacement Lender”) and
each of whom shall be reasonably acceptable to the Administrative Agent; provided
that:


 


(i)                                     at
the time of any replacement pursuant to this Section 1.13, the Replacement
Lender shall enter into one or more Assignment and Assumption Agreements
pursuant to Section 13.07(b) (and with all fees payable pursuant to said
Section 13.07(b) to be paid by the Replacement Lender) pursuant to which
the Replacement Lender shall acquire all of the outstanding Second-Lien Loans
of the Replaced Lender and, in connection therewith, shall pay to the Replaced
Lender in respect thereof an amount equal to the sum of (x) an amount equal to
the principal of, and all accrued interest on, all outstanding Second-Lien
Loans of the Replaced Lender, and (y) an amount equal to all accrued, but
theretofore unpaid, Fees (if any) owing to the Replaced Lender pursuant to
Section 3.01; and


 


(ii)                                  all
obligations of the Borrower then owing to the Replaced Lender (other than those
specifically described in clause (i) above in respect of which the assignment
purchase price has been, or is concurrently being, paid, but including all
amounts, if any, owing under Section 1.11) shall be paid in full to such
Replaced Lender concurrently with such replacement.


 


Upon the execution of the
respective Assignment and Assumption Agreements by the respective Replacement
Lender, the payment of amounts referred to in clauses (i) and (ii) above,
recordation of the assignment on the Register by the Administrative Agent
pursuant to Section 13.07(c) and, if so requested by the Replacement
Lender, delivery to the Replacement Lender of the appropriate Second-Lien Loan
Note or Second-Lien Loan Notes executed by the Borrower, the Replacement Lender
shall become a Lender hereunder and the Replaced Lender shall cease to constitute
a Lender hereunder, except with respect to indemnification provisions under
this Agreement (including, without limitation, Sections 1.10, 1.11, 4.04,
13.04, 13.05 and 13.19), which shall survive as to such Replaced Lender.  In connection with any replacement of
Lenders pursuant to, and as contemplated by, this Section 1.13, the
Borrower hereby irrevocably authorizes the Administrative Agent to take all
necessary action, in the name of the Borrower, as described above in this
Section 1.13 in order to effect the replacement of the respective Lender
or Lenders in accordance with the preceding provisions of this
Section 1.13.


 


SECTION 2. 
Reserved.


 


SECTION 3. 
Fees; Commitments.


 


3.01.  Fees.


 


(a)                                  The
Borrower shall pay to each Agent, for its own account, such fees as may be
agreed to in writing from time to time between the Borrower and such Agent,
when and as due.


 


(b)                                 All
voluntary prepayments of principal of Second-Lien Loans pursuant to
Section 4.01, all mandatory prepayments of principal of Second-Lien Loans
required pursuant to Section 4.02 (excluding, for avoidance of doubt,
repurchases of Second-Lien Loans pursuant to Section 4.02(j)) and all
repayments of principal of Second-Lien Loans required pursuant to


 


10

















 


Section 10 as a
result of the acceleration thereof, in each case prior to the second
anniversary of the Initial Borrowing Date, will be subject to payment to the
Administrative Agent, for the ratable account of each Lender with outstanding
Second-Lien Loans, of a fee as follows: 
(x) if prior to the first anniversary of the Initial Borrowing Date, an
amount equal to 2.0% of the aggregate principal amount of such prepayment or
repayment and (y) if payable on or after the first anniversary of the Initial
Borrowing Date and prior to the second anniversary of the Initial Borrowing
Date, an amount equal to 1.0% of the aggregate principal amount of such
prepayment or repayment.  Such fees
shall be due and payable upon the date of any voluntary prepayment or the due
date of such mandatory prepayment or required repayment, as the case may be.


 


3.02.  Reserved.


 


3.03.  Mandatory Reduction of Commitments.  (a) 
The Total Commitment (and the Commitment of each Lender) shall terminate
in its entirety on April 30, 2004 unless the Initial Borrowing Date has
occurred on or before such date.


 


(b)                                 In
addition to any other mandatory commitment reductions pursuant to this
Section 3.03, the Total Commitment (and the Commitment of each Lender)
shall terminate in its entirety on the Initial Borrowing Date (after giving
effect to the making of Second-Lien Loans on such date).


 


SECTION 4. 
Payments.


 


4.01.  Voluntary Prepayments.  Subject to sub-clause (vi) below and the
last sentence of this Section 4.01, the Borrower shall have the right to
prepay the Second-Lien Loans, in whole or in part, from time to time on the
following terms and conditions:


 


(i)                                     the
Borrower shall give the Administrative Agent at its Notice Office written
notice (or telephonic notice promptly confirmed in writing) of its intent to
prepay the Second-Lien Loans, the amount of such prepayment, the Type of
Second-Lien Loans to be repaid and (in the case of Eurodollar Loans) the
specific Borrowing(s) pursuant to which made, which notice (I) shall be given
by the Borrower prior to 10:00 A.M. (New York time) (x) at least one Business
Day prior to the date of such prepayment in the case of Base Rate Loans and (y)
at least three Business Days prior to the date of such prepayment in the case
of Eurodollar Loans and (II) shall promptly be transmitted by the
Administrative Agent to each of the Lenders;


 


(ii)                                  each
prepayment (other than prepayments in full of (x) all outstanding Base Rate
Loans or (y) any outstanding Borrowing of Eurodollar Loans) shall be in an
aggregate principal amount of at least (x) $1,000,000, in the case of
Eurodollar Loans, (y) $500,000, in the case of Base Rate Loans and, in each
case, if greater, in integral multiples of $100,000, provided, that no
partial prepayment of Eurodollar Loans made pursuant to a Borrowing shall
reduce the aggregate principal amount of the Eurodollar Loans outstanding
pursuant to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto;


 


11

















 


(iii)                               at
the time of any prepayment of Eurodollar Loans pursuant to this
Section 4.01 on any date other than the last day of the Interest Period
applicable thereto, the Borrower shall pay the amounts required pursuant to
Section 1.11;


 


(iv)                              except
as provided in clause (v) below, each prepayment in respect of any Second-Lien
Loans made pursuant to a Borrowing shall be applied pro  rata
among such Second-Lien Loans made pursuant to such Borrowing;


 


(v)                                 in
the event of certain refusals by a Lender to consent to certain proposed
changes, waivers, discharges or terminations with respect to this Agreement
which have been approved by the Required Lenders as provided in
Section 13.01(b), the Borrower may, upon five Business Days’ prior written
notice to the Administrative Agent at its Notice Office (which notice the
Administrative Agent shall promptly transmit to each of the Lenders), elect to
repay all Second-Lien Loans of such Lender (including all amounts, if any,
owing pursuant to Section 1.11), together with accrued and unpaid
interest, Fees and all other amounts then owing to such Lender in accordance
with said Section 13.01(b), so long as the consents required by
Section 13.01(b) in connection with the repayment pursuant to this clause
(v) shall have been obtained; and


 


(vi)                              each
prepayment of Second-Lien Loans pursuant to this Section 4.01 made prior
to the second anniversary of the Initial Borrowing Rate shall be subject to the
payment of the fee described in Section 3.01(b).


 


Notwithstanding the foregoing
provisions of this Section 4.01, no voluntary prepayment of the
Second-Lien Loans shall be permitted to be made pursuant to this
Section 4.01 until such time as the Discharge of the First-Lien
Obligations has occurred; provided, however, that prior to the
Discharge of the First-Lien Obligations, Net Cash Proceeds from the sale or
issuance of Equity Interests pursuant to a Qualified IPO not constituting
Excluded IPO Proceeds and not required to be applied as a mandatory repayment
and/or commitment reduction of loans and/or commitments under the First-Lien
Credit Agreement may (subject to the payment of fees pursuant to clause (vi)
above) be used to make voluntary prepayments of the Second-Lien Loans in
accordance with this Section 4.01.


 


4.02.  Mandatory Repayments and Repurchases.


 


(a)                                  Reserved.


 


(b)                                 All
outstanding Second-Lien Loans shall be paid in full on the Maturity Date.


 


(c)                                  In
addition to any other mandatory repayments pursuant to this Section 4.02,
on each date on or after the Effective Date upon which Holdings or any of its
Subsidiaries receives Net Sale Proceeds from any Asset Sale (other than
Accounts Receivable Facility Assets sold pursuant to Sections 9.02(xiii) and
(xiv)), an amount equal to 100% of the Net Sale Proceeds from such Asset Sale
shall be applied as a mandatory repayment of outstanding principal of
Second-Lien Loans in accordance with the requirements of Sections 4.02(h) and
(i); provided that (i) during any fiscal year of Holdings up to
$10,000,000 in aggregate Net Sale Proceeds received during such fiscal year may
be retained by Holdings and its Subsidiaries


 


12

















 


without giving rise to a
mandatory repayment of Second-Lien Loans as otherwise required above, so long
as no Default or Event of Default exists at the time such Net Sale Proceeds are
received and an Authorized Officer of Holdings has delivered a certificate to
the Administrative Agent on or prior to such date stating that such Net Sale
Proceeds shall be used to purchase capital assets used or to be used in the
businesses permitted pursuant to Section 9.01 (including, without
limitation (but only to the extent permitted by Section 8.14), the
purchase of the capital stock of a Person engaged in such businesses) within
one year following the date of receipt of such Net Sale Proceeds from such
Asset Sale (which certificate shall set forth the estimates of the proceeds to
be so expended) and (ii) if all or any portion of such Net Sale Proceeds not
required to be so applied as a mandatory repayment of Second-Lien Loans are not
so used within such one year period, such remaining portion shall be applied on
the last day of such period (or such earlier date, if any, as the Board of
Directors of Holdings or such Subsidiary, as the case may be, determines not to
reinvest the Net Sale Proceeds relating to such Asset Sale as set forth above)
as a mandatory repayment of outstanding principal of Second-Lien Loans as
provided above (without regard to this proviso).


 


(d)                                 In
addition to any other mandatory repayments pursuant to this Section 4.02,
on each date on or after the Effective Date on which Holdings or any of its
Subsidiaries receives any cash proceeds from (i) any incurrence of Indebtedness
(other than Indebtedness permitted to be incurred pursuant to Section 9.04
(other than clause (xvi) thereof) as in effect on the Effective Date), (ii) any
issuance of Equity Interests (other than Holdings Common Stock or options,
rights or warrants therefor and Qualified Preferred Stock) by Holdings or (iii)
any issuance of capital stock or other Equity Interests by, or cash capital
contributions to, any Subsidiary of Holdings (other than (x) issuances of
common Equity Interests to Holdings or any other Subsidiary of Holdings by
Holdings or any other Subsidiary of Holdings, and (y) cash capital
contributions to any Subsidiary of Holdings by Holdings or any Subsidiary of
Holdings), an amount equal to 100% of the Net Cash Proceeds of the respective
incurrence of Indebtedness, issuance of Equity Interests or cash capital
contribution shall be applied as a mandatory repayment of outstanding principal
of Second-Lien Loans in accordance with the requirements of Sections 4.02(h)
and (i).


 


(e)                                  In
addition to any other mandatory repayments pursuant to this Section 4.02,
on each date on or after the Effective Date on which Holdings or any of its
Subsidiaries receives any cash proceeds from any sale or issuance of Qualified
Preferred Stock or Holdings Common Stock (including from the sale or issuance
of options, warrants or rights to purchase any such equity) by, or cash capital
contributions to, Holdings (excluding proceeds received from the sale or
issuance by Holdings of shares of its common stock (including as a result of
the exercise of any options or warrants with regard thereto), or options or
warrants to purchase shares of its common stock, to any employee, officer or
director of Holdings or any of its Subsidiaries in an aggregate amount (for all
such sales and issuances) not to exceed $5,000,000 in any fiscal year of
Holdings), an amount equal to 50% of such cash proceeds (net of all
underwriting discounts, fees and commissions and other costs and expenses
associated therewith) of the respective equity issuance or capital contribution
(or, in the case of Excluded IPO Proceeds, 100% of such proceeds) shall be
applied as a mandatory repayment of outstanding principal of Second-Lien Loans
in accordance with the requirements of Sections 4.02(h) and (i).


 


13

















 


(f)                                    In
addition to any other mandatory repayments pursuant to this Section 4.02,
within 10 days following each date on or after the Effective Date on which
Holdings or any of its Subsidiaries receives any proceeds from any Recovery
Event (other than proceeds from Recovery Events in an amount less than
$1,000,000 per Recovery Event), an amount equal to 100% of the proceeds of such
Recovery Event (net of reasonable costs (including, without limitation, legal
costs and expenses) and taxes incurred in connection with such Recovery Event
and the amount of such proceeds required to be used to repay any Indebtedness
(other than Indebtedness of the Lenders pursuant to this Agreement) which is
secured by the respective assets subject to such Recovery Event) shall be applied
as a mandatory repayment of outstanding principal of Second-Lien Loans in
accordance with the requirements of Sections 4.02(h) and (i); provided
that (x) so long as no Default or Event of Default then exists and such
proceeds do not exceed $8,000,000, such proceeds shall not be required to be so
applied on such date to the extent that an Authorized Officer of Holdings has
delivered a certificate to the Administrative Agent on or prior to such date
stating that such proceeds shall be used or shall be committed to be used to
replace or restore any properties or assets in respect of which such proceeds
were paid within one year following the date of such Recovery Event (which
certificate shall set forth the estimates of the proceeds to be so expended),
and (y) so long as no Default or Event of Default then exists and to the extent
that (a) the amount of such proceeds exceeds $8,000,000, (b) the amount of such
proceeds, together with other cash available to Holdings and its Subsidiaries
and permitted to be spent by them on Capital Expenditures during the relevant
period, equals at least 100% of the cost of replacement or restoration of the
properties or assets in respect of which such proceeds were paid as determined
by Holdings and as supported by such estimates or bids from contractors or
subcontractors or such other supporting information as the Administrative Agent
may reasonably accept, (c) an Authorized Officer of Holdings has delivered to
the Administrative Agent a certificate on or prior to the date the application
would otherwise be required pursuant to this Section 4.02(f) in the form
described in clause (x) above and also certifying its determination as required
by preceding clause (b) and certifying the sufficiency of business interruption
insurance as required by succeeding clause (d), and (d) an Authorized Officer
of Holdings has delivered to the Administrative Agent such evidence as the
Administrative Agent may reasonably request in form and substance reasonably
satisfactory to the Administrative Agent establishing that Holdings and its
Subsidiaries has sufficient business interruption insurance and that Holdings
or the respective Subsidiary will receive payment thereunder in such amounts
and at such times as are necessary to satisfy all obligations and expenses of
Holdings or the respective Subsidiary (including, without limitation, all debt
service requirements, including pursuant to this Agreement), without any delay
or extension thereof, for the period from the date of the respective casualty,
condemnation or other event giving rise to the Recovery Event and continuing
through the completion of the replacement or restoration of the respective
properties or assets, then the entire amount of the proceeds of such Recovery
Event and not just the portion in excess of $8,000,000 shall be deposited with
the Administrative Agent pursuant to a cash collateral arrangement reasonably
satisfactory to the Administrative Agent whereby such proceeds shall be
disbursed to Holdings or the respective Subsidiary from time to time as needed
to pay or reimburse Holdings or the respective Subsidiary in connection with
the replacement or restoration of the respective properties or assets (pursuant
to such certification requirements as may be established by the Administrative
Agent), provided further, that at any time while an Event of Default has
occurred and is continuing, the Required Lenders may (subject to the provisions
of the Intercreditor Agreement) direct the Administrative Agent (in


 


14

















 


which case the
Administrative Agent shall, and is hereby authorized by the Borrower to, follow
said directions) to apply any or all proceeds then on deposit in such
collateral account to the repayment of Obligations hereunder in the same manner
as proceeds would be applied pursuant to the Security Agreement, and provided
further, that if all or any portion of such proceeds not required to be
applied as a mandatory repayment and/or commitment reduction pursuant to the
second preceding proviso (whether pursuant to clause (x) or (y) thereof) are
either (A) not so used or committed to be so used within one year after the
date of the respective Recovery Event or (B) if committed to be used within one
year after the date of receipt of such net proceeds and not so used within 18
months after the date of respective Recovery Event then, in either such case,
such remaining portion not used or committed to be used in the case of
preceding clause (A), and not used in the case of preceding clause (B), shall
be applied on the date occurring one year after the date of the respective
Recovery Event in the case of clause (A) above, or the date occurring 18 months
after the date of the respective Recovery Event in the case of clause (B)
above, as a mandatory repayment of Second-Lien Loans in accordance with the
requirements of Sections 4.02(h) and (i).


 


(g)                                 In
addition to any other mandatory repayments pursuant to this Section 4.02,
on each Excess Cash Payment Date, an amount equal to the Applicable Excess Cash
Flow Percentage of the Excess Cash Flow for the relevant Excess Cash Flow
Payment Period shall be applied as a mandatory repayment of outstanding
principal of Second-Lien Loans in accordance with the requirements of Sections
4.02(h) and (i).


 


(h)                                 Notwithstanding
anything contained in Sections 4.02(c), (d), (e), (f) and (g), no mandatory
prepayment of the Second-Lien Loans shall be required to be made pursuant to
this Section 4.02 until such time as the Discharge of the First-Lien
Obligations has occurred; provided, however, that (i) mandatory
prepayments of Second-Lien Loans may (and shall) be made pursuant to
Section 4.02(d) with the Net Cash Proceeds of Refinancing Senior
Subordinated Notes incurred in accordance with the requirements of the
definition thereof and (ii) mandatory prepayments of Second-Lien Loans may (and
shall) be made pursuant to Section 4.02(e) with Excluded IPO Proceeds.
Each repayment of Second-Lien Loans pursuant to Sections 4.02(c), (d), (e), (f)
and (g) prior to the second anniversary of the Initial Borrowing Rate shall be
subject to the payment of the fee described in Section 3.01(b).


 


(i)                                     With
respect to each repayment of Second-Lien Loans required by this
Section 4.02, the Borrower may designate the Types of Second-Lien Loans which
are to be repaid and, in the case of Eurodollar Loans, the specific Borrowing
or Borrowings pursuant to which made, provided that:  (i) repayments of Eurodollar Loans pursuant
to this Section 4.02 may only be made on the last day of an Interest
Period applicable thereto unless all Eurodollar Loans with Interest Periods
ending on such date of required repayment and all Base Rate Loans have been
paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to a
single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant to
such Borrowing to an amount less than the Minimum Borrowing Amount applicable
thereto, such Borrowing shall be converted at the end of the then current
Interest Period into a Borrowing of Base Rate Loans; and (iii) each repayment
of Second-Lien Loans made pursuant to a Borrowing shall be applied pro  rata
among such Second-Lien Loans.  In the
absence of a designation by the Borrower as described in the preceding
sentence, the Administrative Agent shall, subject to the above, make such
designation in its sole discretion with a view, but no obligation, to minimize
breakage costs


 


15

















 


owing under
Section 1.11.  Notwithstanding the
foregoing provisions of this Section 4.02, if at any time after the
Discharge of the First-Lien Obligations the mandatory repayment of Second-Lien
Loans pursuant to Section 4.02(c), (d), (e), (f) or (g) would result,
after giving effect to the procedures set forth in this clause (i) above, in the
Borrower incurring breakage costs under Section 1.11 as a result of
Eurodollar Loans being repaid other than on the last day of an Interest Period
applicable thereto (any such Eurodollar Loans, “Affected Loans”), the
Borrower may elect, by written notice to the Administrative Agent, to have the
provisions of the following sentence be applicable so long as no Default or
Event of Default is then in existence. 
At the time any Affected Loans are otherwise required to be prepaid the
Borrower may elect, so long as no Default or Event of Default is then in
existence, to deposit 100% (or such lesser percentage elected by the Borrower
as not being repaid) of the principal amounts that otherwise would have been
paid in respect of the Affected Loans with the Administrative Agent to be held
as security for the obligations of the Borrower hereunder pursuant to a cash
collateral agreement to be entered into in form and substance satisfactory to
the Administrative Agent, with such cash collateral to be released from such
cash collateral account (and applied to repay the principal amount of such
Eurodollar Loans) upon each occurrence thereafter of the last day of an
Interest Period applicable to Eurodollar Loans (or such earlier date or dates
as shall be requested by the Borrower), with the amount to be so released and
applied on the last day of each Interest Period to be the amount of such
Eurodollar Loans to which such Interest Period applies (or, if less, the amount
remaining in such cash collateral account).


 


(j) (I) Upon a Change of
Control, each Lender shall have the right to require that the Borrower
repurchase all or any portion of the Second-Lien Loans of such Lender pursuant
to an Assignment and Assumption Agreement, at a purchase price in cash equal to
the Applicable Change of Control Percentage of the principal amount thereof plus
accrued and unpaid interest to the date of purchase, in accordance with the
terms contemplated in Section 4.02(j)(II); provided that, with
respect to such repurchases, the Borrower shall simultaneously provide a copy
of such Assignment and Assumption Agreement and any other agreements between
the Borrower and each Lender with respect to such repurchase to Administrative
Agent.  Prior to the mailing of the
notice to Lenders provided for in Section 4.02(j)(II) below but in any
event within 60 days following the date the Borrower obtains actual knowledge
of any Change of Control, the Borrower shall (i) repay in full all obligations,
and terminate all commitments, under the First-Lien Credit Agreement or (ii)
obtain the requisite consent under the First-Lien Credit Agreement to permit
the repurchase of the Second-Lien Loans as provided for in
Section 4.02(j)(II).  The Borrower
shall first comply with the covenant in the immediately preceding sentence
before it shall be required to repurchase Second-Lien Loans pursuant to the
provisions described below.  The
Borrower’s failure to comply with the covenant described in the second
preceding sentence (and any failure to send the notice referred to in clause
(II) below as a result of the prohibition in the second preceding sentence) may
(with notice and lapse of time) constitute an Event of Default under
Section 10.03 but shall not constitute an Event of Default described in
Section 10.01.


 


(II)                                Within
60 days following the date the Borrower obtains actual knowledge of any Change
of Control, the Borrower shall mail a notice to Administrative Agent and all
Lenders (the “Change of Control Offer”) stating:


 


16

















 


(i)                                     that
a Change of Control has occurred and that each Lender has the right to require
the Borrower to purchase all or a portion of such Lender’s outstanding
Second-Lien Loans at a purchase price in cash equal to the Applicable Change of
Control Percentage of the principal amount thereof, plus accrued and unpaid
interest to the date of purchase;


 


(ii)                                  the
circumstances and relevant facts and financial information regarding such
Change of Control;


 


(iii)                               the
purchase date (which shall be no earlier than 30 days nor later than 90 days
from the date such notice is mailed); and


 


(iv)                              the
instructions determined by the Borrower (which shall be reasonably acceptable
to Administrative Agent), consistent with this Section 4.02(j), that a
Lender must follow if such Lender elects to have its outstanding Second-Lien
Loans purchased.


 


(III)                            With
respect to all repurchases made by the Borrower pursuant to this
Section 4.02(j), (i) the Borrower shall pay all accrued and unpaid
interest, if any, on the repurchased Second-Lien Loans to the date of
repurchase of such Second-Lien Loans, (ii) the repurchase of such Second-Lien
Loans by the Borrower shall not be taken into account in the calculation of
Excess Cash Flow, (iii) if requested by any Lender (based on advice of counsel),
the Borrower shall have provided to such Lender all information that, together
with any previously provided information, would satisfy the requirements of
Rule 10b-5 of the Exchange Act with respect to an offer by the Borrower to
repurchase securities registered under the Securities Act (whether or not such
securities are outstanding) as if such offer was being made as of the date of
such repurchase of Second-Lien Loans from a Lender, (iv) the Lenders shall be
entitled to withdraw their election if the Borrower receives not later than one
Business Day prior to the repurchase date a telegram, telex, facsimile
transmission or letter setting forth the name of the Lender, the principal
amount of the outstanding Second-Lien Loan which was elected for repurchase by
the Lender and a statement that such Lender is withdrawing its election to have
such Second-Lien Loan repurchased and (v) such repurchases shall not be deemed
to be voluntary prepayments pursuant to Section 4.01.


 


(IV)                            Prior
to any Change of Control Offer, the Borrower shall deliver to the
Administrative Agent on behalf of all Lenders an officer’s certificate stating
that all conditions precedent contained herein to the right of the Borrower to
make such Change of Control Offer have been complied with.


 


(V)                                Following
repurchase by Borrower pursuant to this Section 4.02(j), the Second-Lien
Loans so repurchased shall be deemed cancelled for all purposes and no longer
outstanding (and may not be resold by the Borrower), for all purposes of this
Agreement and all other Credit Documents, including, but not limited to (i) the
making of, or the application of, any payments to the Lenders under this
Agreement or any other Credit Document, (ii) the making of any request, demand,
authorization, direction, notice, consent or waiver under this Agreement or any
other Credit Document or (iii) the determination of Required Lenders, or for
any similar or related purpose, under this Agreement or any other Credit
Document.


 


17

















 


(VI)                            Notwithstanding
the foregoing provisions of this Section 4.02(j), the Borrower shall not
be required to make a Change of Control Offer upon a Change of Control if a
third party makes the Change of Control Offer in the manner, at the times and
otherwise in compliance with the requirements set forth in
Section 4.02(j)(II) applicable to a Change of Control Offer made by the
Borrower and purchases all outstanding Second-Lien Loans validly tendered and
not withdrawn under such Change of Control Offer.


 


(VII) Notwithstanding any
of the provisions set forth in this Agreement to the contrary, the Borrower,
the Lenders and the Administrative Agent hereby agree that nothing in this
Agreement shall be understood to mean or suggest that the Second-Lien Loans
constitute “securities” for purposes of either the Securities Act or the
Exchange Act.


 


4.03.  Method and Place of Payment.  Except as otherwise specifically provided
herein, all payments under this Agreement or any Second-Lien Loan Note shall be
made to the Administrative Agent for the ratable account of the Lender or
Lenders entitled thereto not later than 12:00 Noon (New York time) on the date
when due and shall be made in immediately available funds and in U.S. Dollars
at the Payment Office.  Any payments
under this Agreement or under any Second-Lien Loan Note which are made later
than 12:00 Noon (New York time) shall be deemed to have been made on the next
succeeding Business Day.  Whenever any
payment to be made hereunder or under any Second-Lien Loan Note shall be stated
to be due on a day which is not a Business Day, the due date thereof shall be
extended to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable during such extension at the applicable
rate in effect immediately prior to such extension.


 


4.04.  Net Payments.  (a) 
All payments made by any Credit Party hereunder or under any Credit
Document or under any Second-Lien Loan Note will be made without setoff,
counterclaim or other defense.  Except
as provided in Section 4.04(b), all such payments will be made free and
clear of, and without deduction or withholding for, any present or future
taxes, levies, imposts, duties, fees, assessments or other charges of whatever
nature now or hereafter imposed by any jurisdiction or by any political
subdivision or taxing authority thereof or therein with respect to such
payments (but excluding, except as provided in the second succeeding sentence,
any tax imposed on, measured by or determined by reference to the net income or
net profits of a Lender or franchise taxes imposed in lieu thereof pursuant to
the laws of the jurisdiction in which it is organized or the jurisdiction in
which the principal office or applicable lending office of such Lender is located
or any political subdivision of any such jurisdiction) and all interest,
penalties or similar liabilities with respect to such nonexcluded taxes,
levies, imposts, duties, fees, assessments or other charges (all such
nonexcluded taxes, levies, imposts, duties, fees, assessments or other charges
being referred to collectively as “Taxes”).  If any Taxes are so levied, imposed or collected through
withholding or deduction, the Borrower (or any other Credit Party making the
payment) agrees to pay the full amount of such Taxes, and such additional
amounts as may be necessary so that every payment of all amounts due under this
Agreement or under any Second-Lien Loan Note, after withholding or deduction
for or on account of any Taxes, will not be less than the amount provided for
herein or in such Second-Lien Loan Note. 
If any amounts are payable in respect of Taxes pursuant to the preceding
sentence, the Borrower (or any other Credit Party making the payment) agrees to
reimburse each Lender, upon the written request of such Lender, for taxes
imposed on or measured by the net income or net profits of such Lender pursuant
to the laws of the jurisdiction in which such Lender is organized


 


18

















 


or in which the principal
office or applicable lending office of such Lender is located or under the laws
of any political subdivision or taxing authority of any such jurisdiction in
which such Lender is organized or in which the principal office or applicable
lending office of such Lender is located and for any withholding of taxes as
such Lender shall determine are payable by, or withheld from, such Lender in
respect of such amounts so paid to or on behalf of such Lender pursuant to the
preceding sentence and in respect of any amounts paid to or on behalf of such
Lender pursuant to this sentence.  The
Borrower (or the respective Credit Party) will furnish to the Administrative
Agent within 45 days after the date the payment of any Taxes is due pursuant to
applicable law certified copies of tax receipts or other documentation
evidencing such payment by the Borrower (or such Credit Party).  The Credit Agreement Parties jointly and
severally agree (and each Subsidiary Guarantor pursuant to its Subsidiary
Guaranty, and the incorporation by reference therein of the provisions of this
Section 4.04, shall agree) to indemnify and hold harmless each Lender, and
reimburse such Lender upon its written request, for the amount of any Taxes so
levied or imposed and paid by such Lender; provided that such Lender
shall have provided the Credit Agreement Party (or respective Subsidiary
Guarantor) with evidence, reasonably satisfactory to such Credit Agreement
Party (or such Subsidiary Guarantor), of the payment of such Taxes.


 


(b)                                 Each
Lender that is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code) for U.S. Federal income tax purposes
agrees to deliver to the Borrower and the Administrative Agent on or prior to
the Effective Date, or in the case of a Lender that is an assignee or
transferee of an interest under this Agreement pursuant to Section 1.13 or
13.07 (unless the respective Lender was already a Lender hereunder immediately
prior to such assignment or transfer), on the date of such assignment or transfer
to such Lender, (i) two accurate and complete original signed copies of
Internal Revenue Service Form W-8ECI or W-8BEN (with respect to a complete
exemption under an income tax treaty) (or successor forms) certifying to such
Lender’s entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement and
under any Second-Lien Loan Note, or (ii) if the Lender is not a “bank” within
the meaning of Section 881(c)(3)(A) of the Code and cannot deliver either
Internal Revenue Service Form W-8ECI or W-8BEN (with respect to a complete
exemption under an income tax treaty) pursuant to clause (i) above, (x) a
certificate substantially in the form of Exhibit D (any such certificate, a “Section 4.04(b)(ii)
Certificate”) and (y) two accurate and complete original signed copies of
Internal Revenue Service Form W-8BEN (with respect to the portfolio interest
exemption) (or successor form) certifying to such Lender’s entitlement as of
such date to a complete exemption from United States withholding tax with
respect to payments of interest to be made under this Agreement and under any
Second-Lien Loan Note.  In addition,
each Lender agrees that from time to time after the Effective Date, when a
lapse in time or change in circumstances renders the previous certification
obsolete or inaccurate in any material respect, it will deliver to the Borrower
and the Administrative Agent two new accurate and complete original signed
copies of Internal Revenue Service Form W-8ECI or Form W-8BEN (with respect to
the benefits of an income tax treaty), or Form W-8BEN (with respect to the
portfolio interest exemption) and a Section 4.04(b)(ii) Certificate, as
the case may be, and such other forms as may be required in order to confirm or
establish the entitlement of such Lender to a continued complete exemption from
or reduction in United States withholding tax with respect to payments under
this Agreement and any Second-Lien Loan Note, or it shall immediately notify
the Borrower and the Administrative Agent of its inability to deliver any such
Form or Certificate in which case such


 


19

















 


Lender shall not be
required to deliver any such Form or Certificate pursuant to this Section 4.04(b).
Notwithstanding anything to the contrary contained in Section 4.04(a), but
subject to Section 13.07(b) and the immediately succeeding sentence, (x)
the Borrower shall be entitled, to the extent it is required to do so by law, to
deduct or withhold income or similar taxes imposed by the United States (or any
political subdivision or taxing authority thereof or therein) from interest,
fees or other amounts payable hereunder for the account of any Lender which is
not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for U.S. Federal income tax purposes to the extent that such
Lender has not provided to the Borrower U.S. Internal Revenue Service Forms
that establish a complete exemption from such deduction or withholding and (y)
the Borrower shall not be obligated pursuant to Section 4.04(a) hereof to
gross-up payments to be made to a Lender in respect of income or similar taxes
imposed by the United States if (I) such Lender has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 4.04(b) or (II) in the case of a
payment, other than interest, to a Lender described in clause (ii) above, to
the extent that such Forms do not establish a complete exemption from
withholding of such taxes. 
Notwithstanding anything to the contrary contained in the preceding
sentence or elsewhere in this Section 4.04 and except as set forth in
Section 13.07(b), the Borrower agrees to pay additional amounts and to indemnify
each Lender in the manner set forth in Section 4.04(a) (without regard to
the identity of the jurisdiction requiring the deduction or withholding) in
respect of any amounts deducted or withheld by it as described in the
immediately preceding sentence as a result of any changes that are effective
after the Effective Date in any applicable law, treaty, governmental rule,
regulation, guideline or order, or in the interpretation thereof, relating to
the deducting or withholding of such Taxes (or, if later, the date such Lender
became party to this Agreement).


 


(c)                                  If
the Borrower pays any additional amount under this Section 4.04 to a
Lender and such Lender determines in its sole discretion that it has actually
received or realized in connection therewith any refund or any reduction of,
release or remission for or credit against, its Tax liabilities in or with
respect to the taxable year in which the additional amount is paid (a “Tax
Benefit”), such Lender shall pay to the Borrower an amount that the Lender
shall, in its sole discretion, determine is equal to the net benefit, after
tax, which was obtained by the Lender in such year as a consequence of such
refund, reduction, release or remission for or credit; provided that (i)
any Lender may determine in its sole discretion consistent with the policies of
such Lender whether to seek a Tax Benefit, (ii) any Taxes that are imposed on a
Lender as a result of a disallowance or reduction (including through the
expiration of any tax carryover or carryback of such Lender that otherwise
would not have expired) of any Tax Benefit with respect to which such Lender
has made a payment to the Borrower pursuant to this Section 4.04(c) shall
be treated as a Tax for which the Borrower is obligated to indemnify such Lender
pursuant to this Section 4.04 without any exclusions or defenses, (iii)
nothing in this Section 4.04(c) shall require a Lender to disclose any
confidential information to the Borrower (including, without limitation, its
tax returns), and (iv) no Lender shall be required to pay any amounts pursuant
to this Section 4.04(c) at any time a Default or Event of Default then
exists.


 


(d)                                 The
provisions of this Section 4.04 shall be subject to the provisions of
Section 13.18 (to the extent applicable).


 


20

















 


SECTION 5. 
Conditions Precedent to Initial Credit Events.  The obligation of each Lender to make each
Second-Lien Loan hereunder on the Initial Borrowing Date, is subject, at the
time of the making of such Second-Lien Loan to the satisfaction of the
following conditions:


 


5.01.  Execution of Agreement; Second-Lien Loan
Notes.  On or prior to the Initial
Borrowing Date, (i) the Effective Date shall have occurred and (ii) there shall
have been delivered to the Administrative Agent for the account of each Lender
which has requested the same the appropriate Second-Lien Loan Note executed by
the Borrower and in the amount, maturity and as otherwise provided herein.


 


5.02.  Officer’s Certificate.  On the Initial Borrowing Date, the
Administrative Agent shall have received a certificate from Holdings, dated
such date signed by an Authorized Officer of Holdings, stating that all of the
applicable conditions set forth in Sections 5.05 through 5.09, inclusive, and
5.17 (other than such conditions that are expressly subject to the satisfaction
of any Agent and/or the Required Lenders), have been satisfied on such date.


 


5.03.  Opinions of Counsel.  On the Initial Borrowing Date, the
Administrative Agent shall have received opinions, addressed to each Agent, the
Collateral Agent and each of the Lenders and dated the Initial Borrowing Date,
from (i) Gibson, Dunn & Crutcher LLP, special counsel to the Credit
Parties, which opinion shall cover the matters contained in Exhibit E and such
other matters incident to the transactions contemplated herein as the Agents
and the Required Lenders may reasonably request and be in form and substance
reasonably satisfactory to the Agents and the Required Lenders, and (ii) local
counsel to the Credit Parties and/or the Administrative Agent reasonably
satisfactory to the Administrative Agent, which opinion or opinions shall be in
form, scope and substance reasonably satisfactory to the Administrative Agent.


 


5.04.  Corporate Documents; Proceedings.  (a) 
On the Initial Borrowing Date, the Administrative Agent shall have
received from each Credit Party a certificate, dated the Initial Borrowing
Date, signed by the chairman, a vice-chairman, the president or any vice-president
of such Credit Party, and attested to by the secretary or any assistant
secretary of such Credit Party, in the form of Exhibit F with appropriate
insertions, together with copies of the certificate of incorporation, by-laws
or equivalent organizational documents of such Credit Party and the resolutions
of such Credit Party referred to in such certificate and all of the foregoing
(including each such certificate of incorporation, by-laws or other
organizational document) shall be reasonably satisfactory to the Administrative
Agent.


 


(b)                                 On
the Initial Borrowing Date, all Company proceedings and all instruments and
agreements in connection with the transactions contemplated by this Agreement
and the other Documents shall be reasonably satisfactory in form and substance
to the Administrative Agent, and the Administrative Agent shall have received
all information and copies of all certificates, documents and papers, including
good standing certificates, bring-down certificates and any other records of
Company proceedings and governmental approvals, if any, which the
Administrative Agent reasonably may have requested in connection therewith,
such documents and papers, where appropriate, to be certified by proper Company
or governmental authorities.


 


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5.05.  Adverse Change, etc.  On or prior to the Initial Borrowing
Date, since March 31, 2003, nothing shall have occurred which (i) the
Required Lenders or any Agent shall reasonably determine (x) has had (unless
same has ceased to exist in all respects) or (y) is reasonably likely to have,
a Material Adverse Effect or (ii) has had a material adverse effect on the
Transaction.


 


5.06.  Litigation.  On the Initial Borrowing Date, there shall be no actions, suits,
proceedings or investigations pending or threatened (a) with respect to this
Agreement or any other Document or the Transaction, (b) with respect to any
material Existing Indebtedness or (c) which any Agent or the Required Lenders
shall determine (x) have had (unless same has ceased to exist in all respects)
or (y) are reasonably likely to have (i) a Material Adverse Effect or (ii) a
material adverse effect on the Transaction.


 


5.07.  Approvals.  On or prior to the Initial Borrowing Date, (i) all necessary
governmental (domestic and foreign), regulatory and third party approvals in
connection with any Existing Indebtedness, the Transaction, the transactions
contemplated by the Documents and otherwise referred to herein or therein shall
have been obtained and remain in full force and effect and evidence thereof
shall have been provided to the Administrative Agent, and (ii) all applicable
waiting periods shall have expired without any action being taken by any
competent authority which restrains, prevents or imposes materially adverse
conditions upon the consummation of the Transaction, the making of the
Second-Lien Loans and the transactions contemplated by the Documents or
otherwise referred to herein or therein. 
Additionally, there shall not exist any judgment, order, injunction or
other restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon, or materially delaying, or making economically unfeasible, the
consummation of the Transaction or the making of the Second-Lien Loans.


 


5.08.  Recapitalization.  (a) 
On the Initial Borrowing Date (and concurrently with the incurrence of
Second-Lien Loans hereunder), (i) the Borrower shall have made a one-time cash
payment to Holdings (in the form of a Dividend, intercompany loan and/or
intercompany loan repayment) and to certain of its Subsidiaries (in the form of
an intercompany loan and/or contribution to capital) in an aggregate amount of
$270.0 million, and (ii) Holdings shall, in turn, have utilized the full amount
of the proceeds of such payment received by it to make a one-time cash Dividend
and/or other payment to the Sponsor and certain other shareholders of Holdings
previously identified to the Agents and the relevant Subsidiaries shall have set
aside the remaining portion of such $270.0 million for the payment to certain
members of their management or for payment to their respective Subsidiaries
(for ultimate payment to members of management of the Subsidiaries receiving
such payments), with such payments to be made as promptly as practicable after
the Initial Borrowing Date) (collectively, the “Sponsor Distribution”).


 


(b)                                 On
or prior to the Initial Borrowing Date, all commitments under the Existing
Credit Agreement shall have been terminated, all loans outstanding thereunder
shall have been repaid in full, together with all accrued and unpaid interest
thereon, all accrued and unpaid fees thereon shall have been paid in full, all
letters of credit issued thereunder shall have been terminated (or incorporated
as Letters of Credit under the First-Lien Credit Agreement )


 


22

















 


and all other amounts
owing pursuant to the Existing Credit Agreement shall have been repaid in full.


 


(c)  On or prior to the Initial Borrowing Date,
the Existing Accounts Receivable Facility shall have been terminated, all
Receivables Indebtedness outstanding thereunder shall have been repaid in full
and all other amounts owing pursuant to the Existing Accounts Receivable Facility
shall have been repaid in full.


 


(d) On the Initial
Borrowing Date, all security interests in respect of, and Liens securing, the
Indebtedness To Be Refinanced relating to Holdings and its Subsidiaries shall
have been terminated and released to the satisfaction of the Agents, and the
Administrative Agent shall have received all such releases as may have been
requested by the Agents, which releases shall be in form and substance
satisfactory to the Agents.  Without
limiting the foregoing, there shall have been delivered (i) proper termination
statements (Form UCC-3 or the appropriate equivalent) for filing under the UCC
of each jurisdiction where a financing statement (Form UCC-1 or the equivalent)
was filed with respect to Holdings or any of its Subsidiaries in connection
with the security interests securing the Indebtedness To Be Refinanced and the
documentation related thereto, (ii) a termination or reassignment of any
security interest in, or Lien on, any patents, trademarks, copyrights or
similar interests of Holdings or any of its Subsidiaries on which filings have
been made to secure obligations under the Existing Credit Agreement, fully
executed by the appropriate parties, (iii) terminations of all mortgages,
leasehold mortgages, deeds of trust and leasehold deeds of trust created with
respect to property of Holdings or any of its Subsidiaries, in each case, to
secure the obligations in respect of the Existing Credit Agreement, all of
which shall be in form, scope and substance reasonably satisfactory to each of
the Agents and (iv) all collateral owned by Holdings or any of its Subsidiaries
in the possession of any of the creditors in respect of the Indebtedness To Be
Refinanced or any collateral agent or trustee under any related security
document shall have been returned to Holdings or such Subsidiary.


 


(e)                                  On
the Initial Borrowing Date and after giving effect to the Transaction, Holdings
and its Subsidiaries shall not have outstanding any Indebtedness other than
Indebtedness permitted pursuant to Section 9.04, and all such Indebtedness
which is to remain outstanding after the Initial Borrowing Date shall not be
subject to any default or event of default existing thereunder or arising as a
result of the Transaction and the other transactions contemplated hereby.


 


5.09.  First-Lien Credit Agreement.  (a) On or prior to the Initial Borrowing
Date, (i) the Borrower shall have received gross cash proceeds of at least
$380,000,000 from the incurrence of term loans by it under the First-Lien
Credit Agreement, together with up to $15,000,000 of gross cash proceeds from
the incurrence of Revolving Loans under, and as defined in, the First-Lien
Credit Agreement (to the extent such additional proceeds are required to
finance the Transaction).


 


(b) On the Initial
Borrowing Date, (i) the incurrence of Indebtedness pursuant to the First-Lien
Credit Agreement shall have been consummated in accordance with the terms and
conditions of the applicable Documents therefor and all applicable law, (ii)
the Administrative Agent shall have received true and correct copies of all
First-Lien Credit Documents, certified as


 


23

















 


such by an appropriate
officer of Holdings, (ii) all such First-Lien Credit Documents and all terms
and conditions thereof (including, without limitation, amortization,
maturities, interest rates, covenants, defaults, remedies, guaranties and
guarantors) shall be in form and substance reasonably satisfactory to each
Agent and the Required Lenders, (iii) all such First-Lien Credit Documents
shall be in full force and effect and (iv) all conditions precedent to the
consummation of the incurrence of loans pursuant to the First-Lien Credit
Agreement as set forth therein shall have been satisfied, and not waived unless
consented to by each Agent and the Required Lenders, to the reasonable
satisfaction of each Agent and the Required Lenders.


 


5.10.  Intercreditor Agreement.  On the Initial Borrowing Date, each Credit
Party,  the Administrative Agent, the
First-Lien Administrative Agent and the Collateral Agent shall have duly
authorized, executed and delivered the Intercreditor Agreement in the form of
Exhibit N hereto (as amended, modified, restated and/or supplemented from time
to time, the “Intercreditor Agreement”), and the Intercreditor Agreement
shall be in full force and effect.


 


5.11.  Subsidiaries Guaranties.  On the Initial Borrowing Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered the
Subsidiaries Guaranty in the form of Exhibit G (as amended, modified, restated
and/or supplemented from time to time, the “Subsidiaries Guaranty”),
guaranteeing all of the obligations of the Borrower as more fully provided
therein, and the Subsidiaries Guaranty shall be in full force and effect.


 


5.12.  Security Documents; etc.  (a) 
On the Initial Borrowing Date, each Credit Party shall have duly
authorized, executed and delivered a Pledge Agreement in the form of Exhibit H
(as amended, modified, restated and/or supplemented from time to time in accordance
with the terms thereof and hereof, the “Pledge Agreement”) and shall
have delivered to the Collateral Agent, as pledgee thereunder, all of the
certificated Pledge Agreement Collateral referred to therein then owned by such
Credit Party and required to be pledged pursuant to the terms thereof, (x)
endorsed in blank in the case of promissory notes or (y) accompanied by
executed and undated transfer powers in the case of certificated Equity
Interests, along with evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable, to perfect the security
interests purported to be created by the Pledge Agreement have been taken, and
the Pledge Agreement shall be in full force and effect.


 


(b)                                 On
the Initial Borrowing Date, each Credit Party shall have duly authorized,
executed and delivered a Security Agreement in the form of Exhibit I (as
amended, modified, restated and/or supplemented from time to time in accordance
with the terms thereof and hereof, the “Security Agreement”) covering
all of the Security Agreement Collateral, together with:


 


(i)                                     executed
copies of Financing Statements (Form UCC-1) or appropriate local equivalent in
appropriate form for filing under the UCC or appropriate local equivalent of
each jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported to be
created by the Security Agreement;


 


(ii)                                  certified
copies of Requests for Information or Copies (Form UCC-11), or equivalent
reports, each of a recent date listing all effective financing


 


24

















 


statements that name
Holdings or any of its Subsidiaries as debtor and that are filed in the
jurisdictions referred to in clause (i) above, together with copies of such
financing statements (none of which shall cover the Collateral except (x) those
with respect to which appropriate termination statements executed by the
secured lender thereunder have been delivered to the Administrative Agent and
(y) to the extent evidencing Permitted Liens);


 


(iii)                               evidence
of the completion of all other recordings and filings of, or with respect to,
the Security Agreement as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to perfect the security interests purported to be
created by the Security Agreement; and


 


(iv)                              evidence
that all other actions necessary or, in the reasonable opinion of the
Collateral Agent, desirable, to perfect the security interests purported to be
created by the Security Agreement have been taken.


 


and the Security
Agreement shall be in full force and effect.


