Exhibit 10.10


 


EXECUTION COPY


 


SECOND AMENDED AND RESTATED


 


FINANCING AGREEMENT


 


Dated as of December 19, 2002


 


by and among


 


HIGH VOLTAGE ENGINEERING CORPORATION,


 


MAXIMA TECHNOLOGIES, INC.,


 


STEWART WARNER INSTRUMENT CORPORATION,


 


ROBICON CORPORATION,


 


VIVIRAD - HIGH VOLTAGE CORPORATION,


 


PHYSICAL ELECTRONICS, INC.,


 


and


 


CHARLES EVANS & ASSOCIATES

as Borrowers,


 


CERTAIN SUBSIDIARIES OF THE BORROWERS PARTY
HERETO,

as Guarantors,


 


THE FINANCIAL INSTITUTIONS FROM TIME TO TIME
PARTY HERETO,

as Lenders,


 


ABLECO FINANCE LLC,

as Collateral Agent,


 


and


 


ABLECO FINANCE LLC,

as Administrative Agent


 

















 


TABLE OF CONTENTS


 


	
  ARTICLE I DEFINITIONS; CERTAIN TERMS

  
	
   

  	
  Section
  1.01

  	
  Definitions

  
	
   

  	
  Section
  1.02

  	
  Terms
  Generally

  
	
   

  	
  Section
  1.03

  	
  Accounting
  and Other Terms

  
	
   

  	
  Section
  1.04

  	
  Time
  References

  
	
   

  
	
  ARTICLE
  II THE LOANS

  
	
   

  	
  Section
  2.01

  	
  Existing
  Loans; Revolving Credit Commitments.

  
	
   

  	
  Section
  2.02

  	
  Making
  the Revolving Loans

  
	
   

  	
  Section
  2.03

  	
  Evidence
  of Debt; Repayment of Loans

  
	
   

  	
  Section
  2.04

  	
  Interest

  
	
   

  	
  Section
  2.05

  	
  Reduction
  of Revolving Credit Commitments; Prepayment of Loans

  
	
   

  	
  Section
  2.06

  	
  Fees

  
	
   

  	
  Section
  2.07

  	
  Securitization

  
	
   

  	
  Section
  2.08

  	
  Taxes

  
	
   

  
	
  ARTICLE
  III [INTENTIONALLY OMITTED]

  
	
   

  
	
  ARTICLE
  IV FEES, PAYMENTS AND OTHER COMPENSATION

  
	
   

  	
  Section
  4.01

  	
  Audit
  and Collateral Monitoring Fees

  
	
   

  	
  Section
  4.02

  	
  Payments;
  Computations and Statements

  
	
   

  	
  Section
  4.03

  	
  Sharing
  of Payments, Etc

  
	
   

  	
  Section
  4.04

  	
  Apportionment
  of Payments

  
	
   

  	
  Section
  4.05

  	
  Increased
  Costs and Reduced Return

  
	
   

  	
  Section
  4.06

  	
  Joint
  and Several Liability of the Borrowers

  
	
   

  
	
  ARTICLE
  V CONDITIONS TO EFFECTIVENESS AND LOANS

  
	
   

  	
  Section
  5.01

  	
  Conditions
  Precedent to Effectiveness

  
	
   

  	
  Section
  5.02

  	
  Conditions
  Precedent to all Loans

  
	
   

  
	
  ARTICLE
  VI REPRESENTATIONS AND WARRANTIES

  
	
   

  	
  Section
  6.01

  	
  Representations
  and Warranties

  
	
   

  
	
  ARTICLE
  VII COVENANTS OF THE BORROWER

  
	
   

  	
  Section
  7.01

  	
  Affirmative
  Covenants

  
	
   

  	
  Section
  7.02

  	
  Negative
  Covenants

  
	
   

  	
  Section
  7.03

  	
  Financial
  Covenants

  
	
   

  
	
  ARTICLE
  VIII MANAGEMENT, COLLECTION AND STATUS OF COLLATERAL

  
	
   

  	
  Section
  8.01

  	
  Management
  of Collateral

  
	
   

  	
  Section
  8.02

  	
  Status
  of Collateral

  
	
   

  	
  Section
  8.03

  	
  Collateral
  Custodian

  
	
   

  
	
  ARTICLE
  IX EVENTS OF DEFAULT

  



 


ii

















 


	
   

  	
  Section
  9.01

  	
  Events
  of Default

  
	
   

  
	
  ARTICLE
  X AGENTS

  
	
   

  	
  Section
  10.01

  	
  Appointment

  
	
   

  	
  Section
  10.02

  	
  Nature
  of Duties

  
	
   

  	
  Section
  10.03

  	
  Rights,
  Exculpation, Etc

  
	
   

  	
  Section
  10.04

  	
  Reliance

  
	
   

  	
  Section
  10.05

  	
  Indemnification

  
	
   

  	
  Section
  10.06

  	
  Agents
  Individually

  
	
   

  	
  Section
  10.07

  	
  Successor
  Agent

  
	
   

  	
  Section
  10.08

  	
  Collateral
  Matters

  
	
   

  	
  Section
  10.09

  	
  Collateral
  Sub-Agents

  
	
   

  
	
  ARTICLE
  XI GUARANTY

  
	
   

  	
  Section
  11.01

  	
  Guaranty;
  Limitation of Liability

  
	
   

  	
  Section
  11.02

  	
  Guaranty
  Absolute

  
	
   

  	
  Section
  11.03

  	
  Waiver

  
	
   

  	
  Section
  11.04

  	
  Continuing
  Guaranty; Assignments

  
	
   

  	
  Section
  11.05

  	
  Subrogation

  
	
   

  
	
  ARTICLE
  XII MISCELLANEOUS

  
	
   

  	
  Section
  12.01

  	
  Notices,
  Etc

  
	
   

  	
  Section
  12.02

  	
  Amendments,
  Etc

  
	
   

  	
  Section
  12.03

  	
  No
  Waiver; Remedies, Etc

  
	
   

  	
  Section
  12.04

  	
  Expenses;
  Taxes; Attorneys’ Fees

  
	
   

  	
  Section
  12.05

  	
  Right
  of Set-off

  
	
   

  	
  Section
  12.06

  	
  Severability

  
	
   

  	
  Section
  12.07

  	
  Assignments
  and Participations

  
	
   

  	
  Section
  12.08

  	
  Counterparts

  
	
   

  	
  Section
  12.09

  	
  GOVERNING
  LAW

  
	
   

  	
  Section
  12.10

  	
  CONSENT
  TO JURISDICTION; SERVICE OF PROCESS AND VENUE

  
	
   

  	
  Section
  12.11

  	
  WAIVER
  OF JURY TRIAL, ETC

  
	
   

  	
  Section
  12.12

  	
  Consent
  by the Agents and Lenders

  
	
   

  	
  Section
  12.13

  	
  No
  Party Deemed Drafter

  
	
   

  	
  Section
  12.14

  	
  Reinstatement;
  Certain Payments

  
	
   

  	
  Section
  12.15

  	
  Indemnification

  
	
   

  	
  Section
  12.16

  	
  Parent
  as Agent for Borrowers

  
	
   

  	
  Section
  12.17

  	
  Joint
  and Several

  
	
   

  	
  Section
  12.18

  	
  Records

  
	
   

  	
  Section
  12.19

  	
  Binding
  Effect

  
	
   

  	
  Section
  12.20

  	
  Confidentiality

  
	
   

  	
  Section
  12.21

  	
  Interest

  
	
   

  	
  Section
  12.22

  	
  No
  Recourse..