 


(c)                                  On
the Initial Borrowing Date, the Collateral Agent shall have received:


 


(A)                              fully
executed counterparts of Mortgages in form and substance satisfactory to the
Collateral Agent, which Mortgages shall cover such of the Real Property owned
or leased by Holdings or any of its Subsidiaries (after giving effect to the
Transaction) as are designated on Schedule III as a Mortgaged Property,
together with evidence that counterparts of the Mortgages have been delivered
to the title insurance company insuring the lien of such Mortgage for recording
in all places to the extent necessary or, in the reasonable opinion of the
Collateral Agent, desirable to effectively create a valid and enforceable
second priority mortgage lien on each Mortgaged Property in favor of the
Collateral Agent (or such other trustee as may be required or desirable under
local law) for the benefit of the Secured Creditors, subject to Permitted
Encumbrances;


 


(B)                                Title
insurance policies issued by a reputable title insurer satisfactory to the
Collateral Agent (“Mortgage Policies”) on each Mortgaged Property in
amounts satisfactory to the Administrative Agent and the Required Lenders
assuring the Collateral Agent that the Mortgages on such Mortgaged Properties
are valid and enforceable first priority mortgage liens on the respective
Mortgaged Properties, free and clear of all defects and encumbrances except
Permitted Encumbrances and such Mortgage Policies shall otherwise be in form
and substance satisfactory to the Administrative Agent and the Required Lenders
and shall include, as appropriate, an endorsement for future advances under
this Agreement and the Second-Lien Loan Notes and for any other matter that the
Collateral Agent may request, shall not include an exception for mechanics’
liens or creditors’ rights, and shall provide for affirmative insurance and
such reinsurance (including direct access agreements) as the Collateral Agent
may request; and


 


(C)                                surveys
of each Mortgaged Property designated as a “Surveyed Property” on
Schedule III hereto.


 


25

















 


5.13.  Employee Benefit Plans; Shareholders’
Agreements; Management Agreements; Collective Bargaining Agreements; Existing
Indebtedness Agreements; Tax Allocation Agreements.  On or prior to the Initial Borrowing Date,
there shall have been made available for inspection and copying to the
Administrative Agent, at its request, true and correct copies, certified (in
the case of the agreements referred to in clause (ii), (iii), (vi) and (vii)
below) as true and complete by the President or Vice-President of Holdings  of:


 


(i)                                     all
Plans (and for each Plan that is required to file an annual report on Internal
Revenue Service Form 5500-series, a copy of the most recent such report
(including, to the extent required, the related financial and actuarial
statements and opinions and other supporting statements, certifications, schedules
and information), and for each Plan that is a “single-employer plan,” as
defined in Section 4001(a)(15) of ERISA, the most recently prepared
actuarial valuation therefor) and any other “employee benefit plans,” as
defined in Section 3(3) of ERISA, and any other material agreements, plans
or arrangements, with or for the benefit of current or former employees of
Holdings or any of its Subsidiaries or any ERISA Affiliate (provided that the
foregoing shall apply in the case of any multiemployer plan, as defined in
4001(a)(3) of ERISA, only to the extent that any document described therein is
in the possession of Holdings or any Subsidiary of Holdings or any ERISA
Affiliate or reasonably available thereto from the sponsor or trustee of any
such plan) (collectively, the “Employee Benefit Plans”);


 


(ii)                                  all
agreements (including, without limitation, shareholders’ agreements,
subscription agreements and registration rights agreements) entered into by
Holdings or any of its Subsidiaries governing the terms and relative rights of
the capital stock of the entity that is a party to such agreement and any
agreements entered into by shareholders relating to any such entity with
respect to its capital stock to which such entity is also a party
(collectively, the “Shareholders’ Agreements”);


 


(iii)                               all
material agreements entered into by Holdings or any of its Subsidiaries with
respect to the management of Holdings or any of its Subsidiaries after giving
effect to the Transaction (including consulting agreements and other management
advisory agreements but excluding employment agreements) (collectively, the “Management
Agreements”);


 


(iv)                              all
collective bargaining agreements applying or relating to any employee of
Holdings or any of its Subsidiaries after giving effect to the Transaction
(collectively, the “Collective Bargaining Agreements”);


 


(v)                                 all
agreements evidencing or relating to any Existing Indebtedness of Holdings or
any of its Subsidiaries (collectively, the “Existing Indebtedness Agreements”);


 


(vi)                              any
tax sharing or tax allocation agreements entered into by Holdings or any of its
Subsidiaries (collectively, the “Tax Allocation Agreements”); and


 


(vii)
all material employment agreements entered into by Holdings or any of its
Subsidiaries (collectively, the “Employment Agreements”).


 


26

















 


all of which Employee
Benefit Plans, Shareholders’ Agreements, Management Agreements, Collective
Bargaining Agreements, Existing Indebtedness Agreements, Tax Allocation
Agreements and Employment Agreements shall be in full force and effect on the
Initial Borrowing Date.


 


5.14.  Solvency Certificate; Insurance
Certificates.  On or before the
Initial Borrowing Date, the Administrative Agent shall have received:


 


(a)                                  a
solvency certificate in the form of Exhibit J from the chief financial officer
of Holdings, dated the Initial Borrowing Date, and supporting the conclusion
that, after giving effect to the Transaction and the incurrence of all
financings contemplated herein, the Borrower (on a stand-alone basis), Holdings
and its Subsidiaries (on a consolidated basis) and the Borrower and its
Subsidiaries (on a consolidated basis), in each case, are not insolvent and
will not be rendered insolvent by the indebtedness incurred in connection herewith,
will not be left with unreasonably small capital with which to engage in its or
their respective businesses and will not have incurred debts beyond its or
their ability to pay such debts as they mature and become due; and


 


(b)                                 evidence
of insurance complying with the requirements of Section 8.03 for the
business and properties of Holdings and its Subsidiaries, in scope, form and
substance reasonably satisfactory to the Administrative Agent and the Required
Lenders and naming the Collateral Agent as an additional insured and/or loss
payee, and stating that such insurance shall not be canceled or materially
revised without at least 30 days’ prior written notice by the insurer to the
Collateral Agent.


 


5.15.  Financial Statements; Pro Forma Financial
Statements; Projections.  On or
prior to the Initial Borrowing Date, there shall have been delivered to the
Administrative Agent (i) true and correct copies of the financial statements
referred to in Section 7.10(b), (ii) an unaudited pro  forma
(calculated as if the Transaction had occurred on such date) consolidated
balance sheet of Holdings and its Subsidiaries as of the January, 2004 fiscal
month end, after giving effect to the Transaction and the incurrence of all
Indebtedness (including the Second-Lien Loans) contemplated herein and prepared
in accordance with GAAP (the “Pro Forma Balance Sheet”), and (iii) a
reasonably satisfactory funds flow statement related to the Transaction.


 


5.16.  Payment of Fees.  On the Initial Borrowing Date, all costs,
fees and expenses, and all other compensation due to the Agents and the Lenders
(including, without limitation, legal fees and expenses) shall have been paid
to the extent then due.


 


5.17.  No Default; Representations and
Warranties.  On the Initial
Borrowing Date and immediately after giving effect thereto, (i) there shall
exist no Default or Event of Default and (ii) all representations and
warranties contained herein or in any other Credit Document shall be true and
correct in all material respects with the same effect as though such
representations and warranties had been made on the date of such Credit Event
(it being understood and agreed that any representation or warranty which by
its terms is made as of a specified date shall be required to be true and correct
in all material respects only as of such specified date).


 


27

















 


5.18.  Notice of Borrowing.  Prior to the making of each Second-Lien Loan
on the Initial Borrowing Date, the Administrative Agent shall have received a
Notice of Borrowing meeting the requirements of Section 1.03(a).


 


The occurrence of the
Initial Borrowing Date and the acceptance of the benefits or proceeds of the
Second-Lien Loans shall constitute a representation and warranty by each of Holdings
and the Borrower to each Agent and each of the Lenders that all the conditions
specified in Section 5 (other than such conditions that are expressly
subject to the satisfaction of the Agents and/or the Required Lenders) exist as
of that time. All of the Second-Lien Loan Notes, certificates, legal opinions
and other documents and papers referred to in Section 5, unless otherwise
specified, shall be delivered to the Administrative Agent at the Notice Office
for the account of each of the Lenders and, except for the Second-Lien Loan
Notes, in sufficient counterparts or copies for each of the Lenders and shall
be in form and substance satisfactory to the Lenders.


 


SECTION 6. 
Reserved.


 


SECTION 7. 
Representations and Warranties. 
In order to induce the Lenders to enter into this Agreement and to make
the Second-Lien Loans provided for herein, each of Holdings and the Borrower
makes the following representations and warranties with the Lenders, in each
case after giving effect to the Transaction, all of which shall survive the
execution and delivery of this Agreement and the making of the Second-Lien
Loans (with the occurrence of the Initial Borrowing Date being deemed to
constitute a representation and warranty that the matters specified in this
Section 7 are true and correct in all material respects on and as of the
Initial Borrowing Date, unless stated to relate to a specific earlier date in
which case such representations and warranties shall be true and correct in all
material respects as of such earlier date):


 


7.01.  Company Status.  Each of Holdings and its Subsidiaries (i) is
a duly organized and validly existing Company in good standing under the laws
of the jurisdiction of its organization, (ii) has the Company power and
authority to own its property and assets and to transact the business in which
it is engaged and presently proposes to engage and (iii) is duly qualified and
is authorized to do business and is in good standing in all jurisdictions where
it is required to be so qualified and where the failure to be so qualified (x)
has had (unless same has ceased to exist in all respects) or (y) is reasonably
likely to have, a Material Adverse Effect.


 


7.02.  Company Power and Authority.  Each of Holdings and its Subsidiaries has
the Company power and authority to execute, deliver and carry out the terms and
provisions of the Documents to which it is a party and has taken all necessary
Company action to authorize the execution, delivery and performance of the
Documents to which it is a party.  Each of
Holdings and its Subsidiaries has duly executed and delivered each Document to
which it is a party and each such Document constitutes the legal, valid and
binding obligation of such Person enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
generally affecting creditors’ rights and by equitable principles (regardless
of whether enforcement is sought in equity or at law).


 


28

















 


7.03.  No Violation.  Neither the execution, delivery or
performance by Holdings or any of its Subsidiaries of the Documents to which it
is a party, nor compliance by Holdings or any of its Subsidiaries with the
terms and provisions thereof, nor the consummation of the transactions
contemplated herein or therein, (i) will contravene any material provision of
any material applicable law, statute, rule or regulation, or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii) will
conflict or be inconsistent with or result in any breach of, any of the terms,
covenants, conditions or provisions of, or constitute a default under, or
(other than pursuant to the Security Documents) result in the creation or
imposition of (or the obligation to create or impose) any Lien upon any of the
property or assets of Holdings or any of its Subsidiaries pursuant to the terms
of any indenture, mortgage, deed of trust, loan agreement, credit agreement or
any other material agreement or instrument to which Holdings or any of its
Subsidiaries is a party or by which it or any of its property or assets are
bound or to which it may be subject (including, without limitation, the
Existing Indebtedness Agreements) or (iii) will violate any provision of the
certificate of incorporation, by-laws, certificate of partnership, partnership
agreement, certificate of limited liability company, limited liability company
agreement or equivalent organizational document, as the case may be, of
Holdings or any of its Subsidiaries.


 


7.04.  Litigation.  There are no actions, suits, proceedings or investigations
pending or threatened (i) with respect to any Document, (ii) with respect to
the Transaction, or (iii) with respect to Holdings or any of its Subsidiaries
that (x) have had (unless same has ceased to exist in all respects) or (y) are
reasonably likely to have a Material Adverse Effect.  Additionally, there does not exist any judgment, order or
injunction prohibiting or imposing material adverse conditions upon the
occurrence of any Credit Event.


 


7.05.  Use of Proceeds; Margin Regulations.  (a) 
The proceeds of the Second-Lien Loans shall be utilized by the Borrower
and its Subsidiaries on the Initial Borrowing Date to finance, in part, the
Recapitalization and to pay fees and expenses (not to exceed $15,000,000)
incurred in connection with the Transaction.


 


(b)                                 No
part of any Credit Event (or the proceeds thereof) will be used to purchase or
carry any Margin Stock or to extend credit for the purpose of purchasing or
carrying any Margin Stock.  Neither the
making of any Second-Lien Loan nor the use of the proceeds thereof nor the
occurrence of any other Credit Event will violate or be inconsistent with the
provisions of Regulation T, U or X of the Board of Governors of the Federal
Reserve System.


 


(c)                                  On
the Initial Borrowing Date, not more than 25% of the value of the assets of
Holdings and its Subsidiaries taken as a whole (including all capital stock of
Holdings held in treasury) will constitute Margin Stock.


 


7.06.  Governmental Approvals.  Except as may have been obtained or made on
or prior to the Initial Borrowing Date (and which remain in full force and
effect on the Initial Borrowing Date), no order, consent, approval, license,
authorization or validation of, or filing, recording or registration with, or
exemption by, any foreign or domestic governmental or public body or authority,
or any subdivision thereof, is required to authorize or is required in connection
with (i) the execution, delivery and performance of any Document or (ii) the
legality, validity, binding effect or enforceability of any Document.


 


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7.07.  Investment Company Act.  None of Holdings or any of its Subsidiaries
is an “investment company” or a company “controlled” by an “investment
company,” within the meaning of the Investment Company Act of 1940, as amended.


 


7.08.  Public Utility Holding Company Act.  None of Holdings or any of its Subsidiaries
is a “holding company,” or a “subsidiary company” of a “holding company,” or an
“affiliate” of a “holding company” or of a “subsidiary company” of a “holding
company,” within the meaning of the Public Utility Holding Company Act of 1935,
as amended.


 


7.09.  True and Complete Disclosure.  All factual information (taken as a whole)
heretofore or contemporaneously furnished by or on behalf of Holdings or any of
its Subsidiaries in writing to the Administrative Agent or any Lender
(including, without limitation, all information contained in the Documents) for
purposes of or in connection with this Agreement or any transaction
contemplated herein or therein is, and all other such factual information
(taken as a whole) hereafter furnished by or on behalf of any such Persons in
writing to any Agent or any Lender will be, true and accurate in all material
respects on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time in light of the
circumstances under which such information was provided.  It is understood that the Projections do not
constitute factual information for purposes of this Section 7.09.


 


7.10.  Financial Condition; Financial Statements.  (a) 
On and as of the Initial Borrowing Date, on a pro forma basis after
giving effect to the Transaction, and to all Indebtedness (including the
Second-Lien Loans) incurred, and to be incurred, and Liens created, and to be
created, by each Credit Party in connection therewith, with respect to the
Borrower (on a stand-alone basis), Holdings and its Subsidiaries (on a
consolidated basis) and the Borrower and its Subsidiaries (on a consolidated
basis) (x) the sum of the assets, at a fair valuation, of the Borrower (on a
stand-alone basis), Holdings and its Subsidiaries (on a consolidated basis) and
the Borrower and its Subsidiaries (on a consolidated basis) will exceed its or
their debts, (y) it has or they have not incurred nor intended to, nor believes
or believe that it or they will, incur debts beyond its or their ability to pay
such debts as such debts mature and (z) it or they will have sufficient capital
with which to conduct its or their business. 
For purposes of this Section 7.10, “debt” means any liability on a
claim, and “claim” means (i) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (ii)
right to an equitable remedy for breach of performance if such breach gives
rise to a payment, whether or not such right to an equitable remedy is reduced
to judgment, fixed, contingent, matured, unmatured, disputed, undisputed,
secured or unsecured.


 


(b)                                 (i)
The audited consolidated statements of financial condition of Holdings and its
Subsidiaries at March 31, 2001, March 31, 2002 and March 31,
2003, and the related consolidated statements of income and cash flow and
changes in shareholders’ equity of Holdings and its Subsidiaries for the fiscal
years ended on such dates, (ii) the unaudited consolidated balance sheet of
Holdings and its Subsidiaries as of the end of the fiscal quarter of Holdings
ended December 28, 2003, and the related consolidated statements of
earnings, shareholders’ equity and cash flows of Holdings and its Subsidiaries
for the nine-month period then ended, (iii) the interim statements of income
and cash flows for Holdings and its


 


30

















 


Subsidiaries for each
calendar month ended after December 28, 2003 through and including the
latest calendar month ending at least 25 days prior to the Initial Borrowing
Date and (iv) the Pro Forma Balance Sheet, all furnished to the Lenders
prior to the Initial Borrowing Date, in each case present fairly in all
material respects the financial condition of Holdings and its Subsidiaries at
the date of such statements of financial condition and the results of
operations of Holdings and its Subsidiaries for the periods covered thereby
(or, in the case of the Pro  Forma Balance Sheet, presents a good
faith estimate of the consolidated pro forma financial condition of
Holdings as at the date of the preparation thereof (in each case, after giving
effect to the Transaction at the date thereof or for the period covered
thereby)), subject, in the case of unaudited financial statements, to normal
year-end adjustments.  All such
financial statements (other than the aforesaid Pro  Forma Balance Sheet)
have been prepared in accordance with GAAP and practices consistently applied,
except, in the case of the quarterly and monthly statements, for the omission
of footnotes and ordinary end of period adjustments and accruals (all of which
are of a recurring nature and none of which individually, or in the aggregate,
would be material) and the aforesaid Pro  Forma Balance Sheet has
been prepared on a basis consistent with the historical financial statements of
Holdings set forth in foregoing clause (i) of this Section 7.10(b).


 


(c)                                  After
giving effect to the Transaction, since March 31, 2003 (but assuming the
Transaction had occurred immediately prior to such date), nothing has occurred
that (x) has had a Material Adverse Effect (unless same has ceased to exist in
all respects) or (y) is reasonably likely to have a Material Adverse Effect.


 


(d)                                 Except
as fully reflected in the financial statements described in Sections 7.10(b)
and as otherwise permitted by Section 9.04, (i) there were as of the
Initial Borrowing Date (and after giving effect to any Second-Lien Loans made,
and transactions occurring, on such date), no liabilities or obligations with
respect to Holdings or any of its Subsidiaries of any nature whatsoever
(whether absolute, accrued, contingent or otherwise and whether or not due)
which, either individually or in the aggregate, (x) have had a Material Adverse
Effect (unless same has ceased to exist in all respects) or (y) are reasonably
likely to have a Material Adverse Effect and (ii) neither Holdings nor the
Borrower knows of any basis for the assertion against Holdings or any of its
Subsidiaries of any such liability or obligation which, either individually or
in the aggregate, (x) have had a Material Adverse Effect (unless same has
ceased to exist in all respects) or (y) are reasonably likely to have a
Material Adverse Effect.


 


(e)                                  The
Projections have been prepared on a basis consistent with the financial
statements referred to in Section 7.10(b), and are based on good faith
estimates and assumptions made by the management of Holdings, which assumptions
such management believed were reasonable on the Initial Borrowing Date, it
being recognized by the Lenders that such projections of future events are not
to be viewed as facts and that actual results during the period or periods
covered by any such Projections may differ from the projected results contained
therein and such differences may be material. 
There is no fact known to Holdings, the Borrower or any of their
respective Subsidiaries which (x) has had a Material Adverse Effect (unless
same has ceased to exist in all respects) or (y) is reasonably likely to have a
Material Adverse Effect, which has not been disclosed herein or in such other
documents, certificates and statements furnished to the Lenders for use in
connection with the transactions contemplated hereby.


 


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7.11.  Security Interests.  On and after the Initial Borrowing Date,
each of the Security Documents creates (or after the execution and delivery
thereof will create), as security for the Obligations, a valid and enforceable
perfected security interest in and Lien on all of the Collateral subject
thereto, superior to and prior to the rights of all third Persons, and subject
to no other Liens (except that (i) the Security Agreement Collateral may be
subject to Permitted Liens, (ii) the Pledge Agreement Collateral may be subject
to the Liens described in clauses (i) and (v) of Section 9.03 and (iii)
the security interest and mortgage lien created on any Mortgaged Property may
be subject to the Permitted Encumbrances related thereto), in favor of the
Collateral Agent.  No filings or
recordings are required in order to perfect the security interests created
under any Security Document except for filings or recordings required in
connection with any such Security Document which shall have been made on or
prior to the Initial Borrowing Date as contemplated by Section 5.12 or on
or prior to the execution and delivery thereof as contemplated by Sections 8.11
and 9.15.


 


7.12.  Compliance with ERISA.  (a) 
Schedule V sets forth, as of the Initial Borrowing Date, each Plan
and each Multiemployer Plan of Holdings. 
Each Plan (and each related trust, insurance contract or fund) is in
material compliance with its terms and with all applicable laws, including,
without limitation, ERISA and the Code; each Plan (and each related trust, if
any) which is intended to be qualified under Section 401(a) of the Code
has received a determination letter or an opinion letter since January 1,
2001 from the Internal Revenue Service to the effect that it meets the
requirements of Sections 401(a) and 501(a) of the Code; no Reportable Event has
occurred that could reasonably be expected to result in any material liability
for Holdings, any Subsidiary of Holdings or any ERISA Affiliate; no
Multiemployer Plan is insolvent or in reorganization; except as set forth on
Schedule V with respect to the three plans set forth therein, no Plan has
an Unfunded Current Liability which, when added to the aggregate amount of
Unfunded Current Liabilities with respect to all other Plans (after taking into
account the amount of Unfunded Current Liabilities set forth on Schedule V
with respect to the three plans set forth thereon), exceeds $10,000,000; no
Plan which is subject to Section 412 of the Code or Section 302 of
ERISA has an accumulated funding deficiency, within the meaning of such
sections of the Code or ERISA, or has applied for or received a waiver of an
accumulated funding deficiency or an extension of any amortization period,
within the meaning of Section 412 of the Code or Section 303 or 304
of ERISA; all contributions required to be made with respect to a Plan and a
Multiemployer Plan have been timely made, except to the extent that any failure
to make such contribution would not result in a material liability; neither
Holdings nor any Subsidiary of Holdings nor any ERISA Affiliate has incurred
any material liability (including any indirect, contingent or secondary liability)
to or on account of a Plan or a Multiemployer Plan pursuant to
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or Section 401(a)(29), 4971 or 4975 of the Code or, to the
knowledge of Holdings or the Borrower, reasonably expects to incur any such
material liability under any of the foregoing sections with respect to any Plan
or a Multiemployer Plan; no condition exists which presents a material risk to
Holdings or any Subsidiary of Holdings or any ERISA Affiliate of incurring a
material liability to or on account of a Plan or a Multiemployer Plan pursuant
to the foregoing provisions of ERISA and the Code; no proceedings have been
instituted to terminate or appoint a trustee to administer any Plan which is
subject to Title IV of ERISA; no action, suit, proceeding, hearing, audit or
investigation with respect to the administration, operation or the investment
of assets of any Plan (other than routine claims for benefits) is pending,
expected or, to the knowledge of Holdings or the Borrower, threatened that
could reasonably


 


32

















 


be expected to result in
any material liability for Holdings, any Subsidiary of Holdings or any ERISA
Affiliate; using actuarial assumptions and computation methods consistent with
Part 1 of subtitle E of Title IV of ERISA, Holdings and its Subsidiaries and
ERISA Affiliates would not have any material liabilities to any Multiemployer
Plan in the event of a withdrawal therefrom, as of the close of the most recent
fiscal year of each such Multiemployer Plan ended prior to the date of the most
recent Credit Event; each group health plan (as defined in Section 607(1)
of ERISA or Section 4980B(g)(2) of the Code) which covers or has covered
employees or former employees of Holdings, any Subsidiary of Holdings, or any
ERISA Affiliate has at all times been operated in compliance with the
provisions of Part 6 of subtitle B of Title I of ERISA and Section 4980B
of the Code except to the extent that such noncompliance would not result in a
material liability; each group health plan (as defined in 45 Code of Federal
Regulations Section 160.103) which covers or has covered employees or
former employees of Holdings, any Subsidiary of Holdings or any ERISA Affiliate
has at all times been operated in compliance with the provisions of the Health
Insurance Portability and Accountability Act of 1996 and the regulations
promulgated thereunder, except to the extent that any such failure could
reasonably be expected to result in a material liability; no lien imposed under
the Code or ERISA on the assets of Holdings or any Subsidiary of Holdings or
any ERISA Affiliate exists or to the knowledge of Holdings or the Borrower, is
reasonably likely to arise on account of any Plan or any Multiemployer Plan;
and Holdings and its Subsidiaries do not maintain or contribute to any employee
welfare benefit plan (as defined in Section 3(1) of ERISA) which provides
benefits to retired employees or other former employees (other than as required
by Section 601 of ERISA) the obligations with respect to which could
reasonably be expected to have a Material Adverse Effect.


 


(b)                                 Each
Foreign Pension Plan, if any, has been maintained in material compliance with
its terms and with the requirements of any and all applicable laws, statutes,
rules, regulations and orders and has been maintained, where required, in good
standing with applicable regulatory authorities.  All contributions required to be made with respect to a Foreign
Pension Plan, if any, have been timely made. 
Except as could not reasonably be expected to have a Material Adverse
Effect (i) neither Holdings nor any of its Subsidiaries has incurred any
material obligation in connection with the termination, of or withdrawal from,
any Foreign Pension Plan, and (ii) there are no accrued benefit liabilities
(whether or not vested) under any Foreign Pension Plan that are unfunded or
that have not been adequately reserved for in accordance with generally
accepted accounting principles in the applicable jurisdiction.


 


7.13.  Capitalization.  (a) 
On the Initial Borrowing Date and after giving effect to the Transaction
and the other transactions contemplated hereby, the authorized capital stock of
Holdings shall consist of (i) 1,000,000 shares of Class A common stock, $.01
par value per share, 386,471 shares of which are issued and outstanding, (ii)
1,000,000 shares of Class B common stock, $.01 par value per share, none of
which shares are issued and outstanding (such authorized shares of common stock
described in clauses (i) and (ii), together with any subsequently authorized
shares of common stock of Holdings, collectively, the “Holdings Common Stock”)
and (iii) 1,000,000 shares of Series A convertible preferred stock, par value
$.01 per share, 665,883 shares of which are issued and outstanding (the “Convertible
Preferred Stock”).  All outstanding
shares of Holdings Common Stock and Convertible Preferred Stock have been duly
and validly issued, are fully paid and nonassessable and free of preemptive rights.  As of the Initial Borrowing Date, except as
set forth on Schedule X hereto, Holdings does


 


33

















 


not have outstanding any
securities convertible into or exchangeable for its capital stock or outstanding
any rights to subscribe for or to purchase, or any options for the purchase of,
or any agreement providing for the issuance (contingent or otherwise) of, or
any calls, commitments or claims of any character relating to, its capital
stock.


 


(b)                                 On
the Initial Borrowing Date and after giving effect to the Transaction, the
authorized capital stock of the Borrower shall consist of 3,000 shares of
common stock, $.01 par value per share, 100 of which shares are issued and
outstanding.  All such outstanding shares
have been duly and validly issued, are fully paid and nonassessable and free of
preemptive rights.  The Borrower does
not have outstanding any securities convertible into or exchangeable for its
capital stock or outstanding any rights to subscribe for or to purchase, or any
options for the purchase of, or any agreement providing for the issuance
(contingent or otherwise) of, or any calls, commitments or claims of any
character to, its capital stock.


 


7.14.  Subsidiaries.  On and as of the Initial Borrowing Date and
after giving effect to the Transaction, Holdings has no Subsidiaries other than
the Borrower and its Subsidiaries, and the Borrower has no Subsidiaries other
than those Subsidiaries listed on Schedule VII.  Schedule VII correctly sets forth, as of the Initial
Borrowing Date and after giving effect to the Transaction, the percentage
ownership (direct and indirect) of the Borrower in each class of capital stock
or other Equity Interests of each of its Subsidiaries and also identifies the
direct owner thereof.  All outstanding
shares of Equity Interests of each Subsidiary of the Borrower have been duly
and validly issued, are fully paid and non-assessable and have been issued free
of preemptive rights.  No Subsidiary of
the Borrower has outstanding any securities convertible into or exchangeable
for its Equity Interests or outstanding any right to subscribe for or to
purchase, or any options or warrants for the purchase of, or any agreement
providing for the issuance (contingent or otherwise) of or any calls,
commitments or claims of any character relating to, its Equity Interests or any
stock appreciation or similar rights.


 


7.15.  Intellectual Property, etc.  Each of Holdings and each of its
Subsidiaries owns or has the rights to use all patents, trademarks, permits,
service marks, trade names, technology copyrights, licenses, franchises and
formulas, or other rights with respect to the foregoing, reasonably necessary
for the conduct of its business, without any known conflict with the rights of
others which, or the failure to obtain which, as the case may be, (x) has had
(unless same has ceased to exist in all respects) or (y) is reasonably likely
to have, a Material Adverse Effect.


 


7.16.  Compliance with Statutes; Agreements, etc.  Each of Holdings and each of its
Subsidiaries is in compliance with (i) all applicable statutes, regulations,
rules and orders of, and all applicable restrictions imposed by, all
governmental bodies, domestic or foreign, in respect of the conduct of its
business and the ownership of its property and (ii) all contracts and
agreements to which it is a party, except such non-compliance as (x) has not
(unless same has ceased to exist in all respects) and (y) is not reasonably
likely to, individually or in the aggregate, have a Material Adverse Effect.


 


7.17.  Environmental Matters.  (a) 
Each of Holdings and each of its Subsidiaries has complied with, and on
the date of each Credit Event is in compliance with, all applicable
Environmental Laws and the requirements of any permits issued under such
Environmental Laws


 


34

















 


and neither Holdings nor
any of its Subsidiaries is liable for any material penalties, fines or
forfeitures for failure to comply with any of the foregoing.  There are no pending or past or, to the best
knowledge of Holdings or the Borrower, threatened Environmental Claims against
Holdings or any of its Subsidiaries or any Real Property owned or operated by
Holdings or any of its Subsidiaries. 
There are no facts, circumstances, conditions or occurrences on any Real
Property owned or operated by Holdings or any of its Subsidiaries or on any
property adjoining or in the vicinity of any such Real Property that would
reasonably be expected (i) to form the basis of an Environmental Claim against
Holdings or any of its Subsidiaries or any such Real Property or (ii) to cause
any such Real Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property by Holdings or any of
its Subsidiaries under any applicable Environmental Law.


 


(b)                                 Hazardous
Materials have not at any time been generated, used, treated or stored on, or
transported to or from, any Real Property owned or operated by Holdings or any
of its Subsidiaries except in compliance with all applicable Environmental Laws
and reasonably required in connection with the operation, use and maintenance
of such Real Property by Holdings’ or such Subsidiary’s business.  Hazardous Materials have not at any time
been Released on or from any Real Property owned or operated by Holdings or any
of its Subsidiaries or by any person acting for or under contract to Holdings
or any of its Subsidiaries, or to the knowledge of Holdings, by any other
Person in respect of Real Property owned or operated by Holdings or any of its
Subsidiaries, except in compliance with all applicable Environmental Laws.


 


(c)                                  Notwithstanding
anything to the contrary in this Section 7.17, the representations made in
this Section 7.17 shall only be untrue if the aggregate effect of all
conditions, failures, noncompliances, Environmental Claims, Hazardous
Materials, Releases and presence of underground storage tanks, in each case of
the types described above, (x) has had (unless same has ceased to exist in all
respects) or (y) is reasonably likely to have, a Material Adverse Effect.


 


7.18.  Properties.  All Real Property owned by Holdings or any of its Subsidiaries
and all material Leaseholds leased by Holdings or any of its Subsidiaries, in
each case as of the Initial Borrowing Date and after giving effect to the
Transaction, and the nature of the interest therein, is correctly set forth in
Schedule III.  Each of Holdings and
each of its Subsidiaries has good and marketable title to, or a validly
subsisting leasehold interest in, all material properties owned or leased by
it, including all Real Property reflected in Schedule III and in the
financial statements (including the Pro  Forma Financial
Statements) referred to in Section 7.10(b) (except such properties sold in
the ordinary course of business since the dates of the respective financial
statements referred to therein), free and clear of all Liens, other than
Permitted Liens.


 


7.19.  Labor Relations.  Neither Holdings nor any of its Subsidiaries
is engaged in any unfair labor practice that (x) has had (unless same has
ceased to exist in all respects) or (y) is reasonably likely to have, a
Material Adverse Effect.  There is (i)
no unfair labor practice complaint pending against Holdings or any of its
Subsidiaries or threatened against any of them, before the National Labor
Relations Board, and no grievance or arbitration proceeding arising out of or
under any collective bargaining agreement is so pending against Holdings or any
of its Subsidiaries or threatened against any of them, (ii) no strike, labor
dispute, slowdown or


 


35

















 


stoppage pending against
Holdings or any of its Subsidiaries or threatened against Holdings or any of
its Subsidiaries and (iii) no union representation question existing with
respect to the employees of Holdings or any of its Subsidiaries and no union
organizing activities are taking place, except (with respect to any matter
specified in clause (i), (ii) or (iii) above, either individually or in the
aggregate) such as (x) has not had (unless same has ceased to exist in all
respects) and (y) is not reasonably likely to have, a Material Adverse Effect.


 


7.20.  Tax Returns and Payments.  Each of Holdings and each of its
Subsidiaries has timely filed all federal income tax returns and all other
material tax returns, domestic and foreign, required to be filed by it and has
paid all material taxes and assessments payable by it which have become due,
except for those contested in good faith and adequately disclosed and fully
provided for on the financial statements of Holdings and its Subsidiaries in
accordance with generally accepted accounting principles.  Each of Holdings and each of its
Subsidiaries has at all times paid, or has provided adequate reserves (in the
good faith judgment of the management of Holdings) for the payment of, all
federal, state and foreign income taxes applicable for all prior fiscal years
and for the current fiscal year to date. 
There is no material action, suit, proceeding, investigation, audit, or
claim now pending or, to the knowledge of Holdings or any of its Subsidiaries,
threatened by any authority regarding any taxes relating to Holdings or any of
its Subsidiaries.  Neither Holdings nor
any of its Subsidiaries has entered into an agreement or waiver or been
requested to enter into an agreement or waiver extending any statute of
limitations relating to the payment or collection of taxes of Holdings or any
of its Subsidiaries, or is aware of any circumstances that would cause the
taxable years or other taxable periods of Holdings or any of its Subsidiaries
not to be subject to the normally applicable statute of limitations.


 


7.21.  Existing Indebtedness.  Part A of Schedule IV sets forth a true
and complete list of all Indebtedness of Holdings and its Subsidiaries as of
the Initial Borrowing Date and which is to remain outstanding after giving
effect to the Transaction (excluding (i) the Obligations, (ii) the Indebtedness
pursuant to the First-Lien Credit Documents and (iii) Indebtedness under
Existing Overdraft Facilities) (the “Existing Indebtedness”), in each
case showing the aggregate principal amount thereof and the name of the
respective borrower and any other entity which directly or indirectly
guaranteed such debt.


 


7.22.  Insurance.  Set forth on Schedule VIII hereto is a true, correct and
complete summary of all insurance carried by each Credit Party on and as of the
Initial Borrowing Date (immediately after giving effect to the Transaction),
with the amounts insured set forth therein.


 


7.23.  Transaction.  At the time of consummation thereof, each
element of the Transaction shall have been consummated in all material respects
in accordance with the terms of the relevant Documents therefor and all
applicable laws.  At the time of
consummation thereof, all consents and approvals of, and filings and
registrations with, and all other actions in respect of, all governmental
agencies, authorities or instrumentalities required in order to make or
consummate each element of the Transaction in all material respects in
accordance with the terms of the relevant Documents therefor and all applicable
laws have been obtained, given, filed or taken and are or will be in full force
and effect (or effective judicial relief with respect thereto has been
obtained).  All applicable waiting
periods with respect thereto have or, prior to the time when required, will
have, expired without, in all such cases, any action being taken by any


 


36

















 


competent authority which
restrains, prevents, or imposes material adverse conditions upon the
Transaction.  Additionally, there does
not exist any judgment, order or injunction prohibiting or imposing material
adverse conditions upon any element of the Transaction, the occurrence of any
Credit Event, or the performance by Holdings or any of its Subsidiaries of
their respective obligations under the Documents and all applicable laws.


 


7.24.  Special Purpose Corporation.  (a) 
Holdings has no significant assets (other than the Equity Interests of
the Borrower, any Intercompany Note evidencing an Intercompany Loan permitted
to be made by it pursuant to Section 9.05(vi), cash and Cash Equivalents
held prior to the on-lending, contribution, dividend and/or other application
for purposes not otherwise prohibited by this Agreement and the assets used for
the performance of those activities permitted to be performed by it pursuant to
Section 9.01(b)) or liabilities (other than under this Agreement and the
other Documents to which it is a party and those liabilities permitted to be
incurred by it pursuant to Section 9.01(b)).


 


(b)                                 Cayman
Partnership Shareholder #1 has no significant assets (other than the Equity
Interests of Cayman Partnership Shareholder #2, Cayman Partnership Shareholder
#3, the Cayman Partnership and the immaterial assets used for the performance
of those activities permitted to be performed by it pursuant to
Section 9.01(d)) or liabilities (other than under this Agreement and the
other Credit Documents to which it is a party and those liabilities permitted
to be incurred by it pursuant to Section 9.01(d)); provided that
notwithstanding the foregoing, it is understood and agreed that Cayman
Partnership Shareholder #1 may (x) temporarily hold cash and/or Cash
Equivalents loaned and/or contributed to it by its parent company, so long as
same is promptly contributed and/or on-loaned to one or more of its
Subsidiaries, (y) temporarily hold cash and/or Cash Equivalents on-loaned
and/or dividended to it by one or more of its Subsidiaries, so long as same is
promptly on-loaned and/or dividended to its parent company and (z) hold
intercompany receivables resulting from loans made as contemplated above in
preceding clauses (x) and (y).


 


(c)                                  Cayman
Partnership Shareholder #2 has no significant assets (other than the Equity
Interests of the Cayman Partnership (and the underlying assets of the Cayman
Partnership which it may be deemed to own under the laws of the Cayman Islands)
and the immaterial assets used for the performance of those activities
permitted to be performed by it pursuant to Section 9.01(e)) or
liabilities (other than under this Agreement and the other Credit Documents to
which it is a party and those liabilities permitted to be incurred by it pursuant
to Section 9.01(e)); provided that notwithstanding the foregoing,
it is understood and agreed that Cayman Partnership Shareholder #2 may (x)
temporarily hold cash and/or Cash Equivalents loaned and/or contributed to it
by its parent company, so long as same is promptly contributed and/or on-loaned
to one or more of its Subsidiaries, (y) temporarily hold cash and/or Cash
Equivalents on-loaned and/or dividended to it by one or more of its
Subsidiaries, so long as same is promptly on-loaned and/or dividended to its
parent company, and (z) hold intercompany receivables resulting from loans made
as contemplated above in preceding clauses (x) and (y).


 


(d)                                 Cayman
Partnership Shareholder #3 has no significant assets (other than the Equity
Interests of the Cayman Partnership and the immaterial assets used for the
performance of those activities permitted to be performed by it pursuant to
Section 9.01(f)) or liabilities (other than under this Agreement and the
other Credit Documents to which it is a party


 


37

















 


and those liabilities
permitted to be incurred by it pursuant to Section 9.01(f)); provided
that notwithstanding the foregoing, it is understood and agreed that Cayman
Partnership Shareholder #3 may (x) temporarily hold cash and/or Cash
Equivalents loaned and/or contributed to it by its parent company, so long as
same is promptly contributed and/or on-loaned to one or more of its
Subsidiaries, (y) temporarily hold cash and/or Cash Equivalents on-loaned
and/or dividended to it by one or more of its Subsidiaries, so long as same is
promptly on-loaned and/or dividended to its parent company, and (z) hold
intercompany receivables resulting from loans made as contemplated above in
preceding clauses (x) and (y).


 


7.25.  Subordination.  (a)               On
and after the execution and delivery of any Refinancing Senior Subordinated
Notes Documents (unless all of the Second-Lien Loans and other Obligations
hereunder have been repaid in full concurrently with the incurrence of the
Refinancing Senior Subordinated Notes), the subordination provisions contained
therein are enforceable against the Borrower, the Subsidiary Guarantors and the
holders of such Indebtedness, and all Obligations hereunder and all obligations
of the Credit Parties under the other Credit Documents (including without
limitation, the Subsidiaries Guaranty) are within the definitions of “Senior
Debt” or “Guarantor Senior Debt” (or analogous term or terms) and “Designated
Senior Debt” (or analogous term) included in such subordination provisions.


 


(b)                                 The
subordination provisions contained in each of the Shareholders Subordinated
Notes are enforceable against Holdings and the holders of such Indebtedness,
and all Obligations of Holdings hereunder and under the other Credit Documents
to which it is a party are within the definition of “Senior Debt” included in
such subordination provisions.


 


SECTION 8. 
Affirmative Covenants. 
Each of Holdings and the Borrower hereby covenants and agrees that as of
the Effective Date and thereafter for so long as this Agreement is in effect
and until the Total Commitment has terminated, and all Second-Lien Loans,
together with interest, Fees and all other Obligations (other than any
indemnities described in Section 13.13(b) which are not then due and
payable) incurred hereunder, are paid in full:


 


8.01.  Information Covenants.  Holdings will furnish, or will cause to be
furnished, to the Administrative Agent and each Lender:


 


(a)                                  Quarterly
Financial Statements.  Within 45
days after the close of the first three quarterly accounting periods in each
fiscal year of Holdings, the consolidated balance sheet of Holdings and its
Subsidiaries as at the end of such quarterly accounting period and the related
consolidated statements of income and retained earnings and of cash flows for
such quarterly accounting period and for the elapsed portion of the fiscal year
ended with the last day of such quarterly accounting period and the budgeted
figures for such quarterly period as set forth in the respective budget
delivered pursuant to Section 8.01(c) (unless such quarterly period occurs
prior to the delivery (or required delivery) of the first budget pursuant to
Section 8.01(c) which includes such quarterly accounting period), all of
which shall be in reasonable detail and certified by the senior financial
officer or other Authorized Officer of Holdings that they fairly present in all
material respects the financial condition of Holdings and its Subsidiaries as
of the dates indicated and the results of their operations and changes in their
cash flows for the


 


38

















 


periods indicated,
subject to normal year-end audit adjustments and the absence of footnotes.


 


(b)                                 Annual
Financial Statements.  Within 90
days after the close of each fiscal year of Holdings, the consolidated balance
sheet of Holdings and its Subsidiaries as at the end of such fiscal year and
the related consolidated statements of income and retained earnings and of cash
flows for such fiscal year and setting forth comparative consolidated figures
for the preceding fiscal year and (except in the case of the fiscal year ending
March 31, 2004) comparable budgeted figures for such fiscal year as set
forth in the respective budget delivered pursuant to Section 8.01(c) and
(except for such comparable budgeted figures) certified by Ernst & Young
LLP or such other independent certified public accountants of recognized
national standing as shall be reasonably acceptable to the Administrative
Agent, in each case to the effect that such statements fairly present in all
material respects the financial condition of Holdings and its Subsidiaries as
of the dates indicated and the results of their operations and changes in
financial position for the periods indicated in conformity with GAAP applied on
a basis consistent with prior years, together with a certificate of such
accounting firm stating that in the course of its regular audit of the business
of Holdings and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, no Default or Event of Default which has
occurred and is continuing has come to their attention or, if such a Default or
an Event of Default has come to their attention, a statement as to the nature
thereof.


 


(c)                                  Budgets, etc.  Not
more than 60 days after the commencement of each fiscal year of Holdings
(commencing with the fiscal year of Holdings ending nearest to March 31,
2005), consolidated budgets of Holdings and its Subsidiaries in reasonable
detail for each of the four fiscal quarters of such fiscal year, in each case
as customarily prepared by management for its internal use setting forth the
principal assumptions upon which such budgets are based.  Together with each delivery of financial
statements pursuant to Sections 8.01(a) and (b), a comparison of the current
year to date financial results against the budgets required to be submitted
pursuant to this clause (c) shall be presented.


 


(d)                                 Officer’s
Certificates.  At the time of the
delivery of the financial statements provided for in Sections 8.01(a) and (b),
a certificate of the senior financial officer or other Authorized Officer of
Holdings to the effect that no Default or Event of Default exists or, if any
Default or Event of Default does exist, specifying the nature and extent
thereof, which certificate shall, if delivered in connection with the financial
statements in respect of a period ending on the last day of a fiscal quarter or
fiscal year of Holdings, set forth (x) the calculations required to establish
whether Holdings and its Subsidiaries were in compliance with the provisions of
Sections 4.02(a) through (g), inclusive, Sections 9.02(iv), (v), (xi) and
(xvi), Sections 9.03(vi), (xviii) and (xix), Sections 9.04(iv), (v), (vi),
(vii), (viii), (ix), (x) and (xiii) through (xviii), inclusive, Sections
9.05(vi), (vii), (xi), (xiv) and (xxi), Sections 9.06(ii), (iv), (ix) and (x)
and Sections 9.08 through and including 9.11, inclusive, as at the end of such
fiscal quarter or year, as the case may be, and (y) the calculation of the
Leverage Ratio as at the last day of the respective fiscal quarter or fiscal
year of Holdings, as the case may be.


 


39

















 


(e)                                  Notice
of Default or Litigation.  Promptly,
and in any event within five Business Days after an officer of Holdings or any
of its Subsidiaries obtains actual knowledge thereof, notice of (i) the
occurrence of any event which constitutes a Default or an Event of Default,
which notice shall specify the nature and period of existence thereof and what
action Holdings or the Borrower proposes to take with respect thereto, (ii) any
litigation or proceeding pending or threatened (x) against Holdings or any of
its Subsidiaries which (x) has had (unless same has ceased to exist in all
respects) or (y) is reasonably likely, to have a Material Adverse Effect, (y)
with respect to any material Indebtedness of Holdings or any of its
Subsidiaries or (z) with respect to any Document, (iii) any material
governmental investigation pending or threatened against Holdings or any of its
Subsidiaries and (iv) any other event which (x) has had (unless same has ceased
to exist in all respects) or (y) is reasonably likely to have, a Material
Adverse Effect.


 


(f)                                    Management
Letters.  Promptly upon receipt
thereof, a copy of any “management letter” submitted to Holdings or any of its
Subsidiaries by its independent accountants in connection with any annual,
interim or special audit made by them of the books of Holdings or any of its Subsidiaries
and management’s responses thereto.


 


(g)                                 Environmental
Matters.  Promptly after any officer
of Holdings or any of its Subsidiaries obtains actual knowledge of any of the
following (but only to the extent that any of the following, either individually
or in the aggregate, (x) has had (unless same has ceased to exist in all
respects) or (y) is reasonably likely to have, (a) a Material Adverse Effect or
(b) a remedial cost to Holdings or any of its Subsidiaries in excess of
$5,000,000), written notice of:


 


(i)                                     any
pending or threatened Environmental Claim against Holdings or any of its
Subsidiaries or any Real Property owned or operated by Holdings or any of its
Subsidiaries;


 


(ii)                                  any
condition or occurrence on any Real Property owned or operated by Holdings or
any of its Subsidiaries that (x) results in noncompliance by Holdings or any of
its Subsidiaries with any applicable Environmental Law or (y) could reasonably
be anticipated to form the basis of an Environmental Claim against Holdings or
any of its Subsidiaries or any such Real Property;


 


(iii)                               any
condition or occurrence on any Real Property owned or operated by Holdings or
any of its Subsidiaries that could reasonably be anticipated to cause such Real
Property to be subject to any restrictions on the ownership, occupancy, use or
transferability by Holdings or such Subsidiary, as the case may be, of its
interest in such Real Property under any Environmental Law; and


 


(iv)                              the
taking of any removal or remedial action in response to the actual or alleged
presence of any Hazardous Material on any Real Property owned or operated by
Holdings or any of its Subsidiaries.


 


40

















 


All such notices shall
describe in reasonable detail the nature of the claim, investigation,
condition, occurrence or removal or remedial action and Holdings’ response or
proposed response thereto.  In addition,
Holdings agrees to provide the Lenders with copies of such detailed reports
relating to any of the matters set forth in clauses (i)-(iv) above as may
reasonably be requested by the Administrative Agent or the Required Lenders.


 


(h)                                 Reports.  Promptly upon transmission thereof, (i)
copies of any filings and registrations with, and reports to, the SEC by
Holdings or any of its Subsidiaries, (ii) copies of all financial information,
notices and reports as Holdings or any of its Subsidiaries shall send to the
holders of Indebtedness under the First-Lien Credit Documents and (after the
execution and delivery thereof) the Accounts Receivable Facility Documents and
any other material Indebtedness in their capacity as such holders (to the
extent not theretofore delivered to the Lenders pursuant to this Agreement and,
in the case of the Accounts Receivable Facility Documents, excluding regular
monthly reports as to payments on, and the performance of, the related Accounts
Receivables Related Assets), (iii) following any public issuance of debt or
equity securities of Holdings or any of its Subsidiaries, copies of all
financial statements, proxy statements, notices and reports as Holdings or any
of its Subsidiaries shall send generally to analysts and the holders of their
capital stock or Indebtedness in their capacity as such holders (to the extent
not theretofore delivered to the Lenders pursuant to this Agreement) and (iv)
with reasonable promptness, such other information or documents (financial or
otherwise) as the Administrative Agent on its own behalf or on behalf of the
Required Lenders may reasonably request from time to time.


 


(i)                                     Other
Information.  From time to time,
such other information or documents (financial or otherwise) with respect to
Holdings or its Subsidiaries as the Administrative Agent or any Lender (through
the Administrative Agent) may reasonably request.


 


8.02.  Books, Records and Inspections.  Holdings will, and will cause each of its
Subsidiaries to, keep proper books of record and account in which full, true
and correct entries in conformity with GAAP and all material requirements of
law shall be made of all dealings and transactions in relation to its business
and activities.  Holdings will, and will
cause each of its Subsidiaries to, permit, upon reasonable prior notice to the
senior financial officer or other Authorized Officer of Holdings or the
Borrower, officers and designated representatives of the Administrative Agent
or the Required Lenders, at their expense unless an Event of Default has
occurred, to visit and inspect under the guidance of officers of Holdings or
the Borrower any of the properties or assets of Holdings or any of its
Subsidiaries in whomsoever’s possession, and to examine the books of account of
Holdings and any of its Subsidiaries and discuss the affairs, finances and
accounts of Holdings and of any of its Subsidiaries with, and be advised as to
the same by, their officers and independent accountants, all at such reasonable
times and intervals and to such reasonable extent as the Administrative Agent
or the Required Lenders may desire.


 


8.03.  Insurance.  (a)  Holdings will, and
will cause each of its Subsidiaries to (i) maintain, with financially sound and
reputable insurance companies, insurance on all its property in at least such
amounts and against at least such risks as is consistent and in accordance with
industry practice and (ii) furnish to the Administrative Agent and each of the
Lenders, upon


 


41

















 


request, full information
as to the insurance carried.  In
addition to the requirements of the immediately preceding sentence, Holdings will
at all times cause insurance of the types described in Schedule VIII to be
maintained (with the same scope of coverage as that described in
Schedule VIII) at levels which are consistent with its practices
immediately before the Initial Borrowing Date, or otherwise in form, scope and
amount acceptable to the Administrative Agent. 
Such insurance shall include physical damage insurance on all real and
personal property (whether now owned or hereafter acquired) on an all risk
basis and business interruption insurance. 
The provisions of this Section 8.03 shall be deemed supplemental
to, but not duplicative of, the provisions of any Security Documents that
require the maintenance of insurance.


 


(b)                                 Holdings
will, and will cause each of the Subsidiary Guarantors to, at all times keep
the respective property of the Credit Parties (except real or personal property
leased or financed through third parties in accordance with this Agreement)
insured in favor of the Collateral Agent, and all policies or certificates with
respect to such insurance (and any other insurance maintained by, or on behalf
of, any Credit Party) (i) shall be endorsed to the Collateral Agent’s
satisfaction for the benefit of the Collateral Agent (including, without
limitation, by naming the Collateral Agent as certificate holder, mortgagee and
loss payee with respect to real property, certificate holder and loss payee
with respect to personal property, additional insured with respect to general
liability and umbrella liability coverage and certificate holder with respect
to workers’ compensation insurance), (ii) shall state that such insurance
policies shall not be canceled or materially changed without at least 30 days’
prior written notice thereof by the respective insurer to the Collateral Agent
and (iii) after the Discharge of the First-Lien Obligations, shall be deposited
with the Collateral Agent.


 


(c)                                  If
Holdings or any of its Subsidiaries shall fail to maintain all insurance in
accordance with this Section 8.03, or if Holdings or any of its
Subsidiaries shall fail to so name the Collateral Agent as an additional
insured, mortgagee or loss payee, as the case may be, or so deposit all
certificates with respect thereto, the Administrative Agent and/or the
Collateral Agent shall have the right (but shall be under no obligation), upon
five Business Days notice to the Borrower, to procure such insurance, and the
Credit Parties agree jointly and severally to reimburse the Administrative
Agent or the Collateral Agent, as the case may be, for all costs and expenses
of procuring such insurance.


 


8.04.  Payment of Taxes.  Holdings will pay and discharge, and will
cause each of its Subsidiaries to pay and discharge, all material taxes,
assessments and governmental charges or levies imposed upon it or upon its
income or profits, or upon any properties belonging to it, in each case on a
timely basis, and all lawful claims for material sums that have become due and
payable which, if unpaid, might become a Lien not otherwise permitted under
Section 9.03(i); provided that neither Holdings nor any of its
Subsidiaries shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings if it
has maintained and continues to maintain adequate reserves with respect thereto
in accordance with GAAP.


 


8.05.  Corporate Franchises.  Holdings will do, and will cause each of its
Subsidiaries to do, or cause to be done, all things necessary to preserve and
keep in full force and effect its existence and its material rights,
franchises, authority to do business, licenses, certifications,


 


42

















 


accreditations and
patents, except for rights, franchises, authority to do business, licenses,
certifications, accreditations and patents the loss of which (individually and
in the aggregate) (x) have not had (unless same has ceased to exist in all
respects) and (y) are not reasonably likely to have, a Material Adverse Effect;
provided, however, that any transaction permitted by
Section 9.02 (including, without limitation, the dissolution of any
Subsidiary of the Borrower permitted pursuant to said Section) will not
constitute a breach of this Section 8.05.


 


8.06.  Compliance with Statutes; etc.  Holdings will, and will cause each of its
Subsidiaries to, comply with all applicable statutes, regulations and orders
of, and all applicable restrictions imposed by, all governmental bodies,
domestic or foreign, in respect of the conduct of its business and the
ownership of its property, except for such noncompliance as (x) have not had
(unless same has ceased to exist in all respects) and (y) are not reasonably
likely to have, a Material Adverse Effect.


 


8.07.  Compliance with Environmental Laws.  (a) 
(i)  Holdings will comply, and
will cause each of its Subsidiaries to comply, in all material respects with
all Environmental Laws applicable to the ownership or use of its Real Property
now or hereafter owned or operated by Holdings or any of its Subsidiaries, will
promptly pay or cause to be paid all costs and expenses incurred in connection
with such compliance, and will keep or cause to be kept all such Real Property
free and clear of any Liens imposed pursuant to such Environmental Laws and
(ii) neither Holdings nor any of its Subsidiaries will generate, use, treat,
store, Release or dispose of, or permit the generation, use, treatment,
storage, release or disposal of, Hazardous Materials on any Real Property owned
or operated by Holdings or any of its Subsidiaries, or transport or permit the
transportation of Hazardous Materials to or from any such Real Property, except
in compliance with all applicable Environmental Laws and reasonably required in
connection with the operation, use and maintenance of such Real Property by
Holdings’ or such Subsidiary’s business, unless any failures to comply with the
requirements specified in clause (i) or (ii) above, either individually or in
the aggregate, (x) have not had (unless same has ceased to exist in all
respects) and (y) are not reasonably likely to have, a Material Adverse
Effect.  If Holdings or any of its
Subsidiaries, or any tenant or occupant of any Real Property owned or operated
by Holdings or any of its Subsidiaries, causes or permits any intentional or
unintentional act or omission resulting in the presence or Release of any
Hazardous Material (except in compliance with applicable Environmental Laws),
Holdings agrees, if required to do so under any final applicable directive or
order of any governmental agency, to undertake, and/or to cause any of its
Subsidiaries, tenants or occupants to undertake, at their sole expense, any
clean up, removal, remedial or other action required pursuant to Environmental
Laws to remove and clean up any Hazardous Materials from any Real Property except
where the failure to do so (x) has not had (unless same has ceased to exist in
all respects) and (y) is not reasonably likely to have, a Material Adverse
Effect.


 


(b)                                 At
the written request of the Administrative Agent or the Required Lenders, which
request shall specify in reasonable detail the basis therefor, at any time and
from time to time, Holdings and the Borrower will provide, at their sole cost
and expense, an environmental site assessment report concerning any Real
Property now or hereafter owned or operated by Holdings or any of its
Subsidiaries, prepared by an environmental consulting firm approved by the
Administrative Agent, addressing the matters in clause (i) or (ii) below which
gives rise to such request (or, in the case of a request pursuant to following
clause (i), addressing


 


43

















 


such matter as may be
requested by the Administrative Agent or the Required Lenders) and estimating
the range of the potential costs of any removal, remedial or other corrective
action in connection with any such matter; provided that in no event
shall such request be made unless (i) a Default or Event of Default has
occurred and is continuing or (ii) the Lenders receive notice under
Section 8.01(g) for any event referred to in said Section which,
either individually or in the aggregate, (x) has had (unless same has ceased to
exist in all respects) or (y) is reasonably likely to have, (a) a Material
Adverse Effect or (b) a remedial cost to Holdings or any of its Subsidiaries in
excess of $10,000,000.  If Holdings and
the Borrower fail to provide the same within 60 days after such request was
made, the Administrative Agent may order the same, and Holdings and the
Borrower shall grant and hereby do grant, to the Administrative Agent and the
Lenders and their agents access to such Real Property and specifically grant
the Administrative Agent and the Lenders and their agents an irrevocable
non-exclusive license, subject to the right of tenants, to undertake such an
assessment, all at the Borrower’s expense.


 


8.08.  ERISA.  As soon as possible and, in any event, within ten (10) Business
Days after Holdings, any Subsidiary of Holdings or any ERISA Affiliate knows or
has reason to know of the occurrence of any of the following, Holdings will
deliver to the Administrative Agent a certificate of the chief financial
officer or other Authorized Officer of Holdings setting forth in reasonable
detail information as to such occurrence and the action, if any, that Holdings,
such Subsidiary or such ERISA Affiliate is required or proposes to take,
together with any notices required or proposed to be given to or filed by
Holdings, the Subsidiary, the Plan administrator or such ERISA Affiliate to or
with, the PBGC or any other governmental agency, or a Plan or Multiemployer
Plan participant, and any notices received by Holdings, such Subsidiary or
ERISA Affiliate from the PBGC or other governmental agency or a Plan or
Multiemployer Plan participant or the Plan administrator with respect thereto:  that a Reportable Event has occurred (except
to the extent that Holdings has previously delivered to the Administrative
Agent a certificate and notices (if any) concerning such event pursuant to the
next clause hereof); that a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA is
subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and an
event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to
such Plan within the following 30 days; that an accumulated funding deficiency,
within the meaning of Section 412 of the Code or Section 302 of ERISA,
has been incurred or an application may be or has been made for a waiver or
modification of the minimum funding standard (including any required
installment payments) or an extension of any amortization period under
Section 412 of the Code or Section 303 or 304 of ERISA with respect
to a Plan; that any contribution required to be made with respect to a Plan or
Multiemployer Plan or Foreign Pension Plan has not been timely made, except to
the extent that any failure to make such contribution would not result in a
material liability; that a Plan or Multiemployer Plan has been or may be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; that a Plan has a material Unfunded Current Liability and, to the
knowledge of Holdings or the Borrower, that a Multiemployer Plan has a material
Unfunded Current Liability (assuming, solely for this purpose, that the term
“Unfunded Current Liability” also applies to Multiemployer Plans) not
previously disclosed to the Lenders prior to the Initial Borrowing Date; that
proceedings may be or have been instituted to terminate or appoint a trustee to
administer a Plan which is subject to Title IV of ERISA; that a proceeding has
been instituted pursuant to Section 515 of ERISA to collect a delinquent
contribution to a Plan or


 


44

















 


Multiemployer Plan; that
Holdings, any Subsidiary of Holdings or any ERISA Affiliate will or may incur
any material liability (including any indirect, contingent, or secondary
liability) to or on account of the termination of or withdrawal from a Plan or
Multiemployer Plan under Section 4062, 4063, 4064, 4069, 4201, 4204 or
4212 of ERISA or with respect to a Plan or Multiemployer Plan under
Section 401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or
502(i) or 502(l) of ERISA or with respect to a group health plan (as defined in
Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) under
Section 4980B of the Code; or that Holdings or any Subsidiary of Holdings
may incur any material liability pursuant to any employee welfare benefit plan
(as defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or any Plan or any Foreign Pension Plan.  Holdings and the Borrower will deliver to each of the Lenders
copies of any records, documents or other information that must be furnished to
the PBGC with respect to any Plan pursuant to Section 4010 of ERISA.  Holdings and the Borrower will also deliver
to each of the Lenders upon request a complete copy of the annual report (on
Internal Revenue Service Form 5500-series) of each Plan (including, to the
extent required, the related financial and actuarial statements and opinions
and other supporting statements, certifications, schedules and information)
required to be filed with the Internal Revenue Service.  In addition to any certificates or notices
delivered to the Lenders pursuant to the first sentence hereof, copies of
annual reports and any records, documents or other information required to be
furnished to the PBGC or any other government agency, and any material notices
received by Holdings, any Subsidiary of Holdings or any ERISA Affiliate with
respect to any Plan or Foreign Pension Plan or received from any government
agency or plan administrator or sponsor or trustee with respect to any
Multiemployer Plan, shall be delivered to the Lenders no later than ten (10)
Business Days after the date such annual report has been filed with the
Internal Revenue Service or such records, documents and/or information has been
furnished to the PBGC or any other government agency or such notice has been
received by Holdings, the Subsidiary or the ERISA Affiliate, as applicable.  Holdings and each of its applicable
Subsidiaries shall ensure that all Foreign Pension Plans administered by it or
into which it makes payments obtain or retain (as applicable) registered status
under and as required by applicable law and is administered in a timely manner
in all respects in compliance with all applicable laws except where the failure
to do any of the foregoing (x) has not had (unless same has ceased to exist in
all respects) and (y) is not reasonably likely to have, a Material Adverse
Effect.  If, at any time after the
Initial Borrowing Date, Holdings, any Subsidiary of Holdings or any ERISA
Affiliate maintains, or contributes to (or incurs an obligation to contribute
to), a pension plan as defined in Section 3(2) of ERISA which is not set
forth in Schedule V, as may be updated from time to time, then Holdings
shall deliver to the Administrative Agent an updated Schedule V as soon as
possible and, in any event, within ten (10) days after Holdings, such
Subsidiary or such ERISA Affiliate maintains, or contributes to (or incurs an
obligation to contribute to), such pension plan.  Such updated Schedule V shall supersede and replace the
existing Schedule V.


 


8.09.  Good Repair.  Holdings will, and will cause each of its
Subsidiaries to, ensure that its material properties and equipment used in its
business are kept in good repair, working order and condition, ordinary wear
and tear excepted, and that from time to time there are made in such properties
and equipment all needful and proper repairs, renewals, replacements,
extensions, additions, betterments and improvements thereto, to the extent and
in the manner useful or customary for companies in similar businesses.


 


45

















 


8.10.  End of Fiscal Years; Fiscal Quarters.  Holdings will, for financial reporting
purposes, cause (i) each of its, and each of its Subsidiaries’, fiscal years to
end on March 31 of each year and (ii) itself, and each of its
Subsidiaries, to maintain fiscal quarters consistent therewith and with the
past practices of Holdings and its Subsidiaries as in effect on the Effective
Date.


 


8.11.  Additional Security; Further Assurances.  (a) 
Holdings will, and will cause each of its Wholly-Owned Domestic
Subsidiaries (other than the Receivables Entity) to, grant to the Collateral
Agent security interests and mortgages in such assets and real property of
Holdings and such Wholly-Owned Subsidiaries as are not covered by the original
Security Documents, and as may be reasonably requested from time to time by the
Administrative Agent or the Required Lenders (collectively, the “Additional
Security Documents”), it being understood that no more than 65% of the
total combined voting power of all classes of capital stock of any Exempted
Foreign Corporation (as defined in the Pledge Agreement) entitled to vote shall
be required to be pledged pursuant to such Additional Security Documents.  All such security interests and mortgages
shall be granted pursuant to documentation reasonably satisfactory in form and
substance to the Collateral Agent and shall constitute valid and enforceable
perfected security interests and mortgages superior to and prior to the rights
of all third Persons and subject to no other Liens except for Permitted Liens.  The Additional Security Documents or
instruments related thereto shall have been duly recorded or filed in such
manner and in such places as are required by law to establish, perfect,
preserve and protect the Liens in favor of the Collateral Agent required to be
granted pursuant to the Additional Security Documents and all taxes, fees and
other charges payable in connection therewith shall have been paid in
full.  Notwithstanding the foregoing,
this Section 8.11(a) shall not apply to (and Holdings and its Subsidiaries
shall not be required to grant a security interest or a mortgage in) (i) any
Leasehold in respect of a service center or sales office, (ii) any other
Leasehold that does not have economic value (i.e., below
market rent for a significant remaining term) or strategic value to the
business of the lessee (as reasonably determined by the Administrative Agent),
(iii) any Real Property the fair market value of which (as determined in good
faith by senior management of Holdings or the Borrower) is less than
$2,500,000, (iv) personal property consisting of motor vehicles or other
property subject to certificate of title laws and (v) any local operating,
collection or payroll bank accounts exempted from the perfection requirements
pursuant to the Security Agreement.


 


(b)                                 Holdings
will, and will cause each of its Wholly-Owned Subsidiaries, other than the
Receivables Entity to, at the expense of the Borrower, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
vouchers, invoices, schedules, confirmatory assignments, conveyances, financing
statements, transfer endorsements, powers of attorney, certificates, real
property surveys, reports and other assurances or instruments and take such
further steps relating to the Collateral covered by any of the Security
Documents as the Collateral Agent may reasonably require.  Furthermore, the Borrower shall cause to be
delivered to the Collateral Agent such opinions of counsel, title insurance and
other related documents as may be reasonably requested by the Collateral Agent
to assure itself that this Section 8.11 has been complied with.


 


(c)                                  The
Borrower agrees to cause each Wholly-Owned Domestic Subsidiary of the Borrower
(other than the Receivables Entity) established or created in accordance with
Section 9.15 to execute and deliver a counterpart of the Subsidiaries
Guaranty (and/or an


 


46

















 


assumption agreement in
form and substance satisfactory to the Administrative Agent whereby such
Wholly-Owned Domestic Subsidiary shall become a party to the Subsidiaries
Guaranty) and thereby guaranty all Obligations and all obligations under
Interest Rate Protection Agreements and Other Hedging Agreements to a
Guaranteed Creditor.


 


(d)                                 The
Borrower will cause each Wholly-Owned Domestic Subsidiary of the Borrower
(other than the Receivables Entity) established or created in accordance with
Section 9.15 to grant to the Collateral Agent a first priority (subject
only to Permitted Liens) Lien on property (tangible and intangible) of such
Subsidiary upon terms and with exceptions similar to those set forth in the
Security Documents, as appropriate, and satisfactory in form and substance to
the Administrative Agent and Required Lenders. 
In connection with the actions required to be taken pursuant to the
immediately preceding sentence, the respective Wholly-Owned Domestic Subsidiary
shall become a party to the various existing Security Documents by executing
counterparts thereof and/or assumption agreements relating thereto (together
with the delivery of updated schedules) in each case pursuant to documentation
in form and substance satisfactory to the Administrative Agent, or shall enter
into and deliver such new Security Documents as may be requested by the
Administrative Agent or the Required Lenders. 
The Borrower shall cause each such Wholly-Owned Domestic Subsidiary of
the Borrower, at its own expense, to execute, acknowledge and deliver, or cause
the execution, acknowledgment and delivery of, and thereafter register, file or
record in any appropriate governmental office, any document or instrument
reasonably deemed by the Collateral Agent to be necessary or desirable for the
creation and perfection of the foregoing Liens.  The Borrower will cause each of such Wholly-Owned Domestic
Subsidiaries to take all actions reasonably requested by the Administrative
Agent (including, without limitation, the filing of UCC-1’s) in connection with
the granting of such security interests. 
Notwithstanding the foregoing, no Subsidiary shall be required to take
any of the actions described in clauses (i) through (v) of the last sentence of
Section 8.11(a).


 


(e)                                  At
any time after the Initial Borrowing Date at which the Borrower or any of its
Subsidiaries receives or has performed on its behalf any survey of any
Mortgaged Property (it being understood that the Borrower and its Subsidiaries
shall be under no obligation to obtain any such survey), the Borrower shall
promptly thereafter deliver a copy of such survey to the Administrative Agent.


 


(f)                                    Each
of the Credit Parties agrees that each action required above by this
Section 8.11 shall be completed as soon as possible, but in no event later
than 60 days after such action is either requested to be taken by the
Collateral Agent, the Administrative Agent or the Required Lenders or required
to be taken by Holdings and its Subsidiaries pursuant to the terms of this
Section 8.11; provided that (i) each newly acquired or created
Wholly-Owned Domestic Subsidiary of the Borrower shall be required to take the
actions specified above concurrently with the creation or acquisition thereof
(directly or indirectly) by the Borrower and (ii) in no event will any Credit
Agreement Party or any of its Subsidiaries be required to take any action,
other than using its commercially reasonable efforts, to obtain consents from
third parties with respect to its compliance with this Section 8.11.


 


(g)  Notwithstanding the foregoing, the rights of
the Collateral Agent and the Lenders set forth above are subject to the provisions
of the Intercreditor Agreement (including, without limitation, Sections 2.3 and
2.4 thereof).


 


47

















 


8.12.  Use of Proceeds.  All proceeds of the Second-Lien Loans shall
be used as provided in Section 7.05.


 


8.13.  Ownership of Subsidiaries.  (a) 
Except (i) as otherwise expressly permitted pursuant to
Section 9.15 in the case of the creation or acquisition of new
non-Wholly-Owned Subsidiaries after the Initial Borrowing Date, (ii) as
reflected on Schedule VII or (iii) as contemplated by the definition of
“Wholly-Owned Subsidiary”, the Borrower will directly or indirectly own 100% of
the capital stock of each Subsidiary of the Borrower.


 


(b)                                 EnerSys
shall at all times directly own 100% of the outstanding capital stock of the
Receivables Entity.


 


8.14.  Permitted Acquisitions.  (a) 
Subject to the provisions of this Section 8.14 and the requirements
contained in the definition of Permitted Acquisition, the Borrower and any of
its Wholly-Owned Subsidiaries may from time to time effect Permitted
Acquisitions, so long as (in each case except to the extent the Required
Lenders otherwise specifically agree in writing in the case of a specific
Permitted Acquisition):  (i) no Default
or Event of Default shall be in existence at the time of the consummation of
the proposed Permitted Acquisition or immediately after giving effect thereto;
(ii) the Borrower shall have given the Administrative Agent and the Lenders at
least 15 Business Days’ prior written notice of the proposed Permitted
Acquisition; (iii) calculations are made by Holdings of (x) compliance with the
covenants contained in Sections 9.08 and 9.09 for the period of four
consecutive fiscal quarters (taken as one accounting period) most recently
ended prior to the date of such Permitted Acquisition (each, a “Calculation
Period”), on a Pro  Forma Basis as if the respective Permitted
Acquisition (as well as all other Permitted Acquisitions theretofore
consummated after the first day of such Calculation Period) had occurred on the
first day of such Calculation Period, and such recalculations shall show that
such financial covenants would have been complied with if the Permitted
Acquisition had occurred on the first day of such Calculation Period (for this
purpose, if the first day of the respective Calculation Period occurs prior to
the Initial Borrowing Date, calculated as if the covenants contained in said
Sections 9.08 and 9.09 (in each case, giving effect to the last sentence
appearing therein) had been applicable from the first day of the Calculation
Period) and (y) compliance with Section 9.09 immediately after giving
effect to the consummation of the respective Permitted Acquisition (for this
purpose, using the same ratio which will be required to be met on the last day
of the first fiscal quarter ended on or after the date upon which the
respective Permitted Acquisition is consummated), and Holdings shall be in
compliance therewith; (iv) all representations and warranties contained herein
and in the other Credit Documents shall be true and correct in all material
respects with the same effect as though such representations and warranties had
been made on and as of the date of such Permitted Acquisition (both before and
after giving effect thereto), unless stated to relate to a specific earlier
date, in which case such representations and warranties shall be true and
correct in all material respects as of such earlier date; (v) the Borrower
provides to the Administrative Agent and the Lenders as soon as available but
not later than 5 Business Days after the execution thereof, a copy of any
executed purchase agreement or similar agreement with respect to such Permitted
Acquisition; (vi) the Aggregate Consideration (excluding consideration
consisting of Holdings Common Stock or Qualified Preferred Stock) payable in
connection with the proposed Permitted Acquisition does not exceed $35,000,000;
(vii)  the Aggregate Consideration
payable in connection with the proposed Permitted Acquisition does not exceed
$100,000,000; (viii) the Aggregate Consideration


 


48

















 


(excluding consideration
consisting of Holdings Common Stock or Qualified Preferred Stock) payable in
connection with the proposed Permitted Acquisition, when combined with the
Aggregate Consideration (excluding consideration consisting of Holdings Common
Stock and Qualified Preferred Stock) paid in connection with all other
Permitted Acquisitions consummated prior to the date of the consummation of the
proposed Permitted Acquisition, does not exceed $125,000,000; (ix) the
Aggregate Consideration payable in connection with the proposed Permitted
Acquisition, when combined with the Aggregate Consideration paid in connection
with all other Permitted Acquisitions consummated prior to the date of the
consummation of the proposed Permitted Acquisition, does not exceed
$250,000,000; and (x) Holdings shall have delivered to the Administrative Agent
on the date of the consummation of such proposed Permitted Acquisition, an officer’s
certificate executed by an Authorized Officer of Holdings, certifying to the
best of his knowledge, compliance with the requirements of preceding clauses
(i) through (iv), inclusive, and clauses (vi), (vii), (viii) and (ix) and
containing the calculations required by the preceding clauses (iii), (vi),
(vii), (viii) and (ix).


 


(b)                                 At
the time of each Permitted Acquisition involving the creation or acquisition of
a Subsidiary, or the acquisition of capital stock or other Equity Interest of
any Person, all capital stock or other Equity Interests thereof created or
acquired in connection with such Permitted Acquisition shall be pledged for the
benefit of the Secured Creditors pursuant to, and to the extent required by,
the Pledge Agreement in accordance with the requirements of Section 9.15.


 


(c)                                  The
Borrower shall cause each Subsidiary which is formed to effect, or is acquired
pursuant to, a Permitted Acquisition to comply with, and to execute and
deliver, all of the documentation required by, Sections 8.11 and 9.15, to the
satisfaction of the Administrative Agent.


 


(d)                                 The
consummation of each Permitted Acquisition shall be deemed to be a
representation and warranty by each Credit Agreement Party that the
certifications by a Credit Agreement Party (or by one or more of its respective
Authorized Officers) pursuant to Section 8.14(a), are true and correct and
that all conditions thereto have been satisfied and that same is permitted in
accordance with the terms of this Agreement, which representation and warranty
shall be deemed to be a representation and warranty for all purposes hereunder,
including, without limitation, Sections 6 and 10.


 


8.15.  Maintenance of Company Separateness.  Holdings will, and will cause each of its
Subsidiaries to, satisfy customary Company formalities, including, as
applicable, the holding of regular board of directors’ and shareholders’
meetings or action by directors or shareholders without a meeting and the
maintenance of Company offices and records. 
Neither Holdings nor any of its Subsidiaries shall take any action, or
conduct its affairs in a manner, which is likely to result in the Company
existence of Holdings or any of its Subsidiaries being ignored, or in the
assets and liabilities of Holdings or any of its Subsidiaries being
substantively consolidated with those of any other such Person in a bankruptcy,
reorganization or other insolvency proceeding (it being understood and agreed
that the entering into of the Credit Documents and the First-Lien Credit
Documents by Holdings and its Subsidiaries, and the performance of their
respective obligations thereunder, shall not in and of itself be taken into
account for purposes of determining compliance with the foregoing covenant).


 


49

















 


8.16.  Interest Rate Protection.  (a) No later than the 60th day after the
Initial Borrowing Date, the Borrower shall enter into, and for a minimum period
of three years thereafter maintain, Interest Rate Protection Agreements with
one or more Lenders or their affiliates reasonably acceptable to the
Administrative Agent establishing a fixed or maximum interest rate acceptable
to the Administrative Agent for an aggregate amount with respect to no less
than $60,000,000 in aggregate principal amount of the Second-Lien Loans under,
and as defined in, the First-Lien Credit Agreement (it being understood that
the Existing Interest Rate Protection Agreements covering $60,000,000 of
Indebtedness which shall be maintained from the Initial Borrowing Date until February 22,
2006 shall not be taken account of for purposes of the determining compliance
with this Section 8.16(a)).


 


(b)                                 No
later than the 60th day after the consummation of a Qualified IPO, the Borrower
shall enter into, and for a minimum period of three years after the Initial
Borrowing Date maintain, Interest Rate Protection Agreements with one or more
Lenders or their affiliates reasonably acceptable to the Administrative Agent
establishing a fixed or maximum interest rate acceptable to the Administrative
Agent for an aggregate amount with respect to no less than (after taking into
account the protection provided by the Existing Interest Rate Protection
Agreements) 35% of the aggregate principal amount of the Second-Lien Loans and
the term loans under the First-Lien Credit Agreement outstanding from time to
time.


 


(c)                                  No
later than the February 1, 2005 (if a Qualified IPO has not been
consummated on or prior to December 31, 2004), the Borrower shall enter
into, and for a minimum period of three years after the Initial Borrowing Date
maintain, Interest Rate Protection Agreements with one or more Lenders or their
affiliates reasonably acceptable to the Administrative Agent establishing a
fixed or maximum interest rate acceptable to the Administrative Agent for an
aggregate amount with respect to no less than (after taking into account the
protection provided by the Existing Interest Rate Protection Agreements) 35% of
the aggregate principal amount of the Second-Lien Loans and the term loans
under the First-Lien Credit Agreement outstanding from time to time.


 


8.17.  Performance of Obligations.  Holdings will, and will cause each of its
Subsidiaries to, perform all of its obligations under the terms of each
mortgage, deed of trust, indenture, loan agreement or credit agreement and each
other material agreement, contract or instrument by which it is bound, except
such non-performances as (x) have not caused (unless same has ceased to exist
in all respects) and (y) are not reasonably likely to cause, individually or in
the aggregate, a Default or Event of Default hereunder or a Material Adverse
Effect.


 


8.18.  Margin Regulations.  On and after a Qualified IPO, Holdings will
take all actions so that at all times the fair market value of all Margin Stock
owned by Holdings and its Subsidiaries (other than capital stock of Holdings
held in treasury) shall not exceed $500,000. 
So long as the covenant contained in the immediately preceding sentence
is complied with, all Margin Stock at any time owned by Holdings and its
Subsidiaries will not constitute Collateral and no security interest shall be
granted therein pursuant to any Credit Document.  Without excusing any violation of the first sentence of this
Section 8.18, if at any time the fair market value of all Margin Stock
owned by Holdings and its Subsidiaries (other than capital stock of Holdings
held in treasury) exceeds $500,000, then (x) all Margin Stock owned by the
Credit Parties (other than capital stock of Holdings held in treasury) shall
(subject to the provisions of


 


50

















 


the Intercreditor
Agreement) be pledged, and delivered for pledge, pursuant to the Pledge
Agreement and (y) the Borrower will execute and deliver to the Lenders
appropriate completed forms (including, without limitation, Forms G-3 and U-1,
as appropriate) establishing compliance with Regulations T, U and X.  If at any time any Margin Stock is required
to be pledged as a result of the provisions of the immediately preceding
sentence, repayments of outstanding Obligations shall be required, and
subsequent Credit Events shall be permitted, only in compliance with the
applicable provisions of Regulations T, U and X.


 


8.19.  Accounts Receivable Facility Transaction.  On the Accounts Receivable Facility
Transaction Date, (i) Holdings shall have delivered to the Administrative Agent
an officer’s certificate executed by an Authorized Officer of Holdings
demonstrating compliance with a Leverage Ratio of 3:00:1.00 or less (calculated
on a Pro  Forma Basis after giving effect to the incurrence of the
Receivable Indebtedness under the Accounts Receivables Facility Documents),
together with calculations in reasonable detail demonstrating such compliance,
(ii) Holdings shall have delivered to the Agents and the Lenders true and
correct copies of all Accounts Receivable Facility Documents, certified as such
by an Authorized Officer of Holdings, (iii) the Accounts Receivable Facility
Documents (and the terms and conditions thereof) shall satisfy the Initial
Accounts Receivable Facility Requirements and otherwise be in form and
substance satisfactory to the Agents, (iv) the Receivables Entity designated
with respect thereto shall comply in all respects with the definition of
“Receivables Entity”, (v) all Accounts Receivable Facility Documents shall be
in full force and effect, (vi) each of the conditions precedent to the
consummation of the Accounts Receivable Facility Transaction shall have been
satisfied and not waived except with the consent of the Administrative Agent
and the Required Lenders to the reasonable satisfaction of the Administrative
Agent and the Required Lenders, (vii) each of the representations and
warranties of the Receivables Sellers and the Receivables Entity contained in
the Accounts Receivable Facility Documents shall be true and correct in all
material respects, and (viii) the Accounts Receivable Facility Transaction
shall have been consummated in all material respects in accordance with all
applicable law and the Accounts Receivable Facility Documents.


 


SECTION 9. 
Negative Covenants.  Each
of Holdings and the Borrower hereby covenants and agrees that as of the
Effective Date and thereafter for so long as this Agreement is in effect and
until the Total Commitment has terminated, and the Second-Lien Loans, together
with interest, Fees and all other Obligations (other than any indemnities
described in Section 13.13(b) which are not then due and payable) incurred
hereunder, are paid in full:


 


9.01.  Changes in Business; etc.  (a) 
Holdings and its Subsidiaries will not engage in any business other than
a Permitted Business.


 


(b)                                 Notwithstanding
the foregoing, Holdings will not itself (I) engage in a Permitted Business,
(II) own any significant assets (other than (w) the Equity Interests of the
Borrower, (x) any Intercompany Note evidencing an Intercompany Loan permitted
to be made by it pursuant to Section 9.05(vi), (y) cash and/or Cash
Equivalents to be on-loaned, dividended, contributed and/or otherwise promptly
applied for purposes not otherwise prohibited by this Agreement and (z) other
assets used or held in connection with the performance of activities permitted
to be conducted by Holdings) or (III) have any liabilities (other than those
liabilities for which it is responsible under this Agreement, the Documents to
which it is a party, any


 


51

















 


Intercompany Loan
permitted to be incurred by it pursuant to Section 9.05(vi), any
Shareholder Subordinated Note and any other Indebtedness permitted to be incurred
by Holdings pursuant to Section 9.04); provided  however, the
conduct of business restriction contained in clause (I) above shall not
prohibit (or be construed to prohibit) Holdings from conducting administrative
and other ordinary course “holding company” activities necessary or desirable
in connection with the operation of the Permitted Business through Subsidiaries
of Holdings (including, without limitation, intercompany management functions
and the provision of umbrella insurance policies).


 


(c)                                  Notwithstanding
anything to the contrary contained in this Agreement, the Receivables Entity
will not engage in any business other than purchasing Accounts Receivable
Facility Assets from the Receivables Sellers and the related transactions
contemplated by the terms of the Accounts Receivable Facility Documents; provided
that the Receivables Entity may engage in those activities that are incidental
to (x) the maintenance of its corporate existence in compliance with applicable
law and (y) tax, legal and accounting matters in connection with the foregoing
permitted activities.


 


(d)                                 Notwithstanding
anything to the contrary contained in this Agreement, Cayman Partnership
Shareholder #1 will not engage in any business or own any significant assets
(other than (x) its ownership of the Equity Interests of Cayman Partnership
Shareholder #2, Cayman Partnership Shareholder #3 and the Cayman Partnership
and (y) any cash, Cash Equivalents and/or intercompany receivables permitted to
be held in accordance with the proviso to Section 7.25(b) or have any
material liabilities (other than those liabilities for which it is responsible
under the Credit Documents to which it is a party), provided that Cayman
Partnership Shareholder #1 may engage in those activities that (i) are incidental
to (x) the maintenance of its corporate existence in compliance with applicable
law, (y) legal, tax and accounting matters in connection with any of the
foregoing activities and (z) the entering into, and performing its obligations
under, the Credit Documents to which it is a party and (ii) are otherwise
expressly permitted by this Agreement (other than pursuant to preceding
Section 9.01(a)) and the other Credit Documents.


 


(e)                                  Notwithstanding
anything to the contrary contained in this Agreement, Cayman Partnership
Shareholder #2 will not engage in any business or own any significant assets
(other than (x) its ownership of the Equity Interests of the Cayman Partnership
and (y) any cash, Cash Equivalents and/or intercompany receivables permitted to
be held in accordance with the proviso to Section 7.25(c)) or have any
material liabilities (other than those liabilities for which it is responsible
under the Credit Documents to which it is a party), provided that Cayman
Partnership Shareholder #2 may engage in those activities that (i) are
incidental to (x) the maintenance of its corporate existence in compliance with
applicable law, (y) legal, tax and accounting matters in connection with any of
the foregoing activities and (z) the entering into, and performing its
obligations under, the Credit Documents to which it is a party and (ii) are
otherwise expressly permitted by this Agreement (other than pursuant to
preceding Section 9.01(a)) and the other Credit Documents.


 


(f)                                    Notwithstanding
anything to the contrary contained in this Agreement, Cayman Partnership
Shareholder #3 will not engage in any business or own any significant assets
(other than (x) its ownership of the Equity Interests of the Cayman Partnership
and (y) any


 


52

















 


cash, Cash Equivalents
and/or intercompany receivables permitted to be held in accordance with the
proviso to Section 7.25(d)) or have any material liabilities (other than
those liabilities for which it is responsible under the Credit Documents to
which it is a party), provided that Cayman Partnership Shareholder #3
may engage in those activities that (i) are incidental to (x) the maintenance
of its corporate existence in compliance with applicable law, (y) legal, tax
and accounting matters in connection with any of the foregoing activities and
(z) the entering into, and performing its obligations under, the Credit
Documents to which it is a party and (ii) are otherwise expressly permitted by
this Agreement (other than pursuant to preceding Section 9.01(a)) and the
other Credit Documents.


 


9.02.  Consolidation; Merger; Sale or Purchase
of Assets; etc.  Each Credit
Agreement Party will not, and will not permit any of its Subsidiaries to, wind
up, liquidate or dissolve its affairs or enter into any transaction of merger
or consolidation, or convey, sell, lease or otherwise dispose of all or any
part of its property or assets (other than inventory in the ordinary course of
business), or enter into any partnerships, joint ventures or sale-leaseback
transactions, or purchase or otherwise acquire (in one or a series of related
transactions) any part of the property or assets (other than purchases or other
acquisitions of inventory, materials and equipment in the ordinary course of
business) of any Person or agree to do any of the foregoing at any future time,
except that the following shall be permitted:


 


(i)                                     the
Borrower and its Subsidiaries (other than the Receivables Entity) may, as
lessee, enter into operating leases in the ordinary course of business with
respect to real or personal property;


 


(ii)                                  Capital
Expenditures by the Borrower and its Subsidiaries (other than the Receivables
Entity) to the extent not in violation of Section 9.11;


 


(iii)                               Investments
permitted pursuant to Section 9.05;


 


(iv)                              the
Borrower and its Subsidiaries (other than the Receivables Entity) may, in the
ordinary course of business, sell or otherwise dispose of assets (excluding
capital stock of Subsidiaries and joint ventures) which, in the reasonable
opinion of such Person, are obsolete, uneconomic or worn-out;


 


(v)                                 the
Borrower and its Subsidiaries (other than the Receivables Entity) may sell
assets (other than the Equity Interests of any Subsidiary or joint venture), so
long as (x) each such sale is in an arm’s-length transaction and the Borrower
or the respective Subsidiary receives at least fair market value (as determined
in good faith by the Borrower or such Subsidiary, as the case may be), (y) the
total consideration received by the Borrower or such Subsidiary is at least 70%
cash and is paid at the time of the closing of such sale and (z) the Net Sale
Proceeds therefrom are (I) applied and/or reinvested as (and to the extent)
required by Section 4.02(c) or (II) applied as a mandatory repayment
and/or commitment reduction of loans (or other obligations) and/or commitments
under the First-Lien Credit Agreement and/or reinvested in a Permitted Business
in accordance with the requirements of the First-Lien Credit Agreement;


 


53

















 


(vi)                              each
of the Borrower and its Subsidiaries (other than the Receivables Entity) may
sell or discount, in each case without recourse and in the ordinary course of
business, overdue accounts receivable arising in the ordinary course of business,
but only in connection with the compromise or collection thereof and not as
part of any financing transaction;


 


(vii)                           each of
the Borrower and its Subsidiaries (other than the Receivables Entity) may grant
leases or subleases to other Persons not materially interfering with the
conduct of the business of the Borrower or any of its Subsidiaries;


 


(viii)                        any
Subsidiary of the Borrower (other than the Receivables Entity) may transfer
assets to the Borrower or to any Wholly-Owned Domestic Subsidiary of the
Borrower (other than the Receivables Entity) which is a Subsidiary Guarantor,
so long as the security interests granted to the Collateral Agent for the
benefit of the Secured Creditors pursuant to the Security Documents in the
assets so transferred shall remain in full force and effect and perfected (to
at least the same extent as in effect immediately prior to such transfer);


 


(ix)                                any
Subsidiary of the Borrower (other than the Receivables Entity) may merge with
and into, or be dissolved or liquidated into, the Borrower or any Wholly-Owned
Domestic Subsidiary of the Borrower (other than the Receivables Entity) which
is a Subsidiary Guarantor, so long as (i) in the case of any such merger,
dissolution or liquidation involving the Borrower, the Borrower is the
surviving corporation of any such merger, dissolution or liquidation, (ii) in
all other cases, a Wholly-Owned Domestic Subsidiary which is a Subsidiary
Guarantor is the surviving corporation of any such merger, dissolution or
liquidation and (iii) in all cases, the security interests granted to the
Collateral Agent for the benefit of the Secured Creditors pursuant to the
Security Documents in the assets of such Subsidiary shall remain in full force
and effect and perfected (to at least the same extent as in effect immediately
prior to such merger, dissolution or liquidation);


 


(x)                                   the
Borrower and its Subsidiaries may sell or exchange specific items of equipment,
so long as the purpose of each such sale or exchange is to acquire (and results
within 90 days of such sale or exchange in the acquisition of) replacement
items of equipment which are the functional equivalent of the item of equipment
so sold or exchanged;


 


(xi)                                the
Borrower and its Wholly-Owned Subsidiaries (other than the Receivables Entity)
shall be permitted to make Permitted Acquisitions, so long as such Permitted
Acquisitions are effected in accordance with the requirements of
Section 8.14;


 


(xii)                             the
Transaction shall be permitted;


 


(xiii)                          on and
after the Accounts Receivable Facility Transaction Date, the Receivables
Sellers may (x) contribute cash to the Receivables Entity the proceeds of which
are used to acquire Accounts Receivable Facility Assets from the Receivables
Sellers and (y) transfer and reacquire Accounts Receivable Facility Assets to
and from


 


54

















 


the Receivables Entity,
in each case pursuant to, and in accordance with the terms of, the Accounts
Receivable Facility Documents;


 


(xiv)                         on and
after the Accounts Receivable Facility Transaction Date, the Receivables Entity
may transfer and reacquire Accounts Receivable Facility Assets (to the extent
acquired from the Receivables Sellers as provided in clause (xiii) above)
pursuant to, and in accordance with the terms of, the Accounts Receivable
Facility Documents;


 


(xv)                            any
Foreign Subsidiary of the Borrower may be merged into or consolidated with, or
be dissolved or liquidated into, or transfer any of its assets to, any other
Wholly-Owned Foreign Subsidiary of the Borrower, so long as (i) such
Wholly-Owned Foreign Subsidiary is the surviving corporation of any such
merger, consolidation, dissolution or liquidation (and remains a Wholly-Owned
Subsidiary after giving effect thereto) and (ii) any security interests granted
to the Collateral Agent for the benefit of the Secured Creditors pursuant to
the Security Documents in the Equity Interests of such Wholly-Owned Foreign
Subsidiary shall remain in full force and effect and perfected (to at least the
same extent as in effect immediately prior to such merger, consolidation,
dissolution, liquidation or transfer) and all actions required to maintain said
perfected status have been taken; and


 


(xvi)
the Borrower and its Subsidiaries (other than the Receivables Entity) may sell
or otherwise dispose of Designated Assets, so long as (x) no Default or Event
of Default then exists or would result therefrom, (y) each such sale is in an
arm’s-length transaction and the Borrower or the respective Subsidiary receives
at least fair market value (as determined in good faith by the Borrower or such
Subsidiary, as the case may be) and (z) the aggregate amount of the Net Sale
Proceeds received from the sale or other disposition of such Designated Assets
does not exceed $5,000,000 (it being understood, however, that if the Net Sale
Proceeds from the sale or other disposition of Designated Assets exceeds
$5,000,000, such excess may be independently permitted pursuant to
Section 9.02(v) above).


 


To the extent (x) the
Required Lenders waive the provisions of this Section 9.02 with respect to
the sale or other disposition of any Collateral, (y) any Collateral is sold or
otherwise disposed of as permitted by this Section 9.02 or (z) the
Intercreditor Agreement requires the release of any Collateral from the pledge
created pursuant to the Security Documents, such Collateral (unless transferred
to Holdings or a Subsidiary thereof (excluding the Receivables Entity in the
case of transfers pursuant to clause (xiii) above)) shall be sold or otherwise
disposed of free and clear of the Liens created by the Security Documents and
the Administrative Agent shall take such actions (including, without
limitation, directing the Collateral Agent to take such actions) as are
appropriate in connection therewith.