  
	
   

  	
   

  
	
  Schedule
  1.01(A)

  	
  Lenders
  and Lenders’ Commitments

  
	
  Schedule 1.01(B)

  	
  Exclusions From Consolidated EBITDA

  
	
  Schedule 1.01(C)

  	
  Permitted Holders

  
	
  Schedule 1.01(D)

  	
  Fiscal Months

  



 


iii

















 


	
  Schedule 1.01(E)

  	
  Certain Material Contracts

  
	
  Schedule 6.01(e)

  	
  Subsidiaries

  
	
  Schedule 6.01(f)

  	
  Litigation

  
	
  Schedule 6.01(i)

  	
  ERISA

  
	
  Schedule 6.01(o)

  	
  Real Property

  
	
  Schedule 6.01(q)

  	
  Letters of Credit

  
	
  Schedule 6.01(r)

  	
  Operating Leases

  
	
  Schedule 6.01(s)

  	
  Environmental Matters

  
	
  Schedule 6.01(t)

  	
  Insurance

  
	
  Schedule 6.01(w)

  	
  Bank Accounts

  
	
  Schedule 6.01(x)

  	
  Intellectual Property

  
	
  Schedule 6.01(y)

  	
  Material Contracts

  
	
  Schedule 6.01(ee)

  	
  Inventory Locations; Place of Business; Chief Executive Office

  
	
  Schedule 6.01(ff)

  	
  Tradenames

  
	
  Schedule 7.01(l)

  	
  Collateral Locations

  
	
  Schedule 7.01(m)

  	
  Specified Locations and Release Amounts

  
	
  Schedule 7.02(a)

  	
  Existing Liens

  
	
  Schedule 7.02(b)

  	
  Existing Indebtedness

  
	
  Schedule 7.02(e)

  	
  Existing Investments

  
	
  Schedule 7.02(j)

  	
  Existing Affiliate Transactions

  
	
  Schedule 7.02(k)

  	
  Existing Limitations on Dividends and Other Payment Restrictions

  
	
   

  	
   

  
	
  Exhibit A

  	
  Form of Guaranty

  
	
  Exhibit B

  	
  Form of Amended and Restated Amendatory Agreement

  
	
  Exhibit C

  	
  Form of Notice of Borrowing

  
	
  Exhibit D

  	
  Form of Borrowing Base Certificate

  
	
  Exhibit E

  	
  Form of Opinion of Counsel

  
	
  Exhibit F

  	
  Form of Assignment and Acceptance

  
	
  Exhibit G

  	
  Form of Amended and Restated Contribution Agreement

  



 


iv

















 


SECOND AMENDED AND RESTATED FINANCING
AGREEMENT


 


Second Amended and Restated Financing Agreement, dated as of December
19, 2002, by and among High Voltage Engineering Corporation, a Massachusetts
corporation (the “Parent”), Maxima Technologies, Inc., a
Pennsylvania corporation (“Maxima”), Stewart Warner Instrument
Corporation, an Illinois corporation (“Stewart Warner”), Robicon
Corporation, a Pennsylvania corporation (“Robicon”), Vivirad - High
Voltage Corporation, a Massachusetts corporation (“Vivirad - HVC”),  Physical Electronics, Inc., a Delaware
corporation (“Physical Electronics”),  and
Charles Evans & Associates, a California corporation (“Charles Evans”
and together with the Parent, Maxima, Stewart Warner, Robicon, Vivirad - HVC
and Physical Electronics, each a “Borrower” and collectively, the “Borrowers”),
the direct and indirect subsidiaries of the Borrowers named on the signature
pages hereto as “Guarantors” (each a “Guarantor” and collectively, the “Guarantors”),
the financial institutions from time to time party hereto (individually a “Lender”
and collectively, the “Lenders”), Ableco Finance LLC, a Delaware
limited liability company (“Ableco”), as collateral agent for the
Lenders (in such capacity, the “Collateral Agent”), and Ableco, as
administrative agent for the Lenders (in such capacity, together with any
successor in such capacity, the “Administrative Agent” and together with
the Collateral Agent, each an “Agent” and collectively the “Agents”).


 


RECITALS


 


The Borrowers, the Guarantors, the Lenders, the Collateral Agent and
the Administrative Agent are parties to the Existing Financing Agreement (as
hereinafter defined), pursuant to which the Lenders extended credit to the Borrowers
consisting of a revolving credit facility in an aggregate principal amount not
to exceed $25,000,000 at any time outstanding.


 


The Borrowers and Guarantors have asked the Lenders to amend and
restate the Existing Financing Agreement in its entirety, it being the
intention of the parties hereto that the principal amount of the revolving
loans outstanding under the Existing Financing Agreement as of the Effective
Date (as hereinafter defined) shall, except to the extent repaid as of the
Effective Date, continue and remain outstanding, pursuant to this Agreement
after the Effective Date.  The Lenders
are willing to amend and restate the Existing Financing Agreement, subject to
the terms and conditions hereinafter set forth.


 


Accordingly, in consideration of the premises and the covenants and
agreements contained herein, the parties hereto agree that the Existing
Financing Agreement shall be amended and restated as follows:


 


ARTICLE I



DEFINITIONS; CERTAIN TERMS


 


Section 1.01           Definitions.  As used in this Agreement, the following
terms shall have the respective meanings indicated below, such meanings to be
applicable equally to both the singular and plural forms of such terms:


 

















 


“Ableco” has the meaning specified therefor in the preamble
hereto.


 


“Account Debtor” means each debtor, customer or obligor in any
way obligated on or in connection with any Account Receivable.


 


“Account Receivable” means any and all rights of any Loan Party
to payment for goods sold and services rendered, including accounts, general
intangibles and any and all such rights evidenced by chattel paper, instruments
or documents, whether due or to become due and whether or not earned by
performance, and whether now or hereafter acquired or arising in the future and
any proceeds arising therefrom or relating thereto.


 


“Action” has the meaning specified
therefor in Section 12.12.


 


“Administrative  Agent” has the meaning specified therefor in the preamble hereto.


 


“Administrative Agent’s Account” means
an account at a bank designated by the Administrative Agent from time to time
as the account into which the Borrowers shall make all payments to the
Administrative Agent for the benefit of the Agents and the Lenders under this
Agreement and the other Loan Documents.


 


“Affiliate” means, as to any Person,
any other Person that directly or indirectly through one or more
intermediaries, controls, is controlled by, or is under common control with,
such Person.  For purposes of this
definition, “control” of a Person means the power, directly or indirectly,
either to (i) vote 10% or more of the Capital Stock having ordinary voting
power for the election of directors of such Person or (ii) direct or cause the
direction of the management and policies of such Person whether by contract or
otherwise.  Notwithstanding anything
herein to the contrary, in no event shall any Agent or any Lender be considered
an “Affiliate” of any Loan Party.


 


“Agents” has the meaning specified
therefor in the preamble hereto.