 


9.03.  Liens.  Each Credit Agreement Party will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets of any kind (real or personal, tangible
or intangible) of Holdings or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property


 


55

















 


or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable or notes with
recourse to Holdings or any of its Subsidiaries) or assign any right to receive
income, except for the following (collectively, the “Permitted Liens”):


 


(i)                                     inchoate
Liens for taxes, assessments or governmental charges or levies not yet due and
payable or Liens for taxes, assessments or governmental charges or levies being
contested in good faith and by appropriate proceedings for which adequate
reserves have been established in accordance with GAAP;


 


(ii)                                  Liens
in respect of property or assets of the Borrower or any of its Subsidiaries
imposed by law which were incurred in the ordinary course of business and which
have not arisen to secure Indebtedness for borrowed money, such as carriers’,
warehousemen’s and mechanics’ Liens, statutory landlord’s Liens, and other
similar Liens arising in the ordinary course of business, and which either (x)
do not in the aggregate materially detract from the value of such property or
assets or materially impair the use thereof in the operation of the business of
the Borrower or any of its Subsidiaries or (y) are being contested in good
faith by appropriate proceedings, which proceedings have the effect of
preventing the forfeiture or sale of the property or asset subject to such
Lien;


 


(iii)                               Liens
created by or pursuant to (x) this Agreement and the Security Documents and (y)
the First-Lien Credit Documents;


 


(iv)                              Liens
in existence on the Initial Borrowing Date which are listed, and the property
subject thereto described, in Schedule IX, plus any extensions or renewals
of such Liens, provided that (x) the aggregate principal amount of the
Indebtedness, if any, secured by such Liens does not increase from that amount
outstanding at the time of any such renewal, replacement or extension and (y)
any such renewal, replacement or extension does not encumber any additional
assets or properties of Holdings or any of its Subsidiaries;


 


(v)                                 Liens
arising from judgments, decrees or attachments in circumstances not
constituting an Event of Default under Section 10.09, provided that
no cash or other property shall be pledged by Holdings or any of its
Subsidiaries as security therefor;


 


(vi)                              Liens
(other than any Lien imposed by ERISA) (x) incurred or deposits made in the
ordinary course of business of the Borrower and its Subsidiaries in connection
with workers’ compensation, unemployment insurance and other types of social
security, (y) to secure the performance by the Borrower and its Subsidiaries of
tenders, statutory obligations (other than excise taxes), surety, stay and
customs bonds, statutory bonds, bids, leases, government contracts, trade
contracts, performance and return of money bonds and other similar obligations
(exclusive of obligations for the payment of borrowed money) or (z) to secure
the performance by the Borrower and its Subsidiaries of leases of Real
Property, to the extent incurred or made in the ordinary course of business
consistent with past practices, provided that the aggregate amount of
deposits at any time pursuant to preceding sub-clause (y) and sub-clause (z)
shall not exceed $10,000,000 in the aggregate;


 


56

















 


(vii)                           licenses,
leases or subleases granted to third Persons in the ordinary course of business
not interfering in any material respect with the business of Holdings or any of
its Subsidiaries;


 


(viii)                        Permitted
Encumbrances;


 


(ix)                                Liens
arising from or related to precautionary UCC financing statements regarding
operating leases entered into by the Borrower and its Subsidiaries (other than
the Receivables Entity);


 


(x)                                   Liens
created pursuant to Capital Leases permitted pursuant to Section 9.04(iv),
provided that (x) such Liens only serve to secure the payment of
Indebtedness arising under such Capitalized Lease Obligation and (y) the Lien
encumbering the asset giving rise to the Capitalized Lease Obligation does not
encumber any other asset of Holdings or any of its Subsidiaries;


 


(xi)                                Liens
arising pursuant to purchase money mortgages or security interests securing
Indebtedness representing the purchase price (or financing of the purchase
price within 30 days after the respective purchase) of assets acquired after
the Initial Borrowing Date by the Borrower and its Subsidiaries (other than the
Receivables Entity), provided that (i) any such Liens attach only to the
assets so purchased, (ii) the Indebtedness secured by any such Lien does not
exceed 100%, nor is less than 80% (unless the Secured Creditors have a fully
perfected second subordinated lien on such property pursuant to the Security
Documents), of the lesser of the fair market value or the purchase price of the
property being purchased at the time of the incurrence of such Indebtedness and
(iii) the Indebtedness secured thereby is permitted to be incurred pursuant to
Section 9.04(iv);


 


(xii)                             Liens
on property or assets acquired pursuant to a Permitted Acquisition, or on
property or assets of a Subsidiary of the Borrower in existence at the time
such Subsidiary is acquired pursuant to a Permitted Acquisition, provided
that (i) any Indebtedness that is secured by such Liens is permitted to exist
under Section 9.04(vi), and (ii) such Liens are not incurred in connection
with, or in contemplation or anticipation of, such Permitted Acquisition and do
not attach to any other asset of Holdings or any of its Subsidiaries;


 


(xiii)                          restrictions
imposed in the ordinary course of business and consistent with past practices
on the sale or distribution of designated inventory pursuant to agreements with
customers under which such inventory is consigned by the customer or such
inventory is designated for sale to one or more customers;


 


(xiv)                         Liens in
favor of customs or revenue authorities arising as a matter of law to secure
payment of customs duties in connection with the importation of goods;


 


(xv)                            Liens
on the assets of a Foreign Subsidiary which is not a Subsidiary Guarantor
securing Indebtedness incurred by such Foreign Subsidiary in accordance with
the terms of Section 9.04;


 


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(xvi)                         on and
after the Accounts Receivable Facility Transaction Date, Liens (x) granted by
the Receivables Sellers in favor of the Receivables Entity consisting of UCC-1
financing statements filed to effect the sale of Accounts Receivable Facility Assets
pursuant to the Replacement Receivables Facility Documents, (y) granted by the
Receivables Entity on those Accounts Receivable Facility Assets acquired by it
pursuant to the Accounts Receivable Facility Documents to the extent that such
Liens are created by the Accounts Receivable Facility Documents and (z)
consisting of the right of setoff granted by the Receivables Entity to any
financial institution acting as a lockbox bank in connection with the Accounts
Receivable Facility;


 


(xvii)                      Liens
securing Permitted Refinancing Indebtedness permitted pursuant to
Section 9.04(xv) to the extent such Liens comply with clause (b)(ii) of
the definition of Permitted Refinancing Indebtedness;


 


(xviii)                   Liens on assets
(x) owned by Foreign Subsidiaries of the Borrower securing permitted secured
Indebtedness of such Foreign Subsidiaries of the Borrower pursuant to
Section 9.04(xviii) and/or (y) consisting of equipment, receivables,
inventory and Real Property (other than any Mortgaged Property) owned by the Borrower
and/or one or more of its Subsidiaries which are not Foreign Subsidiaries
securing permitted secured Indebtedness of such Persons pursuant to
Section 9.04(xviii), provided that the aggregate fair market value
of all such assets as described in preceding clause (y) securing Indebtedness
pursuant to Section 9.04(xviii) of the Persons described in preceding
clause (y) shall at no time exceed 150% of the outstanding principal amount of
the Indebtedness secured by such assets (which shall at no time exceed $50,000,000);
and


 


(xix)                           other
Liens incidental to the conduct of the business or the ownership of the assets
of the Borrower or any Subsidiary of the Borrower that (x) were not incurred in
connection with borrowed money, (y) do not encumber any Collateral or any Real
Property owned by Holdings or any Subsidiary of Holdings and do not in the
aggregate materially detract from the value of the assets subject thereto or
materially impair the use thereof in the operation of such business and (z) do
not secure obligations in excess of $10,000,000 in the aggregate for all such
Liens.


 


9.04.  Indebtedness.  No Credit Agreement Party will, nor will
permit any of its Subsidiaries to, contract, create, incur, assume or suffer to
exist any Indebtedness, except:


 


(i)                                     (x)
Indebtedness of the Credit Parties incurred pursuant to this Agreement and the
other Credit Documents; and (y) Indebtedness of the Credit Parties pursuant to
the First-Lien Credit Documents, provided that the aggregate principal
amount of the loans outstanding under the First-Lien Credit Agreement shall not
exceed $580,000,000 at any time;


 


(ii)                                  (x)
Existing Indebtedness outstanding on the Initial Borrowing Date and listed on
Part A of Schedule IV, without giving effect to any subsequent extension,
renewal or refinancing thereof except to the extent expressly permitted by Part
A of Schedule IV (or otherwise permitted by Section 9.04(xv)); provided
that any intercompany Indebtedness among Holdings or any of its Subsidiaries
set forth on Part A


 


58

















 


of Schedule IV shall
be subject to the requirements applicable to Intercompany Loans as set forth in
the proviso appearing in Section 9.05(vi) as if such intercompany
Indebtedness were an “Intercompany Loan” and (y) Indebtedness of Foreign
Subsidiaries of the Borrower under the Existing Overdraft Facilities in an
aggregate outstanding principal amount not to exceed at any time the aggregate
commitments under such Existing Overdraft Facilities as set forth on Part B of
Schedule IV, together with any extension, renewal or refinancing of any
Existing Overdraft Facility (or extension, renewal or refinancing thereof
permitted hereby) to the extent such extension, renewal or refinancing does not
(I) increase the amount of available commitments (or maximum Indebtedness
permitted to be incurred) under the respective Existing Overdraft Facility (or
extension, renewal or refinancing thereof permitted hereby) to be so extended,
renewed or refinanced or (II) add guarantors, obligors or security from that
which applied to such Indebtedness being extended, renewed or refinanced;


 


(iii)                               Indebtedness
under Interest Rate Protection Agreements entered into to protect the Borrower
against fluctuations in interest rates in respect of Indebtedness otherwise
permitted under this Agreement;


 


(iv)                              Capitalized
Lease Obligations and Indebtedness of the Borrower and its Subsidiaries
representing purchase money Indebtedness secured by Liens permitted pursuant to
Section 9.03(xi), provided that (i) all such Capitalized Lease
Obligations are permitted under Section 9.11 and (ii) the sum of (x) the
aggregate Capitalized Lease Obligations outstanding at any time plus (y)
the aggregate principal amount of such purchase money Indebtedness outstanding
at such time shall not exceed $30,000,000;


 


(v)                                 (x)
Indebtedness of Holdings and its Subsidiaries (other than the Receivables
Entity) constituting Intercompany Loans permitted by Section 9.05(vi) and
(y) intercompany Indebtedness of Wholly-Owned Foreign Subsidiaries permitted
pursuant to Section 9.05(xi);


 


(vi)                              Indebtedness
of a Subsidiary acquired pursuant to a Permitted Acquisition (or Indebtedness
assumed at the time of a Permitted Acquisition of an asset securing such
Indebtedness), provided that (i) such Indebtedness was not incurred in
connection with, or in anticipation or contemplation of, such Permitted
Acquisition and (ii) at the time of such Permitted Acquisition, such
Indebtedness does not exceed 25% of the total value of the assets of the
Subsidiary so acquired, or of the assets so acquired, as the case may be (such
Indebtedness described above in this Section 9.04(vi) being “Permitted
Acquired Debt”);


 


(vii)                           on and
after the Accounts Receivable Facility Transaction Date, Indebtedness which may
be deemed to exist pursuant to the Accounts Receivable Facility, so long as the
aggregate amount of Receivables Indebtedness attributable thereto at any time
does not exceed $50,000,000 at any time outstanding;


 


(viii)                        Indebtedness
of Foreign Subsidiaries of the Borrower under lines of credit to any such
Foreign Subsidiary from Persons other than Holdings or any of its


 


59

















 


Subsidiaries, the
proceeds of which Indebtedness are used for such Foreign Subsidiary’s working capital
and other general corporate purposes, provided that the aggregate
principal amount of all such Indebtedness outstanding at any time for all such
Foreign Subsidiaries shall not exceed $50,000,000;


 


(ix)                                Indebtedness
of Holdings under Shareholder Subordinated Notes issued pursuant to
Section 9.06(ii);


 


(x)                                   guaranties
by the Borrower and the Subsidiary Guarantors of each other’s Indebtedness
(other than any Receivables Indebtedness) to the extent that such Indebtedness
is otherwise permitted under this Section 9.04;


 


(xi)                                Indebtedness
arising from the honoring by a bank or other financial institution of a check,
draft or similar instrument inadvertently (except in the case of daylight
overdrafts) drawn against insufficient funds in the ordinary course of business
so long as such Indebtedness is extinguished within three Business Days of the
incurrence thereof;


 


(xii)                             Indebtedness
in respect of Other Hedging Agreements to the extent permitted by
Section 9.05(xiii) and forward commodities purchases to the extent
permitted by Section 9.05(xv);


 


(xiii)                          Indebtedness
of the Borrower or any of its Subsidiaries evidenced by completion guarantees,
performance bonds and surety bonds incurred in the ordinary course of business
for purposes of insuring the performance of the Borrower or such Subsidiary in
an aggregate amount not to exceed at any time outstanding $40,000,000;


 


(xiv)                         Indebtedness
of the Borrower or any Subsidiary of the Borrower arising from agreements of
the Borrower or a Subsidiary of the Borrower providing for indemnification,
adjustment of purchase price, earn out or other similar obligations, in each
case, incurred or assumed in connection with the disposition of any business,
assets or a Subsidiary of the Borrower permitted under this Agreement, other
than guarantees of Indebtedness incurred by any Person acquiring all or any
portion of such business, assets or Subsidiary for the purpose of financing
such acquisition, provided that the maximum assumable liability in
respect of all such Indebtedness shall at no time exceed the gross proceeds
actually received by the Borrower and its Subsidiaries in connection with such
disposition;


 


(xv)                            Permitted
Refinancing Indebtedness, so long as no Default or Event of Default is in
existence at the time of the incurrence of such Permitted Refinancing
Indebtedness and immediately after giving effect thereto;


 


(xvi)                         unsecured
subordinated Indebtedness of the Borrower incurred under the Refinancing Senior
Subordinated Notes and of the Subsidiary Guarantors (and so long as same remain
Subsidiary Guarantors) under subordinated guarantees of the obligations of the
Borrower provided under the Refinancing Senior Subordinated Notes Documents to
which they are a party, in the aggregate principal amount permitted by the definition
of Refinancing Senior Subordinated Notes at the time of issuance thereof (less


 


60

















 


the amount of any
repayments of principal thereof), so long as (A) such Indebtedness is incurred
in accordance with the requirements of the definition of Refinancing Senior
Subordinated Notes and (B) promptly following the incurrence thereof, Net Cash
Proceeds of such Indebtedness shall have been applied to repay Second-Lien
Loans in accordance with the requirements of Section 4.02(d);


 


(xvii)                      unsecured
Indebtedness of the Borrower evidenced by a guaranty of the Indebtedness of
Foreign Subsidiaries permitted pursuant to Sections 9.04(ii)(y) and (viii); and


 


(xviii)                   additional
Indebtedness of the Borrower and its Subsidiaries not otherwise permitted
hereunder not exceeding $50,000,000 in aggregate principal amount at any time
outstanding, provided that not more than $50,000,000 of such
Indebtedness outstanding at any time may be secured and any such security shall
be granted in accordance with Section 9.03(xviii).


 


9.05.  Advances; Investments; Loans.  No Credit Agreement Party will, nor will
permit any of its Subsidiaries to, lend money or extend credit or make advances
to any Person, or purchase or acquire any stock, obligations or securities of,
or any other interest in, or make any capital contribution to, any Person, or
purchase or own a futures contract or otherwise become liable for the purchase
or sale of currency or other commodities at a future date in the nature of a
futures contract, or hold any cash or Cash Equivalents (each of the foregoing
an “Investment” and, collectively, “Investments”), except:


 


(i)                                     Holdings
and its Subsidiaries (other than the Receivables Entity) may hold or invest in
cash and Cash Equivalents;


 


(ii)                                  the
Borrower and its Subsidiaries (other than the Receivables Entity) may acquire
and hold receivables owing to it, if created or acquired in the ordinary course
of business and payable or dischargeable in accordance with customary trade
terms (including the dating of receivables) of the Borrower or such Subsidiary;


 


(iii)                               the
Borrower and its Subsidiaries (other than the Receivables Entity) may acquire
and own investments (including debt obligations) 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;


 


(iv)                              Interest
Rate Protection Agreements entered into in compliance with
Section 9.04(iii) shall be permitted;


 


(v)                                 Investments
in existence on the Initial Borrowing Date and listed on Schedule VI shall
be permitted, without giving effect to any additions thereto or replacements
thereof;


 


(vi)                              (u)
Holdings may make intercompany loans and advances to the Borrower, (v) the
Borrower may make intercompany loans and advances to any Subsidiary Guarantor
(other than the Receivables Entity), (w) any Subsidiary Guarantor


 


61

















 


(other than the
Receivables Entity) may make intercompany loans and advances to the Borrower or
any other Subsidiary Guarantor (other than the Receivables Entity), (x) Foreign
Subsidiaries of the Borrower may make intercompany loans and advances to the
Borrower or any Subsidiary Guarantor (other than the Receivables Entity), (y)
Wholly-Owned Foreign Subsidiaries of the Borrower may make intercompany loans
and advances to each other and (z) the Borrower may make intercompany loans and
advances to Holdings (in lieu of the payment of Dividends) for the purpose of
making payments permitted pursuant to Sections 9.06(iii), (iv), (v) and (x)
(loans pursuant to clauses (u), (v), (w), (x), (y) and (z) of this clause (vi)
collectively, “Intercompany Loans”), provided that (I) each
Intercompany Loan shall be evidenced by an Intercompany Note (or, in the case
of an intercompany loan between Foreign Subsidiaries of the Borrower, such
other instrument or loan agreement as may be reasonably acceptable to the
Administrative Agent) and, to the extent made by a Credit Party, be pledged
(subject to the Intercreditor Agreement) to the Collateral Agent pursuant to
the Pledge Agreement, (II) each intercompany loan made pursuant to clauses (u)
and (x) above shall be subject to the subordination provisions set forth on
Annex A to Exhibit L hereto and (III) intercompany loans made by the Borrower
to Holdings pursuant to preceding clause (z) shall be made as an alternative to
(and not in addition to) Dividends otherwise permitted pursuant to Sections
9.06(iii), (iv), (v) and (x) and shall be limited in amount by the Dividend
limitations set forth in said Sections;


 


(vii)                           loans
and advances by the Borrower and its Subsidiaries (other than the Receivables
Entity) to officers and employees of Holdings and its Subsidiaries, in each
case incurred in the ordinary course of business, in an aggregate outstanding
principal amount not to exceed $5,000,000 at any time (determined without
regard to any write-downs or write-offs of such loans and advances) shall be
permitted;


 


(viii)                        Holdings,
the Borrower and the Subsidiary Guarantors (other than the Receivables Entity)
may make cash equity contributions to their respective direct Wholly-Owned
Subsidiaries (other than the Receivables Entity) which are Credit Parties;


 


(ix)                                the
Borrower and its Wholly-Owned Subsidiaries (other than the Receivables Entity)
may make Permitted Acquisitions in accordance with the relevant requirements of
Section 8.14 and the component definitions therein;


 


(x)                                   the
Borrower and its Subsidiaries may own the capital stock of their respective
Subsidiaries in existence on the Effective Date or thereafter created or
acquired in accordance with the terms of this Agreement;


 


(xi)                                the
Borrower and the Subsidiary Guarantors (other than the Receivables Entity) may
make cash Investments in Wholly-Owned Foreign Subsidiaries not to exceed
$40,000,000 in the aggregate (determined without giving effect to any
write-downs or write-offs thereof), net of any repayments to the Borrower or
any such Subsidiary Guarantor, provided that any such Investment
pursuant to this Section 9.05(xi) in the form of an intercompany loan
shall be evidenced by an Intercompany Note and such Intercompany Note shall be
pledged (subject to the Intercreditor Agreement) to the Collateral Agent
pursuant to the Pledge Agreement;


 


62

















 


(xii)                             the
Borrower and its Subsidiaries (other than the Receivables Entity) may acquire
and hold non-cash consideration issued by the purchaser of assets in connection
with a sale of such assets to the extent permitted by Section 9.02(v) or
(xvi);


 


(xiii)                          the
Borrower and its Subsidiaries (other than the Receivables Entity) may enter
into Other Hedging Agreements in the ordinary course of business providing protection
against fluctuations in currency values in connection with the operations of
the Borrower or any of its Subsidiaries (other than the Receivables Entity) so
long as management of the Borrower or such Subsidiary, as the case may be, has
determined in good faith that the entering into of such Other Hedging
Agreements are bona fide hedging activities and are not for speculative
purposes;


 


(xiv)                         so long
as no Default or Event of Default exists or would exist immediately after
giving effect to the respective Investment, the Borrower and its Wholly-Owned
Subsidiaries shall be permitted to make Investments in any Joint Venture on any
date in an amount not to exceed the Available JV Basket Amount on such date
(after giving effect to all prior and contemporaneous adjustments thereto,
except as a result of such Investment), it being understood and agreed that to
the extent the Borrower or one or more other Wholly-Owned Subsidiaries (after
the respective Investment has been made) receives a cash return from the
respective Joint Venture of amounts previously invested pursuant to this clause
(xiv) (which cash return may be made by way of repayment of principal in the
case of loans and cash equity returns (whether as a distribution, dividend or
redemption) in the case of equity investments) or a return in the form of an
asset distribution from the respective Joint Venture of any asset previously
contributed pursuant to this clause (xiv), then the amount of such cash return
of investment or the fair market value of such distributed asset (as determined
in good faith by senior management of the Borrower), as the case may be, shall,
upon the Administrative Agent’s receipt of a certification of the amount of the
return of investment from an Authorized Officer, apply to increase the
Available JV Basket Amount, provided that the aggregate amount of
increases to the Available JV Basket Amount described above shall not exceed
the amount of returned investment and, in no event, shall the amount of the
increases made to the Available JV Basket Amount in respect of any Investment
exceed the amount previously invested pursuant to this clause (xiv);


 


(xv)                            the
Borrower and its Subsidiaries may (I) make Investments consisting of forward
purchases (of not more than two years’ duration) of commodities used in a
Permitted Business in connection with the hedging of prices of such commodities
and (II) purchase options to buy commodities used in a Permitted Business, and
purchase and sell options to purchase commodities used in a Permitted Business,
in each case in connection with the hedging of prices of such commodities; provided
that (x) the aggregate amount of such forward purchases of any such commodity
and option purchases in respect of any such commodity shall at no time exceed
75% of the estimated purchases by the Borrower and its Subsidiaries of the
respective commodity subject thereto over the two year period following each
date on which an Investment is made pursuant to this Section 9.05(xv) and
(y) management of the Borrower shall have determined in good faith that such
forward and/or option purchases are bona fide hedging activities and not
for speculative purposes;


 


63

















 


(xvi)                         on and
after the Accounts Receivable Facility Transaction Date, the Receivables
Sellers may make Investments in the Receivables Entity as provided in the
Accounts Receivable Facility Documents, so long as the Receivables Entity uses
all of the proceeds of any such Investments on the date of receipt thereof to purchase
Accounts Receivable Facility Assets from the Receivables Sellers, provided
that no such Investment shall be made to the extent the application of the
proceeds thereof in accordance with this Section 9.05(xvi) would cause the
aggregate amount of Receivables Indebtedness of the Borrower and its
Subsidiaries to exceed the amount permitted by Section 9.04(vii);


 


(xvii)                      on and after
the Accounts Receivable Facility Transaction Date,  (A) the Receivables Entity may invest cash and Accounts
Receivable Facility Assets pursuant to, and in accordance with the terms of,
the Accounts Receivable Facility Documents, and (B) the Borrower and its
Subsidiaries may invest cash in the Receivables Entity; provided that
the Receivables Entity shall immediately apply the proceeds of such Investment
exclusively to remitting cash to the “receivables purchaser(s)” pursuant to the
provision of the Accounts Receivable Facility Documents analogous to
section 2.3(b) of the Purchase Agreement referred to in the definition of
“Existing Accounts Receivable Facility”;


 


(xviii)                   the Borrower
and its Subsidiaries (other than the Receivables Entity) may make Investments
in an aggregate amount equal to the Excess Proceeds Amount at such time;


 


(xix)
Wholly-Owned Foreign Subsidiaries of the Borrower may make cash common equity
contributions to their respective Wholly-Owned Foreign Subsidiaries; and


 


(xx)                              the
Borrower and its Subsidiaries may make Investments not otherwise permitted by
clauses (i) through (xix) of this Section 9.05 in an aggregate amount not
to exceed $15,000,000 (determined without regard to any write-downs or
write-offs thereof), net of cash payments of principal in the case of loans and
cash equity returns (whether as a dividend or redemption) in the case of equity
investments.


 


9.06.  Dividends; etc.  Holdings will not, and will not permit any
of its Subsidiaries to, declare or pay any dividends (other than dividends
payable solely in common stock of Holdings or any such Subsidiary, as the case
may be) or return any capital to, its stockholders, partners or other equity
holders or authorize or make any other distribution, payment or delivery of
property or cash to its stockholders, partners or other equity holders as such,
or redeem, retire, purchase or otherwise acquire, directly or indirectly, for a
consideration, any shares of any class of its capital stock or other Equity
Interests, now or hereafter outstanding (or any warrants for or options or
stock appreciation rights in respect of any of such shares), or set aside any
funds for any of the foregoing purposes, and Holdings will not permit any of
its Subsidiaries to purchase or otherwise acquire for consideration any shares
of any class of the capital stock or other Equity Interests of Holdings or any
other Subsidiary, as the case may be, now or hereafter outstanding (or any
options or warrants or stock appreciation rights issued by such Person with
respect to its capital stock or other Equity Interests) (all of the foregoing


 


64

















 


“Dividends”) or
make any payments in respect of any outstanding Shareholder Subordinated Notes,
except that:


 


(i)                                     (x)  any Subsidiary of the Borrower may pay
Dividends to the Borrower or any Wholly-Owned Subsidiary of the Borrower and
(y) any non-Wholly-Owned Subsidiary of the Borrower may pay cash Dividends to
its shareholders generally so long as the Borrower or its respective Subsidiary
which owns the Equity Interest in the Subsidiary paying such Dividends receives
at least its proportionate share thereof (based upon its relative holding of
the Equity Interest in the Subsidiary paying such Dividends and taking into
account the relative preferences, if any, of the various classes of Equity
Interests of such Subsidiary);


 


(ii)                                  Holdings
may redeem or purchase shares of Holdings Common Stock or options to purchase
Holdings Common Stock, as the case may be, held by former officers or employees
of Holdings or any of its Subsidiaries (or corporations owned by former
officers or employees) following the termination of their employment and may
make payments to former officers or employees of Holdings or any of its
Subsidiaries in respect of certain tax liabilities arising from the exercise of
options to purchase Holdings Common Stock, provided that (w) the only
consideration paid by Holdings in respect of such redemptions, purchases and/or
payments shall be cash and Shareholder Subordinated Notes, (x) no payments
shall be made in respect of any Shareholder Subordinated Notes, (y) the
aggregate amount paid by Holdings in cash in respect of all such redemptions,
purchases and/or payments shall not exceed $5,000,000 in any fiscal year of
Holdings, provided that in the event that the amount of cash permitted
to be spent pursuant to this clause (y) in any fiscal year of Holdings (before
giving effect to any increase in such permitted amount pursuant to this
proviso) is greater than the amount of cash actually expended by Holdings and
its Subsidiaries during any fiscal year of Holdings, 50% of such excess may be
carried forward and used to make cash redemptions and repurchases of Holdings’
Common Stock in the immediately succeeding fiscal year of Holdings, provided
further that no amount once carried forward pursuant to the immediately
preceding proviso may be carried forward to any fiscal year thereafter and such
amounts carried forward in any fiscal year may only be utilized after Holdings
has spent its full $5,000,000 allotment for such cash redemptions or
repurchases in such fiscal year of Holdings, provided further that
notwithstanding the foregoing provisions of this Section 9.06(ii) (but
subject to following clause (z)) Holdings may redeem or repurchase shares of
Holdings’ Common Stock owned by former officers or employees of Holdings or any
of its Subsidiaries upon the death or permanent disability of such officer or
employee with cash in excess of amounts permitted above in this clause (y) not
to exceed $4,000,000 in any fiscal year of Holdings and with the proceeds of
any key man life insurance carried by Holdings and/or its Subsidiaries in
respect of such deceased or permanently disabled officer or employee and (z) at
the time of any cash payment permitted to be made pursuant to this
Section 9.06(ii), no Default or Event of Default shall then exist or result
therefrom;


 


(iii)                               so
long as no Default or Event of Default then exists or would result therefrom,
the Borrower may pay cash Dividends to Holdings so long as the cash


 


65

















 


proceeds thereof are
promptly used by Holdings for the purposes described in Section 9.06(ii);


 


(iv)                              cash
Dividends may be paid to Holdings so long as the proceeds thereof are promptly
used by Holdings to pay operating expenses in the ordinary course of business
(including, without limitation, professional fees and expenses, insurance
premiums and corporate management fees) and other similar corporate overhead
costs and expenses, so long as the aggregate amount of cash Dividends paid
pursuant to this Section 9.06(iv) shall at no time during any fiscal year
of the Borrower exceed $20,000,000;


 


(v)                                 the
Borrower may pay cash Dividends to Holdings in the amounts and at the times of
any payment by Holdings in respect of its taxes (or taxes of its consolidated
group), provided that (x) the amount of cash Dividends paid pursuant to
this clause (v) to enable Holdings to pay taxes at any time shall not exceed
the amount of such taxes owing by Holdings at such time for the respective
period and (y) any refunds received by Holdings attributable to the Borrower or
any of its Subsidiaries shall be promptly returned by Holdings to the Borrower;


 


(vi)                              repurchases
of capital stock of Holdings deemed to occur upon the exercise of stock options
if such capital stock represents a portion of the exercise price thereof and so
long as no cash is otherwise paid or distributed by Holdings or any of its
Subsidiaries in connection therewith;


 


(vii)                           Holdings
may pay Dividends on its Qualified Preferred Stock solely through the issuance
of additional shares of Qualified Preferred Stock and not in cash;


 


(viii)                        the
Sponsor Distribution may be consummated in accordance with the requirements of
Section 5.08(a);


 


(ix)                                Hawker
SA FA (Poland) may redeem or repurchase shares of its capital stock held by its
employees, so long as the aggregate amount of cash paid in respect of such
redemptions or repurchases shall not exceed $1,000,000;


 


(x)                                   Holdings
may pay cash Dividends on Holdings Common Stock, and the Borrower may pay cash
Dividends to Holdings to enable Holdings to pay such Dividends, in each case so
long as (I) no Default or Event of Default then exists or would exist after
giving effect to the respective Dividend, (II) calculations are made by
Holdings of compliance with a Leverage Ratio not to exceed 3.0:1.0, determined
on a Pro  Forma Basis after giving effect to the incurrence of any
Indebtedness to finance such Dividend, (III) Holdings shall have satisfied the
Minimum Ratings Condition on such date, (IV) the aggregate amount of cash paid
pursuant to this clause (x) in any fiscal year of Holdings shall not exceed
$30,000,000, (V) Holdings shall have utilized the proceeds of the cash Dividend
paid to it by the Borrower described above promptly (and, in any event, within
two Business Days following receipt thereof) to pay the cash Dividends on
Holdings Common Stock described above and (VI) Holdings shall furnish to the
Administrative


 


66

















 


Agent a certificate from
an Authorized Officer of Holdings certifying to the best of his or her knowledge
as to compliance with the requirements of this Section 9.06(x) and, if
applicable, containing the calculations (in reasonable detail) required by the
preceding clause (y)(II).


 


(xi)
Holdings may make Dividends in the form of the issuance of additional capital
stock to effectuate the Shareholders Rights Plan, so long as no Change of
Control would result therefrom; and


 


(xii)
Convertible Preferred Stock may be converted into shares of Holdings Common
Stock in accordance with the terms of the certificate of designation governing
the same.


 


In the event the Borrower
elects to make Intercompany Loans to Holdings as contemplated by
Section 9.05(vi)(z) in lieu of making Dividends permitted pursuant to
Sections 9.06(iii), (iv), (v) and (x), the Dividend baskets set forth in said
Sections (if any) shall be proportionally reduced by the principal amount of
any such Intercompany Loans made for the corresponding purpose during the
relevant period.


 


9.07.  Transactions with Affiliates.  No Credit Agreement Party will, nor will
permit any of its Subsidiaries to, enter into any transaction or series of
transactions with any Affiliate of Holdings or any of its Subsidiaries other
than on terms and conditions substantially as favorable to Holdings or such
Subsidiary as would be reasonably expected to be obtainable by Holdings or such
Subsidiary at the time in a comparable arm’s-length transaction with a Person
other than an Affiliate; provided that the following shall in any event
be permitted:  (i) the Transaction; (ii)
intercompany transactions among Holdings and its Subsidiaries to the extent
expressly permitted by Sections 9.02, 9.04, 9.05 and 9.06 shall be permitted
(including the payment of interest and principal on intercompany Indebtedness
permitted by Section 9.04); (iii) the payment of consulting or other fees
to the Borrower by any of its Subsidiaries in the ordinary course of business;
(iv) customary fees to non-officer directors of Holdings and its Subsidiaries;
(v) the Borrower and its Subsidiaries perform their respective obligations
under the Employment Agreements in effect on the Effective Date and other
employment arrangements with respect to the procurement of services with their
respective officers and employees, and enter into and perform their respective
obligations under renewals or replacements of such arrangements, in each case
so long as such employment arrangements or renewals and replacements thereof
are entered into in the ordinary course of business; (vi) Dividends may be paid
by Holdings to the extent permitted by Section 9.06; (vii) payments may be
made pursuant to any Tax Allocation Agreement; (viii) the payment of customary
fees (excluding management fees) to Morgan Stanley, the Sponsors and their
respective Affiliates for services (including, without limitation, any
underwriting discounts and commissions) shall be permitted; (ix) the
reimbursement of Morgan Stanley and its Affiliates for reasonable out-of-pocket
expenses payable in accordance with the Preferred Stock Subscription Agreement and
(x) Holdings and its Subsidiaries may enter into transactions with employees
and/or officers of Holdings and its Subsidiaries in the ordinary course of
business so long as any such material transaction has been approved by the
Board of Directors of Holdings or such Subsidiary.  In no event shall any management, consulting or similar fee be
paid or payable by Holdings or any of its Subsidiaries to any Affiliate, except
as specifically provided in this Section 9.07.


 


67

















 


9.08.  Consolidated Interest Coverage Ratio.  Holdings will not permit the Consolidated
Interest Coverage Ratio for any Test Period ended on the last day of a fiscal
quarter set forth below to be less than the ratio set forth opposite such fiscal
quarter below:


 


	
  Fiscal Quarter Ended

  Closest to

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30,
  2004

  	
   

  	
  2.60:1.00

  	
   

  
	
  December 31,
  2004

  	
   

  	
  2.60:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2005

  	
   

  	
  2.60:1.00

  	
   

  
	
  June 30,
  2005

  	
   

  	
  2.60:1.00

  	
   

  
	
  September 30,
  2005

  	
   

  	
  2.60:1.00

  	
   

  
	
  December 31,
  2005

  	
   

  	
  2.60:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2006

  	
   

  	
  2.70:1.00

  	
   

  
	
  June 30,
  2006

  	
   

  	
  2.70:1.00

  	
   

  
	
  September 30,
  2006

  	
   

  	
  2.70:1.00

  	
   

  
	
  December 31,
  2006

  	
   

  	
  2.70:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2007

  	
   

  	
  2.80:1.00

  	
   

  
	
  June 30,
  2007

  	
   

  	
  2.80:1.00

  	
   

  
	
  September 30,
  2007

  	
   

  	
  2.80:1.00

  	
   

  
	
  December 31,
  2007

  	
   

  	
  2.80:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2008

  	
   

  	
  2.90:1.00

  	
   

  
	
  June 30,
  2008

  	
   

  	
  2.90:1.00

  	
   

  
	
  September 30,
  2008

  	
   

  	
  2.90:1.00

  	
   

  
	
  December 31,
  2008

  	
   

  	
  2.90:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31,
  2009 and each fiscal quarter thereafter

  	
   

  	
  3.00:1.00

  	
   

  



 


For purposes of making
determinations pursuant to (x) this Section 9.08 for any Test Period ended
prior to (but not after) the first anniversary of the Initial Borrowing Date
and (y) Section 8.14, the Consolidated Interest Coverage Ratio shall be
calculated on a Pro  Forma Basis (it being understood that this
sentence shall not affect any adjustments required pursuant to the definitions
of Consolidated Net Interest Expense or Consolidated EBITDA).


 


9.09.  Leverage Ratio.  Holdings will not permit the Leverage Ratio
on the last day of a fiscal quarter set forth below to be greater than the
ratio set forth opposite such fiscal quarter below:


 


68

















 


	
  Fiscal Quarter Ended

  Closest to

  	
   

  	
  Ratio

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  September 30, 2004

  	
   

  	
  5.50:1.00

  	
   

  
	
  December 31, 2004

  	
   

  	
  5.50:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2005

  	
   

  	
  5.50:1.00

  	
   

  
	
  June 30, 2005

  	
   

  	
  5.30:1.00

  	
   

  
	
  September 30, 2005

  	
   

  	
  5.30:1.00

  	
   

  
	
  December 31, 2005

  	
   

  	
  5.30:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2006

  	
   

  	
  4.90:1.00

  	
   

  
	
  June 30, 2006

  	
   

  	
  4.90:1.00

  	
   

  
	
  September 30, 2006

  	
   

  	
  4.90:1.00

  	
   

  
	
  December 31, 2006

  	
   

  	
  4.90:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2007

  	
   

  	
  4.40:1.00

  	
   

  
	
  June 30, 2007

  	
   

  	
  4.40:1.00

  	
   

  
	
  September 30, 2007

  	
   

  	
  4.40:1.00

  	
   

  
	
  December 31, 2007

  	
   

  	
  4.40:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2008

  	
   

  	
  3.80:1.00

  	
   

  
	
  June 30, 2008

  	
   

  	
  3.80:1.00

  	
   

  
	
  September 30, 2008

  	
   

  	
  3.80:1.00

  	
   

  
	
  December 31, 2008

  	
   

  	
  3.80:1.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  March 31, 2009 and
  each fiscal quarter thereafter

  	
   

  	
  3.20:1.00

  	
   

  



 


Notwithstanding anything
to the contrary contained in this Agreement, all determinations of the Leverage
Ratio for purposes of this Section 9.09 shall include Consolidated EBITDA
as calculated on a Pro Forma Basis to give effect to all Permitted
Acquisitions, if any, effected during the respective Test Period for which
Consolidated EBITDA is being determined, as provided in the first sentence of
the definition of Leverage Ratio contained herein (with the second sentence of
the definition of Leverage Ratio being inapplicable to determinations pursuant
to this Section 9.09).


 


9.10.  Reserved.


 


9.11.  Capital Expenditures.  (a) 
Holdings will not, and will not permit any of its Subsidiaries to, make
any Capital Expenditures, except that (i) prior to a Qualified IPO, during any
fiscal year of Holdings set forth below (taken as one accounting period), the
Borrower and its Subsidiaries may make Capital Expenditures so long as the
aggregate amount of such Capital Expenditures does not exceed the amount set
forth below opposite such fiscal year under the heading “Pre-IPO Amount” and
(ii) after the occurrence of a Qualified IPO, during any fiscal year of
Holdings set


 


69

















 


forth below (taken as one
accounting period), the Borrower and its Subsidiaries may make Capital
Expenditures so long as the aggregate amount of such Capital Expenditures does
not exceed the amount set forth below opposite such fiscal year under the
heading “Post-IPO Amount”:


 


	
  Period

  	
   

  	
  Pre-IPO
  Amount

  	
   

  	
  Post-IPO
  Amount

  	
   

  
	
   

  	
   

  	
   

  	
   

  	
   

  	
   

  
	
  Fiscal year ending
  closest to March 31, 2004

  	
   

  	
  $

  	
  45,000,000

  	
   

  	
  N/A

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2005

  	
   

  	
  $

  	
  50,000,000

  	
   

  	
  $

  	
  55,000,000

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2006

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2007

  	
   

  	
  $

  	
  65,000,000

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2008

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2009

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2010

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  70,000,000

  	
   

  
	
  Fiscal year ended
  closest to March 31, 2011

  	
   

  	
  $

  	
  60,000,000

  	
   

  	
  $

  	
  70,000,000

  	
   

  



 


(b)                                 Notwithstanding
the foregoing, in the event that the amount of Capital Expenditures permitted
to be made by the Borrower and its Subsidiaries pursuant to clause (a) above
during any fiscal year of Holdings commencing after the fiscal year of Holdings
ended March 31, 2004 (before giving effect to any increase in such
permitted Capital Expenditure amount pursuant to this clause (b)) is greater
than the amount of Capital Expenditures actually made by the Borrower and its
Subsidiaries during such fiscal year, such excess may be carried forward and
utilized to make Capital Expenditures in the immediately succeeding fiscal
year, provided that no amounts once carried forward pursuant to this
Section 9.11(b) may be carried forward to any subsequent fiscal year
thereafter and such amounts may only be utilized after the Borrower and its
Subsidiaries have utilized in full the permitted Capital Expenditure amount for
such fiscal year as set forth in the table in clause (a) above (without giving
effect to any increase in such amount pursuant to this clause (b)).


 


(c)                                  In
addition to the foregoing, the Borrower and its Subsidiaries may make
additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under Section 9.11(a)) with the Net Sale
Proceeds of Asset Sales to the extent such proceeds are not required to be
applied to repay Second-Lien Loans pursuant to Section 4.02(c) and/or as a
mandatory repayment and/or commitment reduction of loans and/or commitments
under the First-Lien Credit Agreement.


 


70

















 


(d)                                 In
addition to the foregoing, the Borrower and its Subsidiaries may make
additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under Section 9.11(a)) with the insurance
proceeds received by the Borrower or any of its Subsidiaries from any Recovery
Event so long as such Capital Expenditures are to replace or restore any
properties or assets in respect of which such proceeds were paid within one
year (or, to the extent permitted by Section 4.02(f), 18 months) following
the date of the receipt of such insurance proceeds to the extent such insurance
proceeds are not required to be applied to repay Second-Lien Loans pursuant to
Section 4.02(f) and/or as a mandatory repayment and/or commitment
reduction of loans and/or commitments under the First-Lien Credit Agreement.


 


(e)                                  In
addition to the foregoing, the Borrower and the Subsidiaries may make
additional Capital Expenditures (which Capital Expenditures will not be
included in any determination under Section 9.11(a)) constituting
Permitted Acquisitions effected in accordance with the requirements of
Section 8.14.


 


(f)                                    In
addition to the foregoing, the Borrower and its Subsidiaries may make Capital
Expenditures at any time in an aggregate amount equal to the Excess Proceeds
Amount at such time (which Capital Expenditures will not be included in any
determination under Section 9.11(a)).


 


9.12.  Limitation on Modifications of Certain
Other Agreements; etc.  No Credit
Agreement Party will, nor will permit any of its Subsidiaries to:


 


(i)                                     make
(or give any notice in respect of) any voluntary or optional payment or
prepayment on or redemption, repurchase or acquisition for value of (including,
without limitation, by way of depositing with the trustee with respect thereto
or any other Person money or securities before due for the purpose of paying
when due), or any prepayment or redemption (except as expressly required under
the terms of the relevant agreement) as a result of any asset sale, change of
control or similar event of any Indebtedness pursuant to, after the incurrence
or issuance thereof, any Shareholder Subordinated Notes (except to the extent
expressly permitted under Section 9.06(ii)), Refinancing Senior
Subordinated Notes or any Qualified Preferred Stock; provided that so
long as no Default or Event of Default then exists or would result therefrom,
the Refinancing Senior Subordinated Notes may be exchanged for Permanent
Exchange Refinancing Senior Subordinated Notes in accordance with the
requirements of the respective definitions thereof and the relevant provisions
of this Agreement; and


 


(ii)                                  amend,
modify or change in a way adverse to the interests of the Lenders in any
material respect any Refinancing Senior Subordinated Notes Document or any
Accounts Receivable Facility Document (it being understood that the Accounts
Receivable Facility may be extended, amended, modified or replaced in
accordance with the proviso to the definition thereof), any Tax Allocation
Agreement, any Management Agreement, or enter into any new Tax Allocation
Agreement or Management Agreement which could reasonably be expected to be
adverse in any material respect to the interests of the Lenders or, in the case
of any Management Agreement, which involves the payment by Holdings or any of
its Subsidiaries of any amount which could give rise to a violation of this
Agreement.


 


71

















 


9.13.  Limitation on Issuance of Capital Stock
and Other Equity Interests. 
(a)  No Credit Agreement Party
will, nor will permit any of its Subsidiaries to, issue (i) any Preferred Stock
(or any options, warrants or rights to purchase Preferred Stock), other than
issuances by Holdings of Qualified Preferred Stock or Preferred Stock pursuant
to the Shareholders Right Plan or (ii) any redeemable common Equity Interests.


 


(b)                                 The
Borrower shall not, and shall not permit any of its Subsidiaries to, issue any
Equity Interests (including by way of sales of treasury stock), except (i) for
transfers and replacements of then outstanding shares of capital stock or other
Equity Interests, (ii) for stock splits, stock dividends and additional
issuances which do not decrease the percentage ownership of Holdings or any of
its Subsidiaries in any class of the Equity Interests of such Subsidiaries,
(iii) to qualify directors to the extent required by applicable law and (iv)
Subsidiaries formed after the Effective Date pursuant to Section 9.15 may
issue Equity Interests in accordance with the requirements of
Section 9.15.  All Equity Interests
issued in accordance with this Section 9.13(b) shall, to the extent
required by the Pledge Agreement (and subject to the Intercreditor Agreement),
be delivered to the Collateral Agent for pledge pursuant to the Pledge
Agreement.


 


9.14.  Limitation on Certain Restrictions on
Subsidiaries.  (a)  Holdings will not, and will not permit any
of its Subsidiaries to, directly or indirectly, create or otherwise cause or
suffer to exist or become effective, any encumbrance or restriction on the
ability of any such Subsidiary to (x) pay dividends or make any other
distributions on its capital stock or any other Equity Interest or
participation in its profits owned by the Borrower or any Subsidiary of the
Borrower, or pay any Indebtedness owed to the Borrower or a Subsidiary of the
Borrower, (y) make loans or advances to the Borrower or any Subsidiary of the
Borrower or (z) transfer any of its properties or assets to the Borrower or any
of its Subsidiaries, except for such encumbrances or restrictions existing
under or by reason of (i) applicable law, (ii) this Agreement and the other
Credit Documents, (iii) on and after the Accounts Receivables Transaction Date,
the provisions applicable to the Receivables Sellers and Receivables Entity
contained in the Accounts Receivable Facility, (iv) customary provisions
restricting subletting or assignment of any lease governing a leasehold
interest of the Borrower or a Subsidiary of the Borrower, (v) customary
provisions restricting assignment of any contract entered into by the Borrower
or any Subsidiary of the Borrower in the ordinary course of business, (vi) any
agreement or instrument governing Permitted Acquired Debt, which encumbrance or
restriction is not applicable to any Person or the properties or assets of any
Person, other than the Person or the properties or assets of the Person acquired
pursuant to the respective Permitted Acquisition and so long as the respective
encumbrances or restrictions were not created (or made more restrictive) in
connection with or in anticipation of the respective Permitted Acquisition,
(vii) restrictions applicable to any joint venture that is a Subsidiary
existing at the time of the acquisition thereof as a result of an Investment
pursuant to Section 9.05 or a Permitted Acquisition effected in accordance
with Section 8.14; provided that the restrictions applicable to
such joint venture are not made more burdensome, from the perspective of the
Borrower and its Subsidiaries, than those as in effect immediately before
giving effect to the consummation of the respective Investment or Permitted
Acquisition, (viii) any restriction or encumbrance with respect to assets
subject to Liens permitted by Sections 9.03(iv), (x), (xi), (xii) and (xvii),
(ix) the First-Lien Credit Documents and (x) the Refinancing Senior
Subordinated Notes Documents.


 


72

















 


(b)                                 Holdings
will not, and will not permit any of its Subsidiaries to, directly or
indirectly agree to any consensual encumbrance or restriction on the ability of
any non-Subsidiary joint venture to (x) pay dividends or make other
distributions on its capital stock or other Equity Interests or participations
in its profits owned by the Borrower or any Subsidiary of the Borrower or (y)
make loans or advances to the Borrower or any Subsidiary of the Borrower,
except for such encumbrances or restrictions existing under or by reason of (i)
applicable law, (ii) this Agreement and the other Credit Documents, (iii)
customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of such non-Subsidiary joint venture, (iv)
customary provisions restricting assignment of any contract entered into by
such non-Subsidiary joint venture in the ordinary course of business, (v)
normal restrictions (as determined in good faith by the Borrower) applicable to
any non-Subsidiary joint venture at the time of the establishment thereof (so
long as not in connection with a Permitted Acquisition), (vi) restrictions
applicable to any non-Subsidiary joint venture existing at the time of the
acquisition thereof as a result of an Investment pursuant to Section 9.05
or a Permitted Acquisition effected in accordance with Section 8.14; provided
that the restrictions applicable to the respective non-Subsidiary joint venture
are not made more burdensome, from the perspective of the Borrower and its
Subsidiaries, than those as in effect immediately before giving effect to the
consummation of the respective Investment or Permitted Acquisition and (vi) the
First-Lien Credit Documents.


 


9.15.  Limitation on the Creation of Subsidiaries
and Joint Ventures.  (a)  Notwithstanding anything to the contrary
contained in this Agreement, Holdings will not, and will not permit any of its
Subsidiaries to, establish, create or acquire after the Effective Date any
Subsidiary; provided that the Borrower and its Wholly-Owned Subsidiaries
shall be permitted to establish, create and, to the extent permitted by
Section 8.14, acquire Subsidiaries (which, except as expressly permitted
by Section 8.14, shall be Wholly-Owned Subsidiaries) so long as, in each
case, (i) at least 10 Business Days’ prior written notice thereof is given to
the Administrative Agent (or such lesser prior written notice as may be agreed
to by the Administrative Agent in any given case), (ii) the Equity Interests of
such new Subsidiary are promptly pledged pursuant to, and to the extent
required by, this Agreement and the Pledge Agreement and (subject to the
provisions of the Intercreditor Agreement) the certificates, if any,
representing such Equity Interests, together with appropriate transfer powers
duly executed in blank, are delivered to the Collateral Agent, (iii) such new
Subsidiary (other than a Foreign Subsidiary) promptly executes a counterpart of
the Subsidiaries Guaranty, the Pledge Agreement and the Security Agreement, and
(iv) to the extent requested by the Administrative Agent or the Required
Lenders, takes all actions required pursuant to Section 8.11.  In addition, each new Subsidiary that is
required to execute any Credit Document shall execute and deliver, or cause to
be executed and delivered, all other relevant documentation of the type
described in Section 5 as such new Subsidiary would have had to deliver if
such new Subsidiary were a Credit Party on the Initial Borrowing Date.


 


(b)                                 Holdings
will not, and will not permit any of its Subsidiaries to, enter into any
partnerships (except to the extent that such partnership is a Wholly-Owned
Subsidiary of the Borrower) or joint ventures; provided that the
Borrower and its Subsidiaries may establish, acquire or create, and make
Investments in, partnerships and joint ventures after the Initial Borrowing
Date as a result of Permitted Acquisitions (subject to the limitations
contained in the definition thereof) and Investments expressly permitted to be
made pursuant to Section 9.05, so long as (x) all Equity Interests of each
such partnership or joint venture shall be pledged by any


 


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Credit Party which owns
same to the extent required by the Pledge Agreement, and (y) any actions
required to be taken pursuant to Section 8.11 in connection with the
establishment of, or Investments in, the respective Subsidiaries are taken in
accordance with the requirements of said Section 8.11.


 


SECTION 10. 
Events of Default.  Upon
the occurrence of any of the following specified events (each, an “Event of
Default”):


 


10.01.  Payments.  The Borrower shall (i) default in the payment when due of any
principal of the Second-Lien Loans or (ii) default, and such default shall
continue for three or more Business Days, in the payment when due of any
interest on the Second-Lien Loans or any Fees or any other amounts owing
hereunder or under any other Credit Document; or


 


10.02.  Representations, etc.  Any representation, warranty or statement
made by any Credit Party herein or in any other Credit Document or in any
statement or certificate delivered pursuant hereto or thereto shall prove to be
untrue in any material respect on the date as of which made or deemed made; or


 


10.03.  Covenants.  Any Credit Party shall (a) default in the due performance or
observance by it of any term, covenant or agreement contained in
Section 8.01(e)(i), 8.10, 8.14, 8.19 or 9 (other than Section 9.07
and, to the extent (and only to the extent) the respective default relates to a
Subsidiary established, created or acquired after the Effective Date the book
value of the gross assets of which does not exceed $500,000,
Section 9.15), or (b) default in the due performance or observance by it
of any term, covenant or agreement (other than those referred to in
Section 10.01, 10.02 or clause (a) of this Section 10.03) contained
in this Agreement and such default shall continue unremedied for a period of at
least 30 days after notice to the defaulting party by the Administrative Agent
or the Required Lenders; or


 


10.04.  Default Under Other Agreements.  (a) 
Holdings or any of its Subsidiaries shall (i) default in any payment
with respect to any Indebtedness (other than the Obligations) beyond the period
of grace, if any, provided in the instrument or agreement under which
Indebtedness was created or (ii) default in the observance or performance of
any agreement or condition relating to any such Indebtedness or contained in
any instrument or agreement evidencing, securing or relating thereto, or any
other event shall occur or condition exist, the effect of which default or
other event or condition is to cause, or to permit the holder or holders of
such Indebtedness (or a trustee or agent on behalf of such holder or holders)
to cause (determined without regard to whether any notice is required), any
such Indebtedness to become due prior to its stated maturity (it being
understood that a default or other event or condition described above in this
clause (ii) shall cease to constitute an Event of Default if and when same has
been cured or otherwise ceases to exist, in each case prior to the taking of
any action by the Administrative Agent or the Required Lenders pursuant to the
last paragraph of this Section 10); or (b) any Indebtedness (other than
the Obligations) of Holdings or any of its Subsidiaries shall be declared to be
due and payable, or shall be required to be prepaid other than by a regularly
scheduled required prepayment or as a mandatory prepayment (unless such
required prepayment or mandatory prepayment results from a default thereunder
or an event of the type that constitutes an Event of Default), prior to the
stated maturity thereof; provided that it shall not constitute an Event
of Default pursuant to clause (a) or (b) of this Section 10.04 unless the
principal amount of


 


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any one issue of such
Indebtedness, or the aggregate amount of all such Indebtedness referred to in
clauses (a) and (b) above, exceeds $10,000,000 at any one time; provided,
further that with respect to any failure or breach or default under the
First-Lien Credit Agreement (other than a payment “event of default” under, or
an acceleration of the Indebtedness under, the First-Lien Credit Agreement),
such event shall only constitute an Event of Default under this Agreement if
such event occurs and is not cured or waived within sixty (60) days after the
occurrence of such event; or


 


10.05.  Bankruptcy, etc.  Holdings or any of its Subsidiaries shall
commence a voluntary case concerning itself under Title 11 of the United States
Code entitled “Bankruptcy,” as now or hereafter in effect, or any successor
thereto (the “Bankruptcy Code”); or an involuntary case is commenced
against Holdings or any of its Subsidiaries and the petition is not
controverted within 20 days, or is not dismissed within 90 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code) is
appointed for, or takes charge of, all or substantially all of the property of Holdings
or any of its Subsidiaries; or Holdings or any of its Subsidiaries commences
any other proceeding under any reorganization, arrangement, adjustment of debt,
relief of debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to Holdings or any of
its Subsidiaries; or there is commenced against Holdings or any of its
Subsidiaries any such proceeding which remains undismissed for a period of 90
days; or Holdings or any of its Subsidiaries is adjudicated insolvent or
bankrupt; or any order of relief or other order approving any such case or
proceeding is entered; or Holdings or any of its Subsidiaries suffers any
appointment of any custodian or the like for it or any substantial part of its
property to continue undischarged or unstayed for a period of 90 days; or
Holdings or any of its Subsidiaries makes a general assignment for the benefit
of creditors; or any corporate action is taken by Holdings or any of its
Subsidiaries for the purpose of effecting any of the foregoing; or


 


10.06.  ERISA.  (a)  Any Plan shall fail
to satisfy the minimum funding standard required for any plan year or part
thereof under Section 412 of the Code or Section 302 of ERISA or a
waiver of such standard or extension of any amortization period is sought or
granted under Section 412 of the Code or Section 303 or 304 of ERISA,
a Reportable Event shall have occurred, a contributing sponsor (as defined in
Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of ERISA shall
be subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof) and an
event described in subsection .62, .63, .64, .65, .66, .67 or .68 of PBGC
Regulation Section 4043 shall be reasonably expected to occur with respect
to such Plan within the following 30 days, any Plan which is subject to Title
IV of ERISA shall have had or is reasonably likely to have a trustee appointed
to administer such Plan, any Plan or, to the knowledge of Holdings or the
Borrower, Multiemployer Plan which is subject to Title IV of ERISA is, shall
have been or is reasonably likely to be terminated or to be the subject of
termination proceedings under ERISA, any Plan shall have an Unfunded Current
Liability, a contribution required to be made with respect to a Plan or
Multiemployer Plan or a Foreign Pension Plan has not been timely made, Holdings
or any Subsidiary of Holdings or any ERISA Affiliate has incurred or is
reasonably likely to incur any liability to or on account of a Plan or
Multiemployer Plan under Section 409, 502(i), 502(l), 515, 4062, 4063,
4064, 4069, 4201, 4204 or 4212 of ERISA or Section 401(a)(29), 4971 or
4975 of the Code or on account of a group health plan (as defined in Section 607(1)
of ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of
the Code and/or the Health Insurance


 


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Portability and
Accountability Act of 1996, as amended, or Holdings or any Subsidiary of Holdings
has incurred or is reasonably likely to incur liabilities pursuant to one or
more employee welfare benefit plans (as defined in Section 3(1) of ERISA)
that provide benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or Plans or Foreign Pension
Plans, a “default” within  the meaning
of Section 4219(c)(5) of ERISA, shall occur with respect to any Plan or
Multiemployer Plan, any applicable law, rule or regulation is adopted, changed
or interpreted, or the interpretation or administration thereof is changed, in
each case after the date hereof, by any governmental authority or agency or by
any court (a “Change of Law”), or, as a result of a Change in Law, an
event occurs following a Change in Law, with respect to or otherwise affecting
any Plan or Multiemployer Plan; (b) there shall result from any such event or
events described above in this Section 10.06 the imposition of a lien, the
granting of a security interest, or a liability or a material risk of incurring
a liability resulting from any event described in clause (a) above; and (c)
such lien, security interest or liability, individually and/or in the
aggregate, in the reasonable opinion of the Required Lenders, (x) has had
(unless same has ceased to exist in all respects) or (y) is reasonably likely
to have, a Material Adverse Effect; or


 


10.07.  Security Documents.  (a) 
Any Security Document shall cease to be in full force and effect, or
shall cease to give the Collateral Agent for the benefit of the Secured
Creditors the Liens, rights, powers and privileges purported to be created
thereby (including, without limitation, a perfected security interest in, and
Lien on, all of the Collateral, other than Collateral with an aggregate value
of less than or equal to $2,500,000), in favor of the Collateral Agent,
superior to and prior to the rights of all third Persons (except as permitted
by Section 9.03), and subject to no other Liens (except as permitted by
Section 9.03), or (b) any Credit Party shall default in the due
performance or observance of any term, covenant or agreement on its part to be
performed or observed pursuant to any such Security Document and such default
(except to the extent that same will adversely affect the continued perfection
or priority of the Liens created by any such Security Document in Collateral
with an aggregate value in excess of $2,500,000, in which case clause (a) of
this Section 10.07 will be applicable) shall continue beyond any cure or
grace period specifically applicable thereto pursuant to the terms of any such
Security Document; or


 


10.08.  Guaranty.  Any Guaranty or any provision thereof shall cease to be in full
force and effect, or any Guarantor or any Person acting by or on behalf of such
Guarantor shall deny or disaffirm such Guarantor’s obligations under the
relevant Guaranty or any Guarantor shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to its Guaranty; or


 


10.09.  Judgments.  One or more judgments or decrees shall be entered against
Holdings or any of its Subsidiaries involving a liability (to the extent not
paid or covered by insurance (with any portion of any judgment or decree not so
covered to be included in any determination hereunder)) in excess of
$10,000,000 for all such judgments and decrees and all such judgments or
decrees shall not have been vacated, discharged or stayed or bonded pending
appeal within 60 days from the entry thereof;


 


then, and in any such
event, and at any time thereafter, if any Event of Default shall then be
continuing, the Administrative Agent shall, upon the written request of the
Required Lenders, by


 


76

















 


written notice to the
Borrower, take any or all of the following actions, without prejudice to the
rights of the Administrative Agent or any Lender to enforce its claims against
any Credit Party, except as otherwise specifically provided for in this
Agreement (provided that if an Event of Default specified in
Section 10.05 shall occur, the result which would occur upon the giving of
written notice by the Administrative Agent as specified in clauses (i) and (ii)
below shall occur automatically without the giving of any such notice):  (i) declare the Total Commitment terminated,
whereupon the Commitment of each Lender shall forthwith terminate immediately;
(ii) declare the principal of and any accrued interest and Fees in respect of
all Second-Lien Loans and all Obligations owing hereunder to be, whereupon the
same shall become, forthwith due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower; (iii) subject to the Intercreditor Agreement, enforce, as Collateral
Agent (or direct the Collateral Agent to enforce), any or all of the Liens and
security interests created pursuant to the Security Documents; and (iv) subject
to the Intercreditor Agreement, apply any cash collateral as provided in
Section 4.02.


 


SECTION 11. 
Definitions.  As used
herein, the following terms shall have the meanings herein specified unless the
context otherwise requires.  Defined
terms in this Agreement shall include in the singular number the plural and in
the plural the singular:


 


“Accounts Receivable
Facility” shall mean the receivables facility created pursuant to the
Accounts Receivable Facility Documents; provided that the Accounts
Receivable Facility may be extended, amended, modified, refinanced or replaced,
or successively extended, amended, modified, refinanced or replaced after the
Accounts Receivable Facility Transaction Date, so long as the Accounts
Receivables Facility Amendment Conditions are satisfied (in which event the
Accounts Receivable Facility, as so extended, amended, modified, refinanced or
replaced, shall be deemed to be the Accounts Receivable Facility hereunder).


 


“Accounts Receivables
Facility Amendment Conditions” shall mean, with respect to any extension,
amendment, modification or replacement of any Accounts Receivable Facility Document,
the requirement that the following shall be true after giving effect to such
extension, amendment, modification or replacement:


 


(A)                              the
maximum Receivables Indebtedness permitted under the Accounts Receivable
Facility shall not be greater than $50.0 million;


 


(B)                                the
scheduled maturity of such extended, amended, modified or replaced facility
shall not be earlier than the scheduled maturity of the Accounts Receivable
Facility prior to such extension, amendment, modification or replacement;


 


(C)                                the
Receivables Entity would be required to apply all funds available to it (after
giving effect to the allocation of funds to reserves required under the terms
of the Accounts Receivable Facility Documents and to the payment of interest,
principal and other amounts owed under the Accounts Receivable Facility
Documents) to pay the purchase price for accounts receivable (including any
deferred portion of the purchase price) or to make Dividends to EnerSys or to
the Borrower;


 


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(D)                               the
termination events or early amortization events (however defined) in the
Accounts Receivable Facility Documents shall not be made more onerous (whether
through the modification of existing termination events or early amortization
events or the provision of additional such events) on the Borrower and its
Subsidiaries in any material respect;


 


(E)                                 the
degree of recourse to Holdings or its Subsidiaries (other than the Receivables
Entity) under or in respect of the Accounts Receivable Facility Documents shall
not be increased in any material respect (as determined in good faith by the
Borrower) and in no event shall Holdings or any of its Subsidiaries (other than
the Receivables Entity) have recourse liability (except pursuant to Standard
Securitization Undertakings) for the payment of any Accounts Receivable
Facility Assets or any investor certificates or purchased interests pursuant to
such extended, amended, modified or replaced facility;


 


(F)                                 the
covenants included in the Accounts Receivable Facility Documents shall not be
made more restrictive (whether through the modification of existing covenants
or the provision of additional covenants) to the Borrower and its Subsidiaries
in any material respect;


 


(G)                                if
additional representations and warranties are included in the Accounts
Receivable Facility Documents or existing representations and warranties are
made more restrictive, such additional or amended representations and
warranties shall not be adverse in any material respect to the interest of the
Borrower and its Subsidiaries taken as a whole (as determined in good faith by
the Borrower); and


 


(H)                               the
provisions of the Accounts Receivable Facility shall not conflict with the
relevant requirements of Sections 9.02, 9.03, 9.04 and 9.05.


 


“Accounts Receivable
Facility Assets” shall mean Receivables (whether now existing or arising in
the future) of the Borrower and its Subsidiaries which are transferred to the
Receivables Entity pursuant to the Accounts Receivable Facility Documents and any
related Accounts Receivable Related Assets which are also so transferred to the
Receivables Entity.


 


“Accounts Receivable
Facility Documents” shall mean each of the documents and agreements entered
into in connection with the Accounts Receivable Replacement Facility, including
all documents and agreements relating to the issuance, funding and/or purchase
of certificates and purchased interests, in each case as such documents and
agreements may be amended, modified, supplemented, refinanced or replaced from
time to time in accordance with the terms hereof and thereof.


 


“Accounts Receivables
Facility Financing Costs” shall mean, for any period, the total
consolidated interest expense of the Borrower and its Subsidiaries which would
have existed for such period pursuant to the Accounts Receivable Facility (or
any substantially similar facility) if same were structured as a secured
lending arrangement rather than as a facility for the sale of receivables and
related assets, in each case assuming an imputed interest rate


 


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commensurate with amounts
being charged pursuant to the Accounts Receivable Facility Documents or such
similar facility.


 


“Accounts Receivable
Facility Transaction” shall mean the consummation of the Accounts
Receivable Facility and related transactions contemplated by the Accounts
Receivable Facility Documents.


 


“Accounts Receivable
Facility Transaction Date” shall mean the date of the consummation of the
Accounts Receivable Facility Transaction in accordance with the requirements of
Section 8.19.


 


“Accounts Receivable
Related Assets” shall mean, with respect to any Person, all of the
following property and interests in property of such Person, whether now
existing or existing in the future or hereafter acquired or arising and in each
case to the extent relating to the Receivables of such Person:  (i) all unpaid seller’s or lessor’s rights
(including, without limitation, rescission, replevin, reclamation and stoppage
in transit, relating to any of the foregoing or arising therefrom), (ii) all
rights to any goods or merchandise represented by any of the foregoing
(including, without limitation, returned or repossessed goods), (iii) all
reserves and credit balances with respect to any such Receivable or the
respective account debtor, (iv) all letters of credit, security or guarantees
of any of the foregoing, (v) all insurance policies or reports relating to any
of the foregoing, (vi) all collection or deposit accounts relating to any of
the foregoing, (vii) all proceeds of any of the foregoing, and (viii) all books
and records relating to any of the foregoing.


 


“Acquired Person”
shall have the meaning provided in the definition of Permitted Acquisition.


 


“Additional Security
Documents” shall have the meaning provided in Section 8.11.


 


“Adjusted Consolidated
Net Income” shall mean, for any period, Consolidated Net Income for such
period plus, without duplication and to the extent deducted in arriving at
Consolidated Net Income, the sum of the amount of all non-cash charges
(including, without limitation, to the extent deducted in arriving at
Consolidated Net Income, depreciation, amortization, deferred income tax
expense and non-cash interest expense) and non-cash losses which were included
in arriving at Consolidated Net Income for such period, less (without
duplication of items reflected in Adjusted Consolidated Working Capital) the
amount of all non-cash gains and gains from the sale of assets (other than
sales of inventory in the ordinary course of business) which were included in
arriving at Consolidated Net Income for such period.


 


“Adjusted Consolidated
Working Capital” shall mean, at any time, Consolidated Current Assets (but
excluding therefrom all cash, Cash Equivalents and deferred income taxes to the
extent otherwise included therein) less Consolidated Current
Liabilities.


 


“Administrative Agent”
shall have the meaning provided in the first paragraph of this Agreement and
shall include any successor to the Administrative Agent appointed pursuant to
Section 12.10.


 


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“Administrative
Questionnaire” means an Administrative Questionnaire in a form supplied by
the Administrative Agent.


 


“Affected Loans”
shall have the meaning provided in Section 4.02(i).


 


“Affiliate” shall
mean, with respect to any Person, any other Person directly or indirectly
controlling (including but not limited to all directors and officers of such
Person), controlled by, or under direct or indirect common control with such
Person; provided, however, that for purposes of
Section 9.07, (i) an Affiliate of Holdings shall include any Person that
directly or indirectly owns more than 10% of any class of the capital stock of
Holdings (or, in the case of Convertible Preferred Stock, 15% of such capital
stock) and any Senior Manager or director of Holdings or any such Person and
(ii) any successor to Morgan Stanley Capital Partners (by merger,
consolidation, sale or otherwise) shall be deemed to be an Affiliate of Morgan
Stanley, irrespective of whether it would otherwise be one pursuant to the
terms of this definition.


 


“Agents” shall
have the meaning provided in the first paragraph of this Agreement.


 


“Agent-Related Persons”
means each Agent and the Collateral Agent, together with their respective
Affiliates (including, in the case of Bank of America, in its capacity as the
Administrative Agent, Banc of America Securities LLC, in its capacity as joint
lead arranger and joint book manager), and the officers, directors, employees,
agents and attorneys-in-fact of such Persons and Affiliates.


 


“Aggregate
Consideration” shall mean, with respect to any Permitted Acquisition, the
sum (without duplication) of (i) the fair market value of the Holdings Common
Stock (based on the average closing trading price of the Holdings Common Stock
for the 20 trading days immediately prior to the date of such Permitted
Acquisition on the stock exchange on which Holdings Common Stock is listed or,
if Holdings Common Stock is not so listed, the good faith determination of the
senior management of Holdings) issued (or to be issued) as consideration in
connection with such Permitted Acquisition (including, without limitation,
Holdings Common Stock which may be required to be issued as earnout
consideration upon the achievement of certain future performance goals of the
respective Acquired Person), (ii) the aggregate amount of all cash paid (or to
be paid) by Holdings or any of its Subsidiaries in connection with such
Permitted Acquisition (including, without limitation, payments of fees and
costs and expenses in connection therewith) and all contingent cash purchase
price or other earnout obligations of Holdings and its Subsidiaries incurred in
connection therewith (as determined in good faith by Holdings), (iii) the
aggregate principal amount of all Indebtedness assumed, incurred and/or issued
in connection with such Permitted Acquisition to the extent permitted by
Section 9.04, (iv) the aggregate liquidation preference of any Preferred
Stock issued in connection with such Permitted Acquisition and (v) the fair
market value (determined in good faith by senior management of Holdings) of all
other consideration payable in connection with such Permitted Acquisition.


 


“Agreement” shall
mean this Credit Agreement, as the same may be from time to time modified,
amended, restated and/or supplemented.


 


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“Agreement Currency”
shall have the meaning provided in Section 13.20.


 


“Applicable Change of
Control Percentage” shall mean (i) in the case of a purchase of Second-Lien
Loans pursuant to Section 4.02(j) prior to the first anniversary of the
Initial Borrowing Date, 102%, (ii) in the case of a purchase of Second-Lien
Loans pursuant to Section 4.02(j) on and after the first anniversary of
the Initial Borrowing Date and prior to the second anniversary of the Initial
Borrowing Date, 101% and (iii) at any other time, 100%.


 


“Applicable Excess
Cash Flow Percentage” shall mean, with respect to any Excess Cash Flow
Payment Date, 50%; provided that so long as no Default or Event of
Default is then in existence, if on the last day of the relevant Excess Cash
Flow Payment Period, the Leverage Ratio for the Test Period then most recently
ended (as established pursuant to the officer’s certificate delivered (or
required to be delivered) pursuant to Section 8.01(d)) is less than
2.00:1.0, then the Applicable Excess Cash Flow Percentage shall instead be 0%.


 


“Applicable Margin”
shall mean at any time a percentage per annum equal to (x) in the case of
Second-Lien Loans maintained as Base Rate Loans, 4.00% and (y) in the case of
Second-Lien Loans maintained as Eurodollar Loans, 5.00%


 


“Approved Fund”
shall have the meaning provided in Section 13.07.


 


 “Asset Sale” shall mean any sale,
transfer or other disposition by Holdings or any of its Subsidiaries to any
Person other than Holdings or any Wholly-Owned Subsidiary of Holdings of any
asset (including, without limitation, any capital stock or other Equity
Interests of another Person, but excluding the sale by such Person of its own
Equity Interests) of Holdings or such Subsidiary other than (i) sales,
transfers or other dispositions of inventory made in the ordinary course of
business, and (ii) any other sale, transfer or other disposition (for such purpose,
treating any series of related sales, transfers or dispositions as a single
such transaction) that generates Net Sale Proceeds of less than $250,000.


 


“Assignment and
Assumption Agreement” shall mean the Assignment and Assumption Agreement
substantially in the form of Exhibit K (appropriately completed).


 


“Attorney Costs”
means and includes all reasonable fees, expenses and disbursements of any law
firm or other external counsel and, without duplication, the allocated cost of
internal legal services and all expenses and disbursements of internal counsel.


 


“Attributable
Indebtedness” in respect of any Synthetic Lease Obligation, means, on any
date, the capitalized amount of the remaining lease payments under the relevant
lease that would appear on a balance sheet of such Person prepared as of such
date in accordance with GAAP if such lease were accounted for as a capital
lease.


 


“Authorized Officer”
shall mean, with respect to (i) delivering financial information and officer’s
certificates pursuant to this Agreement, the chief financial officer, the chief
executive officer, the chief operating officer, the corporate controller, any
treasurer or other financial officer of Holdings and (ii) any other matter in
connection with this Agreement or any other Credit Document, any officer (or a
person or persons so designated by such officer) of


 


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Holdings or the Borrower,
as the case may be, in each case to the extent reasonably acceptable to the
Administrative Agent.


 


“Available JV Basket
Amount” shall mean, on any date of determination, an amount equal to the
sum of (i) $25,000,000 minus (ii) the aggregate amount of Investments
made (including for such purpose the fair market value of any assets
contributed to any Joint Venture (as determined in good faith by senior
management of the Borrower), net of Indebtedness and, without duplication,
Capitalized Lease Obligations assigned to, and assumed by, the respective Joint
Venture in connection therewith) pursuant to Section 9.05(xiv) after the
Effective Date, minus (iii) the aggregate amount of Indebtedness or
other obligations (whether absolute, accrued, contingent or otherwise and
whether or not due) of any Joint Venture for which Holdings or any of its
Subsidiaries (other than the respective Joint Venture) is liable, minus
(iv) all payments made by Holdings or any of its Subsidiaries (other than the
respective Joint Venture) in respect of Indebtedness or other obligations of
the respective Joint Venture (including, without limitation, payments in
respect of obligations described in preceding clause (iii)) after the Effective
Date, plus (v) the amount of any increase to the Available JV Basket
Amount made after the Effective Date in accordance with the provisions of
Section 9.05(xiv).


 


“Bank of America”
shall mean Bank of America, N.A., in its individual capacity, and any successor
corporation thereto by merger, consolidation or otherwise.


 


“Bankruptcy Code”
shall have the meaning provided in Section 10.05.


 


“Base Rate” means
for any day a fluctuating rate per annum equal to the higher of (a) the Federal
Funds Rate plus 1/2 of 1% and (b) the rate of interest in effect for
such day as publicly announced from time to time by Bank of America as its
“prime rate.”  The “prime rate” is a
rate set by Bank of America based upon various factors including Bank of
America’s costs and desired return, general economic conditions and other
factors, and is used as a reference point for pricing some credits, which may
be priced at, above, or below such announced rate.  Any change in such rate announced by Bank of America shall take
effect at the opening of business on the day specified in the public
announcement of such change.


 


“Base Rate Loan”
shall mean each Loan bearing interest at the rates provided in
Section 1.08(a) (subject to any increases pursuant to
Section 1.08(c)).


 


“Borrower” shall
have the meaning provided in the first paragraph of this Agreement.


 


“Borrowing” shall
mean and include the borrowing of one Type of Second-Lien Loan by the Borrower
from all of the Lenders having Commitments (and/or outstanding Second-Lien
Loans) on a pro  rata basis on a given date (or resulting from
conversions on a given date), having in the case of Eurodollar Loans the same
Interest Period; provided that Base Rate Loans incurred pursuant to
Section 1.10(b) shall be considered part of any related Borrowing of
Eurodollar Loans.


 


“Business Day”
shall mean (i) for all purposes other than as covered by clause (ii) below, any
day excluding Saturday, Sunday and any day which shall be in the City of New
York a legal holiday or a day on which banking institutions are authorized by
law or other


 


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governmental actions to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) and which is also a day for
trading by and between banks in U.S. dollar deposits in the interbank
Eurodollar market.


 


“Calculation Period”
shall have the meaning provided in Section 8.14.


 


“Capital Expenditures”
shall mean, with respect to any Person, for any period, all expenditures by
such Person which should be capitalized in accordance with GAAP during such
period and are, or are required to be, included in property, plant or equipment
reflected on the consolidated balance sheet of such Person (including, without
limitation, expenditures for maintenance and repairs which should be so capitalized
in accordance with GAAP) and, without duplication, the amount of all
Capitalized Lease Obligations incurred by such Person during such period.


 


“Capital Lease,”
as applied to any Person, shall mean any lease of any property (whether real,
personal or mixed) by that Person as lessee which, in conformity with GAAP, is
accounted for as a capital lease on the balance sheet of that Person.


 


“Capitalized Lease
Obligations” shall mean all obligations under Capital Leases of Holdings or
any of its Subsidiaries, in each case taken at the amount thereof accounted for
as liabilities in accordance with GAAP.


 


“Cash Equivalents”
means (i) demand deposit accounts held in accounts denominated in U.S. Dollars
and, in the case of any of Foreign Subsidiaries of the Borrower, such local
currencies held by them from time to time in the ordinary course of their
businesses, (ii) securities issued or directly fully guaranteed or insured by
the governments of the United States, The Netherlands, Great Britain, France or
Germany or any agency or instrumentality thereof (provided that the full
faith and credit of the respective such government is pledged in support
thereof) having maturities of not more than six months from the date of
acquisition, (iii) certificates of deposit and eurodollar time deposits with
maturities of six months or less from the date of acquisition, bankers’
acceptances with maturities not exceeding six months and overnight bank
deposits, in each case with any domestic commercial bank or commercial bank of
a foreign country recognized by the United States, in each case having capital
and surplus in excess of $500,000,000 (or the foreign currency equivalent
thereof) and has outstanding debt which is rated “A” (or similar equivalent
thereof) or higher by at least one nationally recognized statistical rating
organization (as defined under Rule 436 under the Securities Act) or any
money-market fund sponsored by a registered broker dealer or mutual fund
distributor, (iv) repurchase obligations with a term of not more than seven
days for underlying securities of the types described in clauses (ii) and (iii)
above entered into with any financial institution meeting the qualifications
specified in clause (iii) above and (v) commercial paper having one of the two
highest ratings obtainable from S&P or Moody’s and in each case maturing
within six months after the date of acquisition.  Furthermore, with respect to Foreign Subsidiaries of the
Borrower, Cash Equivalents shall include bank deposits (and investments
pursuant to operating account agreements) maintained with various local banks
in the ordinary course of business consistent with past practice of the
Borrower’s Foreign Subsidiaries.


 


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“Cayman Partnership”
shall mean EnerSys Cayman L.P., a limited partnership organized under the laws
of the Cayman Islands.


 


“Cayman Partnership
Shareholder #1” shall mean EnerSys European Holding Co., a corporation
organized under the laws of Delaware and a Wholly-Owned Subsidiary of the
Borrower.


 


“Cayman Partnership
Shareholder #2” shall mean EnerSys Del. LLC I, a limited liability company
organized under the laws of Delaware and a Wholly-Owned Subsidiary of the
Borrower.


 


“Cayman Partnership
Shareholder #3” shall mean EnerSys Del. LLC II, a limited liability company
organized under the laws of Delaware and a Wholly-Owned Subsidiary of the
Borrower.


 


“Cayman Partnership
Shareholders” shall mean and include Cayman Partnership Shareholder #1,
Cayman Partnership Shareholder #2 and Cayman Partnership Shareholder #3.


 


“Change of Control”
shall mean (i) Holdings shall at any time cease to own directly 100% of the
Equity Interests of the Borrower, (ii) prior to the occurrence of a Qualified
IPO, the Permitted Holders shall at any time and for any reason fail to own at
least a majority of both the economic and voting interest in Holdings’ capital
stock, (iii) after the occurrence of a Qualified IPO, any “person” or “group”
(as such terms are used in Sections 13(d) and 14(d) of the Exchange Act) (other
than the Permitted Holders) is or shall become the “beneficial owner” (as
defined in Rules 13(d)-3 and 13(d)-5 under the Exchange Act), directly or
indirectly, of greater than 40% of the economic or voting interests in
Holdings’ capital stock at any time when the Permitted Holders shall own a
lesser percentage (than such “person” or “group”) of such economic or voting
interests, as the case may be, in Holdings’ capital stock, (iv) after the
occurrence of a Qualified IPO, the Board of Directors of Holdings shall cease
to consist of a majority of Continuing Directors or (v) a “change of control”
or similar event shall occur as provided in any Qualified Preferred Stock (or
the documentation governing the same) or any Refinancing Senior Subordinated Notes
Document.


 


“Change of Control
Offer” shall have the meaning provided in Section 4.02(j)(II).


 


“Change of Law”
shall have the meaning provided in Section 10.06.


 


“Code” shall mean
the Internal Revenue Code of 1986, as amended from time to time, and the regulations
promulgated and rulings issued thereunder. 
Section references to the Code are to the Code, as in effect at the
date of this Agreement and any subsequent provisions of the Code, amendatory
thereof, supplemental thereto or substituted therefor.


 


“Collateral” shall
mean all of the Collateral as defined in each of the Security Documents.


 


“Collateral Agent”
shall mean Bank of America, N.A., acting as collateral agent for the Secured
Creditors.


 


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“Collective Bargaining
Agreements” shall have the meaning provided in Section 5.13.


 


“Commitment” shall
mean, with respect to each Lender, the amount set forth opposite such Lender’s
name in Schedule I directly below the column entitled “Commitment”
as the same may be terminated pursuant to Sections 3.03 and/or 10.


 


“Company” shall
mean any corporation, limited liability company, partnership or other business
entity (or the adjectival form thereof, where appropriate).


 


“Consolidated Current
Assets” shall mean, at any time, the current assets of Holdings and its
Subsidiaries at such time determined on a consolidated basis in accordance with
GAAP.


 


“Consolidated Current
Liabilities” shall mean, at any time, the current liabilities of Holdings
and its Subsidiaries determined on a consolidated basis in accordance with
GAAP, but excluding deferred income taxes, and the current portion of and
accrued but unpaid interest on any Indebtedness under this Agreement and any
other long-term Indebtedness which would otherwise be included therein.


 


“Consolidated Debt”
shall mean, at any time, (A) the sum of (without duplication) (i) the principal
amount of all Indebtedness of Holdings and its Subsidiaries (on a consolidated
basis) as would be required to be reflected as debt or capital leases on the
liability side of a consolidated balance sheet of Holdings and its Subsidiaries
in accordance with GAAP, (ii) all Indebtedness of Holdings and its Subsidiaries
of the type described in clause (iii) of the definition of Indebtedness, (iii)
the aggregate amount of Receivables Indebtedness of the Borrower and its
Subsidiaries (including the Receivables Entity) outstanding at such time, and
(iv) Attributable Indebtedness in respect of Synthetic Lease Obligations at
such time minus (B) the aggregate amount of cash and Cash Equivalents of
Holdings, the Borrower and the Subsidiary Guarantors at such time to the extent
same would be reflected on a consolidated balance sheet of Holdings if same
were prepared on such date.


 


“Consolidated EBIT”
shall mean, for any period, the Consolidated Net Income of Holdings and its
Subsidiaries plus, in each case to the extent actually deducted in determining
Consolidated Net Income for such period, consolidated interest expense of
Holdings and its Subsidiaries and provision for income taxes, adjusted to
exclude for such period (i) any extraordinary gains or losses, (ii) gains or
losses from sales of assets other than inventory sold in the ordinary course of
business, (iii) any write-downs of non-current assets relating to impairments
or the sale of non-current assets or (iv) any non-cash expenses incurred in
connection with stock options, stock appreciation rights or similar equity
rights.


 


“Consolidated EBITDA”
shall mean for any period, Consolidated EBIT, adjusted by (x) adding thereto
(in each case to the extent deducted in determining Consolidated Net Income for
such period and not already added back in determining Consolidated EBIT) the
amount of (i) all amortization and depreciation that were deducted in arriving
at Consolidated EBIT for such period, (ii) any non-cash charges in such period
to the extent that such non-cash charges do not give rise to a liability that
would be required to be reflected on the consolidated


 


85

















 


balance sheet of Holdings
and so long as no cash payments or cash expenses will be associated therewith
(whether in the current period or for any future period), (iii) in the case of
any period including the fiscal quarter of Holdings ended nearest to
December 31, 2003, the non-recurring charges specified on Schedule XV
hereto incurred during such fiscal quarter in an aggregate amount not to exceed
$35.2 million and (iv) in the case of any period including the fiscal quarter
of Holdings ended nearest to March 31, 2004, one-time cash charges
incurred by Holdings in connection with the Recapitalization in an aggregate
amount not to exceed $20.0 million (representing expenses incurred in
connection with the payments pursuant to the Recapitalization and the early
termination and repayment of Indebtedness pursuant to the Refinancing) and (y)
subtracting therefrom, to the extent included in arriving at Consolidated EBIT
for such period, the amount of non-cash gains during such period.


 


“Consolidated Interest
Coverage Ratio” for any period shall mean the ratio of Consolidated EBITDA
to Consolidated Net Interest Expense for such period.


 


“Consolidated Net
Income” shall mean, for any period, the net after tax income (or loss) of
Holdings and its Subsidiaries determined on a consolidated basis in accordance
with GAAP, provided that in determining Consolidated Net Income of
Holdings and its Subsidiaries (i) the net income of any of Person which is not
a Subsidiary of Holdings or is accounted for by Holdings by the equity method
of accounting shall be included only to the extent of the payment of dividends
or disbursements by such Person to Holdings or a Wholly-Owned Subsidiary of
Holdings during such period, (ii) except for determinations expressly required
to be made on a Pro  Forma Basis, the net income (or loss) of any
Person accrued prior to the date it becomes a Subsidiary or all or
substantially all of the property or assets of such Person are acquired by a
Subsidiary shall be excluded from such determination and (iii) the net income
of any Subsidiary to the extent that the declaration or payment of dividends or
similar distributions by such Subsidiary of such net income is not at the time
permitted by the operation of the terms of its charter or any agreement,
instrument, judgment, decree, order, statute, rule or governmental regulation
applicable to such Subsidiary shall be excluded from such determination.


 


“Consolidated Net
Interest Expense” shall mean, for any period, (i) the total consolidated
interest expense of Holdings and its Subsidiaries for such period (calculated
without regard to any limitations on payment thereof) plus, to the extent not
included above, Accounts Receivables Facility Financing Costs pursuant to the
Accounts Receivable Facility for such period, adjusted to exclude (to the
extent same would otherwise be included in the calculation above in this clause
(i)) (A) the amortization of any deferred financing costs for such period, (B)
non-cash interest expense (including amortization of discount and interest
which will be added to, and thereafter become part of, the principal or
liquidation preference of the respective Indebtedness or Preferred Stock
through a pay-in-kind feature or otherwise, but excluding all regularly
accruing interest expense which will be payable in cash in a subsequent period)
payable in respect of any Indebtedness or Preferred Stock and (C) dividends on
Qualified Preferred Stock in the form of additional Qualified Preferred Stock plus
(ii) without duplication, that portion of Capitalized Lease Obligations of
Holdings and its Subsidiaries on a consolidated basis representing the interest
factor for such period minus (iii) the cash portion of interest income
of Holdings and its Subsidiaries on a consolidated basis for such period (for
this purpose, excluding any cash interest income received by any
non-Wholly-Owned Subsidiary to the same extent as such amount, if representing
net income, would be excluded from Consolidated Net Income pursuant


 


86

















 


to the proviso to the
definition thereof), all as determined in accordance with GAAP (subject to the
express requirements set forth above).


 


“Contingent
Obligations” shall mean as to any Person any obligation of such Person guaranteeing
or intended to guarantee any Indebtedness, leases, dividends or other
obligations (“primary obligations”) of any other Person (the “primary
obligor”) in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (x) for the purchase
or payment of any such primary obligation or (y) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (d) otherwise to assure or hold harmless the owner of
such primary obligation against loss in respect thereof; provided, however,
that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection or standard contractual indemnities
entered into, in each case in the ordinary course of business.  The amount of any Contingent Obligation
shall be deemed to be an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Contingent Obligation is made
or, if not stated or determinable, the maximum reasonably anticipated liability
in respect thereof (assuming such Person is required to perform thereunder) as
determined by such Person in good faith.


 


“Continuing Directors”
shall mean the directors of Holdings on the date of the occurrence of the first
Qualified IPO occurring after the Effective Date and each other director if
such director’s nomination for election to the Board of Directors of Holdings
is recommended by a majority of the then Continuing Directors.


 


“Convertible Preferred
Stock” shall have the meaning provided in Section 7.13(a).


 


“Credit Agreement
Party” shall mean each of Holdings and the Borrower.


 


“Credit Documents”
shall mean this Agreement, the Second-Lien Loan Notes, the Subsidiaries
Guaranty, the Intercreditor Agreement, each Security Document and any other
guarantees or security documents executed and delivered for the benefit of the
Guaranteed Creditors in accordance with the requirements of this Agreement.


 


“Credit Event”
shall mean the making of a Second-Lien Loan.


 


“Credit Party”
shall mean Holdings, the Borrower and each Subsidiary Guarantor.


 


“Debtor Relief Laws”
means the Bankruptcy Code of the United States, and all other liquidation,
conservatorship, bankruptcy, assignment for the benefit of creditors,
moratorium, rearrangement, receivership, insolvency, reorganization, or similar
debtor relief Laws of the United States or other applicable jurisdictions from
time to time in effect and affecting the rights of creditors generally.


 


“Default” shall
mean any event, act or condition which with notice or lapse of time, or both,
would constitute an Event of Default.


 


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“Defaulting Lender”
shall mean any Lender with respect to which a Lender Default is in effect.


 


“Designated Assets”
shall means those assets of the Borrower and its Subsidiaries described on
Schedule XIII hereto.


 


“Discharge of the
First-Lien Obligations” shall have the meaning provided in the
Intercreditor Agreement.


 


“Dividend” shall
have the meaning provided in Section 9.06.


 


“Documentation Agent”
shall have the meaning provided in the first paragraph of this Agreement.


 


“Documents” shall
mean and include (i) the Credit Documents, (ii) the Refinancing Documents,
(iii) on and after the execution and delivery thereof, the Accounts Receivable
Facility Documents, (iv) the First-Lien Credit Documents and (v) on and after
the execution and delivery thereof, the Refinancing Senior Subordinated Notes
Documents.


 


“Domestic Subsidiary”
shall mean each Subsidiary incorporated or organized in the United States or
any State or territory thereof (other than any Cayman Partnership Shareholder).


 


“Effective Date”
shall have the meaning provided in Section 13.22.


 


“Eligible Assignee”
shall have the meaning provided in Section 13.07(g).


 


“Employee Benefit
Plans” shall have the meaning set forth in Section 5.13.


 


“Employment Agreements”
shall have the meaning set forth in Section 5.13.


 


“EnerSys” shall
mean EnerSys Delaware Inc., a Delaware corporation.


 


“Environmental Claims”
shall mean any and all administrative, regulatory or judicial actions, suits,
demands, demand letters, claims, liens, notices of non-compliance or violation,
investigations or proceedings relating in any way to any violation (or alleged
violation) by Holdings or any of its Subsidiaries under any Environmental Law
(hereafter “Claims”) or any permit issued to Holdings or any of its
Subsidiaries under any such law, including, without limitation, (a) any and all
Claims by governmental or regulatory authorities for enforcement, cleanup,
removal, response, remedial or other actions or damages pursuant to any applicable
Environmental Law, and (b) any and all Claims by any third party seeking
damages, contribution, indemnification, cost recovery, compensation or
injunctive relief resulting from Hazardous Materials or arising from alleged
injury or threat of injury to health, safety or the environment.


 


“Environmental Law”
shall mean any U.S. or non-U.S. federal, state or local law, policy having the
force and effect of law, statute, rule, regulation, ordinance, code or rule of
common law now or hereafter in effect and in each case as amended, and any
judicial or administrative interpretation thereof, including any judicial or
administrative order, consent,


 


88

















 


decree or judgment (for
purposes of this definition (collectively, “Laws”)), relating to the
environment, or Hazardous Materials or health and safety to the extent such
health and safety issues arise under the Occupational Safety and Health Act of
1970, as amended.


 


“Equity Interests”
of any Person shall mean any and all shares, interests, rights to purchase,
warrants, options, participation or other equivalents of or interest in
(however designated) equity of such Person, including any preferred stock, any
limited or general partnership interest and any limited liability company
membership interest.


 


“ERISA” shall mean
the Employee Retirement Income Security Act of 1974, as amended from time to
time, and the regulations promulgated and rulings issued thereunder.  Section references to ERISA are to
ERISA, as in effect at the date of this Agreement and any subsequent provisions
of ERISA, amendatory thereof, supplemental thereto or substituted therefor.


 


“ERISA Affiliate”
shall mean each person (as defined in Section 3(9) of ERISA) which
together with the Holdings or a Subsidiary of Holdings would be deemed to be a
“single employer” within the meaning of Section 414(b), (c), (m) or (o) of
the Code.


 


“Eurodollar Loans”
shall mean each Loan bearing interest at the rates provided in
Section 1.08(b) (subject to any increases pursuant to
Section 1.08(c)).


 


“Eurodollar Rate”
means for any Interest Period with respect to a Eurodollar Loan:


 


(a)                                  the
applicable Screen Rate for such Interest Period; or


 


(b)                                 if
the applicable Screen Rate shall not be available, the rate per annum
determined by the Administrative Agent as the rate of interest at which
deposits in the relevant currency for delivery on the first day of such
Interest Period in immediately available funds in the approximate amount of the
Eurodollar Loan being made, continued or converted by Bank of America and with
a term equivalent to such Interest Period would be offered by Bank of America’s
London Branch (or other Bank of America branch or Affiliate) to major banks in
the London or other offshore interbank market for such currency at their
request at approximately 4:00 p.m. (London time) two Business Days prior to the
first day of such Interest Period.


 


“Event of Default”
shall have the meaning provided in Section 10.