 


“Agreement” means this Second Amended
and Restated Financing Agreement, including all amendments, modifications and
supplements and any exhibits or schedules to any of the foregoing, and shall
refer to the Agreement as the
same may be in effect at the time such reference becomes operative.


 


“Amendatory Agreement” means the Amended and Restated Amendatory
Agreement dated as of the Effective Date, and substantially in the form of
Exhibit B hereto, by and between the Loan Parties and the Collateral Agent.


 


“Anniversary Fee” has the meaning
specified therefor in Section 2.06(b).


 


“Applicable Law” means all applicable
laws, rules, regulations (including proposed, temporary and final income tax
regulations), statutes, treaties, codes, ordinances, permits, certificates,
orders and licenses of and interpretations by any Governmental Authority, and applicable
judgments, decrees, injunctions, writs, orders or like action of any court,
arbitrator or other administrative, judicial or quasi-judicial tribunal or
agency of competent jurisdiction.


 


“Applicable Margin” means 2.5%.


 


2

















 


“ASI Performance Security Deposit”
means the performance security deposit in the amount of approximately 5 billion
Italian Lire which, upon release, is payable to one or more Loan Parties.


 


“Assignment and Acceptance” means an
assignment and acceptance entered into by an assigning Lender and an assignee,
and accepted by the Collateral Agent, in accordance with Section 12.07 and
substantially in the form of
Exhibit F or in such other form as is reasonably acceptable to the Collateral
Agent.


 


“Authorized Officer” means any officer
or employee of the Parent.


 


“Availability” means, at any time, the
difference between (i) the lesser of (A) the Borrowing Base and
(B) the Total Revolving Credit Commitment and (ii)  the aggregate
outstanding principal amount of all Revolving Loans.


 


“Board” means the Board of Governors
of the Federal Reserve System of the United States.


 


“Book Value” means, as to any
Inventory, the lower of (i) cost (as reflected in the general ledger of
the Borrowers before customary (but not extraordinary) reserves established by
the Borrowers in good faith and in accordance with GAAP) and (ii) market
value, in each case determined in accordance with GAAP calculated on a first in
first out basis).


 


“Borrowers” has the meaning specified
therefor in the preamble hereto.


 


“Borrowing Base” means, at any time,
the lesser of (i) $10,000,000 and (ii) the difference between (a) the sum
of the lesser of (1) 60% of the Book Value of the Borrowers’ Eligible Inventory
at such time and (2) 125% of the appraised orderly liquidation value of
the Borrowers’ Eligible Inventory at such time as determined by an independent
third party appraiser acceptable to the Agents and (b) such reserves as
the Administrative Agent may deem appropriate in its Permitted Discretion.


 


“Borrowing Base Certificate” means a
certificate signed by the chief financial officer of the Parent and setting
forth the calculation of the Borrowing Base in compliance with
Section 7.01(a)(vi), substantially in the form of Exhibit D.


 


“Business Day” means any day other
than a Saturday, Sunday or other day on which commercial banks in New York City
are authorized or required to close.


 


“Capital Expenditures” means, with
respect to any Person for any period, the sum of (i) the aggregate of all
expenditures by such Person and its Subsidiaries during such period that in
accordance with GAAP are or should be included in “property, plant and
equipment” or similar fixed asset account on its balance sheet, whether such
expenditures are paid in cash or financed and including all Capitalized Lease
Obligations paid or payable during such period, and (ii) to the extent not
covered by clause (i) above, the aggregate of all expenditures by such Person
and its Subsidiaries to acquire by purchase or otherwise the business or fixed
assets of, or the Capital Stock of, any other Person.


 


3

















 


“Capital Guideline” means any law, rule, regulation, policy,
guideline or directive (whether or not having the force of law and whether or
not the failure to comply therewith would be unlawful) (i) regarding capital
adequacy, capital ratios, capital requirements, the calculation of a bank’s
capital or similar matters, or (ii) affecting the amount of capital required to
be obtained or maintained by the Lenders, any Person controlling any Lender, or
the manner in which the Lenders or any Person controlling any Lender allocate
capital to any of their contingent liabilities (including letters of credit),
advances, acceptances, commitments, assets or liabilities.


 


“Capitalized Lease” means, with
respect to any Person, any lease of real or personal property by such Person as
lessee which is required under GAAP to be capitalized on the balance sheet of
such Person.


 


“Capitalized Lease Obligations” means,
with respect to any Person, obligations of such Person and its Subsidiaries
under Capitalized Leases, and, for purposes hereof, the amount of any such
obligation shall be the capitalized amount thereof determined in accordance
with GAAP.


 


“Capital Stock” means (i) with respect to any Person that is a
corporation, any and all shares, interests, participations or other equivalents
(however designated and whether or not voting) of corporate stock (including
preferred stock), and (ii) with respect to any Person that is not a
corporation, any and all partnership, membership or other equity interests of
such Person.


 


“Cash and Cash Equivalents” means all cash and any presently
existing or hereafter arising deposit account balances, certificates of deposit
or other financial instruments properly classified as cash equivalents under
GAAP.


 


“Cash Collateral Account” means an interest bearing account
maintained by one or more Borrowers with the Cash Collateral Bank pursuant to
the terms of the Cash Collateral Agreement.


 


“Cash Collateral Agreement” means the Account Control Agreement
dated June 12, 2002, among the Parent, the Collateral Agent and the Cash
Collateral Bank, as the same may be amended or otherwise modified from time to
time.


 


“Cash Collateral Bank” means Citizens Bank of Massachusetts or
such other financial institution as may be appointed by the Collateral Agent
from time to time to serve as the Cash Collateral Bank.


 


“Change of Control” means each occurrence of any of the
following:


 


(a)           the acquisition,
directly or indirectly, by any person or group (within the meaning of
Section 13(d)(3) of the Exchange Act), other than the Permitted Holders,
of beneficial ownership of more than 25% of the aggregate outstanding Voting
Stock of the Parent;


 


(b)           during any period of
two consecutive years, individuals who at the beginning of such period
constituted the Board of Directors of the Parent (together with any new
directors whose election by such Board of Directors or whose nomination for
election by the


 


4

















 


shareholders of the Parent was
approved by a vote of at least a majority the directors of the Parent then
still in office who were either directors at the beginning of such period, or
whose election or nomination for election was previously approved) cease for
any reason to constitute a majority of the Board of Directors of the Parent;


 


(c)           the Parent shall
cease to have beneficial ownership (as defined in Rule 13d-3 under the
Exchange Act) of 100% of the aggregate Voting Stock of the other Loan Parties,
free and clear of all Liens (other than in favor of the Collateral Agent), provided
that it shall not constitute a Change of Control if the Parent shall cease to
have beneficial ownership of 100% of the aggregate Voting Stock of any such
other Loan Party as result of a disposition, merger or consolidation permitted
by Section 7.02(c);


 


(d)           (i)  any
Borrower consolidates with or merges into another entity (other than with or
into another Borrower) or conveys, transfers or leases all or substantially all
of its property and assets to another Person (other than to another Borrower),
(ii) any Guarantor consolidates with or merges into another Person (other
than with or into another Loan Party) or conveys, transfers or leases all or
substantially all of its property and assets to any Person (other than to
another Loan Party), or (iii) any entity consolidates with or merges into
any Loan Party in a transaction pursuant to which the outstanding Voting Stock
of such Loan Party is reclassified or changed into or exchanged for cash,
securities or other property, other than any such transaction described in this
clause (iii) in which either (A) in the case of any such transaction
involving the Parent, no person or group (within the meaning of Section
13(d)(3) of the Exchange Act) (other than the Permitted Holders) has, directly
or indirectly, acquired beneficial ownership of more than 25% of the aggregate
outstanding Voting Stock of the Parent or (B) in the case of any such
transaction involving a Loan Party other than the Parent, the Parent has
beneficial ownership of 100% of the aggregate Voting Stock of the resulting,
surviving or transferee entity, free and clear of all Liens (other than in
favor of the Collateral Agent) ; or


 


(e)           Russell L. Shade,
Jr. shall cease to be involved in the day to day operations and management of
the business of the Borrowers and a successor, reasonably acceptable to the
Agents, is not appointed within 180 days of the cessation of such involvement.