 


“Excess Cash Flow”
shall mean, for any period, the remainder of (i) the sum of (a) Adjusted
Consolidated Net Income for such period and (b) the decrease, if any, in
Adjusted Consolidated Working Capital from the first day to the last day of
such period, minus (ii) the sum of (a) the amount of all Capital
Expenditures made by the Borrower and its Subsidiaries pursuant to Sections
9.11(a), (b), (e) and (f) during such period, (b) the aggregate principal
amount of permanent principal payments of Indebtedness for borrowed money of
the Borrower and its Subsidiaries (other than repayments of intercompany
Indebtedness and repayments of Second-Lien Loans or Loans under, and as defined
in, the First-Lien Credit Agreement, provided that (x) repayments of
Second-Lien Loans shall be included in the deduction set forth in clause
(ii)(b) above in determining Excess Cash Flow if such repayments were made as a
voluntary


 


89

















 


prepayment with
internally generated funds and (y) repayments of Loans under, and as defined
in, the First-Lien Credit Agreement shall be included in the deduction set
forth in clause (ii)(b) above in determining Excess Cash Flow if such
repayments were (x) required as a result of a “scheduled repayment” under the
First-Lien Credit Agreement or (y) made as a voluntary prepayment with
internally generated funds (but in the case of a voluntary prepayment of
Revolving Loans or Swingline Loans (each, as defined in the First-Lien Credit
Agreement), only to the extent accompanied by a voluntary reduction to the
revolving loan commitments thereunder in an equal amount)) during such period,
(c) the aggregate amount of cash (not to exceed $10.0 million for such period)
utilized to finance Permitted Acquisitions during such period, (d) the
increase, if any, in Adjusted Consolidated Working Capital from the first day
to the last day of such period and (e) the aggregate amount of any cash
restructuring charges incurred (and paid) during such period (to the extent
resulting from the elimination of a long-term liability which had appeared on
the balance sheet of Holdings), so long as the aggregate amount deducted
pursuant to this clause (e) after the Effective Date does not exceed
$12,300,000.


 


“Excess Cash Flow
Payment Period” shall mean, with respect to each Excess Cash Payment Date,
the immediately preceding fiscal year of Holdings.


 


“Excess Cash Payment
Date” shall mean the date occurring 90 days after the last day of a fiscal
year of Holdings (beginning with its fiscal year ending on March 31,
2005).


 


“Excess Proceeds
Amount” shall initially be $0, which amount shall be (A) increased
(i) on each Excess Cash Payment Date so long as any repayment required pursuant
to Section 4.02(g) has been made, by an amount equal to the Excess Cash
Flow for the immediately preceding Excess Cash Flow Period multiplied by a
percentage equal to 100% minus the Applicable Excess Cash Flow
Percentage and (ii) on the date of receipt by Holdings of net cash proceeds
from any sale or issuance of Holdings Common Stock (except to the extent applied
as a mandatory repayment and/or commitment reduction of loans and/or
commitments under the First-Lien Credit Agreement), so long as any repayment
pursuant to Section 4.02(e) that is required by such Section has been
made, by an amount equal to 50% of such net cash proceeds, and (B) reduced
(i) on each Excess Cash Payment Date where Excess Cash Flow for the immediately
preceding Excess Cash Flow Period is a negative number, by such amount, and
(ii) at the time any Capital Expenditure is made pursuant to Section 9.11(f)
or Investment is made pursuant to Section 9.05(xviii), by the amount
thereof (it being understood that the Excess Proceeds Amount may be reduced to
an amount below zero after giving effect to the reductions enumerated in clause
(B) above).


 


“Exchange Act”
shall mean the Securities Exchange Act of 1934, as amended.


 


“Excluded IPO Proceeds”
shall mean the net cash proceeds received by Holdings from a Qualified IPO, so
long as (i) no Default of Event of Default is then in existence, (ii) such proceeds
are not required to be applied as a mandatory repayment and/or commitment
reduction pursuant to the terms of the First-Lien Credit Agreement and (iii)
Holdings has delivered to the Administrative Agent and the Administrative Agent
under, and as defined in, the First-Lien Credit Agreement an officer’s
certificate executed by an Authorized Officer of Holdings demonstrating
compliance with a Leverage Ratio of 3:00:1.00 or less (calculated on a Pro
Forma  


 


90

















 


Basis as if the
repayments described in the preceding clause (ii) and any contemporaneous
repayment of loans under the First-Lien Credit Agreement had been made on the
first day of the Test Period then last ended), together with calculations in
reasonable detail demonstrating such compliance.


 


“Existing Accounts
Receivable Facility” shall mean the receivables purchase arrangement
governed by the Amended and Restated Receivables Purchase Agreement, dated as
of November 9, 2000, among Yesco, Inc., as the Seller, Yuasa, Inc., as the
Servicer, the investors named therein, Variable Funding Capital Corporation, as
a Purchaser, First Union Securities, Inc., as the Deal Agent and First Union
National Bank, as the Liquidity Agent, and the Amended and Restated Receivables
Transfer Agreement, dated as of November 9, 2000, between Yuasa, Inc. and
Yesco, Inc. (as the same may have been modified, amended, restated and/or
supplemented from time to time prior to the Initial Borrowing Date).


 


“Existing Credit
Agreement” shall mean the Credit Agreement, dated as of November 9,
2000, among Holdings, the Borrower, the lenders party thereto and Morgan
Stanley Senior Funding, Inc., as syndication agent and administrative agent, as
in effect on the Initial Borrowing Date (immediately prior to giving effect
thereto).


 


“Existing Indebtedness”
shall have the meaning provided in Section 7.21.


 


“Existing Indebtedness
Agreements” shall have the meaning provided in Section 5.13.


 


“Existing Interest
Rate Protection Agreements” shall mean and include (i) that certain
Interest Rate Protection Agreement entered into by the Borrower and Fleet
National Bank and maturing on February 22, 2006, (ii) that certain
Interest Rate Protection Agreement entered into by the Borrower and PNC Bank,
NA and maturing on February 22, 2006 and (iii) that certain Interest Rate
Protection Agreement entered into by the Borrower and Wachovia Bank, N.A. and
maturing on February 22, 2006, in each case as in effect on the Initial
Borrowing Date.


 


“Existing Overdraft Facilities”
shall mean the overdraft facilities and lines of credit of certain Foreign
Subsidiaries of the Borrower existing on the Initial Borrowing Date and as
listed on Part B of Schedule IV hereto, in each case in the committed
amount set forth opposite such overdraft facility or line of credit on said
Part B of Schedule IV.


 


“Federal Funds Rate”
means, for any day, the rate per annum equal to the weighted average of the
rates on overnight Federal funds transactions with members of the Federal
Reserve System arranged by Federal funds brokers on such day, as published by
the Federal Reserve Bank of New York on the Business Day next succeeding such
day; provided that (a) if such day is not a Business Day, the Federal
Funds Rate for such day shall be such rate on such transactions on the next
preceding Business Day as so published on the next succeeding Business Day, and
(b) if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate (rounded upward, if
necessary, to a whole multiple of 1/100 of 1%) charged to Bank of America on
such day on such transactions as determined by the Administrative Agent.


 


“Fees” shall mean
all amounts payable pursuant to, or referred to in, Section 3.01.


 


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“First-Lien
Administrative Agent” shall mean Bank of America, N.A. in its capacity as
collateral agent for the secured creditors under the First-Lien Credit
Documents.


 


“First-Lien Credit
Agreement” shall mean that certain Credit Agreement, dated as of
March 17, 2004, among Holdings, the Borrower, the First-Lien
Administrative Agent and various lenders from time to time party thereto, as
the same may be amended, modified, supplemented, extended, replaced, renewed,
restated and/or refinanced from time to time (including any such agreement
which adds Subsidiaries of the Borrower as additional and/or replacement
borrowers or guarantors thereunder and any successor or replacement agreement
with the same or any other agent, lender or group of lenders).


 


“First-Lien Credit
Documents” shall mean the First-Lien Credit Agreement, and the related
guarantees, pledge agreements, security agreements, mortgages, notes and other
agreements and instruments entered into in connection with the First-Lien
Credit Agreement, in each case as the same may be amended, modified,
supplemented, extended, replaced, renewed, restated and/or refinanced from time
to time (including any such guarantee or other agreement which adds Subsidiaries
of the Borrower as additional and/or replacement borrowers or guarantors
thereunder and any successor or replacement guarantee or other agreement with
the same or any other agent, lender or group of lenders).


 


“Foreign Pension Plan”
means any plan, fund (including, without limitation, any superannuation fund)
or other similar program established or maintained outside the United States of
America by Holdings or any one or more of its Subsidiaries primarily for the
benefit of employees of Holdings or any of its Subsidiaries residing outside
the United States of America, which plan, fund or other similar program
provides, or results in, retirement income, a deferral of income in
contemplation of retirement or payments to be made upon termination of employment,
and which plan is not subject to ERISA or the Code.


 


“Foreign Subsidiary”
shall mean each Subsidiary other than a Domestic Subsidiary; provided
that, notwithstanding the foregoing, each Cayman Partnership Shareholder shall
be deemed to be (and shall be treated as) a Foreign Subsidiary for all purposes
of this Agreement and the other Credit Documents.


 


“Fund” shall have
the meaning provided in Section 13.07(g).


 


“GAAP” shall mean
generally accepted accounting principles in the United States of America as in
effect from time to time; it being understood and agreed that determinations in
accordance with GAAP for purposes of Applicable Margins and Sections 4.02, 8.14
and 9, including defined terms as used therein, and for all purposes of
determining the Leverage Ratio, are subject (to the extent provided therein) to
Section 13.21(a).


 


“Guaranteed Creditors”
shall mean and include each of the Administrative Agent, the Syndication Agent,
the Documentation Agent, the Collateral Agent and the Lenders.


 


“Guaranteed Obligations”
shall mean the principal and interest on each Second-Lien Loan Note issued to
each Lender, and all Second-Lien Loans made, under this Agreement, together
with all the other obligations (including obligations which, but for the
automatic stay under Section 362(a) of the Bankruptcy Code, would become
due) and liabilities (including,


 


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without limitation,
indemnities, fees and interest thereon) of the Borrower to any Guaranteed
Creditor now existing or hereafter incurred under, arising out of or in
connection with this Agreement and each other Credit Document and the due
performance and compliance by the Borrower with all the terms, conditions and
agreements contained in this Agreement and each other Credit Document to which
it is a party.


 


“Guarantor” shall
mean Holdings and each Subsidiary Guarantor.


 


“Guaranty” shall
mean and include the Holdings Guaranty and the Subsidiaries Guaranty.


 


“Hazardous Materials”
shall mean (a) any petrochemical or petroleum products, radioactive materials,
asbestos in any form that is or could become friable, urea formaldehyde foam
insulation, transformers or other equipment that contain dielectric fluid
containing levels of polychlorinated biphenyls, and radon gas; and (b) any
chemicals, materials or substances defined under any Environmental Law as or
included in the definition of “hazardous substances,” “hazardous wastes,”
“hazardous materials,” “restricted hazardous materials,” “extremely hazardous
wastes,” “restrictive hazardous wastes,” “toxic substances,” “toxic
pollutants,” “contaminants” or “pollutants.”


 


“Holdings” shall
have the meaning provided in the first paragraph of this Agreement.


 


“Holdings Common Stock”
shall have the meaning provided in Section 7.13(a).


 


“Holdings Guaranty”
shall mean the guaranty of Holdings pursuant to Section 14.


 


“Indebtedness” of
any Person shall mean, without duplication, (i) all indebtedness of such Person
for borrowed money, (ii) the deferred purchase price of assets or services
payable to the sellers thereof or any of such seller’s assignees which in
accordance with GAAP would be shown on the liability side of the balance sheet
of such Person but excluding deferred rent and trade payables not overdue by
more than 60 days, both as determined in accordance with GAAP, (iii) the face
amount of all letters of credit issued for the account of such Person and,
without duplication, all drafts drawn thereunder, (iv) all Indebtedness of a
second Person secured by any Lien on any property owned by such first Person,
whether or not such Indebtedness has been assumed, (v) all Capitalized Lease
Obligations of such Person, (vi) all obligations of such Person to pay a
specified purchase price for goods or services whether or not delivered or accepted,
i.e., take-or-pay and similar obligations, (vii) all obligations under
any Swap Contract, (viii) all Contingent Obligations of such Person, (ix) all
Receivables Indebtedness and (x) all Synthetic Lease Obligations, provided
that Indebtedness shall not include trade payables and accrued expenses, in
each case arising in the ordinary course of business.  The amount of any obligation under any Swap Contract on any date
shall be deemed to be the Swap Termination Value thereof as of such date.  The amount of any Synthetic Lease Obligation
as of any date shall be deemed to be the amount of Attributable Indebtedness in
respect thereof as of such date.


 


“Indebtedness To Be
Refinanced” shall mean all of the Indebtedness and other obligations under
the Existing Credit Agreement and the Existing Accounts Receivable Facility.


 


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“Indemnified
Liabilities” shall have the meaning provided in Section 13.05.


 


“Indemnitees”
shall have the meaning provided in Section 13.05.


 


“Initial Accounts
Receivable Facility Requirements” shall mean, with respect to the Accounts
Receivable Facility to be entered into on the Accounts Receivable Facility
Transaction Date, the following requirements:


 


(A)                              the
maximum Receivables Indebtedness permitted under the Accounts Receivable
Facility shall not be greater than $50.0 million;


 


(B)                                the
scheduled maturity of the Accounts Receivable Facility shall not be earlier
than 364 days after the date of the entering into of such Accounts Receivable
Facility (subject to 6 month extensions);


 


(C)                                the
Receivables Entity is required to apply all funds available to it (after giving
effect to the allocation of funds to reserves required under the terms of the
Accounts Receivable Facility Documents and to the payment of interest,
principal and other amounts owed under the Accounts Receivable Facility
Documents) to pay the purchase price for accounts receivable (including any
deferred portion of the purchase price) or to make Dividends to EnerSys or to the
Borrower;


 


(D)                               the
termination events or early amortization events (however defined) in the
Accounts Receivable Facility Documents therefor shall not be made more onerous
(whether through the modification of existing termination events or early
amortization events or the provision of additional such events) on the Borrower
and its Subsidiaries in any material respect than those contained in the
Existing Accounts Receivable Facility Documents and, in any event, shall be
reasonably satisfactory to the Agents;


 


(E)                                 the
degree of recourse to Holdings or its Subsidiaries (other than the Receivables
Entity) under or in respect of the Accounts Receivable Facility Documents
governing the Accounts Receivable Facility shall not be increased in any
material respect (as determined in good faith by the Borrower) from the degree
of recourse to such Persons under the Existing Accounts Receivables Documents
(as in effect on the Initial Borrowing Date, prior to the termination thereof)
and in no event shall Holdings or any of its Subsidiaries (other than the
Receivables Entity) have recourse liability (except pursuant to Standard
Securitization Undertakings) for the payment of any Accounts Receivable
Facility Assets or any investor certificates or purchased interests pursuant to
such Accounts Receivables Facility;


 


(F)                                 the
covenants included in the Accounts Receivable Facility Documents shall not be
made more restrictive (whether through the modification of existing covenants
or the provision of additional covenants) to the Borrower and its Subsidiaries
in any material respect than those contained in the Existing Accounts
Receivables Documents and, in any event, shall be reasonably satisfactory to
the Agents;


 


(G)                                if
representations and warranties not included in the Existing Accounts
Receivables Documents are included in the Accounts Receivable Facility
Documents,


 


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such additional
representations and warranties shall not be adverse in any material respect to
the interest of the Borrower and its Subsidiaries taken as a whole (as
determined in good faith by the Borrower); and


 


(H)                               the
provisions of the Accounts Receivable Facility shall not conflict with the
relevant requirements of Sections 9.02, 9.04 and 9.05.


 


Without limiting the
foregoing, (i) if any covenant or default “basket” included in this Agreement
which has a corresponding “basket” in the relevant Accounts Receivable Facility
Document was increased to a level greater than the related basket level
included in the Existing Credit Agreement, then the corresponding basket in the
relevant Accounts Receivable Facility Document shall be increased to at least
the level of the related basket contained herein and (ii) in no event shall the
“termination events” included for such Accounts Receivable Facility include an
event based on the occurrence of  “a
material adverse effect”.


 


“Initial Borrowing
Date” shall mean the date upon which the initial Borrowing of Second-Lien
Loans occurs.


 


“Intercompany Loan”
shall have the meaning provided in Section 9.05(vi).


 


“Intercompany Note”
shall mean a promissory note evidencing Intercompany Loans or intercompany
loans made or permitted pursuant to Sections 9.05(xi) and (xiv) or
Section 9.04(ii), in each case duly executed and delivered substantially
in the form of Exhibit L, with blanks completed in conformity herewith.


 


“Intercreditor
Agreement” shall have the meaning provided in Section 5.10.


 


“Interest
Determination Date” shall mean, with respect to any Eurodollar Loan, the
second Business Day prior to the commencement of any Interest Period relating
to such Eurodollar Loan.


 


“Interest Period”
with respect to any Eurodollar Loan, shall mean the interest period applicable
thereto, as determined pursuant to Section 1.09.


 


“Interest Rate Protection
Agreement” shall mean any interest rate swap agreement, interest rate cap
agreement, interest rate collar agreement, interest rate hedging agreement or
other similar agreement or arrangement.


 


“Investment” shall
have the meaning provided in the preamble to Section 9.05.


 


“Joint Venture”
shall mean any Person, other than an individual or a Wholly-Owned Subsidiary of
the Borrower, (i) in which the Borrower or a Subsidiary of the Borrower holds
or acquires an ownership interest (whether by way of capital stock, partnership
or limited liability company interest, or other evidence of ownership) and (ii)
which is engaged in a Permitted Business.


 


“Judgment Currency”
shall have the meaning provided in Section 13.20.


 


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“LCPI” shall mean
Lehman Commercial Paper Inc., in its individual capacity, and any successor
corporation thereto by merger, consolidation or otherwise.


 


“Leasehold” of any
Person shall mean all of the right, title and interest of such Person as lessee
or licensee in, to and under leases or licenses of land, improvements and/or
fixtures.


 


“Lender” shall
mean each financial institution listed on Schedule I, as well as any
Person that becomes a “Lender” hereunder pursuant to Section 1.13 or 13.07(b).


 


“Lender Default”
shall mean (i) the wrongful refusal (which has not been retracted) of a Lender
to make available its portion of any Borrowing or (ii) a Lender having notified
the Administrative Agent and/or the Borrower that it does not intend to comply
with its obligations under Section 1.01(a) in circumstances where such
non-compliance would constitute a breach of such Lender’s obligations under
said Section.


 


“Leverage Ratio”
shall mean on any date of determination the ratio of (i) Consolidated Debt on
such date to (ii) Consolidated EBITDA for the Test Period most recently ended
on or prior to such date; provided that Consolidated EBITDA shall be
determined on a Pro  Forma Basis  to give effect to all
Permitted Acquisitions (if any) actually made during such most recently ended
Test Period.  Furthermore, to the extent
provided in the definition of Applicable Margin, and for such purposes only,
the determination of Leverage Ratio pursuant thereto shall be further
determined on a Pro  Forma Basis to give effect to Permitted
Acquisitions consummated after the last day of the respective Test Period and
on or prior to the date of the delivery of the certificate referenced therein,
as well as to any Indebtedness incurred or assumed in connection therewith.


 


“Lien” shall mean
any mortgage, pledge, security interest, encumbrance, lien or charge of any
kind (including any agreement to give any of the foregoing, any conditional
sale or other title retention agreement, any financing or similar statement or
notice filed under the UCC or any similar recording or notice statute, and any
lease having substantially the same effect as the foregoing).


 


“Management Agreements”
shall have the meaning provided in Section 5.13.


 


“Margin Regulations”
shall mean Regulations T, U and X, collectively.


 


“Margin Stock”
shall have the meaning provided in Regulation U.


 


“Material Adverse
Effect” shall mean (i) a material adverse effect on the business,
properties, assets, operations, liabilities or financial condition (A) of the
Borrower and its Subsidiaries taken as a whole or (B) Holdings, the Borrower
and the Borrower’s Subsidiaries taken as a whole or (ii) a material adverse
effect (x) on the rights or remedies of the Lenders or the Administrative Agent
hereunder or under any other Credit Document or (y) on the ability of any
Credit Party to perform its obligations to the Lenders or the Administrative
Agent hereunder or under any other Credit Document, taking into account in the
case of either of clauses (i) or (ii) above (in each such case to the extent
relevant) insurance, indemnities, rights of contribution and/or similar rights
and claims available and applicable to any determination pursuant to this


 


96

















 


definition so long as
consideration is given to the nature and quality of, and likelihood of recovery
under, such insurance, indemnities, rights of contribution and/or similar
rights and claims; provided that payments made by Holdings in connection
with the InvenSys settlement and previously disclosed to the Agents in writing
shall not be taken into account for purposes of any determination pursuant to
clause (i) of this definition.


 


“Maturity Date”
shall mean March 17, 2012.


 


“Maximum Rate”
shall have the meaning provided in Section 13.10.


 


“Mexican Subsidiary”
shall mean ESB de Mexico, S.A., Powersonic SA de CV, Ymfltd, S. de R.L. de C.V.
and Yecoltd, S. de R.L. de C.V.


 


 “Minimum Borrowing Amount” shall mean
$1,000,000.


 


“Minimum Ratings
Condition” shall exist on any date if, on such date, the Loans under, and
as defined in, the First-Lien Credit Agreement (or, if the Discharge of the
First-Lien Obligations has occuured, the Second-Lien Loans) have received a
rating of both (i) BB- (with a stable outlook) or better from S&P and (ii)
Ba3 (with a stable outlook) or better from Moody’s, which ratings remain in
full force and effect on such date.


 


“Moody’s” shall
mean Moody’s Investors Service, Inc.


 


“Morgan Stanley”
shall mean Morgan Stanley, a Delaware Corporation.


 


“Mortgage” shall
mean each mortgage, deed to secure debt or deed of trust pursuant to which any
Credit Party shall have granted to the Collateral Agent a mortgage lien on such
Credit Party’s Mortgaged Property.


 


“Mortgage Policy”
shall have the meaning provided in Section 5.12.


 


“Mortgaged Property”
shall mean (i) each Real Property owned by any Credit Party and designated as a
Mortgaged Property on Schedule III and (ii) each Real Property owned or
leased by any Credit Party and designated as a Mortgaged Property pursuant to Section 8.11.


 


“MSSF” shall mean
Morgan Stanley Senior Funding, Inc., in its individual capacity, and any
successor corporation thereto by merger, consolidation or otherwise.


 


“Multiemployer Plan”
shall mean (i) any plan, as defined in Section 4001(a)(3) of ERISA, which
is maintained or contributed to (or to which there is an obligation to
contribute to) by Holdings or a Subsidiary of Holdings or an ERISA Affiliate
and that is subject to Title IV of ERISA, and (ii) each such plan for the five
year period immediately following the latest date on which Holdings, a
Subsidiary of Holdings or an ERISA Affiliate maintained, contributed to or had
an obligation to contribute to such plan if, for purposes of this clause (ii),
Holdings, any Subsidiary of Holdings or any ERISA Affiliate could currently
incur any liability under such plan.


 


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“Net Cash Proceeds”
shall mean for any event requiring a repayment of Second-Lien Loans pursuant to
Section 3.03 or 4.02, as the case may be, the gross cash proceeds
(including any cash received by way of deferred payment pursuant to a
promissory note, receivable or otherwise, but only as and when received)
received from such event, net of reasonable transaction costs (including, as applicable,
any underwriting, brokerage or other customary commissions and reasonable
legal, advisory and other fees and expenses associated therewith) received from
any such event.


 


“Net Sale Proceeds”
shall mean for any sale of assets, the gross cash proceeds (including any cash
received by way of deferred payment pursuant to a promissory note, receivable
or otherwise, but only as and when received) received from any sale of assets,
net of (i) reasonable transaction costs (including, without limitation, any
underwriting, brokerage or other customary selling commissions and reasonable
legal, advisory and other fees and expenses, including title and recording
expenses, associated therewith) and payments of unassumed liabilities relating
to the assets sold at the time of, or within 30 days after, the date of such
sale, (ii) the amount of such gross cash proceeds required to be used to repay
any Indebtedness (other than Indebtedness of the Lenders pursuant to this
Agreement) which is secured by the respective assets which were sold, and (iii)
the estimated marginal increase in income taxes which will be payable by
Holdings’ consolidated group with respect to the fiscal year in which the sale
occurs as a result of such sale; provided, however, that such
gross proceeds shall not include any portion of such gross cash proceeds which
Holdings determines in good faith should be reserved for post-closing
adjustments (including indemnification payments) (to the extent Holdings
delivers to the Lenders a certificate signed by its chief financial officer or
treasurer, controller or chief accounting officer as to such determination), it
being understood and agreed that on the day that all such post-closing
adjustments have been determined (which shall not be later than six months
following the date of the respective asset sale), the amount (if any) by which
the reserved amount in respect of such sale or disposition exceeds the actual
post-closing adjustments payable by Holdings or any of its Subsidiaries shall
constitute Net Sale Proceeds on such date received by Holdings and/or any of
its Subsidiaries from such sale, lease, transfer or other disposition.  Net Sale Proceeds shall not include any
trade-in-credits or purchase price reductions received by Holdings or any of
its Subsidiaries in connection with an exchange of equipment for replacement
equipment that is the functional equivalent of such exchanged equipment.


 


“Non-Defaulting Lender”
shall mean each Lender other than a Defaulting Lender.


 


“Non-Wholly Owned
Entity” shall have the meaning provided in the definition of Permitted
Acquisition.


 


“Notice of Borrowing”
shall have the meaning provided in Section 1.03(a).


 


“Notice of
Conversion/Continuation” shall have the meaning provided in
Section 1.06.


 


“Notice Office”
shall mean, with respect to notices for payments, requests for credit
extensions or other notices, the relevant office of the Administrative Agent as
set forth on Schedule II hereto or such other office as the Administrative
Agent may designate to Holdings and the Lenders from time to time.


 


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 “Obligations” shall mean all amounts,
direct or indirect, contingent or absolute, of every type or description, and
at any time existing, owing to any Agent, the Collateral Agent or any Lender
pursuant to the terms of this Agreement or any other Credit Document.


 


“Other Hedging
Agreements” shall mean any foreign exchange contracts, currency swap
agreements or other similar agreements or arrangements designed to protect against
fluctuations in currency values.


 


“Participant”
shall have the meaning provided in Section 13.07.


 


“Payment Office”
means, with respect to any currency, the Administrative Agent’s address and, as
appropriate, account as set forth on Schedule II with respect to such
currency, or such other address or account with respect to such currency as the
Administrative Agent may from time to time notify to the Borrower and the
Lenders.


 


“PBGC” shall mean
the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.


 


“Permanent Exchange
Refinancing Senior Subordinated Notes” shall mean senior subordinated notes
issued by the Borrower pursuant to a registered exchange offer or private
exchange offer for the Refinancing Senior Subordinated Notes and pursuant to
the Refinancing Senior Subordinated Notes Indenture, which senior subordinated
notes are substantially identical securities to the Refinancing Senior
Subordinated Notes.  In no event will
the issuance of any Permanent Exchange Refinancing Senior Subordinated Notes
increase the aggregate principal amount of the Refinancing Senior Subordinated
Notes then outstanding or otherwise result in an increase in the interest rate
theretofore applicable to the Refinancing Senior Subordinated Notes.


 


“Permitted Acquired
Debt” shall have the meaning set forth in Section 9.04(vi).


 


“Permitted Acquisition”
shall mean the acquisition by the Borrower or any of its Wholly-Owned
Subsidiaries (other than the Receivables Entity) of assets constituting a
business, division or product line of any Person, not already a Subsidiary of
Holdings or any of its Wholly-Owned Subsidiaries, or of 100% of the capital
stock or other Equity Interests of any such Person, which Person shall, as a
result of such acquisition, become a Wholly-Owned Subsidiary of the Borrower or
such Wholly-Owned Subsidiary, provided that (A) the consideration paid
by the Borrower or such Wholly-Owned Subsidiary consists solely of cash, the
issuance of Holdings Common Stock, the issuance of any Qualified Preferred
Stock otherwise permitted pursuant to Section 9.13, the incurrence of
Indebtedness otherwise permitted in Section 9.04 and the
assumption/acquisition of any Permitted Acquired Debt relating to such business,
division, product line or Person which is permitted to remain outstanding in
accordance with the requirements of Section 9.04, (B) in the case of the
acquisition of 100% of the capital stock or other Equity Interests of any
Person, such Person (the “Acquired Person”) shall own no capital stock
or other Equity Interests of any other Person unless either (x) the Acquired
Person owns 100% of the capital stock or other Equity Interests of such other
Person or (y) if the Acquired Person owns capital stock or Equity Interests in
any other Person which is not a Wholly-Owned Subsidiary of the Acquired Person
(a “Non-Wholly Owned Entity”), (1) the Acquired Person shall not have
been created or established in contemplation of, or for purposes of, the
respective


 


99

















 


Permitted Acquisition,
(2) any Non-Wholly Owned Entity of the Acquired Person shall have been
non-wholly-owned prior to the date of the respective Permitted Acquisition and
not created or established in contemplation thereof and (3) the Acquired Person
and/or its Wholly-Owned Subsidiaries own 80% of the consolidated assets of such
Person and its Subsidiaries, (C) except in the case of any such acquisition by
a Wholly-Owned Foreign Subsidiary of the Borrower, substantially all of the
business, division or product line acquired pursuant to the respective
Permitted Acquisition, or the business of the Acquired Person and its
Subsidiaries taken as a whole, is in the United States, (D) the assets
acquired, or the business of the Acquired Person, shall be in a Permitted
Business and (E) all applicable requirements of Sections 8.14 and 9.02
applicable to Permitted Acquisitions are satisfied.  Notwithstanding anything to the contrary contained in the
immediately preceding sentence, an acquisition which does not otherwise meet
the requirements set forth above in the definition of “Permitted Acquisition”
shall constitute a Permitted Acquisition if, and to the extent, the Required
Lenders agree in writing that such acquisition shall constitute a Permitted
Acquisition for purposes of this Agreement.


 


“Permitted Business”
shall mean the manufacture, distribution, installation and servicing of
batteries and reasonably related products, and activities reasonably related to
the foregoing.


 


“Permitted
Encumbrances” shall mean (i) those liens, encumbrances and other matters
affecting title to any Real Property and found reasonably acceptable by the
Administrative Agent (including, without limitation, liens and encumbrances on
Real Property pursuant to the First-Lien Credit Agreement), (ii) as to any
particular Real Property at any time, such easements, encroachments, covenants,
rights of way, minor defects, irregularities or encumbrances on title which
could reasonably be expected to materially impair such Real Property for the
purpose for which it is held by the mortgagor thereof, or the lien held by the
Collateral Agent, (iii) zoning and other municipal ordinances which are not
violated in any material respect by the existing improvements and the present
use made by the mortgagor thereof of the premises, (iv) general real estate
taxes and assessments not yet delinquent, and (v) such other similar items as
the Administrative Agent may consent to (such consent not to be unreasonably
withheld).


 


“Permitted Holders”
shall mean the Sponsor, any majority owned and controlled Affiliate of the
Sponsor, the Senior Managers and any other shareholders of Holdings which
received any portion of the Sponsor Distribution on the Initial Borrowing Date.


 


“Permitted Liens”
shall have the meaning provided in Section 9.03.


 


“Permitted Refinancing
Indebtedness” shall mean any Indebtedness of the Borrower and its
Subsidiaries issued or given in exchange for, or the proceeds of which are used
to, extend, refinance, renew, replace, substitute or refund any Existing
Indebtedness, Permitted Acquired Debt, or any Indebtedness issued to so extend,
refinance, renew, replace, substitute or refund any such Indebtedness, so long
as (a) such Indebtedness has a weighted average life to maturity greater than
or equal to the weighted average life to maturity of the Indebtedness being
refinanced, (b) such refinancing or renewal does not (i) increase the amount of
such Indebtedness outstanding immediately prior to such refinancing or renewal
by more than 3% or (ii) add guarantors, obligors or security from that which
applied to such Indebtedness being refinanced or


 


100

















 


renewed, (c) such
refinancing or renewal Indebtedness has substantially the same (or, from the
perspective of the Lenders, more favorable) subordination provisions, if any,
as applied to the Indebtedness being renewed or refinanced, and (d) all other
terms of such refinancing or renewal (including, without limitation, with
respect to the amortization schedules, redemption provisions, maturities,
covenants, defaults and remedies), are not, taken as a whole, materially less
favorable to the respective borrower than those previously existing with
respect to the Indebtedness being refinancing or renewed, provided, however,
that any intercompany Existing Indebtedness (and subsequent extensions,
refinancings, renewals, replacements and refundings thereof as provided above
in this definition) may only be extended, refinanced, renewed, replaced or
refunded as provided above in this definition if the Indebtedness so extended,
refinanced, renewed, replaced or refunded has the same obligors(s) and
obligee(s) as the Indebtedness being extended, refinanced, renewed, replaced or
refunded.


 


“Person” shall
mean any individual, partnership, joint venture, firm, corporation, limited
liability company, association, trust or other enterprise or any government or
political subdivision or any agency, department or instrumentality thereof.


 


“Plan” shall mean
any pension plan as defined in Section 3(2) of ERISA (other than a
Multiemployer Plan), which is maintained or contributed to by (or to which
there is an obligation to contribute of) Holdings or a Subsidiary of Holdings
or an ERISA Affiliate, and each such plan for the five year period immediately
following the latest date on which Holdings, or a Subsidiary of Holdings or an
ERISA Affiliate maintained, contributed to or had an obligation to contribute
to such plan to the extent that Holdings or any Subsidiary of Holdings or an
ERISA Affiliate could, in the reasonable opinion of the Lenders, reasonably be
expected to have any liability under such Plan.


 


“Pledge Agreement”
shall have the meaning provided in Section 5.12(a).


 


“Pledge Agreement Collateral”
shall  mean all “Collateral” as defined
in the Pledge Agreement.


 


“Post-Closing Period”
shall have the meaning provided in Section 8.14(a).


 


“Preferred Stock,”
as applied to the capital stock of any Person, means capital stock of such
Person (other than common stock of such Person) of any class or classes
(however designated) that ranks prior, as to the payment of dividends or as to
the distribution of assets upon any voluntary or involuntary liquidation,
dissolution or winding up of such Person, to shares of capital stock of any
other class of such Person, and shall include any Qualified Preferred Stock and
any preferred stock which is not Qualified Preferred Stock.


 


“Preferred Stock
Subscription Agreement” shall mean the Stock Subscription Agreement, dated
as of March 22, 2002, among Holdings and the Sponsor and other of the
initial purchasers of the Convertible Preferred Stock, as the same may be
amended and/or modified in accordance with the terms hereof and thereof.


 


“Pro  Forma
Basis” shall mean, in connection with any calculation of compliance with any
financial covenant or financial term, the calculation thereof after giving
effect on a pro  forma basis to (x) the Permitted Acquisition then
being consummated as well as any other


 


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Permitted Acquisition
consummated after the first day of the relevant Test Period or Calculation
Period, as the case may be, and on or prior to the date of the respective
Permitted Acquisition then being effected and (y) the incurrence of any
Indebtedness that is incurred in connection with, or to finance, the
Transaction one or more Permitted Acquisitions and/or any other transaction to
be consummated on a “Pro  Forma Basis”; provided that, for
purposes of calculations pursuant to (I) Section 9.08 for any Test Period
ended prior to (but not after) the first anniversary of the Initial Borrowing
Date, (II) Sections 8.14, 8.19 and 9.06(x) and (III) the definition of Excluded
IPO Proceeds, such calculations shall also give effect on a pro  forma
basis to (a) the incurrence of any Indebtedness (other than revolving
Indebtedness, except to the extent same is incurred to refinance other
outstanding Indebtedness or to finance a Permitted Acquisition) after the first
day of the relevant Calculation Period as if such Indebtedness had been
incurred (and the proceeds thereof applied) on the first day of the relevant
Calculation Period and (b) the permanent repayment of any Indebtedness (other
than revolving Indebtedness) after the first day of the relevant Calculation
Period as if such Indebtedness had been retired or redeemed on the first day of
the relevant Calculation Period, with the following rules to apply in
connection therewith:


 


(i)                                     for
purposes of (I) Section 9.08 for any Test Period ended prior to (but not
after) the first anniversary of the Initial Borrowing Date, (II) Sections 8.14,
8.19 and 9.06(x) and (III) the definition of Excluded IPO Proceeds, all
Indebtedness (x) (other than revolving Indebtedness, except to the extent same
is incurred to finance the Transaction, to refinance other outstanding
Indebtedness or to finance Permitted Acquisitions) incurred or issued after the
first day of the relevant Calculation Period (whether incurred to finance a
Permitted Acquisition, to refinance Indebtedness or otherwise) shall be deemed
to have been incurred or issued (and the proceeds thereof applied) on the first
day of the respective Test Period or Calculation Period and remain outstanding
through the date of determination (and thereafter in the case of projections
pursuant to Section 8.14) and (y) (other than revolving Indebtedness)
permanently retired or redeemed after the first day of the relevant Test Period
or Calculation Period shall be deemed to have been retired or redeemed on the
first day of the respective Test Period or Calculation Period and remain
retired through the date of determination (and thereafter in the case of
projections pursuant to Section 8.14);


 


(ii)                                  for
purposes of (I) Section 9.08 for any Test Period ended prior to (but not
after) the first anniversary of the Initial Borrowing Date and (II)
Section 8.14, all Indebtedness assumed to be outstanding pursuant to
preceding clause (i) shall be deemed to have borne interest at (x) the rate
applicable thereto, in the case of fixed rate indebtedness or (y) the rates
which would have been applicable thereto during the respective period when same
was deemed outstanding, in the case of floating rate Indebtedness (although
interest expense with respect to any Indebtedness for periods while same was
actually outstanding during the respective period shall be calculated using the
actual rates applicable thereto while same was actually outstanding); provided
that all Indebtedness (whether actually outstanding or deemed outstanding)
bearing interest at a floating rate of interest shall be tested on the basis of
the rates applicable at the time the determination is made pursuant to said
provisions;


 


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(iii)                               for
purposes of determinations of the Leverage Ratio (other than for purposes of
Section 8.14, 8.19 and 9.06(x) and the definition of Excluded IPO
Proceeds), Consolidated Debt shall be the actual amount thereof as of the last
day of the respective Calculation Period or Test Period, as the case may be; provided
that, for purposes of determining the Leverage Ratio as it relates to the
definition of Applicable Margin, to the extent any Permitted Acquisition is
consummated after the last day of the respective Calculation Period or Test
Period and on or prior to the date of delivery of the certificate referenced in
the definition of Applicable Margin, all Indebtedness incurred or assumed in
connection with one or more Permitted Acquisitions consummated after the last
day of the respective Test Period shall be added to Consolidated Debt and shall
be deemed to have been outstanding on the last day of the respective
Calculation Period or Test Period, as the case may be;


 


(iv)                              in
making any determination of Consolidated EBITDA on a Pro  Forma
Basis, pro  forma effect shall be given to any Permitted
Acquisition effected during the respective Calculation Period or Test Period
(or thereafter to the extent provided in the definition of Applicable Margin or
for purposes of Section 8.14) as if same had occurred on the first day of
the respective Calculation Period or Test Period, as the case may be, taking
into account, in the case of any Permitted Acquisition, factually supportable
and identifiable cost savings and expenses which would otherwise be accounted
for as an adjustment pursuant to Article 11 of Regulation S-X under the
Securities Act, as if such cost savings or expenses were realized on the first
day of the respective period.


 


“Pro  Forma
Balance Sheet” shall have the meaning provided in Section 5.15.


 


“Projections”
shall mean the detailed projected consolidated financial statements of Holdings
and its Subsidiaries certified by a senior financial officer of Holdings for
the five fiscal years after the Initial Borrowing Date and made available to
the Lenders on or prior to the Initial Borrowing Date.


 


“Qualified IPO”
shall mean a bona fide underwritten sale to the public of common stock of
Holdings pursuant to a registration statement (other than on Form S-8 or any
other form relating to securities issuable under any benefit plan of Holdings
or any of its Subsidiaries, as the case may be) that is declared effective by
the SEC and results in gross cash proceeds (exclusive of underwriter’s
discounts and commissions and other expenses) of at least $50,000,000 (or, for
purposes of Sections 8.16 and 9.11, $150,000,000).


 


“Qualified Preferred
Stock” shall mean any preferred stock of Holdings so long as the terms of
any such preferred stock (i) do not contain any mandatory put, redemption,
repayment, sinking fund or other similar provision prior to one year after the
latest Maturity Date (as determined at the time of issuance of such Qualified
Preferred Stock), (ii) do not require the cash payment of dividends at a time
when such payment would be prohibited or not permitted under this Agreement,
(iii) do not contain any covenants, (iv) do not grant the holders thereof any
voting rights except for (x) voting rights required to be granted to such
holders under applicable law and (y) limited customary voting rights on
fundamental matters such as mergers, consolidations,


 


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sales of all or
substantially all of the assets of Holdings, or liquidations involving
Holdings, and (v) are otherwise reasonably satisfactory to the Administrative
Agent.


 


“Quarterly Payment
Date” shall mean the last Business Day of each March, June,
September and December.


 


“Real Property” of
any Person shall mean all of the right, title and interest of such Person in
and to land, improvements and fixtures, including Leaseholds.


 


“Recapitalization”
shall mean, collectively, the Sponsor Distribution and the Refinancing.


 


“Receivables”
shall mean all accounts receivable (including, without limitation, all rights
to payment created by or arising from sales of goods, leases of goods or the
rendering of services no matter how evidenced and whether or not earned by
performance).


 


“Receivables Entity”
shall mean (x) ESECCO, Inc., a Delaware corporation which is a Wholly-Owned
Subsidiary of the Borrower or (y) any other Wholly-Owned Subsidiary of the
Borrower which is designated (as provided below) as the “Receivables Entity”,
in each case so long as such entity engages in no activities other than in
connection with the financing of accounts receivable of the Receivables Sellers
and (a) no portion of the Indebtedness or any other obligations (contingent or
otherwise) of such entity (i) is guaranteed by Holdings or any other Subsidiary
of Holdings (excluding guarantees of obligations (other than the principal of,
and interest on, Indebtedness)) pursuant to Standard Securitization
Undertakings, (ii) is recourse to or obligates Holdings or any other Subsidiary
of Holdings in any way (other than pursuant to Standard Securitization
Undertakings) or (iii) subjects any property or asset of Holdings or any other
Subsidiary of Holdings, directly or indirectly, contingently or otherwise, to
the satisfaction thereof, other than pursuant to Standard Securitization
Undertakings, (b) neither Holdings nor any of its Subsidiaries has any
contract, agreement, arrangement or understanding (other than pursuant to the
Accounts Receivable Facility Documents (including with respect to fees payable
in the ordinary course of business in connection with the servicing of accounts
receivable and related assets)) with such entity on terms less favorable to
Holdings or such Subsidiary than those that might be obtained at the time from
persons that are not Affiliates of Holdings, and (c) neither Holdings nor any
other Subsidiary of Holdings has any obligation to maintain or preserve such
entity’s financial condition or cause such entity to achieve certain levels of
operating results.  Any such designation
of any entity other than ESECCO, Inc. shall be evidenced to the Administrative
Agent by filing with the Administrative Agent an officer’s certificate of
Holdings or the Borrower certifying that, to the best of such officer’s
knowledge and belief after consultation with counsel, such designation complied
with the foregoing conditions.


 


“Receivables
Indebtedness” shall mean indebtedness of the Borrower and/or its
Subsidiaries deemed to exist pursuant to the Existing Accounts Receivable
Facility and, after the Accounts Receivable Facility Transaction Date, the
Accounts Receivable Facility, in each case determined as if such Existing
Accounts Receivable Facility and Accounts Receivable Facility were structured
as a secured financing transaction as opposed to an asset purchase and
sale  transaction.


 


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“Receivables Sellers”
shall mean the Borrower and any Subsidiary Guarantors, in each case to the
extent such Person is party (as a seller) to the Accounts Receivable Facility
Documents.


 


“Recovery Event”
shall mean the receipt by Holdings or any of its Subsidiaries of any insurance
or condemnation proceeds (other than proceeds from business interruption
insurance) payable (i) by reason of theft, physical destruction or damage or
any other similar event with respect to any properties or assets of Holdings or
any of its Subsidiaries, (ii) by reason of any condemnation, taking, seizing or
similar event with respect to any properties or assets of Holdings or any of
its Subsidiaries and (iii) under any policy of insurance required to be maintained
under Section 8.03.


 


“Refinancing”
shall mean the refinancing transactions described in Sections 5.08(b), (c) and
(d).


 


“Refinancing Documents”
shall mean documents, letters and agreements entered into in connection with
the Refinancing.


 


“Refinancing Senior
Subordinated Notes” shall mean any Indebtedness of the Borrower evidenced
by senior subordinated notes incurred to refinance, in whole or in part,
Second-Lien Loans, so long as, unless the Second-Lien Loans are refinanced in
full with the Net Cash Proceeds thereof, (a) such Indebtedness has a final
maturity no earlier than one year following the Maturity Date, (b) such
Indebtedness does not provide for security, (c) such Indebtedness does not
provide for guaranties by any Person other than the Subsidiary Guarantors, (d)
such refinancing does not increase the amount of such Indebtedness outstanding
immediately prior to such refinancing by more than 3%, (e) all of the Net Cash
Proceeds from the incurrence of such Indebtedness shall have been applied to repay
Second-Lien Loans and (f) all other terms of such Indebtedness (including,
without limitation, with respect to interest rate, amortization, redemption
provisions, maturities, covenants, defaults, remedies and subordination
provisions) are satisfactory to the Administrative Agent and the Syndication
Agent in their sole discretion, as such Indebtedness may be amended, modified
or supplemented from time to time in accordance with the terms hereof and
thereof.  The issuance of Refinancing
Senior Subordinated Senior Notes shall be deemed to be a representation and
warranty by the Borrower that all conditions thereto have been satisfied in all
material respects and that same is permitted in accordance with the terms of
this Agreement, which representation and warranty shall be deemed to be a
representation and warranty for all purposes hereunder, including, without
limitation, Sections 6 and 10.  As used
herein, the term “Refinancing Senior Subordinated Notes” shall include any
Permanent Exchange Refinancing Senior Subordinated Notes issued pursuant to the
Refinancing Senior Subordinated Notes Indenture in exchange for theretofore
outstanding Refinancing Senior Subordinated Notes, as contemplated by the
definition of Permanent Exchange Refinancing Senior Subordinated Notes.


 


“Refinancing Senior
Subordinated Notes Documents” shall mean the Refinancing Senior
Subordinated Notes Indenture, the Refinancing Senior Subordinated Notes and
each other agreement, document or instrument relating to the issuance of the
Refinancing Senior Subordinated Notes, as the same may be amended, modified or
supplemented from time to time in accordance with the terms hereof and thereof.


 


105

















 


“Refinancing Senior
Subordinated Notes Indenture” shall mean any indenture or similar agreement
entered into in connection with the issuance of Refinancing Senior Subordinated
Notes, as the same may be amended, modified or supplemented from time to time
in accordance with the terms hereof and thereof.


 


“Register” shall
have the meaning provided in Section 13.07(c).


 


“Regulation D”
shall mean Regulation D of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion thereof
establishing reserve requirements.


 


“Regulation T”
shall mean Regulation T of the Board of Governors of the Federal Reserve System
as from to time in effect and any successor to all or any portion thereof.


 


“Regulation U”
shall mean Regulation U of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or a portion thereof.


 


“Regulation X”
shall mean Regulation X of the Board of Governors of the Federal Reserve System
as from time to time in effect and any successor to all or any portion thereof.


 


“Release” means
disposing, discharging, injecting, spilling, pumping, leaking, leaching,
dumping, emitting, escaping, emptying, seeping, placing, pouring and the like,
into or upon any land or water or air, or otherwise entering into the
environment.


 


“Replaced Lender”
shall have the meaning provided in Section 1.13.


 


“Replacement Lender”
shall have the meaning provided in Section 1.13.


 


“Reportable Event”
shall mean an event described in Section 4043(c) of ERISA with respect to
a Plan that is subject to Title IV of ERISA other than those events as to which
the 30-day notice period is waived under subsection .22, .23, .25, .27, or
..28 of PBGC Regulation Section 4043.