 


“Charles Evans” has the meaning specified therefor in the
preamble hereto.


 


“Citizens Bank” means Citizens Bank of Massachusetts.


 


“Citizens Bank Letters of Credit” means the letters of credit
described in Schedule 6.01(q) and issued by Citizens Bank.


 


“Closing Fee” has the meaning specified therefor in
Section 2.06(a).


 


“Collateral” means all of the property and assets and all
interests therein and proceeds thereof now owned or hereafter acquired by any
Person upon which a Lien is granted or purported to be granted by such Person
as security for all or any part of the Obligations.


 


“Collateral Agent” has the meaning specified therefor in the
preamble hereto.


 


5

















 


“Collateral Agent Advances” has the meaning specified therefor
in Section 10.08(a).


 


“Commitments” means with respect to each Lender, such Lender’s
Revolving Credit Commitment and Term Loan A Commitment.


 


“Consolidated EBITDA” means, with respect to any Person for any
period, the Consolidated Net Income of such Person and its Subsidiaries for
such period, plus (i) without duplication, the sum of the following
amounts of such Person and its Subsidiaries for such period and to the extent
deducted in determining Consolidated Net Income of such Person for such
period:  (A) Consolidated Net Interest
Expense, (B) income tax expense, (C) depreciation expense,
(D) amortization expense, (E) extraordinary or non recurring losses, (F)
losses described in Schedule 1.01(B), (G) restructuring charges and (H) losses
from discontinued operations, so long as each of the foregoing items (E), (F),
(G), and (H) remain reasonably acceptable to the Agents, less (ii)
without duplication, the sum of the following amounts of such Person and
its Subsidiaries for such period and to the extent added in determining
Consolidated Net Income of such Person for such period:  (A) extraordinary or non recurring
gains, (B) gains described in Schedule 1.01(B), (C) gains from discontinued
operations and (D) interest income (to the extent not deducted from
Consolidated Net Interest Expense), so long as each of the foregoing items
remain reasonably acceptable to the Agents.


 


“Consolidated Funded Indebtedness” means, with respect to any
Person at any date, all Indebtedness of such Person, determined on a
consolidated basis in accordance with GAAP, which by its terms matures more
than one year after the date of calculation, and any such Indebtedness maturing
within one year from such date which is renewable or extendable at the option
of such Person to a date more than one year from such date including, in any
event, with respect to the Parent and its Subsidiaries, the Revolving Loans,
but excluding (i) any Indebtedness arising under the Receivable Purchase
Documents and (ii) Contingent Obligations.


 


“Consolidated Net Income” means, with respect to any Person for
any period, the net income (loss) of such Person and its Subsidiaries for such
period, determined on a consolidated basis and in accordance with GAAP.


 


“Consolidated Net Interest Expense” means, with respect to any
Person for any period, gross interest expense of such Person and its
Subsidiaries for such period determined in conformity with GAAP (including,
without limitation, interest expense paid to Affiliates of such Person,
including the discount under the Receivable Purchase Documents), less
(i) the sum of (A) interest income for such period and (B) gains
for such period on Hedging Agreements (to the extent not included in interest
income above and to the extent not deducted in the calculation of such gross
interest expense), plus (ii) the sum of (A) losses for such
period on Hedging Agreements (to the extent not included in such gross interest
expense), and (B) the upfront costs or fees for such period associated
with Hedging Agreements (to the extent not included in gross interest expense),
each determined on a consolidated basis and in accordance with GAAP for such
Person and its Subsidiaries.


 


“Consolidated Tangible Net Worth” means, with respect to any
Person at any time, (i) the sum of the following accounts (or their
equivalents) set forth on a consolidated


 


6

















 


balance sheet of such Person
and its Subsidiaries prepared in accordance with GAAP: the par or stated value
of all outstanding Capital Stock, capital surplus and retained earnings (or
less accumulated deficits), less (ii) all intangibles included on
the asset side of such balance sheet, including, without limitation, goodwill
(including any amounts, however designated on such balance sheet, representing
the excess of the purchase price paid for assets or stock acquired over the
value assigned thereto on the books of such Person and its Subsidiaries),
patents, trademarks, trade names, copyrights and similar intangibles.


 


“Contingent Obligation” means, with respect 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, (i) the direct or indirect
guaranty, endorsement (other than for collection or deposit in the ordinary
course of business), co-making, discounting with recourse or sale with recourse
by such Person of the obligation of a primary obligor, (ii) the obligation
to make take-or-pay or similar payments, if required, regardless of
nonperformance by any other party or parties to an agreement, (iii) 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 (1) for the purchase or payment
of any such primary obligation or (2) 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, assets,
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
holder of such primary obligation against loss in respect thereof; provided,
however, that the term “Contingent Obligation” shall not include any
products warranties extended 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 with respect to which such Contingent Obligation is made
(or, if less, the maximum amount of such primary obligation for which such
Person may be liable pursuant to the terms of the instrument evidencing such
Contingent Obligation) or, if not stated or determinable, the maximum
reasonably anticipated liability with respect thereto (assuming such Person is
required to perform thereunder), as determined by such Person in good faith.


 


“Contribution Agreement” means the Amended and Restated Contribution
Agreement dated as of the Effective Date, and substantially in the form of
Exhibit G hereto, among the Borrowers.


 


“Default” means an event which, with the giving of notice or the
lapse of time or both, would constitute an Event of Default.


 


“Demand Notes” means (i) the promissory notes dated as of the
date hereof, executed and delivered by each Originator to the Parent pursuant
to the Parent Purchase Agreement and (ii) the promissory note dated the date
hereof, executed and delivered by the Parent to Funding Corp. pursuant to the
Funding Purchase Agreement, as each such promissory note may be amended,
supplemented, restated, modified or extended from time to time, and any
promissory note or notes issued in exchange or replacement therefor.


 


7

















 


“Disposition” means any transaction, or series of related
transactions, pursuant to which any Loan Party or any of its Subsidiaries
sells, assigns, transfers or otherwise disposes of any property or assets (whether
now owned or hereafter acquired) to any other Person, in each case whether or
not the consideration therefor consists of cash, securities or other assets
owned by the acquiring Person, excluding (i) any sales of
“Receivables” and “Related Rights” (each as defined in the Receivable Purchase
Documents) pursuant to the Receivable Purchase Documents, (ii) any sales of
Inventory in the ordinary course of business on ordinary business terms, and
(iii) sales or other dispositions of Permitted Investments.


 


“Dollar,” “Dollars” and the symbol “$” each means
lawful money of the United States of America.


 


“Effective Date” means the date, on which all of the conditions
precedent set forth in Section 5.01 are satisfied or waived and the initial
Loan is made.


 


“Eligible Inventory” means all finished goods and raw materials
Inventory that meets all of the following specifications:  (i) such Inventory is lawfully owned by
a Borrower free and clear of any existing Lien, other than that of the
Collateral Agent for the benefit of the Lenders under the Loan Documents;
(ii) such Inventory is not held on consignment and may be lawfully sold
and it continues to be in full conformity with all representations and
warranties made by such Borrower with respect thereto in the Loan Documents;
(iii) such Borrower has the right to grant Liens on such Inventory;
(iv) such Inventory arose or was acquired in the ordinary course of the
business of such Borrower and does not represent damaged, obsolete or unsalable
goods; (v) no Account Receivable or document of title has been created or
issued with respect to such Inventory; (vi) such Inventory is located in
one of the locations in one of the continental United States listed on
Schedule 6.01(ee) or such other locations in the continental United States
as the Collateral Agent may approve in writing from time to time; (vii) if
such Inventory consists of finished goods Inventory sold under a licensed
trademark (A) the Collateral Agent shall have entered into a waiver
letter, in form and substance satisfactory to the Collateral Agent, with the
licensor with respect to the rights of the Collateral Agent to use the licensed
trademark to sell or otherwise dispose of such Inventory or (B) the
Collateral Agent shall otherwise be satisfied, in its sole discretion, that the
Collateral Agent has rights to sell or dispose of such Inventory;
(viii) the Inventory is not work-in-process, supplies or packaging; and
(ix) such Inventory is and at all times shall continue to be acceptable to
the Administrative Agent.


 


“Employee Plan” means an employee benefit plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained (or was
maintained at any time during the six (6) calendar years preceding the date of
any borrowing hereunder) for employees of a Borrower or any of ERISA Affiliates
of a Borrower.


 


“Environmental Actions” means any complaint, summons, citation,
notice, demand, directive, order, claim, litigation, investigation, judicial or
administrative proceeding, judgment, letter or other communication from any
Governmental Authority or any third party involving violations of Environmental
Laws or Releases or threatened Releases of Hazardous Materials (i) onto or from
any assets, properties or businesses presently or formerly owned or operated by
any Loan Party or any of its Subsidiaries or any predecessor in interest; (ii)
onto or from adjoining properties or businesses; or (iii) onto or from any
facilities which received


 


8

















 


Hazardous Materials generated
by any Loan Party or any of its Subsidiaries or any predecessor in interest.


 


“Environmental Laws” means the Comprehensive Environmental
Response, Compensation and Liability Act (“CERCLA”) (42 U.S.C. § 9601, et
seq.), the Hazardous Materials Transportation Act (49 U.S.C. § 1801, et
seq.), the Resource Conservation and Recovery Act (42 U.S.C.
§ 6901, et  seq.), the Federal Clean Water Act
(33 U.S.C. § 1251 et  seq.), the Clean Air Act
(42 U.S.C. § 7401 et  seq.), the Toxic Substances
Control Act (15 U.S.C. § 2601 et  seq.) and the
Occupational Safety and Health Act (29 U.S.C. § 651 et  seq.),
as such laws may be amended or otherwise modified from time to time, and any
other present or future federal, state, local or foreign statute, law,
ordinance, rule, regulation, order, judgment, decree, permit, license or other
binding determination of any Governmental Authority imposing liability or
establishing standards of conduct for the protection of the indoor or outdoor
environment.


 


“Environmental Liabilities and Costs” means all liabilities,
monetary obligations, Remedial Actions, losses, damages, punitive damages,
consequential damages, treble damages, costs and expenses (including all
reasonable fees, disbursements and expenses of counsel, experts and consultants
and costs of investigations and feasibility studies), fines, penalties,
sanctions and interest incurred as a result of any Environmental Action.


 


“Environmental Lien” means any Lien in favor of any Governmental
Authority for Environmental Liabilities and Costs.


 


“ERISA” means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute of similar import, and regulations
thereunder, in each case as in effect from time to time.  References to sections of ERISA shall be construed
also to refer to any successor sections.


 


“ERISA Affiliate” means, with respect to any Person, any trade
or business (whether or not incorporated) which is a member of a group of which
such Person is a member and which would be deemed to be a “controlled group”
within the meaning of Sections 414(b), (c), (m) and (o) of the Internal Revenue
Code.


 


“Event of Default” means any of the events set forth in Section
9.01.


 


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


 


“Excluded Subsidiaries” means Nicole Corporation, a
Massachusetts corporation, and each of its direct and indirect subsidiaries, so
long as any such Person continues to be an “Unrestricted Subsidiary”, as such
term is defined in the Indenture.


 


“Existing Financing Agreement” means the Amended and Restated
Financing Agreement dated as of July 19, 2001 by and among the Borrowers, the
Guarantors, the Lenders, the Collateral Agent and the Administrative Agent, as
amended through the date hereof.


 


“Existing Financing Agreement Effective Date” means July 19,
2001.


 


9

















 


“Existing Revolving Loans” means the revolving loans made by
Ableco to the Borrowers under the Existing Financing Agreement.


 


“Federal Funds Rate” means, for any period, a fluctuating
interest rate per annum equal for each day during such period of the weighted
average of the rates on overnight Federal funds transactions with members of
the Federal Reserve System arranged by Federal funds brokers, as published on the
next succeeding Business Day by the Federal Reserve Bank of New York, or, if
such rate is not so published for any day which is a Business Day, the average
of the quotations for such day on such transactions received by the
Administrative Agent from three Federal funds brokers of recognized standing
selected by it.


 


“Field Examination Fees” has the meaning specified for such term
in Section 4.01.


 


“Final Maturity Date” means October 31, 2003, or such earlier
date on which any Loan shall become due and payable, in whole or in part, in
accordance with the terms of this Agreement and the other Loan Documents.


 


“Financial Statements” means (i) the audited consolidated and
unaudited consolidating balance sheet of the Parent and its Subsidiaries for
the Fiscal Year ended April 27, 2002 and the related consolidated and
consolidating statement of operations and cash flows and the consolidated
statement of shareholders’ equity for the Fiscal Year then ended, (ii) the
unaudited consolidated and consolidating balance sheet of the Parent and its
Subsidiaries for the one fiscal quarter ended July 27, 2002 and (iii) the
unaudited consolidated and consolidating balance sheet of the Parent and its
Subsidiaries for the three Fiscal Months ended October 26, 2002 and the related
consolidated and consolidating statement of operations and cash flows and the
consolidated statement of shareholders’ equity for the three Fiscal Months then
ended.


 


“Fiscal Month” means (i) for the 2001 Fiscal Year, the fiscal
months of the Parent and its Subsidiaries set forth on Schedule 1.01(D), and
(ii) for each Fiscal Year thereafter, the fiscal months set forth in the
projections delivered pursuant to Section 7.01(a)(vii) corresponding to such
Fiscal Year.


 


“Fiscal Year” means the fiscal year of the Parent and its
Subsidiaries ending on the last Saturday in April of each year or May 1 of
each year if such date falls on a Saturday.