 


“Required Lenders”
shall mean Non-Defaulting Lenders, the sum of whose outstanding Second-Lien
Loans represent an amount greater than 50% of the sum of all outstanding
Second-Lien Loans of Non-Defaulting Lenders.


 


“S&P” shall
mean Standard & Poor’s Ratings Services, a division of McGraw Hill, Inc.


 


 “Screen Rate” means, for any Interest
Period:


 


(a)                                  the
rate per annum equal to the rate determined by the Administrative Agent to be
the offered rate that appears on the page of the Telerate screen (or any
successor thereto) that displays an average British Bankers Association
Interest Settlement Rate for deposits in U.S. Dollars (for delivery on the
first day of such Interest Period) with a term


 


106

















 


equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period; or


 


(b)                                 if
the rate referenced in the preceding clause (a) does not appear on such page or
service or such page or service shall cease to be available, the rate per annum
equal to the rate determined by the Administrative Agent to be the offered rate
on such other page or other service that displays an average British Bankers
Association Interest Settlement Rate for deposits in U.S. Dollars (for delivery
on the first day of such Interest Period) with a term equivalent to such
Interest Period, determined as of approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period.


 


 “SEC” shall mean the Securities and
Exchange Commission or any successor thereto.


 


“Second-Lien Loans”
shall have the meaning provided in Section 1.01.


 


“Second-Lien
Loan Note” shall have the meaning provided in Section 1.05.


 


“Section 4.04(b)(ii)
Certificate” shall have the meaning provided in Section 4.04(b)(ii).


 


“Secured Creditors”
shall have the meaning provided in the Security Documents.


 


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


 


“Security Agreement”
shall have the meaning provided in Section 5.12(b).


 


“Security Agreement
Collateral” shall mean all “Collateral” as defined in the Security
Agreement.


 


“Security Documents”
shall mean and include the Security Agreement, the Pledge Agreement, each
Mortgage, each Additional Security Document, if any, and any other pledge
agreement entered into pursuant to Section 13.25.


 


“Senior Managers”
shall mean, collectively, John D. Craig, Charles K. McManus, John A. Shea,
Richard W. Zuidema and Michael T. Philion.


 


“Shareholder
Subordinated Note” shall mean an unsecured junior subordinated note issued
by Holdings (and not guaranteed or supported in any way by the Borrower or any
of its Subsidiaries), which note shall be in the form of Exhibit M, provided
that additional provisions may be included so long as such provisions do not
adversely affect the interests of the Lenders and are not in conflict with the
provisions of this Agreement or any other Credit Document.


 


“Shareholders’
Agreements” shall have the meaning provided in Section 5.13.


 


107

















 


“Shareholder Rights
Plan” shall mean a plan approved by the board of directors of Holdings
after consummation of, or in conjunction with, a Qualified IPO providing for
the distribution to shareholders of Holdings of rights to purchase Preferred
Stock of Holdings (which Preferred Stock need not be Qualified Preferred Stock)
on such terms and conditions as are customary for similar plans adopted by
publicly-held companies of comparable size to Holdings.


 


“Specified Default”
shall mean any Default under Section 10.01 or 10.05.


 


“Sponsor” shall
mean Morgan Stanley Dean Witter Capital Partners IV, L.P (and any successor
entity thereto) and its affiliated funds.


 


“Sponsor Distribution”
shall have the meaning provided in Section 5.08.


 


“Standard
Securitization Undertakings” shall mean representations, warranties,
covenants and indemnities entered into by the Borrower or any Subsidiary
thereof in connection with the Accounts Receivables Facility which are
reasonably customary in an off-balance-sheet accounts receivable transaction.


 


“Subsidiaries Guaranty”
shall have the meaning provided in Section 5.11.


 


“Subsidiary” of
any Person shall mean and include (i) any corporation more than 50% of whose
stock of any class or classes having by the terms thereof ordinary voting power
to elect a majority of the directors of such corporation (irrespective of
whether or not at the time stock of any class or classes of such corporation
shall have or might have voting power by reason of the happening of any
contingency) is at the time owned by such Person directly or indirectly through
Subsidiaries and (ii) any partnership, limited liability company, association,
joint venture or other entity (other than a corporation) in which such Person directly
or indirectly through Subsidiaries, has more than a 50% equity interest at the
time.


 


“Subsidiary Guarantor”
shall mean each Wholly-Owned Domestic Subsidiary of Holdings (other than the
Borrower, the Receivables Entity and the Cayman Partnership Shareholders).


 


“Swap Contract”
means (a) any and all rate swap transactions, basis swaps, credit derivative
transactions, forward rate transactions, commodity swaps, commodity options,
forward commodity contracts, equity or equity index swaps or options, bond or
bond price or bond index swaps or options or forward bond or forward bond price
or forward bond index transactions, interest rate options, forward foreign
exchange transactions, cap transactions, floor transactions, collar
transactions, currency swap transactions, cross-currency rate swap
transactions, currency options, spot contracts, or any other similar
transactions or any combination of any of the foregoing (including any options
to enter into any of the foregoing), whether or not any such transaction is
governed by or subject to any master agreement, and (b) any and all
transactions of any kind, and the related confirmations, which are subject to
the terms and conditions of, or governed by, any form of master agreement
published by the International Swaps and Derivatives Association, Inc., any
International Foreign Exchange Master Agreement, or any other master agreement
(any such master agreement, together with any related schedules, a “Master
Agreement”), including any such obligations or liabilities under any Master
Agreement.


 


108

















 


“Swap Termination
Value” means, in respect of any one or more Swap Contracts, after taking
into account the effect of any legally enforceable netting agreement relating
to such Swap Contracts, (a) for any date on or after the date such Swap
Contracts have been closed out and termination value(s) determined in
accordance therewith, such termination value(s), and (b) for any date prior to
the date referenced in clause (a), the amount(s) determined as the
mark-to-market value(s) for such Swap Contracts, as determined based upon one
or more mid-market or other readily available quotations provided by any
recognized dealer in such Swap Contracts (which may include a Lender or any
Affiliate of a Lender).


 


“Syndication Agent”
shall have the meaning provided in the first paragraph of this Agreement.


 


“Syndication Date”
shall mean the earlier of (i) the 90th day following the Initial Borrowing Date
and (ii) the date upon which the Administrative Agent determines (and notifies
the Borrower and the Lenders) that the primary syndication (and resultant
addition of Persons as Lenders pursuant to Section 13.07(b)) has been
completed.


 


“Synthetic Lease
Obligation” means the monetary obligation of a Person under (a) a so-called
synthetic, off-balance sheet or tax retention lease, or (b) an agreement for
the use or possession of property creating obligations that do not appear on
the balance sheet of such Person but which, upon the insolvency or bankruptcy
of such Person, would be characterized as the indebtedness of such Person
(without regard to accounting treatment).


 


“Tax Allocation
Agreements” shall have the meaning provided in Section 5.13.


 


“Tax Benefit”
shall have the meaning provided in Section 4.04(c).


 


“Taxes” shall have
the meaning provided in Section 4.04(a).


 


“Test Period”
shall mean each period of four consecutive fiscal quarters then last ended, in
each case taken as one accounting period.


 


“Total Commitment”
shall mean the sum of the Commitments of each of the Lenders.


 


“Transaction”
shall mean, collectively, (i) the Recapitalization, (ii) the entering into of
the First-Lien Credit Documents and the incurrence of all loans thereunder,
(iii) the entering into of the Credit Documents and the incurrence of all
Second-Lien Loans on the Initial Borrowing Date, and (iv) the payment of fees
and expenses in connection with the foregoing.


 


“Type” shall mean
any type of Loan determined with respect to the interest option applicable
thereto, i.e., a Base Rate Loan or a Eurodollar Loan.


 


“UCC” shall mean
the Uniform Commercial Code as in effect from time to time in the relevant
jurisdiction.


 


“Unfunded Current
Liability” of any Plan shall mean the amount, if any, by which the
actuarial present value of the accumulated plan benefits under the Plan as of
the close of its


 


109

















 


most recent plan year
exceeds the fair market value of the assets allocable thereto, each determined
in accordance with Statement of Financial Accounting Standards No. 87, based
upon the actuarial assumptions used by the Plan’s actuary in the most recent
annual valuation of the Plan.


 


“U.S. Dollars” and
the sign “$” shall each mean freely transferable lawful money of the United
States of America.


 


“Wholly-Owned Domestic
Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of
such Person which is a Domestic Subsidiary.


 


“Wholly-Owned Foreign
Subsidiary” shall mean, as to any Person, any Wholly-Owned Subsidiary of
such Person which is not a Domestic Subsidiary.


 


“Wholly-Owned
Subsidiary” shall mean, as to any Person, (i) any corporation 100% of whose
capital stock (other than director’s qualifying shares and/or other nominal
amounts of shares required to be held other than by such Person under
applicable law and, in the case of Hawker SA FA (Poland) and Hawker SA
(France), shares (not to exceed 1% of the capital stock of either such entity)
held by third parties) is at the time owned by such Person and/or one or more
Wholly-Owned Subsidiaries of such Person and (ii) any partnership, limited
liability company, association, joint venture or other entity in which such
Person and/or one or more Wholly-Owned Subsidiaries of such Person has a 100%
equity interest at such time (for such purpose, without taking account of
directors qualifying shares and/or other nominal amounts of shares required to
be held by such Person under applicable law); provided that Shenzen
Hunda Power Mechanical & Electrical Co, Ltd. (China), Hunda (Jianqsu) Power
Supply System Co. Ltd. (China) and Oldham Italia S.R.L. shall be deemed to be
“Wholly-Owned Subsidiaries” of the Borrower for all purposes of this Agreement,
so long as at least 80% (or, in the case of Oldham Italia S.R.L., 99.5%) of the
capital (and voting) stock of such entities is at all times owned (directly or
indirectly) by the Borrower or a Wholly-Owned Subsidiary of the Borrower.


 


“Written” (whether
lower or upper case) or “in writing” shall mean any form of written
communication or a communication by means of telex, facsimile device, telegraph
or cable.


 


SECTION 12. 
The Agents.


 


12.01.  Appointment.  (a) 
Each Lender hereby irrevocably appoints, designates and authorizes Bank
of America as Administrative Agent and as Collateral Agent for such Lender,
MSSF as Syndication Agent for such Lender and LCPI as Documentation Agent for
such Lender (for purposes of this Section 12, the term “Agents” shall mean
Bank of America in its capacity as Administrative Agent hereunder and in its
capacity as Collateral Agent hereunder and pursuant to the Security Documents,
MSSF in its capacity as Syndication Agent and LCPI in its capacity as
Documentation Agent), to act on its behalf under the provisions of this
Agreement and each other Credit Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Credit Document, together with such powers as are
reasonably incidental thereto.  Notwithstanding
any provision to the contrary contained elsewhere herein or in any other Credit
Document, no Agent shall have any


 


110

















 


duties or
responsibilities, except those expressly set forth herein, nor shall any Agent
have or be deemed to have any fiduciary relationship with any Lender or
participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into this Agreement or any other
Credit Document or otherwise exist against the Agents.  Without limiting the generality of the
foregoing sentence, the use of the term “agent” herein and in the other Credit
Documents with reference to the Agents is not intended to connote any fiduciary
or other implied (or express) obligations arising under agency doctrine of any
applicable law.  Instead, such term is
used merely as a matter of market custom, and is intended to create or reflect
only an administrative relationship between independent contracting parties.


 


(b)                                 Each
Lender irrevocably authorizes the Second-Lien Collateral Agent to sign the
Intercreditor Agreement on behalf of the Lenders and acknowledges and agrees
that (i) Bank of America may act as First-Lien Collateral Agent and Second-Lien
Collateral Agent under the Intercreditor Agreement, (ii) such Lender will be
bound by the terms of the Intercreditor Agreement as a “Creditor” and
“Second-Lien Creditor” thereunder and (iii) the Collateral granted under the
Security Documents will be subject to the prior Lien securing the First-Lien
Obligations (as defined in the Intercreditor Agreement) on the terms provided
in the Intercreditor Agreement.


 


12.02.  Delegation of Duties.  Each Agent may execute any of its duties
under this Agreement or any other Credit Document by or through agents,
employees or attorneys-in-fact, including, for the purposes of any payments in
a currency other than U.S. Dollars, such sub-agents as shall be deemed
necessary by such Agent, and shall be entitled to advice of counsel and other
consultants or experts concerning all matters pertaining to such duties.  No Agent shall be responsible for the
negligence or misconduct of any agent, sub-agent or attorney-in-fact that it
selects in the absence of gross negligence or willful misconduct.  Any such agent, sub-agent or other Person
retained or employed pursuant to this Section 12.02 shall have all the
benefits and immunities provided to any Agent in this Section 12 with
respect to any acts taken or omissions suffered by such Person in connection
herewith or therewith, as fully as if the term “Agent” as used in this
Section 12 and in the definition of “Agent-Related Person” included such
additional Persons with respect to such acts or omissions.


 


12.03.  Liability of Agents.  No Agent-Related Person shall (a) be liable
for any action taken or omitted to be taken by any of them under or in
connection with this Agreement or any other Credit Document or the transactions
contemplated hereby (except for its own gross negligence or willful misconduct
in connection with its duties expressly set forth herein), or (b) be
responsible in any manner to any Lender or participant for any recital,
statement, representation or warranty made by any Credit Party or any officer
thereof, contained herein or in any other Credit Document, or in any certificate,
report, statement or other document referred to or provided for in, or received
by any Agent under or in connection with, this Agreement or any other Credit
Document, or the validity, effectiveness, genuineness, enforceability or
sufficiency of this Agreement or any other Credit Document, or for any failure
of any Credit Party or any other party to any Credit Document to perform its
obligations hereunder or thereunder.  No
Agent-Related Person shall be under any obligation to any Lender or participant
to ascertain or to inquire as to the observance or performance of any of the
agreements contained in, or conditions of, this Agreement or any other Credit
Document, or to inspect the properties, books or records of any Credit Party or
any Affiliate thereof.


 


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12.04.  Reliance by Administrative Agent.  (a)  Each Agent shall be entitled to rely, and shall be fully
protected in relying, upon any writing, communication, signature, resolution,
representation, notice, consent, certificate, affidavit, letter, telegram,
facsimile, telex or telephone message, electronic mail message, statement or
other document or conversation believed by it to be genuine and correct and to
have been signed, sent or made by the proper Person or Persons, and upon advice
and statements of legal counsel (including counsel to any Credit Party),
independent accountants and other experts selected by such Agent.  Each Agent shall be fully justified in
failing or refusing to take any action under any Credit Document unless such
Agent shall first receive such advice or concurrence of the Required Lenders as
such Agent deems appropriate (including, without limitation, for purposes of
making determinations pursuant to Section 8.16 or 8.19 and the definition
of “Refinancing Senior Subordinated Notes”) and, if such Agent so requests, it
shall first be indemnified to its satisfaction by the Lenders against any and
all liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. 
Each Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Credit Document in
accordance with a request or consent of the Required Lenders (or such greater
number of Lenders as may be expressly required hereby in any instance) and such
request and any action taken or failure to act pursuant thereto shall be
binding upon all the Lenders.


 


(b)                                 For
purposes of determining compliance with the conditions specified in Sections 5,
6, 8.16 and 8.19 and the definition of “Refinancing Senior Subordinated Notes”,
each Agent and each Lender shall be deemed to have consented to, approved or
accepted or to be satisfied with, each document or other matter required
thereunder to be consented to or approved by or acceptable or satisfactory to
the Administrative Agent, the Collateral Agent, any other Agent and/or a Lender
unless the Administrative Agent shall have received notice from an objecting
Agent or Lender prior to the Effective Date or other relevant date of
determination, as the case may be, specifying its objection thereto.  Without limiting the foregoing, it is
understood and agreed that each Lender has the right to request from the Administrative
Agent and/or the Collateral Agent a copy of (x) any item required to be
delivered pursuant to Section 5, 8.16 or 8.19 which is required to be
satisfactory in form, scope and substance to the Administrative Agent, the
Collateral Agent or any other Agent and (y) any Refinancing Senior Subordinated
Notes Documents.


 


12.05.  Notice of Default. 
The Administrative Agent shall not be deemed to have
knowledge or notice of the occurrence of any Default or Event of Default,
except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a
Lender or the Borrower referring to this Agreement, describing such Default or
Event of Default and stating that such notice is a “notice of default.”  The Administrative Agent will notify the
Lenders of its receipt of any such notice. 
The Administrative Agent shall take such action with respect to such
Default or Event of Default as may be directed by the Required Lenders in
accordance with Section 10; provided, however, that unless
and until the Administrative Agent has received any such direction, the
Administrative Agent may (but shall not be obligated to) take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable or in the best interest of the Lenders.


 


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12.06.  Credit Decision; Disclosure of
Information by the Agents.  Each
Lender acknowledges that no Agent-Related Person has made any representation or
warranty to it, and that no act by any Agent hereafter taken, including any
consent to and acceptance of any assignment or review of the affairs of any
Credit Party or any Affiliate thereof, shall be deemed to constitute any
representation or warranty by any Agent-Related Person to any Lender as to any
matter, including whether Agent-Related Persons have disclosed material
information in their possession.  Each
Lender represents to each Agent that it has, independently and without reliance
upon any Agent-Related Person and based on such documents and information as it
has deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Credit Parties and their respective Subsidiaries, and
all applicable bank or other regulatory laws relating to the transactions
contemplated hereby, and made its own decision to enter into this Agreement and
to extend credit to the Borrower.  Each
Lender also represents that it will, independently and without reliance upon
any Agent-Related Person and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement
and the other Credit Documents, and to make such investigations as it deems
necessary to inform itself as to the business, prospects, operations, property,
financial and other condition and creditworthiness of Holdings and its
Subsidiaries.  Except for notices,
reports and other documents expressly required to be furnished to the Lenders
by an Agent herein, no Agent shall have any duty or responsibility to provide
any Lender with any credit or other information concerning the business,
prospects, operations, property, financial and other condition or
creditworthiness of any of the Credit Parties or any of their respective
Affiliates which may come into the possession of any Agent-Related Person.


 


12.07.  Indemnification. 
Whether or not the transactions contemplated hereby are
consummated, the Lenders shall indemnify upon demand each Agent-Related Person
(to the extent not reimbursed by or on behalf of any Credit Party and without
limiting the obligation of any Credit Party to do so), pro rata, and hold
harmless each Agent-Related Person from and against any and all Indemnified
Liabilities incurred by it; provided, however, that no Lender shall be liable
for the payment to any Agent-Related Person of any portion of such Indemnified
Liabilities to the extent determined in a final, nonappealable judgment by a
court of competent jurisdiction to have resulted from such Agent-Related
Person’s own gross negligence or willful misconduct, provided, however, that no
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of
this Section 12.07.  Without
limitation of the foregoing, each Lender shall reimburse each Agent upon demand
for its ratable share of any costs or out-of-pocket expenses (including
Attorney Costs) incurred by such Agent in connection with the preparation,
execution, delivery, administration, modification, amendment or enforcement
(whether through negotiations, legal proceedings or otherwise) of, or legal
advice in respect of rights or responsibilities under, this Agreement, any
other Credit Document, or any document contemplated by or referred to herein,
to the extent that such Agent is not reimbursed for such expenses by or on
behalf of the Borrower.  The undertaking
in this Section 12.07 shall survive termination of the Total Commitment,
the payment of all other Obligations and the resignation of the Agents.


 


12.08.  Agents in their Individual Capacities.  Each Agent and its Affiliates may
make loans to, issue letters of credit for the account of, accept deposits
from, acquire equity


 


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interests in and
generally engage in any kind of banking, trust, financial advisory,
underwriting or other business with each of the Credit Parties and their
respective Affiliates (including, without limitation, entering into Interest
Rate Protection Agreements with the Borrower as contemplated by
Section 8.16 and underwriting and/or placing the Refinancing Senior
Subordinated Notes) as though such Agent were not an Agent hereunder and
without notice to or consent of the Lenders. 
The Lenders acknowledge that, pursuant to such activities, any Agent or
its Affiliates may receive information regarding any Credit Party or its
Affiliates (including information that may be subject to confidentiality
obligations in favor of such Credit Party or such Affiliate) and acknowledge
that no Agent shall be under any obligation to provide such information to
them.  With respect to its Second-Lien
Loans and all Obligators owing it, any Agent shall have the same rights and
powers under this Agreement as any other Lender and may exercise such rights
and powers as though it were not an Agent and the terms “Lender” and “Lenders”
include any Agent in its individual capacity.


 


12.09.  Successor Agents. 
(a)  The
Administrative Agent may resign as Administrative Agent upon 30 days’ notice to
the Lenders.  If the Administrative
Agent resigns under this Agreement, the Required Lenders shall appoint from
among the Lenders a successor administrative agent for the Lenders, which
successor administrative agent shall be consented to by the Borrower at all
times other than during the existence of an Event of Default (which consent of
the Borrower shall not be unreasonably withheld or delayed).  If no successor administrative agent is
appointed prior to the effective date of the resignation of the Administrative
Agent, the Administrative Agent may appoint, after consulting with the Lenders
and the Borrower, a successor administrative agent from among the Lenders.  Upon the acceptance of its appointment as
successor administrative agent hereunder, the Person acting as such successor
administrative agent shall succeed to all the rights, powers and duties of the
retiring Administrative Agent and the term “Administrative Agent” shall mean
such successor administrative agent and the retiring Administrative Agent’s
appointment, powers and duties as Administrative Agent shall be terminated
without any other or further act or deed on the part of any other Lender.  After any retiring Administrative Agent’s
resignation hereunder as Administrative Agent, the provisions of this
Section 12 and Sections 13.04 and 13.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.  If no
successor administrative agent has accepted appointment as Administrative Agent
by the date which is 30 days following a retiring Administrative Agent’s notice
of resignation, the retiring Administrative Agent’s resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of
the duties of the Administrative Agent hereunder until such time, if any, as
the Required Lenders appoint a successor agent as provided for above.


 


(b)  The Syndication Agent may resign as
Syndication Agent upon 5 days’ notice to the Lenders.  If the Syndication Agent resigns under this Agreement, the
Administrative Agent shall succeed to all the rights, powers and duties of the
retiring Syndication Agent, and the retiring Syndication Agent’s appointment,
powers and duties as Syndication Agent shall be terminated, without any other
or further act or deed on the part of such retiring Syndication Agent. After
any retiring Syndication Agent’s resignation hereunder as Syndication Agent,
the provisions of this Section 12 and Sections 13.04 and 13.05 shall inure
to its benefit as to any actions taken or omitted to be taken by it while it
was Syndication  Agent under this
Agreement.


 


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(c)  The Documentation Agent may resign as
Documentation Agent upon 5 days’ notice to the Lenders.  If the Documentation Agent resigns under
this Agreement, the Administrative Agent shall succeed to all the rights,
powers and duties of the retiring Documentation Agent, and the retiring
Documentation Agent’s appointment, powers and duties as Documentation Agent
shall be terminated, without any other or further act or deed on the part of
such retiring Documentation Agent. After any retiring Documentation Agent’s
resignation hereunder as Documentation Agent, the provisions of this
Section 12 and Sections 13.04 and 13.05 shall inure to its benefit as to
any actions taken or omitted to be taken by it while it was Documentation Agent
under this Agreement.


 


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


 


(a)                                  to
file and prove a claim for the whole amount of the principal and interest owing
and unpaid in respect of the Second-Lien Loans and all other Obligations that
are owing and unpaid and to file such other documents as may be necessary or
advisable in order to have the claims of the Lenders and the Administrative
Agent (including any claim for the reasonable compensation, expenses,
disbursements and advances of the Lenders and the Administrative Agent and
their respective agents and counsel and all other amounts due the Lenders and
the Agents under Sections 3.01 and 13.04) allowed in such judicial proceeding;
and


 


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


 


and any custodian,
receiver, assignee, trustee, liquidator, sequestrator or other similar official
in any such judicial proceeding is hereby authorized by each Lender to make
such payments to the Administrative Agent and, in the event that the
Administrative Agent shall consent to the making of such payments directly to
the Lenders, to pay to the Administrative Agent any amount due for the
reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 3.01 and 13.04.


 


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


 


12.11.  Collateral and Guaranty Matters.  The Lenders irrevocably authorize
the Administrative Agent (including in its capacity as Collateral Agent), at
its option and in its discretion,


 


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(a)                                  to
release any Lien on any property granted to or held by the Administrative Agent
(in its capacity as Collateral Agent) under any Security Document (i) upon
termination of the Total Commitment and payment in full of all Obligations
(other than contingent indemnification obligations), (ii) that is sold or to be
sold as part of or in connection with any sale permitted hereunder or under any
other Credit Document (other than a sale to Holdings or any of its
Subsidiaries), (iii) subject to Section 13.01, if approved, authorized or
ratified in writing by the Required Lenders or (iv) required by the terms of
the Intercreditor Agreement;


 


(b)                                 to
subordinate any Lien on any property granted to or held by the Administrative
Agent under any Security Document to the holder of any Lien on such property
that is permitted by Section 9.03 or required by the Intercreditor
Agreement; and


 


(c)                                  to
release any Subsidiary Guarantor from its obligations under the Subsidiary
Guaranty if (x) such Person ceases to be a Subsidiary as a result of a
transaction permitted hereunder or (y) such release is required by the Intercreditor
Agreement.


 


Upon request by the
Administrative Agent at any time, the Required Lenders will confirm in writing
the Administrative Agent’s authority to release or subordinate its interest in
particular types or items of property, or to release any Subsidiary Guarantor
from its obligations under the Subsidiary Guaranty pursuant to this
Section 12.11.


 


12.12.  Other Agents; Arrangers and Managers.  None of the Lenders or other Persons
identified on the facing page or signature pages of this Agreement as a
“co-agent,” “book manager,” “lead manager,” “arranger,” “lead arranger” or
“co-arranger” shall have any right, power, obligation, liability,
responsibility or duty under this Agreement other than, in the case of such
Lenders, those applicable to all Lenders as such.  Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary
relationship with any Lender.  Each
Lender acknowledges that it has not relied, and will not rely, on any of the
Lenders or other Persons so identified in deciding to enter into this Agreement
or in taking or not taking action hereunder.


 


SECTION 13.  Miscellaneous.


 


13.01.  Amendment or Waiver.  (a)  Except as provided by the Intercreditor Agreement, neither this
Agreement nor any other Credit Document nor any terms hereof or thereof may be
changed, waived, discharged or terminated unless such change, waiver, discharge
or termination is in writing signed by the respective Credit Parties party
thereto and the Required Lenders, provided that no such change, waiver,
discharge or termination shall, without the consent of each Lender (with
Obligations being directly affected thereby in the case of the following clause
(i)), (i) extend the final stated maturity of any Second-Lien Loan or
Second-Lien Loan Note, or reduce the rate or extend the time of payment of
interest or Fees thereon, or reduce the principal amount thereof (it being
understood that the waiver of any mandatory repayment or repurchase of
Second-Lien Loans pursuant to Section 4.02 shall not constitute a
reduction or waiver of any Fee, interest or premium otherwise payable in
connection therewith), (ii) subject to the Intercreditor Agreement, release all
or substantially all of the Collateral (except


 


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as expressly provided in
the Security Documents) under all the Security Documents, (iii) amend, modify
or waive any provision of this Section 13.01 (except for technical
amendments with respect to additional extensions of credit pursuant to this
Agreement which afford the protections to such additional extensions of credit
of the type provided to the Second-Lien Loans on the Effective Date), (iv)
reduce the percentage specified in the definition of Required Lenders (it being
understood that, with the consent of the Required Lenders, additional
extensions of credit pursuant to this Agreement may be included in the
determination of the Required Lenders on substantially the same basis as the
extensions of Second-Lien Loans are included on the Effective Date), (v)
consent to the assignment or transfer by Holdings or the Borrower of any of its
rights and obligations under this Agreement, (vi) amend or modify
Section 13.19(a), or (vii) release Holdings from the Holdings Guaranty or
Holdings or the Borrower from this Agreement; provided  further,
that no such change, waiver, discharge or termination shall (w) be effective
without the written acknowledgment (though not consent) of the Administrative
Agent (such acknowledgment not to be unreasonably withheld or delayed), (x)
increase the Commitments of any Lender over the amount thereof then in effect
without the consent of such Lender (it being understood that waivers or
modifications of conditions precedent, covenants, Defaults or Events of Default
or of a mandatory reduction in the Total Commitment shall not constitute an
increase of the Commitment of any Lender, and that an increase in the available
portion of any Commitment of any Lender shall not constitute an increase in the
Commitment of such Lender), (y) without the consent of the respective Agent
affected thereby, amend, modify or waive any provision of Section 12 as
same applies to such Agent or any other provision as same relates to the rights
or obligations of such Agent, and (z) without the consent of the Collateral
Agent, amend, modify or waive any provision relating to the rights or
obligations of the Collateral Agent.


 


(b)                                 If,
in connection with any proposed change, waiver, discharge or termination of or to
any of the provisions of this Agreement as contemplated by clauses (i) through
(vii), inclusive, of the first proviso to Section 13.01(a), the consent of
the Required Lenders is obtained but the consent of one or more of such other
Lenders whose consent is required is not obtained, then the Borrower shall have
the right, so long as all non-consenting Lenders whose individual consent is
required are treated as described in either clause (A) or (B) below, to either
(A) replace each such non-consenting Lender or Lenders with one or more
Replacement Lenders pursuant to Section 1.13 so long as at the time of
such replacement, each such Replacement Lender consents to the proposed change,
waiver, discharge or termination or (B) repay outstanding Second-Lien Loans of
such Lender in accordance with Section 4.01(v), provided that,
unless the Second-Lien Loans which are repaid pursuant to preceding clause (B)
are immediately replaced in full at such time through the addition of new
Lenders or the increase of the outstanding Loans of existing Lenders (who in
each case must specifically consent thereto), then in the case of any action
pursuant to preceding clause (B), the Required Lenders (determined after giving
effect to the proposed action) shall specifically consent thereto, provided
further, that the Borrower shall not have the right to replace a Lender or
repay its Second-Lien Loans solely as a result of the exercise of such Lender’s
rights (and the withholding of any required consent by such Lender) pursuant to
the second proviso to Section 13.01(a).


 


13.02.  Notices and Other Communications;
Facsimile Copies.  (a)  General. Unless otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be in
writing (including by facsimile transmission). 
All such written notices


 


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shall be mailed certified
or registered mail, faxed or delivered to the applicable address, facsimile
number or (subject to subsection (c) below) electronic mail address, and
all notices and other communications expressly permitted hereunder to be given
by telephone shall be made to the applicable telephone number, as follows:


 


(i)                                     if
to the Borrower, any Agent or the Collateral Agent, to the address, facsimile
number, electronic mail address or telephone number specified for such Person
on Schedule II or to such other address, facsimile number, electronic mail
address or telephone number as shall be designated by such party in a notice to
the other parties; and


 


(ii)                                  if
to any other Lender, to the address, facsimile number, electronic mail address
or telephone number specified in its Administrative Questionnaire or to such
other address, facsimile number, electronic mail address or telephone number as
shall be designated by such party in a notice to the Borrower and the
Administrative Agent.


 


Notices sent by hand or
overnight courier service, or mailed by certified or registered mail, shall be
deemed to have been given when received; notices sent by facsimile shall be
deemed to have been given when sent (except that, if not given during normal
business hours for the recipient, shall be deemed to have been given at the
opening of business on the next business day for the recipient).  Notices delivered through electronic
communications to the extent provided in subsection (b) below, shall be
effective as provided in such subsection (b).


 


(b)                                 Electronic
Communications.  Notices and other
communications to the Lenders hereunder may be delivered or furnished by electronic
communication (including e-mail and Internet or intranet websites) pursuant to
procedures approved by the Administrative Agent, provided that the
foregoing shall not apply to notices to any Lender pursuant to Section 1,
2 or 3 if such Lender has notified the Administrative Agent that it is
incapable of receiving notices under such Sections by electronic
communication.  The Administrative Agent
or the Borrower may, in its discretion, agree to accept notices and other
communications to it hereunder by electronic communications pursuant to
procedures approved by it, provided that approval of such procedures may
be limited to particular notices or communications.


 


(c)                                  Effectiveness
of Facsimile Documents and Signatures. 
Credit Documents may be transmitted and/or signed by facsimile.  The effectiveness of any such documents and
signatures shall, subject to applicable law, have the same force and effect as
manually-signed originals and shall be binding on all Credit Parties, the
Agents, the Collateral Agent, and the Lenders. 
The Administrative Agent may also require that any such documents and
signatures be confirmed by a manually-signed original thereof; provided,
however, that the failure to request or deliver the same shall not limit
the effectiveness of any facsimile document or signature.


 


(d)                                 Reliance
by Administrative Agent and Lenders.  The
Administrative Agent, the Collateral Agent and the Lenders shall each be
entitled to rely and act upon any notices (including telephonic Notices of
Borrowing) believed by it in good faith to have been given by or on behalf of
the Borrower even if (i) such notices were not made in a manner specified
herein, were incomplete or were not preceded or followed by any other form of
notice specified herein, or (ii) the terms thereof, as understood by the
recipient, varied from any


 


118

















 


confirmation
thereof.  The Borrower shall indemnify
each Agent-Related Person and each Lender from all losses, costs, expenses and
liabilities resulting from the reliance by such Person on each notice believed
by the respective such Person in good faith to have been given by or on behalf
of the Borrower or any other Credit Party. 
All telephonic notices to and other communications with the Administrative
Agent may be recorded by the Administrative Agent, and each of the parties
hereto hereby consents to such recording.


 


13.03.  No Waiver; Cumulative Remedies.  No failure by any Lender, any
Agent or the Collateral Agent to exercise, and no delay by any such Person in
exercising, any right, remedy, power or privilege hereunder shall operate as a
waiver thereof; nor shall any single or partial exercise of any right, remedy,
power or privilege hereunder preclude any other or further exercise thereof or
the exercise of any other right, remedy, power or privilege.  The rights, remedies, powers and privileges
herein provided are cumulative and not exclusive of any rights, remedies,
powers and privileges provided by law.


 


13.04.  Attorney Costs, Expenses and Taxes.  The Borrower agrees (a) to pay or
reimburse each Agent and the Collateral Agent for all costs and expenses
incurred in connection with the development, preparation, negotiation and
execution of this Agreement and the other Credit Documents and any amendment,
waiver, consent or other modification of the provisions hereof and thereof
(whether or not the transactions contemplated hereby or thereby are
consummated), and the consummation and administration of the transactions
contemplated hereby and thereby, including all Attorney Costs, provided that
the Borrower shall only be responsible for the fees and expenses of a single
law firm acting as counsel to the Agents in each jurisdiction the laws of which
govern any of the Credit Documents or in which Holdings or any of its
Subsidiaries is organized or owns property or assets and (b) to pay or
reimburse each Agent and each Lender for all costs and expenses incurred in
connection with the enforcement, attempted enforcement, or preservation of any
rights or remedies under this Agreement or the other Credit Documents
(including all such costs and expenses incurred during any “workout” or
restructuring in respect of the Obligations and during any legal proceeding,
including any proceeding under any Debtor Relief Law), including all Attorney
Costs.  The foregoing costs and expenses
shall include all search, filing, recording, title insurance and appraisal
charges and fees and taxes related thereto, and other out-of-pocket expenses
incurred by any Agent or the Collateral Agent and the cost of independent
public accountants and other outside experts retained by any Agent, the
Collateral Agent or any Lender.  All
amounts due under this Section 13.04 shall be payable within ten Business
Days after demand therefor.  The
agreements in this Section shall survive the termination of the total
Commitments and repayment of all other Obligations.


 


13.05.  Indemnification by the Borrower.  Whether or not the transactions
contemplated hereby are consummated, the Borrower shall indemnify and hold
harmless each Agent-Related Person, each Lender and their respective
Affiliates, directors, officers, employees, counsel, agents and
attorneys-in-fact (collectively the “Indemnitees”) from and against any
and all liabilities, obligations, losses, damages, penalties, claims, demands,
actions, judgments, suits, costs, expenses and disbursements (including
Attorney Costs) of any kind or nature whatsoever which may at any time be
imposed on, incurred by or asserted against any such Indemnitee in any way
relating to or arising out of or in connection with (a) the execution,
delivery, enforcement, performance or administration of any Credit Document or
any other agreement,


 


119

















 


letter or instrument
delivered in connection with the transactions contemplated thereby or the
consummation of the transactions contemplated thereby, (b) any Commitment or
Loan or the use or proposed use of the proceeds therefrom, or (c) any actual or
alleged presence or release of Hazardous Materials on or from any property
currently or formerly owned or operated by Holdings or any of its Subsidiaries
or any Environmental Claim related in any way to Holdings or any of its
Subsidiaries, or (d) any actual or prospective claim, litigation, investigation
or proceeding relating to any of the foregoing, whether based on contract, tort
or any other theory (including any investigation of, preparation for, or
defense of any pending or threatened claim, investigation, litigation or
proceeding) and regardless of whether any Indemnitee is a party thereto (all
the foregoing, collectively, the “Indemnified Liabilities”), in all
cases, whether or not caused by or arising, in whole or in part, out of the
negligence of the Indemnitee; provided that such indemnity shall not, as to any
Indemnitee, be available to the extent that such liabilities, obligations,
losses, damages, penalties, claims, demands, actions, judgments, suits, costs,
expenses or disbursements are determined by a court of competent jurisdiction
by final and nonappealable judgment to have resulted from the gross negligence
or willful misconduct of such Indemnitee. 
No Indemnitee shall be liable for any damages arising from the use by others
of any information or other materials obtained through IntraLinks or other
similar information transmission systems in connection with this Agreement, nor
shall any Indemnitee have any liability for any indirect or consequential
damages relating to this Agreement or any other Credit Document or arising out
of its activities in connection herewith or therewith (whether before or after
the Effective Date).  All amounts due
under this Section 13.05 shall be payable within ten Business Days after
demand therefor.  The agreements in this
Section shall survive the resignation of the Administrative Agent, the
replacement of any Lender, the termination of the total Commitment and the
repayment, satisfaction or discharge of all the other Obligations.


 


13.06.  Payments Set Aside.  To the extent that any payment by
or on behalf of the Borrower is made to any Agent, the Collateral Agent or any
Lender, or any Agent, the Collateral Agent or any Lender exercises its right of
set-off, and such payment or the proceeds of such set-off or any part thereof
is subsequently invalidated, declared to be fraudulent or preferential, set
aside or required (including pursuant to any settlement entered into by such
Agent, the Collateral Agent or such Lender in its discretion) to be repaid to a
trustee, receiver or any other party, in connection with any proceeding under
any Debtor Relief Law or otherwise, then (a) to the extent of such recovery,
the obligation or part thereof originally intended to be satisfied shall be
revived and continued in full force and effect as if such payment had not been
made or such set-off had not occurred, and (b) each Lender severally agrees to
pay to the Administrative Agent upon demand its applicable share of any amount
so recovered from or repaid by the Administrative Agent, plus interest thereon
from the date of such demand to the date such payment is made at a rate per
annum equal to the applicable Federal Funds Rate from time to time in effect,
in the applicable currency of such recovery or payment.


 


13.07.  Successors and Assigns.  (a) The provisions of this
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns permitted hereby, except that no
Credit Agreement Party may assign or otherwise transfer any of its rights or obligations
hereunder without the prior written consent of each Lender and no Lender may
assign or otherwise transfer any of its rights or obligations hereunder except
(i) to an Eligible Assignee in accordance with the provisions of
subsection (b) of this Section, (ii) by way of participation in accordance
with the provisions of subsection (d) of this 


 


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Section, or (iii) by way
of pledge or assignment of a security interest subject to the restrictions of subsection (f)
of this Section (and any other attempted assignment or transfer by any
party hereto shall be null and void). 
Nothing in this Agreement, expressed or implied, shall be construed to
confer upon any Person (other than the parties hereto, their respective
successors and assigns permitted hereby, Participants to the extent provided in
subsection (d) of this Section and, to the extent expressly
contemplated hereby, the Indemnitees) any legal or equitable right, remedy or
claim under or by reason of this Agreement.


 


(b)                                 Any
Lender may at any time assign to one or more Eligible Assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Second-Lien Loans at the time owing to it); provided that
(i) except in the case of an assignment of the entire remaining amount of the
assigning Lender’s Second-Lien Loans at the time owing to it or in the case of
an assignment to a Lender or an Affiliate of a Lender or an Approved Fund (as
defined in subsection (g) of this Section) with respect to a Lender, the
aggregate amount of the Second-Lien Loans subject to each such assignment,
determined as of the date the Assignment and Assumption Agreement with respect
to such assignment is delivered to the Administrative Agent or, if “Trade Date”
is specified in the Assignment and Assumption Agreement, as of the Trade Date,
shall not be less than $1,000,000, unless each of the Administrative Agent and,
so long as no Event of Default has occurred and is continuing, the Borrower
otherwise consents (each such consent not to be unreasonably withheld or
delayed); (ii) each partial assignment shall be made as an assignment of a
proportionate part of all the assigning Lender’s rights and obligations under
this Agreement with respect to the Second-Lien Loans assigned; and (iii) the
parties to each assignment shall execute and deliver to the Administrative
Agent an Assignment and Assumption Agreement, together with a processing and
recordation fee of $3,500.  Subject to
acceptance and recording thereof by the Administrative Agent pursuant to
subsection (c) of this Section, from and after the effective date
specified in each Assignment and Assumption Agreement, the Eligible Assignee
thereunder shall be a party to this Agreement and, to the extent of the
interest assigned by such Assignment and Assumption Agreement, have the rights
and obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Assumption Agreement, be released from its obligations under this Agreement
(and, in the case of an Assignment and Assumption Agreement covering all of the
assigning Lender’s rights and obligations under this Agreement, such Lender
shall cease to be a party hereto but shall continue to be entitled to the
benefits of Sections 1.10, 1.11, 4.04, 13.04 and 13.05 with respect to facts
and circumstances occurring prior to the effective date of such
assignment).  Upon request, the Borrower
(at its expense) shall execute and deliver a Second-Lien Loan Note to the
assignee Lender.  Any assignment or
transfer by a Lender of rights or obligations under this Agreement that does
not comply with this subsection shall be treated for purposes of this
Agreement as a sale by such Lender of a participation in such rights and
obligations in accordance with subsection (d) of this Section.


 


(c)                                  The
Administrative Agent, acting solely for this purpose as an agent of the
Borrower, shall maintain at the Notice Office a copy of each Assignment and
Assumption Agreement delivered to it and a register for the recordation of the
names and addresses of the Lenders, and principal amounts of the Second-Lien
Loans owing to, each Lender pursuant to the terms hereof from time to time (the
“Register”).  The entries in the
Register shall be conclusive, and the Borrower, the Administrative Agent, the
Collateral Agent and the Lenders may treat each Person whose name is recorded
in the Register pursuant to the terms hereof as a Lender


 


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hereunder for all
purposes of this Agreement, notwithstanding notice to the contrary.  The Register shall be available for
inspection by the Borrower at any reasonable time and from time to time upon
reasonable prior notice.  In addition,
at any time that a request for a consent for a material or other substantive
change to the Credit Documents is pending, any Lender wishing to consult with
other Lenders in connection therewith may request and receive from the
Administrative Agent a copy of the Register.


 


(d)                                 Any
Lender may at any time, without the consent of, or notice to, the Borrower or
the Administrative Agent, sell participations to any Person (other than a
natural person or Holdings’ Affiliates or Subsidiaries) (each, a “Participant”)
in all or a portion of such Lender’s rights and/or obligations under this
Agreement (including all or a portion of Second-Lien Loans owing to it); provided
that (i) such Lender’s obligations under this Agreement shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations and (iii) the Borrower, the
Administrative Agent, the Collateral Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender’s
rights and obligations under this Agreement. 
Any agreement or instrument pursuant to which a Lender sells such a
participation shall provide that such Lender shall retain the sole right to
enforce this Agreement and to approve any amendment, modification or waiver of
any  provision of this Agreement, except
to the extent such amendment, modification or waiver would (i) extend the final
stated maturity of any Second-Lien Loan or Second-Lien Loan Note in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant’s
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment or of a mandatory repayment of Second-Lien Loans shall not
constitute a change in the terms of such participation, that an increase in any
Commitment or Loan shall be permitted without the consent of any participant if
the participant’s participation is not increased as a result thereof and that any
amendment or modification to the financial definitions in this Agreement shall
not constitute a reduction in any rate of interest or fees for purposes of this
clause (i)), (ii) consent to the assignment or transfer by Holdings or the
Borrower of any of its rights and obligations under this Agreement or (iii)
subject to the provisions of the Intercreditor Agreement, release all or
substantially all of the Collateral under all of the Security Documents (except
as expressly provided in the Security Documents) supporting the Second-Lien
Loans hereunder in which such participant is participating.  Subject to subsection (e) of this
Section, the Borrower agrees that each Participant shall be entitled to the
benefits of Sections 1.10, 1.11 and 4.04  to the same extent as if it were a Lender
and had acquired its interest by assignment pursuant to subsection (b) of
this Section.  To the extent permitted
by law, each Participant also shall be entitled to the benefits of Section 13.09  as
though it were a Lender, provided such Participant agrees to be subject
to Section 13.19(b) as though it were a Lender.


 


(e)                                  A
Participant shall not be entitled to receive any greater payment under
Section 1.10, 1.11 or 4.04  than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with the Borrower’s prior written consent. 
A Participant that would be a non-U.S. Lender for purposes of
Section 4.04 if it were a Lender shall not be entitled to the


 


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benefits of
Section 4.04 unless the Borrower is notified of the participation sold to
such Participant and such Participant agrees, for the benefit of the Borrower,
to comply with Section 4.04 as though it were a Lender.


 


(f)                                    Any
Lender may at any time pledge or assign a security interest in all or any
portion of its rights under this Agreement (including under its Second-Lien
Loan Note(s), if any) to secure obligations of such Lender, including any
pledge or assignment to secure obligations to a Federal Reserve Bank; provided
that no such pledge or assignment shall release such Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such
Lender as a party hereto.


 


(g)                                 As
used herein, the following terms have the following meanings:


 


“Eligible Assignee”
means (a) a Lender; (b) an Affiliate of a Lender; (c) an Approved Fund; and (d)
any other Person (other than a natural person) approved by (i) the
Administrative Agent and (ii) unless an Event of Default has occurred and is
continuing, the Borrower (each such approval not to be unreasonably withheld or
delayed); provided that notwithstanding the foregoing, “Eligible
Assignee” shall not include the Borrower or any of Holdings’ Affiliates or
Subsidiaries.


 


“Fund” means any
Person (other than a natural person) that is (or will be) engaged in making,
purchasing, holding or otherwise investing in commercial loans and similar
extensions of credit in the ordinary course of its business.


 


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


 


(h)                                 At
the time of each assignment pursuant to Section 13.07(b) to a Person which
is not already a Lender hereunder and which is not a United States person (as
such term is defined in Section 7701(a)(30) of the Code) for Federal
income tax purposes, the respective assignee Lender shall provide to the
Borrower and the Administrative Agent the appropriate Internal Revenue Service
Forms (and, if applicable a Section 4.04(b)(ii) Certificate) described in
Section 4.04(b).  To the extent
that an assignment of all or any portion of a Lender’s Commitment and
outstanding Obligations pursuant to Section 1.13 or Section 13.07(b)
would, due to circumstances existing at the time of such assignment, result in
increased costs under Section 1.10, 1.11 or 4.04 from those being charged
by the respective assigning Lender prior to such assignment, then the Borrower
shall not be obligated to pay such increased costs (although the Borrower shall
be obligated to pay any other increased costs of the type described above
resulting from changes after the date of the respective assignment).