 


“Fixed Charge Coverage Ratio” means, for any period, the ratio
of (i) Consolidated EBITDA of the Parent and its Subsidiaries for such
period, to (ii) the sum of, without duplication (A) all principal of
Indebtedness of the Parent and its Subsidiaries scheduled to be paid or prepaid
during such period (not including (x) prepayments of the Revolving Loans unless
such prepayments are accompanied by a reduction of the Revolving Credit
Commitment and (y) the loans outstanding under the Existing Financing Agreement
that are repaid on the Existing Financing Agreement Effective Date), plus
(B) Consolidated Net Interest Expense of the Parent and its Subsidiaries
for such period, plus (C) cash income taxes paid or payable by the
Parent and its Subsidiaries during such period, plus (D) cash
dividends or distributions paid by the Parent and its Subsidiaries (other than
dividends or distributions paid to the Parent) during such period, plus
(E) Capital Expenditures made by the Parent and its Subsidiaries during
such


 


10

















 


period, plus
(F) all amounts paid or payable by the Parent and its Subsidiaries on
Operating Lease Obligations having a scheduled due date during such
period.  In determining the Fixed Charge
Coverage Ratio for a particular period (A) pro forma effect will be given
to:  (1) the incurrence, repayment
or retirement of any Indebtedness by the Parent and its Subsidiaries since the
first day of such period as if such Indebtedness was incurred, repaid or
retired on the first day of such period and (2) the acquisition (whether by
purchase, merger or otherwise) or disposition (whether by sale, merger or
otherwise) of any property or assets acquired or disposed of by the Parent and
its Subsidiaries since the first day of such period, as if such acquisition or
disposition occurred on the first day of such period; and (B) the amount
of Indebtedness under a revolving credit facility will be computed based upon
the average daily balance of such Indebtedness during such period.


 


“Funding Corp.” means High Voltage Funding Corporation, a
Delaware corporation.


 


“Funding Corp. Financing Agreement” means the Financing
Agreement, dated as of December 19, 2002, by and among Funding Corp., as
borrower, the financial institutions party thereto as lenders, and Ableco
Finance LLC, as administrative agent and collateral agent.


 


“Funding Purchase Agreement” means the Purchase and Sale
Agreement dated as of the date hereof, by and among the Parent, as seller and
initial servicer, and Funding Corp., as purchaser, as the same may be amended
or otherwise modified from time to time.


 


“GAAP” means generally accepted accounting principles in effect
from time to time in the United States, applied on a consistent basis, provided
that for the purpose of Section 7.03 and the definitions used therein,
“GAAP” shall mean generally accepted accounting principles in effect on the
date hereof and consistent with those used in the preparation of the Financial
Statements, provided, further, that if there occurs after the
date of this Agreement any change in GAAP that affects in any respect the
calculation of any covenant contained in Section 7.03, the Collateral
Agent and the Parent shall negotiate in good faith amendments to the provisions
of this Agreement that relate to the calculation of such covenant with the
intent of having the respective positions of the Lenders and the Parent after
such change in GAAP conform as nearly as possible to their respective positions
as of the date of this Agreement and, until any such amendments have been
agreed upon, the covenants in Section 7.03 shall be calculated as if no
such change in GAAP has occurred.


 


“Governmental Authority” means any nation or government, any
Federal, state, city, town, municipality, county, local or other political
subdivision thereof or thereto and any department, commission, board, bureau,
instrumentality, agency or other entity exercising executive, legislative,
judicial, taxing, regulatory or Administrative powers or functions of or
pertaining to government.


 


“Guaranties” means (i) the joint and several guaranty of the
Guarantors contained in Article XI, and (ii) each guaranty
substantially in the form of Exhibit A, made by a Guarantor in favor of
the Collateral Agent for the benefit of the Lenders pursuant to
Section 7.01(b).


 


11

















 


“Guarantors” had the meaning specified for such term in the
preamble hereto and, in addition, means each other Person which
guarantees, pursuant to Section 7.01(b) or otherwise, all or any part of
the Obligations.


 


“Hazardous Materials” means (i) any element, compound or
chemical that is defined, listed or otherwise classified as a contaminant,
pollutant, toxic pollutant, toxic or hazardous substance, extremely hazardous
substance or chemical, hazardous waste, special waste, or solid waste under
Environmental Laws; (ii) petroleum and its refined products;
(iii) polychlorinated biphenyls; (iv) any substance exhibiting a
hazardous waste characteristic, including but not limited to, corrosivity,
ignitability, toxicity or reactivity as well as any radioactive or explosive
materials; and (v) any raw materials, building components, including but
not limited to asbestos-containing materials and manufactured products
containing Hazardous Materials.


 


“Hedging Agreement” means any interest rate, foreign currency,
commodity or equity swap, collar, cap, floor or forward rate agreement, or
other agreement or arrangement designed to protect against fluctuations in
interest rates or currency, commodity or equity values (including, without
limitation, any option with respect to any of the foregoing and any combination
of the foregoing agreements or arrangements), and any confirmation executed in
connection with any such agreement or arrangement.


 


“Highest Lawful Rate” means, with respect to the Agents or a
Lender, the maximum non-usurions interest rate, if any, that at any time or
from time to time may be contracted for, taken, reserved, charged or received
on the Obligations under laws applicable to the Agents or such Lender which are
currently in effect or, to the extent allowed by law, under such applicable
laws which may hereafter be in effect and which allow a higher maximum
non-usurious interest rate than applicable laws now allow.


 


“HIVEC Holdings” means HIVEC Holdings, Inc., a Delaware
corporation.


 


“Indebtedness” means, without duplication, with respect to any
Person, (i) all indebtedness of such Person for borrowed money; (ii) all
obligations of such Person for the deferred purchase price of property or
services (other than trade payables or other account payables incurred in the
ordinary course of such Person’s business and not outstanding for (A) more than
90 days after the date such payable was created or (B) a longer period if such
payable is being contested in good faith and by appropriate proceedings
promptly initiated and diligently conducted, and a reserve or other appropriate
provision, if any, as shall be required by GAAP shall have been made therefor, provided
that the aggregate amount excluded under this clause (B) shall not exceed $3
million at any time); (iii) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments or upon which interest
payments are customarily made; (iv) all obligations and liabilities of
such Person created or arising under any conditional sales or other title
retention agreement with respect to property used and/or acquired by such
Person, even though the rights and remedies of the lessor, seller and/or lender
thereunder are limited to repossession or sale of such property; (v) all
Capitalized Lease Obligations of such Person; (vi) all obligations and
liabilities, contingent or otherwise, of such Person, in respect of letters of
credit, acceptances and similar facilities; (vii) all obligations and
liabilities, calculated on a basis satisfactory to the Collateral Agent and in
accordance with accepted practice, of such


 


12

















 


Person under Hedging
Agreements; (viii) all Contingent Obligations; (ix) liabilities
incurred under Title IV of ERISA with respect to any plan (other than a
Multiemployer Plan) covered by Title IV of ERISA and maintained for
employees of such Person or any of its ERISA Affiliates; (x) withdrawal
liability incurred under ERISA by such Person or any of its ERISA Affiliates to
any Multiemployer Plan; (xi) all other items which, in accordance with
GAAP, would be included as liabilities on the liability side of the balance
sheet of such Person; and (xii) all obligations referred to in clauses
(i) through (xi) of this definition of another Person secured by (or for
which the holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) a Lien upon property owned by such Person, even
though such Person has not assumed or become liable for the payment of such
Indebtedness.  The Indebtedness of any
Person shall include the Indebtedness of any partnership of or joint venture in
which such Person is a general partner or a joint venturer.


 


“Indemnified Matters” has the meaning specified therefor in
Section 12.15.


 


“Indemnitees” has the meaning specified therefor in Section
12.15.


 


“Indenture” means the Indenture, dated as August 8, 1997,
between the Parent, as issuer, and the Indenture Trustee, as amended from time
to time prior to the date hereof and as further amended or otherwise modified
from time to time in accordance with this Agreement.


 


“Indenture Collateral” means the Intercompany Notes in the
possession of the Indenture Trustee pursuant to the Indenture Pledge Agreement
and the real property located at 6509 Flying Cloud Drive, Eden Praire, Minnesota.


 


“Indenture Documents” means the Indenture, the Indenture Notes,
the Indenture Pledge Agreement and any other instrument or document delivered
by any Loan Party to the Indenture Trustee in connection with the Indenture.


 


“Indenture Notes” means the Parent’s 10 1⁄2% Senior Notes due
2004, issued pursuant to the Indenture.


 


“Indenture Pledge Agreement” means the Amended and Restated
Pledge Agreement between the Parent and the Indenture Trustee dated
December 31, 1999, relating to the pledge of the Intercompany Notes, as
same may be amended or otherwise modified from time to time in accordance with
this Agreement.


 


“Indenture Trustee” means State Street Bank and Trust Company,
as trustee under the Indenture, and any successor trustee.


 


“Insolvency Proceeding” means any proceeding commenced by or
against any Person under any provision of the Bankruptcy Code or under any
other bankruptcy or insolvency law, assignments for the benefit of creditors,
formal or informal moratoria, compositions, extensions generally with
creditors, or proceedings seeking reorganization, arrangement, or other similar
relief.


 


13

















 


“Intercompany Notes” means the Intercompany Notes issued by the
direct Subsidiaries of the Parent evidencing loans made by such Subsidiaries to
the Parent in the following principal amounts: 
(i) Robicon:  $39.5 million;
(ii) Physical Electronics: 
$39.5 million; (iii) Maxima: 
$19.0 million; (iv) HIVEC Holdings:  $3.5 million; and (v) Stewart Warner:  $20.0 million.


 


“Internal Revenue Code” means the Internal Revenue Code of 1986,
as amended (or any successor statute thereto) and the regulations thereunder.


 


“Inventory” means all goods and merchandise of the Loan Parties,
including, without limitation, all raw materials, work-in-process, packaging,
supplies, materials and finished goods of every nature used or usable in
connection with the shipping, storing, advertising or sale of such goods and
merchandise, whether now owned or hereafter acquired, and all such other
property the sale or other disposition of which would give rise to an Account
Receivable or cash.


 


“Lease” means any lease of real property to which any Loan Party
is a party as lessor or lessee.


 


“Lender” and “Lenders” have the meanings specified therefor
in the preamble hereto.


 


“Liabilities” has the meaning specified therefor in
Section 2.07.


 


“Lien” means any mortgage, deed of trust, pledge, lien
(statutory or otherwise), security interest, charge or other encumbrance or
security or preferential arrangement of any nature, including, without
limitation, any conditional sale or title retention arrangement, any
Capitalized Lease and any assignment, deposit arrangement or financing lease
intended as, or having the effect of, security.


 


“Loan” means the Term Loan or any Revolving Loan made by an
Agent or a Lender to the Borrowers pursuant to Article II.


 


“Loan Account” means an account maintained hereunder by the
Administrative Agent on its books of account, at the Payment Office and with
respect to the Borrowers, in which the Borrowers will be charged with all Loans
made to, and all other Obligations incurred by, the Borrowers.


 


“Loan Documents” means this Agreement, the Notes, the
Guaranties, the Security Agreements, the Pledge Agreement, the Mortgages, the
Contribution Agreement, the Amendatory Agreement, the Cash Collateral Agreement
and all other agreements, instruments, and other documents executed and
delivered pursuant hereto or thereto or otherwise evidencing or securing any
Loan or other Obligation.


 


“Loan Parties” means the Borrowers and the Guarantors.


 


“Loan Servicing Fee” has the meaning specified therefor in
Section 2.06(d).


 


14

















 


“Material Adverse Effect” means a material adverse effect on any
of (i) the operations, business, assets, properties, condition (financial
or otherwise) or prospects of the Loan Parties (taken as a whole),
(ii) the ability of the Loan Parties (taken as a whole) to perform any of
their obligations under any Loan Document, (iii) the legality, validity or
enforceability of this Agreement or any other Loan Document, (iv) the
rights and remedies of the Agents and the Lenders under any Loan Document, or
(v) the validity, perfection or priority of a Lien in favor of the Collateral
Agent for the benefit of the Lenders on any of the Collateral with an aggregate
fair market value in excess of $500,000.


 


“Material Contract” means, with respect to any Person, each
contract or agreement to which such Person or its Subsidiary is a party
(a) involving aggregate consideration payable to or by such Person or such
Subsidiary of (i) in the case of the contracts and agreements described in
Schedule 1.01(E) hereto, $500,000 or more, and (ii) in all other
cases, $250,000 or more (but excluding (A) purchase orders in the ordinary
course of the business of such Person and (B) contracts that by their
terms may be terminated by such Person or Subsidiary in the ordinary course of
its business upon less than 60 days’ notice without penalty or premium) or
(b) otherwise material to the business, operations, condition (financial
or otherwise), performance, prospects or properties of such Person or such
Subsidiary.


 


“Maxima” has the meaning specified therefor in the preamble
hereto.


 


“Moody’s” means Moody’s Investors Service, Inc. and any
successor thereto.


 


“Mortgage” means each mortgage, deed of trust or deed to secure
debt, in form and substance satisfactory to the Collateral Agent, made by a
Loan Party in favor of the Collateral Agent for the benefit of the Lenders,
securing the Obligations and delivered to the Collateral Agent pursuant to the
Original Financing Agreement, the Existing Financing Agreement or Section
7.01(b).


 


“Multiemployer Plan” means a “multiemployer plan” as defined in
Section 4001(a)(3) of ERISA for which any Borrower or any ERISA Affiliate
of a Borrower has contributed to, or has been obligated to contribute to, at
any time during the preceding six (6) years.


 


“Net Cash Proceeds” means, (i) with respect to any
Disposition by any Person, the amount of cash received (directly or indirectly)
from time to time (whether as initial consideration or through the payment of
deferred consideration) by or on behalf of such Person or any of its
Subsidiaries or Affiliates, in connection therewith after deducting therefrom
only (A) the principal amount of any Indebtedness secured by any Lien
permitted by Section 7.02(a) on any asset (other than Indebtedness assumed
by the purchaser of such asset) which is required to be, and is, repaid in
connection with such Disposition (other than Indebtedness under this
Agreement), (B) reasonable expenses related thereto incurred by such
Person or such Affiliate, (C) transfer taxes paid by such Person or such
Affiliate in connection therewith, and (D) net income taxes to be paid in
connection with such Disposition (after taking into account any tax credits or
deductions and any tax sharing arrangements and (ii) with respect to the
issuance or incurrence of any Indebtedness by any Person, or the sale or issuance
by any Person of any shares of its Capital Stock, the aggregate amount of cash
received (directly or indirectly) from


 


15

















 


time to time (whether as
initial consideration or through the payment of deferred consideration) by or
on behalf of such Person or any of its Subsidiaries or Affiliates in connection
therewith after deducting therefrom reasonable brokerage commissions,
underwriting fees and discounts, legal fees and similar fees and commissions
incurred in connection therewith.