 


13.08.  Confidentiality.  Each of the Administrative Agent and the
Lenders agrees to maintain the confidentiality of the Information (as defined
below), except that Information may be disclosed (a) to its Affiliates and to
its and its Affiliates’ respective partners, directors, officers, employees,
agents, advisors and representatives (it being understood that the Persons to
whom such disclosure is made will be informed of the confidential nature of
such Information and instructed to keep such Information confidential), (b) to
the extent requested by any


 


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regulatory authority
purporting to have jurisdiction over it (including any self-regulatory
authority, such as the National Association of Insurance Commissioners), (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party hereto, (e) in connection with
the exercise of any remedies hereunder or under any other Credit Document or
any action or proceeding relating to this Agreement or any other Credit
Document or the enforcement of rights hereunder or thereunder, (f) subject to
an agreement containing provisions substantially the same as those of this
Section, to (i) any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement or
(ii) any actual or prospective counterparty (or its advisors) to any swap or
derivative transaction relating to the Borrower and its obligations, (g) with
the consent of the Borrower, (h) to the extent such Information (x) becomes
publicly available other than as a result of a breach of this Section or
(y) becomes available to the Administrative Agent or any Lender on a
nonconfidential basis from a source other than the Borrower or (i) to any
direct or indirect contractual counterparty in swap agreements or such
contractual counterparty’s professional advisor (so long as such contractual
counterparty or professional advisor to such contractual counterparty agrees to
be bound by the provisions of this Section 13.08).  For purposes of this Section, “Information”
means all information received from Holdings or any of its Subsidiaries or any
of their respective businesses, other than any such information that is
available to the Administrative Agent or any Lender on a nonconfidential basis
prior to disclosure by Holdings or any of its Subsidiaries; provided that, in
the case of information received from Holdings or any Subsidiary after the date
hereof, such information is clearly identified at the time of delivery as
confidential.  Any Person required to
maintain the confidentiality of Information as provided in this
Section shall be considered to have complied with its obligation to do so
if such Person has exercised the same degree of care to maintain the
confidentiality of such Information as such Person would accord to its own
confidential information.


 


Notwithstanding anything
herein to the contrary, “Information” shall not include, and the Credit
Parties, each Agent, each Lender and the respective Affiliates of each of the
foregoing (and the respective partners, directors, officers, employees, agents,
advisors and other representatives of each of the foregoing and their
Affiliates) may disclose to any and all Persons, without limitation of any kind
(a) any information with respect to the U.S. federal and state income tax
treatment of the transactions contemplated hereby and any facts that may be
relevant to understanding such tax treatment, which facts shall not include for
this purpose the names of the parties or any other Person named herein, or
information that would permit identification of the parties or such other
Persons, or any pricing terms or other nonpublic business or financial
information that is unrelated to such tax treatment or facts, and (b) all
materials of any kind (including opinions or other tax analyses) relating to
such tax treatment or facts that are provided to any of the Persons referred to
above.


 


13.09.  Set-off. 
In addition to any rights and remedies of the Lenders
provided by law, upon the occurrence and during the continuance of any Event of
Default, subject to the provisions of the Intercreditor Agreement, each Lender
(acting in any capacity hereunder) is authorized at any time and from time to
time, without prior notice to the Borrower or any other Credit Party, any such
notice being waived by the Borrower (on its own behalf and on behalf of each
Credit Party) to the fullest extent permitted by law, to set off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held by, and other


 


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indebtedness at any time
owing by, such Lender to or for the credit or the account of the respective
Credit Parties against any and all Obligations owing to such Lender hereunder
or under any other Credit Document, now or hereafter existing, irrespective of
whether or not the Administrative Agent or such Lender shall have made demand
under this Agreement or any other Credit Document and although such Obligations
may be contingent or unmatured or denominated in a currency different from that
of the applicable deposit or indebtedness. 
Each Lender agrees promptly to notify the Borrower and the
Administrative Agent after any such set-off and application made by such
Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application.


 


13.10.  Interest Rate Limitation.  Notwithstanding anything to the
contrary contained in any Credit Document, the interest paid or agreed to be
paid under the Credit Documents shall not exceed the maximum rate of
non-usurious interest permitted by applicable Law (the “Maximum Rate”).  If the Administrative Agent or any Lender
shall receive interest in an amount that exceeds the Maximum Rate, the excess
interest shall be applied to the principal of the Second-Lien Loans or, if it
exceeds such unpaid principal, refunded to the Borrower.  In determining whether the interest
contracted for, charged, or received by the Administrative Agent or a Lender
exceeds the Maximum Rate, such Person may, to the extent permitted by
applicable Law, (a) characterize any payment that is not principal as an
expense, fee, or premium rather than interest, (b) exclude voluntary
prepayments and the effects thereof, and (c) amortize, prorate, allocate, and
spread in equal or unequal parts the total amount of interest throughout the
contemplated term of the Obligations hereunder.


 


13.11.  Counterparts. 
This Agreement may be executed in one or more counterparts,
each of which shall be deemed an original, but all of which together shall
constitute one and the same instrument.


 


13.12.  Integration. 
This Agreement, together with the other Credit Documents,
comprises the complete and integrated agreement of the parties on the subject
matter hereof and thereof and supersedes all prior agreements, written or oral,
on such subject matter.  In the event of
any conflict between the provisions of this Agreement and those of any other
Credit Document, the provisions of this Agreement shall control; provided that
the inclusion of supplemental rights or remedies in favor of the Administrative
Agent or the Lenders in any other Credit Document shall not be deemed a
conflict with this Agreement.  Each
Credit Document was drafted with the joint participation of the respective
parties thereto and shall be construed neither against nor in favor of any
party, but rather in accordance with the fair meaning thereof.


 


13.13.  Survival. 
(a)  All
representations and warranties made hereunder and in any other Credit Document
or other document delivered pursuant hereto or thereto or in connection
herewith or therewith shall survive the execution and delivery hereof and
thereof.  Such representations and
warranties have been or will be relied upon by the Administrative Agent and
each Lender, regardless of any investigation made by the Administrative Agent
or any Lender or on their behalf and notwithstanding that the Administrative
Agent or any Lender may have had notice or knowledge of any Default or Event of
Default at the time of any Credit Event, and shall continue in full force and
effect as long as any Loan or any other Obligation hereunder shall remain
unpaid or unsatisfied.


 


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(b)                                 All
indemnities set forth herein including, without limitation, in Sections 1.10,
1.11, 4.04, 12.07, 13.04 and 13.05, shall, subject to the provisions of
Section 13.18 (to the extent applicable), survive the execution and
delivery of this Agreement and the making and repayment of the Second-Lien
Loans.


 


13.14.  Severability. 
If any provision of this Agreement or the other Credit
Documents is held to be illegal, invalid or unenforceable, (a) the legality,
validity and enforceability of the remaining provisions of this Agreement and
the other Credit Documents shall not be affected or impaired thereby and (b)
the parties shall endeavor in good faith negotiations to replace the illegal,
invalid or unenforceable provisions with valid provisions the economic effect
of which comes as close as possible to that of the illegal, invalid or
unenforceable provisions.  The
invalidity of a provision in a particular jurisdiction shall not invalidate or
render unenforceable such provision in any other jurisdiction.


 


13.15.  Governing Law. 
(a)    THIS AGREEMENT
SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF THE STATE OF
NEW YORK APPLICABLE TO AGREEMENTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH
STATE;
PROVIDED THAT THE ADMINISTRATIVE AGENT AND EACH LENDER SHALL RETAIN ALL RIGHTS
ARISING UNDER FEDERAL LAW.


 


(b)                                 ANY
LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK SITTING IN THE
BOROUGH OF MANHATTAN, CITY OF NEW YORK, OR OF THE UNITED STATES FOR THE
SOUTHERN DISTRICT OF SUCH STATE, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, THE BORROWER, THE ADMINISTRATIVE AGENT AND LENDERS CONSENTS, FOR
ITSELF AND IN RESPECT OF ITS PROPERTY, TO THE NON-EXCLUSIVE JURISDICTION OF
THOSE COURTS.  THE BORROWER, THE
ADMINISTRATIVE AGENT AND EACH LENDER IRREVOCABLY WAIVES ANY OBJECTION,
INCLUDING ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON
CONVENIENS, WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY ACTION OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF ANY CREDIT DOCUMENT
OR OTHER DOCUMENT RELATED THERETO.  THE
BORROWER, THE ADMINISTRATIVE AGENT AND EACH LENDER WAIVES PERSONAL SERVICE OF
ANY SUMMONS, COMPLAINT OR OTHER PROCESS, WHICH MAY BE MADE BY ANY OTHER MEANS
PERMITTED BY THE LAW OF SUCH STATE.


 


13.16.  Waiver of Right to Trial by Jury.  EACH PARTY TO THIS AGREEMENT HEREBY EXPRESSLY
WAIVES ANY RIGHT TO TRIAL BY JURY OF ANY CLAIM, DEMAND, ACTION OR CAUSE OF
ACTION ARISING UNDER ANY LOAN DOCUMENT OR IN ANY WAY CONNECTED WITH OR RELATED
OR INCIDENTAL TO THE DEALINGS OF THE PARTIES HERETO OR ANY OF THEM WITH RESPECT
TO ANY CREDIT DOCUMENT, OR THE TRANSACTIONS RELATED THERETO, IN EACH CASE
WHETHER NOW EXISTING OR HEREAFTER ARISING, AND WHETHER FOUNDED IN CONTRACT OR
TORT OR OTHERWISE; AND EACH PARTY HEREBY AGREES AND CONSENTS THAT ANY SUCH
CLAIM, DEMAND, ACTION OR CAUSE


 


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OF ACTION SHALL BE
DECIDED BY COURT TRIAL WITHOUT A JURY, AND THAT ANY PARTY TO THIS AGREEMENT MAY
FILE AN ORIGINAL COUNTERPART OR A COPY OF THIS SECTION WITH ANY COURT AS
WRITTEN EVIDENCE OF THE CONSENT OF THE SIGNATORIES HERETO TO THE WAIVER OF
THEIR RIGHT TO TRIAL BY JURY.


 


13.17.  USA PATRIOT Act Notice.  Each Lender and the
Administrative Agent (for itself and not on behalf of any Lender) hereby
notifies each Credit Agreement Party that pursuant to the requirements of the
USA Patriot Act (Title III of Pub. L. 107-56 (signed into law October 26,
2001)) (the “Act”), it is required to obtain, verify and record
information that identifies such Credit Agreement Party, which information
includes the name and address of such Credit Agreement Party and other
information that will allow such Lender or the Administrative Agent, as
applicable, to identify such Credit Agreement Party in accordance with the Act.


 


13.18.  Limitation on Additional Amounts; Cash
Collateral, etc.  (a)  Notwithstanding anything to the contrary
contained in Section 1.10, 1.11 or 4.04 of this Agreement, unless a Lender
gives notice to the Borrower that it is obligated to pay an amount under such
Section within six months after the later of (x) the date the Lender
incurs the respective increased costs, Taxes, loss, expense or liability,
reduction in amounts received or receivable or reduction in return on capital
or (y) the date such Lender has actual knowledge of its incurrence of the
respective increased costs, Taxes, loss, expense or liability, reductions in
amounts received or receivable or reduction in return on capital, then such
Lender shall only be entitled to be compensated for such amount pursuant to
said Section 1.10, 1.11 or 4.04, as the case may be, to the extent of the
costs, Taxes, loss, expense or liability, reduction in amounts received or
receivable or reduction in return on capital that are incurred or suffered on
or after the date which occurs six months prior to such Lender giving notice to
the Borrower that it is obligated to pay the respective amounts pursuant to
said Section 1.10, 1.11 or 4.04, as the case may be.  This Section 13.18 shall have no
applicability to any Section of this Agreement other than said Sections
1.10, 1.11 and 4.04.


 


(b)                                 So
long as no Default or Event of Default shall exist and be continuing, at any
time that the Borrower has on deposit with the Collateral Agent any cash
collateral securing any of the Obligations, the Borrower shall have the right
to direct the Collateral Agent to invest such cash collateral in Cash
Equivalent reasonably satisfactory to the Administrative Agent until such time
as such Cash Collateral is applied to the repayment of Obligations or otherwise
disbursed in accordance with the provisions of this Agreement and the other
Credit Documents.


 


13.19.  Payments Pro Rata; Sharing of Payments.  (a) 
The Administrative Agent agrees that promptly after its receipt of each
payment from or on behalf of any Credit Party in respect of any Obligations of
such Credit Party, it shall, except as otherwise provided in this Agreement,
distribute such payment to the Lenders (other than any Lender that has
consented in writing to waive its pro rata share of such payment) pro rata
based upon their respective shares, if any, of the Obligations with respect to
which such payment was received.


 


(b)                                 If,
other than as expressly provided elsewhere herein, any Lender shall obtain on
account of the Second-Lien Loans made by it, any payment (whether voluntary,


 


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involuntary, through the
exercise of any right of set-off, or otherwise) in excess of its ratable share
(or other share contemplated hereunder) thereof, such Lender shall immediately
(a) notify the Administrative Agent of such fact, and (b) purchase from the
other Lenders such participations in the Second-Lien Loans made by them as
shall be necessary to cause such purchasing Lender to share the excess payment
in respect of such Second-Lien Loans pro  rata with each of them; provided,
however, that if all or any portion of such excess payment is thereafter
recovered from the purchasing Lender under any of the circumstances described
in Section 13.06 (including pursuant to any settlement entered into by the
purchasing Lender in its discretion), such purchase shall to that extent be
rescinded and each other Lender shall repay to the purchasing Lender the
purchase price paid therefor, together with an amount equal to such paying
Lender’s ratable share (according to the proportion of (i) the amount of such
paying Lender’s required repayment to (ii) the total amount so recovered from
the purchasing Lender) of any interest or other amount paid or payable by the
purchasing Lender in respect of the total amount so recovered, without further
interest thereon.  The Borrower agrees
that any Lender so purchasing a participation from another Lender may, to the
fullest extent permitted by law, exercise all its rights of payment (including
the right of set-off, but subject to Section 13.09) with respect to such
participation as fully as if such Lender were the direct creditor of the
Borrower in the amount of such participation. 
The Administrative Agent will keep records (which shall be conclusive
and binding in the absence of manifest error) of participations purchased under
this Section and will in each case notify the Lenders following any such
purchases or repayments.  Each Lender
that purchases a participation pursuant to this Section shall from and
after such purchase have the right to give all notices, requests, demands,
directions and other communications under this Agreement with respect to the
portion of the Obligations purchased to the same extent as though the
purchasing Lender were the original owner of the Obligations purchased.


 


(c)                                  Notwithstanding
anything to the contrary contained herein, the provisions of the preceding
Sections 13.19(a) and (b) shall be subject to the express provisions of this
Agreement which require, or permit, differing payments to be made to Non-Defaulting
Lenders as opposed to Defaulting Lenders.


 


13.20.  Judgment Currency.  If, for the purposes of obtaining judgment
in any court, it is necessary to convert a sum due hereunder or any other
Credit Document in one currency into another currency, the rate of exchange
used shall be that at which in accordance with normal banking procedures the
Administrative Agent could purchase the first currency with such other currency
on the Business Day preceding that on which final judgment is given.  The obligation of the Borrower in respect of
any such sum due from it to the Administrative Agent or the Lenders hereunder
or under the other Credit Documents shall, notwithstanding any judgment in a
currency (the “Judgment Currency”) other than that in which such sum is
denominated in accordance with the applicable provisions of this Agreement (the
“Agreement Currency”), be discharged only to the extent that on the
Business Day following receipt by the Administrative Agent of any sum adjudged
to be so due in the Judgment Currency, the Administrative Agent may in
accordance with normal banking procedures purchase the Agreement Currency with
the Judgment Currency.  If the amount of
the Agreement Currency so purchased is less than the sum originally due to the
Administrative Agent from the Borrower in the Agreement Currency, the Borrower
agrees, as a separate obligation and notwithstanding any such judgment, to
indemnify the Administrative Agent or the Person to whom such obligation was
owing against such loss.  If


 


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the amount of the
Agreement Currency so purchased is greater than the sum originally due to the
Administrative Agent in such currency, the Administrative Agent agrees to
return the amount of any excess to the Borrower (or to any other Person who may
be entitled thereto under applicable law).


 


13.21.  Calculations; Computations.  (a) 
The financial statements to be furnished to the Lenders pursuant hereto
shall be made and prepared in accordance with GAAP consistently applied
throughout the periods involved (except as set forth in the notes thereto or as
otherwise disclosed in writing by the Borrower to the Lenders); provided that
except as otherwise specifically provided herein, all computations determining
the Applicable Margins and compliance with Sections 4.02, 8.14 and 9, including
in each case definitions used therein, shall, in each case, utilize accounting
principles and policies in effect at the time of the preparation of, and in
conformity with those used to prepare, the March 31, 2003 financial
statements of Holdings delivered to the Lenders pursuant to
Section 7.10(b); provided further, that (i) to the extent expressly
required pursuant to the provisions of this Agreement, certain calculations
shall be made on a Pro  Forma Basis, (ii) for all purposes of this
Agreement, all Receivables Indebtedness shall be treated as Indebtedness of
Holdings and its Subsidiaries hereunder, regardless of any differing treatment
pursuant to generally accepted accounting principles and (iii) for purposes of
determining compliance with any incurrence or expenditure tests set forth in
Sections 8 and/or 9, any amounts so incurred or expended (to the extent
incurred or expended in a currency other than U.S. Dollars) shall be converted
into U.S. Dollars on the basis of the exchange rates (as shown on Reuters ECB
page 37 or, if same does not provide such exchange rates, on such other basis
as is satisfactory to the Administrative Agent) as in effect on the date of
such incurrence or expenditure under any provision of any such
Section that has an aggregate U.S. Dollar limitation therein (and to the
extent the respective incurrence or expenditure test regulates the aggregate
amount outstanding at any time and is expressed in terms of U.S. Dollars, all
outstanding amounts originally incurred or spent in currencies other than U.S.
Dollars shall be converted into U.S. Dollars on the basis of the exchange rates
(as shown on Reuters ECB page 37 or, if same does not provide such exchange rates,
on such other basis as is satisfactory to the Administrative Agent) as in
effect on the date of any new incurrence or expenditures made under any
provision of any such Section that regulates the U.S. Dollar amount
outstanding at any time).


 


(b)                                 All
computations of interest (except as provided in the immediately succeeding
sentence) hereunder shall be made on the actual number of days elapsed over a
year of 360 days.  All computations of
Base Rate interest hereunder shall be made on the actual number of days elapsed
over a year of 365/366 days.


 


13.22.  Effectiveness.  This Agreement shall become effective on the
date (the “Effective Date”) on which Holdings, the Borrower, each Agent
and each of the Lenders shall have signed a counterpart hereof (whether the
same or different counterparts) and shall have delivered the same (including by
way of facsimile transmission) to the Administrative Agent at the Notice Office
or at the office of the Administrative Agents’ counsel.  The Administrative Agent will give Holdings,
the Borrower and each Lender prompt written notice of the occurrence of the
Effective Date.


 


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13.23.  Headings Descriptive.  The headings of the several sections and
subsections of this Agreement are inserted for convenience only and shall not
in any way affect the meaning or construction of any provision of this
Agreement.


 


13.24.  Domicile of Second-Lien Loans and
Commitments.  Each Lender may
transfer and carry its Second-Lien Loans and/or Commitments at, to or for the
account of any branch office, subsidiary or affiliate of such Lender; provided
that the Borrower shall not be responsible for costs arising under
Section 1.10, 1.11 or 4.04 resulting from any such transfer (other than a
transfer pursuant to Section 1.12) to the extent such costs would not
otherwise be applicable to such Lender in the absence of such transfer.


 


13.25.  Special Provisions Regarding Pledges of
Equity Interests in, and Promissory Notes Owed by, Foreign Persons.  The parties hereto acknowledge and agree
that the provisions of the various Security Documents executed and delivered by
the Credit Parties require that, among other things, all promissory notes
executed by, and Equity Interests in, various Persons owned by the respective
Credit Party be pledged, and delivered for pledge, pursuant to the Security
Documents.  The parties hereto further
acknowledge and agree that each Credit Party shall be required to take all
actions under the laws of the jurisdiction in which such Credit Party is
organized to create and perfect all security interests granted pursuant to the
various Security Documents and to take all actions under the laws of the United
States (or any state thereof) to perfect the security interests in the Equity Interests
of, and promissory notes issued by, any Person organized under the laws of the
United States or any state thereof (in each case, to the extent said Equity
Interests or promissory notes are owned by any Credit Party).  Except as provided in the immediately
preceding sentence, to the extent any Security Document requires or provides
for the pledge of promissory notes issued by, or Equity Interests in, any
Person organized under the laws of a jurisdiction other than the United States
or any state thereof, it is acknowledged that, as of the Initial Borrowing
Date, no actions have been required to be taken to perfect, under local law of
the jurisdiction of the Person who issued the respective promissory notes or
whose Equity Interests are pledged, under the Security Documents.  Holdings and the Borrower hereby agree that,
following any request by the Administrative Agent or Required Lenders to do so,
the Borrower shall, and shall cause its Subsidiaries to, take such actions
(including, without limitation, the execution of Additional Security Documents,
the making of any filings and the delivery of appropriate legal opinions) under
the local law of any jurisdiction with respect to which such actions have not
already been taken as are reasonably determined by the Administrative Agent or
Required Lenders to be necessary or desirable in order to fully perfect,
preserve or protect the security interests granted pursuant to the various
Security Documents under the laws of such jurisdictions.  If requested to do so pursuant to this
Section 13.25, all such actions shall be taken in accordance with the
provisions of this Section 13.25 and Section 8.11 and within the time
periods set forth therein.  All
conditions and representations contained in this Agreement and the other Credit
Documents shall be deemed modified to the extent necessary to effect the
foregoing and so that same are not violated by reason of the failure to take
actions under local law (but only with respect to Equity Interests in, and
promissory notes issued by, Persons organized under laws of jurisdictions other
than the United States or any state thereof) not required to be taken in
accordance with the provisions of this Section 13.25, provided that
to the extent any representation or warranty would not be true because the
foregoing actions were not taken, the respective representation of warranties
shall be required to be true and correct in all material respects at such time
as the respective action is


 


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required to be taken in
accordance with the foregoing provisions of this Section 13.25 or pursuant
to Section 8.11.


 


13.26.  Post-Closing Actions.  Notwithstanding anything to the contrary
contained in this Agreement or the other Credit Documents, the parties hereto
acknowledge and agree that:


 


1.                                       The
actions relating to the Mortgages and Real Property of Holdings and its
Subsidiaries described on Part A of Schedule XI shall be completed in
accordance with Part A of Schedule XI.


 


2.                                       Within
90 days following the Initial Borrowing Date, the Borrower shall have duly
authorized, executed and delivered to the Administrative Agent a pledge
agreement governed by the laws of Mexico covering 65% of the equity interests
of the Mexican Subsidiary (as amended, restated, modified and/or supplemented
from time to time in accordance with the terms thereof and hereof, the “Mexican
Pledge Agreement”), which Mexican Pledge Agreement shall be in form and
substance satisfactory to the Administrative Agent and in full force and
effect, (ii) the Mexican Pledge Agreement shall have been duly recorded or
filed in such manner and in such places as required by Mexican law to
establish, perfect, preserve and protect the pledge in favor of the pledgee
thereunder, (iii) all taxes, fees and other charges payable in connection with
Mexican Pledge Agreement (including the recordation thereof) shall have been
paid in full and (iv) the Administrative Agent shall have received such other
evidence that all actions necessary or, in the opinion of the Administrative
Agent, desirable, to perfect and/or render enforceable the security interest
purported to be created by the Mexican Pledge Agreement have been taken
(including, without limitation, the delivery of an opinion from Mexican counsel
acceptable to the Administrative Agent in form, scope and substance reasonably
satisfactory to the Administrative Agent).


 


3.                                       Holdings
and its Subsidiaries shall be required to take the actions specified in Parts B
and C of Schedule XI as promptly as practicable and in any event within
the time periods set forth in said Parts B and C of Schedule XI.  The provisions of Parts B and C of
Schedule XI shall be deemed incorporated herein by reference as fully as if
set forth herein in its entirety.


 


All provisions of this
Credit Agreement and the other Credit Documents (including, without limitation,
all conditions precedent, representations, warranties, covenants, events of
default and other agreements herein and therein) shall be deemed modified to
the extent necessary to effect the foregoing (and to permit the taking of the
actions described above within the time periods required above, rather than as
otherwise provided in the Credit Documents); provided that (x) to the
extent any representation and warranty would not be true because the foregoing
actions were not taken on the Initial Borrowing Date the respective
representation and warranty shall be required to be true and correct in all
material respects at the time the respective action is taken (or was required
to be taken) in accordance with the foregoing provisions of this


 


131

















 


Section 13.26 and
(y) all representations and warranties relating to the Security Documents shall
be required to be true immediately after the actions required to be taken by
this Section 13.26 have been taken (or were required to be taken).  The acceptance of the benefits of the
Second-Lien Loans shall constitute a covenant and agreement by each of Holdings
and the Borrower to each of the Lenders that the actions required pursuant to
this Section 13.26 will be, or have been, taken within the relevant time
periods referred to in this Section 13.26 and that, at such time, all
representations and warranties contained in this Credit Agreement and the other
Credit Documents shall then be true and correct without any modification
pursuant to this Section 13.26. 
The parties hereto acknowledge and agree that the failure to take any of
the actions required above, within the relevant time periods required above,
shall give rise to an immediate Event of Default pursuant to this Agreement.


 


SECTION 14. 
Holdings Guaranty..


 


14.01.  Holdings Guaranty.  In order to induce the Lenders to enter into
this Agreement and to extend credit hereunder, and in recognition of the direct
benefits to be received by Holdings from the proceeds of the Second-Lien Loans,
Holdings hereby agrees with the Lenders as follows: Holdings hereby
unconditionally and irrevocably guarantees, as primary obligor and not merely
as surety the full and prompt payment when due, whether upon maturity,
acceleration or otherwise, of any and all of the Guaranteed Obligations to the
Guaranteed Creditors.  If any or all of
the Guaranteed Obligations to the Guaranteed Creditors becomes due and payable
hereunder, Holdings unconditionally promises to pay such indebtedness to the
Guaranteed Creditors, or order, on demand, together with any and all expenses
which may be incurred by the Guaranteed Creditors in collecting any of the
Guaranteed Obligations.  This Holdings
Guaranty is a guaranty of payment and not of collection.  This Holdings Guaranty is a continuing one
and all liabilities to which it applies or may apply under the terms hereof
shall be conclusively presumed to have been created in reliance hereon.  If claim is ever made upon any Guaranteed
Creditor for repayment or recovery of any amount or amounts received in payment
or on account of any of the Guaranteed Obligations and any of the aforesaid payees
repays all or part of said amount by reason of (i) any judgment, decree or
order of any court or administrative body having jurisdiction over such payee
or any of its property or (ii) any settlement or compromise of any such claim
effected by such payee with any such claimant (including the Borrower), then
and in such event Holdings agrees that any such judgment, decree, order,
settlement or compromise shall be binding upon Holdings, notwithstanding any
revocation of this Holdings Guaranty or any other instrument evidencing any
liability of the Borrower, and Holdings shall be and remain liable to the
aforesaid payees hereunder for the amount so repaid or recovered to the same
extent as if such amount had never originally been received by any such payee.


 


14.02.  Bankruptcy.  Additionally, Holdings unconditionally and irrevocably guarantees
the payment of any and all of the Guaranteed Obligations to the Guaranteed
Creditors whether or not due or payable by the Borrower upon the occurrence of
any of the events specified in Section 10.05, and unconditionally promises
to pay such indebtedness to the Guaranteed Creditors, or order, on demand.


 


14.03.  Nature of Liability.  The liability of Holdings hereunder is
exclusive and independent of any guaranty of the Guaranteed Obligations whether
executed by Holdings, any


 


132

















 


other guarantor or by any
other party, and the liability of Holdings hereunder is not affected or
impaired by (a) any direction as to application of payment by the Borrower or
by any other party, or (b) any other continuing or other guaranty, undertaking
or maximum liability of a guarantor or of any other party as to the Guaranteed
Obligations, or (c) any payment on or in reduction of any such other guaranty
or undertaking, or (d) any dissolution, termination or increase, decrease or
change in personnel by the Borrower, or (e) any payment made to the Guaranteed
Creditors on the Guaranteed Obligations which any such Guaranteed Creditor
repays to the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
Holdings waives any right to the deferral or modification of its obligations
hereunder by reason of any such proceeding, or (f) any action or inaction of
the type described in Section 14.05, or (g) the lack of validity or
enforceability of any Credit Document or any other instrument relating thereto.


 


14.04.  Independent Obligation.  No invalidity, irregularity or
unenforceability of all or any part of the Guaranteed Obligations shall affect,
impair or be a defense to this Holdings Guaranty, and this Holdings Guaranty
shall be primary, absolute and unconditional notwithstanding the occurrence of
any event or the existence of any other circumstances which might constitute a
legal or equitable discharge of a surety or guarantor except payment in full of
the Guaranteed Obligations.  The
obligations of Holdings hereunder are independent of the obligations of the
Borrower, any other guarantor or any other Person and a separate action or
actions may be brought and prosecuted against Holdings whether or not action is
brought against the Borrower, any other guarantor or any other Person and
whether or not the Borrower, any other guarantor or any other Person be joined
in any such action or actions.  Holdings
waives, to the full extent permitted by law, the benefit of any statute of
limitations affecting its liability hereunder or the enforcement thereof. Any
payment by the Borrower with respect to any Guaranteed Obligations or other
circumstance which operates to toll any statute of limitations as to the
Borrower shall operate to toll the statute of limitations as to Holdings.


 


14.05.  Authorization.  Holdings authorizes the Guaranteed Creditors
without notice or demand (except as shall be required by applicable statute and
cannot be waived), and without affecting or impairing its liability hereunder,
from time to time to:


 


(a)                                    change
the manner, place or terms of payment of, and/or change or extend the time of
payment of, renew, increase, accelerate or alter, any of the Guaranteed
Obligations (including any increase or decrease in the rate of interest
thereon) or any liability incurred directly or indirectly in respect thereof,
and this Holdings Guaranty shall apply to the Guaranteed Obligations as so
changed, extended, renewed, increased or altered;


 


(b)                                   take
and hold security for the payment of the Guaranteed Obligations and sell,
exchange, release, impair, surrender, realize upon or otherwise deal with in
any manner and in any order any property by whomsoever at any time pledged or
mortgaged to secure, or howsoever securing, the Guaranteed Obligations or any
liabilities (including any of those hereunder) incurred directly or indirectly
in respect thereof or hereof, and/or any offset thereagainst;


 


(c)                                    exercise
or refrain from exercising any rights against the Borrower or


 


133

















 


others or otherwise act
or refrain from acting;


 


(d)                                   release
or substitute any one or more endorsers, guarantors, the Borrower or other
obligors;


 


(e)                                    settle
or compromise any of the Guaranteed Obligations or any liability (including any
of those hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to the
payment of any liability (whether due or not) of the Borrower to its respective
creditors other than the Guaranteed Creditors;


 


(f)                                      apply
any sums by whomsoever paid or howsoever realized to any liability or
liabilities of the Borrower to the Guaranteed Creditors regardless of what
liability or liabilities of the Borrower remain unpaid;


 


(g)                                   consent
to or waive any breach of, or any act, omission or default under, this
Agreement, any other Credit Document or any of the instruments or agreements
referred to herein or therein, or otherwise amend, modify or supplement this
Agreement, any other Credit Document or any of such other instruments or
agreements; and/or


 


(h)                                   take
any other action which would, under otherwise applicable principles of common
law, give rise to a legal or equitable discharge of Holdings from its
liabilities under this Holdings Guaranty.


 


14.06.  Reliance.  It is not necessary for the Guaranteed Creditors to inquire into
the capacity or powers of the Borrower or the officers, directors, partners or
agents acting or purporting to act on their behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder by Holdings.


 


14.07.   Subordination.  Any of the indebtedness of the Borrower now
or hereafter owing to Holdings is hereby subordinated to the Guaranteed
Obligations of the Borrower owing to the Guaranteed Creditors; and if the
Administrative Agent so requests at a time when an Event of Default exists, all
such indebtedness of the Borrower to Holdings shall be collected, enforced and
received by Holdings for the benefit of the Guaranteed Creditors and be paid
over to the Administrative Agent on behalf of the Guaranteed Creditors on
account of the Guaranteed Obligations of the Borrower to the Guaranteed
Creditors, but without affecting or impairing in any manner the liability of
Holdings under the other provisions of this Holdings Guaranty.  Prior to the transfer by Holdings to any
Person (other than a Subsidiary Guarantor) of any note or negotiable instrument
evidencing any of the indebtedness of the Borrower to Holdings, Holdings shall
mark such note or negotiable instrument with a legend that the same is subject
to this subordination.  Without limiting
the generality of the foregoing, Holdings hereby agrees with the Guaranteed
Creditors that it will not exercise any right of subrogation which it may at
any time otherwise have as a result of this Holdings Guaranty (whether
contractual, under Section 509 of the Bankruptcy Code or otherwise) until
all Guaranteed Obligations have been irrevocably paid in full in cash.


 


14.08.   Waiver.  (a)  Holdings waives any
right (except as shall be required by applicable statute and cannot be waived)
to require any Guaranteed Creditor to (i) proceed


 


134

















 


against the Borrower, any
other guarantor or any other party, (ii) proceed against or exhaust any
security held from the Borrower, any other guarantor or any other party or
(iii) pursue any other remedy in any Guaranteed Creditor’s power
whatsoever.  Holdings waives any defense
based on or arising out of any defense of the Borrower, any other guarantor or
any other party, other than payment in full in cash of the Guaranteed
Obligations, based on or arising out of the disability of the Borrower, any
other guarantor or any other party, or the unenforceability of the Guaranteed
Obligations or any part thereof from any cause, or the cessation from any cause
of the liability of the Borrower other than payment in full in cash of the
Guaranteed Obligations.  The Guaranteed
Creditors may, at their election, foreclose on any security held by the
Administrative Agent or any other Guaranteed Creditor by one or more judicial
or nonjudicial sales, whether or not every aspect of any such sale is
commercially reasonable (to the extent such sale is permitted by applicable
law), or exercise any other right or remedy the Guaranteed Creditors may have
against the Borrower or any other party, or any security, without affecting or
impairing in any way the liability of Holdings hereunder except to the extent
the Guaranteed Obligations of Holdings have been paid in full in cash.  Holdings waives any defense arising out of
any such election by the Guaranteed Creditors, even though such election
operates to impair or extinguish any right of reimbursement or subrogation or
other right or remedy of Holdings against the Borrower or any other party or
any security.


 


(b)  Holdings waives all presentments, demands
for performance, protests and notices, including, without limitation, notices
of nonperformance, notices of protest, notices of dishonor, notices of
acceptance of this Holdings Guaranty, and notices of the existence, creation,
modification or incurring of new or additional Guaranteed Obligations.  Holdings assumes all responsibility for
being and keeping itself informed of the Borrower’s financial condition and
assets, and of all other circumstances bearing upon the risk of nonpayment of
the Guaranteed Obligations and the nature, scope and extent of the risks which
Holdings assumes and incurs hereunder, and agrees that the Guaranteed Creditors
shall have no duty to advise Holdings of information known to them regarding
such circumstances or risks.


 


(c)  Until such time as the Guaranteed
Obligations have been paid in full in cash, Holdings hereby waives all rights
of subrogation which it may at any time otherwise have as a result of this
Holdings Guaranty (whether contractual, under Section 509 of the
Bankruptcy Code, or otherwise) to the claims of the Guaranteed Creditors
against any other guarantor of the Guaranteed Obligations and all contractual,
statutory or common law rights of reimbursement, contribution or indemnity from
the Borrower or any other guarantor which it may at any time otherwise have as
a result of this Holdings Guaranty.


 


(d)  Holdings hereby acknowledges and affirms
that it understands that to the extent the Guaranteed Obligations are secured
by Real Property located in California, Holdings shall be liable for the full
amount of the liability hereunder notwithstanding the foreclosure on such Real
Property by trustee sale or any other reason impairing Holdings’ or any
Guaranteed Creditor’s right to proceed against the Borrower or any other
guarantor of the Guaranteed Obligations. 
In accordance with Section 2856 of the California Civil Code,  Holdings hereby waives:


 


135

















 


(i)                                     all
rights of subrogation, reimbursement, indemnification, and contribution and any
other rights and defenses that are or may become available to Holdings by
reason of Sections 2787 to 2855, inclusive, 2899 and 3433 of the California
Civil Code;


 


(ii)                                  all
rights and defenses that Holdings may have because the Guaranteed Obligations
are secured by Real Property located in California, it being understood that
this means, among other things:  (A) the
Guaranteed Creditors may collect from Holdings without first foreclosing on any
real or personal property collateral pledged by the Borrower or any other
Credit Party; and (B) if the Guaranteed Creditors foreclose on any Real
Property collateral pledged by the Borrower or any other Credit Party, (1) the
amount of the Guaranteed Obligations may be reduced only by the price for which
that collateral is sold at the foreclosure sale, even if the collateral is
worth more than the sale price, and (2) the Guaranteed Creditors may collect
from the Borrower even if the Guaranteed Creditors, by foreclosing on the Real
Property collateral, have destroyed any right the Borrower may have to collect
from the Borrower.  This is an
unconditional and irrevocable waiver of any rights and defenses the Borrower
may have because the Guaranteed Obligations are secured by Real Property.  These rights and defenses include, but are
not limited to, any rights or defenses based upon Section 580a, 580d or
726 of the California Code of Civil Procedure; and


 


(iii)                               all
rights and defenses arising out of an election of remedies by the Guaranteed
Creditors, even though that election of remedies, such as a nonjudicial
foreclosure with respect to security for the Guaranteed Obligations, has
destroyed Holdings’ rights of subrogation and reimbursement against the
Borrower by the operation of Section 580d of the Code of Civil Procedure
or otherwise.


 


(e) Holdings warrants and
agrees that each of the waivers set forth above is made with full knowledge of
its significance and consequences and that if any of such waivers are
determined to be contrary to any applicable law of public policy, such waivers
shall be effective only to the maximum extent permitted by law.


 


14.09.  Payments.  All payments made by Holdings pursuant to this Section 14
shall be made in U.S. Dollars.  All
payments made by Holdings pursuant to this Section 14 will be made without
setoff, counterclaim or other defense, and shall be subject to the payment
provisions applicable to the Borrower in Sections 4.03 and 4.04.


 


*    *   
*


 


136

















 


IN WITNESS WHEREOF, the
parties hereto have caused their duly authorized officers to execute and
deliver this Agreement as of the date first above written.


 


	
  Address:

  
	
   

  
	
   

  
	
  2366 Bernville Road

  	
   

  	
  ENERSYS

  	 

	
  Reading, PA 19605

  	
   

  	
   

  	 

	
  Telephone No.:
  610-208-1991

  	
   

  	
   

  	 

	
  Facsimile No.: 610-208-1671

  	
  By:

  	
   

  	 

	
  Attention: Michael T.
  Philion

  	
   

  	
  Name:

  	 

	
   

  	
   

  	
  Title:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  2366 Bernville Road

  	
   

  	
  ENERSYS CAPITAL INC.

  	 

	
  Reading, PA 19605

  	
   

  	
   

  	 

	
  Telephone No.:
  610-208-1991

  	
   

  	
   

  	 

	
  Facsimile No.:
  610-208-1671

  	
  By:

  	
   

  	 

	
  Attention: Michael T.
  Philion

  	
   

  	
  Name:

  	 

	
   

  	
   

  	
  Title:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  Mailcode NC1-007-13-06 

  100 N. Tryon Street, 13th Floor

  	
  BANK OF AMERICA, N.A.,

  Individually

  	 

	
  Charlotte, NC 28255

  	
   

  	
   

  	 

	
  Telephone No.:
  704-388-6415

  	
   

  	
   

  	 

	
  Facsimile No.:
  704-409-0564

  	
   

  	
   

  	 

	
  Electronic Mail:

  	
  By:

  	
   

  	 

	
  Laura.l.clark@bankofamerica.com

  	
   

  	
  Name:

  	 

	
  Attention: Laura Clark

  	
   

  	
  Title:

  	 

	
   

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  For Payments and
  Requests for Credit Extensions:

  Mailcode NC1-001-15-04

  	
  BANK OF AMERICA, N.A.,
  as

  Administrative Agent

  	 

	
  101 N. Tryon Street

  	
   

  	
   

  	 

	
  Charlotte, NC 28255

  	
   

  	
   

  	 

	
  Telephone: (704)
  387-1184

  	
  By:

  	
   

  	 

	
  Facsimile: (704)
  409-0024

  	
   

  	
  Name:

  	 

	
  Electronic Mail:

  	
   

  	
  Title:

  	 

	
  kristen.gilliam@bankofamerica.com

  	
   

  	
   

  	 

	
  Attention: Kristen
  Gilliam

  	
   

  	
   

  	 

	
  Ref : EnerSys
  Capital, Inc.

  	
   

  	
   

  	 

	
  Account
  # 1366212250600

  	
   

  	
   

  	 

	
  ABA # 026009593

  	
   

  	
   

  	 

	
   

  	
   

  	
   

  	 

	
  Other Notices:

  Mailcode CA5-701-05-19

  1455 Market Street, 5th Floor

  	
   

  	
   

  	 




 

















 


	
  San Francisco, CA 94103
  

  Telephone: (415) 436-3495

  Facsimile:   (415) 503-5006

  Electronic Mail:

  charles.graber@bankofamerica.com

  Attention: Charles Graber

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  with a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Mailcode NC1-007-13-06

  100 North Tryon Street, 13th Floor

  Charlotte, North Carolina  28255

  Telephone No.:  704-388-6415

  Facsimile No.:  704-409-0564

  Electronic Mail: laura.l.clark@bankofamerica.com

  Attention:  Laura Clark

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  1585 Broadway

  New York, NY 10036

  Telephone No.:  212-761-2373

  	
  MORGAN STANLEY SENIOR

  FUNDING, INC., Individually and as

  Syndication Agent

  
	
  Facsimile No.:
  212-507-2941

  	
   

  	
   

  
	
  Attention: John McCann

  	
  By:

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  

  745 Seventh Avenue, 23rd Floor

  New York, NY 10019

  	
  LEHMAN COMMERCIAL PAPER

  INC., Individually and as

  Documentation Agent

  
	
  Telephone No.:
  212-526-4054

  	
   

  	
   

  
	
  Facsimile No.:
  646-758-5233

  	
  By:

  	
   

  
	
  Attention: David Baron

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  



 


137

















 


	
   

  	
  SIGNATURE PAGE TO THE
  SECOND-LIEN CREDIT AGREEMENT, DATED AS OF
  MARCH     , 2004, AMONG ENERSYS, A DELAWARE
  CORPORATION, ENERSYS CAPITAL INC., A DELAWARE CORPORATION, THE LENDERS FROM
  TIME TO TIME PARTY HERETO, BANK OF AMERICA, N.A., AS ADMINISTRATIVE AGENT,
  MORGAN STANLEY SENIOR FUNDING, INC., AS SYNDICATION AGENT, AND LEHMAN
  COMMERCIAL PAPER INC., AS DOCUMENTATION AGENT

  
	
   

  	
   

  
	
   

  	
  NAME OF INSTITUTION:

  
	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  
	
   

  	
   

  	
  Title:

  
				



 


138

















 


SCHEDULE I


 


LIST OF LENDERS
AND COMMITMENTS


 


	
  Lender

  	
   

  	
  Commitment

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A.

  	
   

  	
  $

  	
  118,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  KZH
  SOLEIL-2 LLC

  	
   

  	
  $

  	
  2,000,000.00

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
  Total

  	
   

  	
  $

  	
  120,000,000

  	
   

  



 

















 


SCHEDULE II


 


LENDER ADDRESSES


 


	
  Administrative Agent

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  For Payments and
  Requests for Credit Extensions

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A., as Administrative Agent

  	
   

  	
  Mailcode NC1-001-15-04

  101 N. Tryon Street

  Charlotte, NC  28255

  Attention:  Kristen Gilliam

  Telephone:  (704) 387-1184

  Facsimile:   (704) 409-0024

  Electronic Mail: 

  kristen.gilliam@bankofamerica.com

  Ref : EnerSys Capital, Inc.

  Account # 1366212250600

  ABA #  026009593

  
	
   

  	
   

  	
   

  
	
  Other Notices to
  Administrative Agent:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Bank of America,
  N.A., as Administrative Agent

  Agency Management

  	
   

  	
  Mailcode CA5-701-05-19

  1455 Market Street, 5th Floor

  San Francisco, CA 94103 

  Attention:  Charles Graber

  Telephone:  (415) 436-3495

  Facsimile:   (415) 503-5006

  Electronic Mail: 

  charles.graber@bankofamerica.com

  
	
   

  	
   

  	
   

  
	
  with
  a copy to:

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  Bank
  of America, N.A.

  	
   

  	
  Mailcode NC1-007-13-01

  100 North Tryon Street, 13th Floor

  Charlotte, North Carolina  28255

  Attention:  Laura Clark

  Telephone No.:  704-388-6415

  Facsimile No.:  704-409-0564

  Electronic Mail: laura.l.clark@bankofamerica.com

  
	
   

  	
   

  	
   

  
	
  Lender

  	
   

  	
  Address

  
	
   

  	
   

  	
   

  
	
  Bank of America, N.A.

  	
   

  	
  Mailcode NC1-007-13-06

  100 North Tryon Street, 13th Floor

  Charlotte, NC 28255 

  Attention: Laura Clark

  



 

















 


	
   

  	
   

  	
  Telephone No.:  (704) 388-6415

  Facsimile No.: (704) 409-0564

  
	
   

  	
   

  	
   

  
	
  Morgan Stanley Senior
  Funding, Inc.

  	
   

  	
  1633  Broadway 

  New York, New York  10036

  Attention:  Michael Fabiano

  Telephone No.:  (212) 761-2383

  Facsimile No.:  (212) 507-3417

  
	
   

  	
   

  	
   

  
	
  Lehman Commercial Paper
  Inc.

  	
   

  	
  745 Seventh Avenue

  New York, New York 10019

  Attention: Francis Chang

  Telephone No.:  (212) 526-5390

  Facsimile No.:  (646) 758-3864

  
	
   

  	
   

  	
   

  
	
  KZH SOLEIL-2 LLC

  	
   

  	
  c/o JPMorgan Chase Bank

  4 MetroTech Center- 10th Floor

  Brooklyn, New York 11245

  Attention: Virginia R. Conway

  Telephone No.:  (718) 242-4932

  Facsimile No.: (718) 242-6220

  



 


3

















 


SCHEDULE III


 


REAL PROPERTY


 

















 


SCHEDULE IV


 


EXISTING
INDEBTEDNESS


 

















 


SCHEDULE V


 


PENSION PLANS


 

















 


SCHEDULE VI


 


EXISTING INVESTMENTS


 

















 


SCHEDULE VII


 


SUBSIDIARIES


 

















 


SCHEDULE VIII


 


INSURANCE


 


Schedule of
Insurance Policies


 

















 


SCHEDULE IX


 


LIEN FILINGS


 

















 


SCHEDULE X


 


CAPITALIZATION


 

















 


SCHEDULE XI


 


POST-CLOSING
MATTERS


 

















 


SCHEDULE XII


 


CONFLICTS


 

















 


SCHEDULE XV


 


GROUP STRUCTURE
CHARTS


 


[TO BE PROVIDED]