 


“Notes” means any promissory note issued pursuant to Section
2.03 and all promissory notes delivered in substitution or exchange therefor.


 


“Notice of Borrowing” has the meaning specified therefor in
Section 2.02(a).


 


“Obligations” means (i) the joint and several obligations of the
Borrowers to pay, as and when due and payable (by scheduled maturity, required
prepayment, acceleration, demand or otherwise), all amounts from time to time
owing by the Borrowers in respect of the Loan Documents, whether for principal,
interest (including, without limitation, all interest that accrues after the
commencement of any case, proceeding or other action relating to bankruptcy,
insolvency or reorganization of any Borrower), fees, indemnification payments,
expense reimbursements or otherwise, and (ii) the obligations of the Borrowers
and the other Loan Parties to perform or observe all of their obligations from
time to time existing under the Loan Documents.


 


“Operating Lease Obligations” means all obligations for the
payment of rent for any real or personal property under leases or agreements to
lease, other than Capitalized Lease Obligations.


 


“Ophir Investment” means the Capital Stock of Ophir Corporation,
a Colorado corporation, owned by the Parent.


 


“Original Effective Date” means November 30, 2000.


 


“Original Financing Agreement” means the Financing Agreement
dated as of November 30, 2000 by and among the Borrowers, the Guarantors, the
Lenders, the Collateral Agent and Foothill Capital Corporation, as
administrative agent.


 


“Originator Notes” means the promissory notes dated as of the
date hereof, executed and delivered by the Parent to each Originator pursuant
to the Parent Purchase Agreement, as such promissory notes may be amended,
supplemented, restated, modified or extended from time to time, and any
promissory note or notes issued in exchange or replacement therefor.


 


“Originators” means the Borrowers, other than the Parent.


 


“Parent” has the meaning specified therefor in the Preamble
hereto.


 


“Parent Note” means the promissory note dated as of the date
hereof, executed and delivered by Funding Corp. to the Parent pursuant to the
Funding Purchase Agreement, as such promissory note may be amended,
supplemented, restated, modified or extended from time to time, and any
promissory note or notes issued in exchange or replacement therefor.


 


16

















 


“Parent Purchase Agreement” means the High Voltage Engineering
Corporation Purchase and Sale Agreement dated as of the date hereof, by and
among the Parent, as purchaser, and each of the Originators, as sellers.


 


“Participant Register” has the meaning specified therefor in
Section 12.07(b)(v).


 


“Payment Office” means the Administrative Agent’s office located
at 450 Park Avenue, 28th Floor, New York, New York 10022 or at
such other office or offices of the Administrative Agent as may be designated
in writing from time to time by the Administrative Agent to the Collateral
Agent and the Parent.


 


“Permitted Discretion” means a determination made in good faith
and in the exercise of reasonable (from the prospective of a secured
asset-based lender) business judgment.


 


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


 


“Permitted Holders” means the Persons named on Schedule 1.01(C).


 


“Permitted Indebtedness” means:


 


(a)           any Indebtedness
owing to the Agents and the Lenders under this Agreement and the other Loan
Documents;


 


(b)           any Indebtedness
listed on Schedule 7.02(b), including the Indebtedness evidenced by the
Indenture Notes, and the extension of maturity, refinancing or modification of
the terms thereof; provided, however, that (i) such extension,
refinancing or modification is pursuant to terms that are not less favorable to
the Borrowers and the Lenders than the terms of the Indebtedness being
extended, refinanced or modified and (ii) after giving effect to the extension,
refinancing or modification, such Indebtedness is not greater than the amount
of Indebtedness outstanding immediately prior to such extension, refinancing or
modification;


 


(c)           Indebtedness
evidenced by Capitalized Lease Obligations entered into after the Effective
Date in order to finance Capital Expenditures made by the Borrowers in
accordance with the provisions of Section 7.02(g), which Indebtedness,
when aggregated with the principal amount of all Indebtedness incurred under
this clause (c) and clause (d) of this definition, does not exceed $5 million
at any time outstanding;


 


(d)           Indebtedness
permitted by clause (e) of the definition of “Permitted Lien” incurred after
the Effective Date;


 


(e)           Indebtedness
permitted under Section 7.02(e);


 


(f)            Subordinated
Indebtedness;


 


(g)           Indebtedness
incurred in connection with the W.P. Carey Lease or any refinancing or replacement
thereof not to exceed $9,000,000;


 


17

















 


(h)           Indebtedness of
foreign Subsidiaries not subject to a guaranty by any Borrower or Guarantor;


 


(i)            Indebtedness
evidenced by the Intercompany Notes, as such notes are in effect on the date
hereof;


 


(j)            Indebtedness
incurred pursuant to the Receivable Purchase Documents;


 


(k)           other intercompany
Indebtedness among the Loan Parties so long as such Indebtedness is evidenced
by promissory notes which are pledged and delivered to the Collateral Agent as
Collateral;


 


(l)            Indebtedness
consisting of (i) reimbursement obligations to Wells Fargo with respect to the
Wells Fargo Letters of Credit to the extent such reimbursement obligations are
secured by cash collateral (not to exceed 110% of the stated amount of such
letters of credit) and (ii) reimbursement obligations to Citizens with respect
to the Citizens Letters of Credit to the extent such reimbursement obligations
are secured by cash collateral (not to exceed 110% of the stated amount of such
letters of credit);


 


(m)          to the extent
permitted under the Indenture, additional Indebtedness for borrowed money in an
aggregate amount outstanding at any time not to exceed (i) prior to the
Effective Date, $1,200,000, and (ii) thereafter, $2,000,000, provided
that such Indebtedness shall be unsecured and that the terms of such
Indebtedness would not otherwise reasonably be expected to give rise to a
Default or Event of Default.


 


“Permitted Investments” means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by any agency thereof and backed by the full faith and credit of the United
States, in each case maturing within six months from the date of acquisition
thereof; (ii) commercial paper, maturing not more than 270 days after
the date of issue rated P-1 by Moody’s or A-1 by Standard &
Poor’s; (iii) certificates of deposit maturing not more than 270 days
after the date of issue, issued by commercial banking institutions and money
market or demand deposit accounts maintained at commercial banking
institutions, each of which is a member of the Federal Reserve System and has a
combined capital and surplus and undivided profits of not less than
$500,000,000; (iv) repurchase agreements having maturities of not more
than 90 days from the date of acquisition which are entered into with
major money center banks included in the commercial banking institutions
described in clause (iii) above and which are secured by readily
marketable direct obligations of the Government of the United States of America
or any agency thereof, (v) money market accounts maintained with mutual
funds having assets in excess of $2,500,000,000, and (vi) tax exempt
securities rated A or better by Moody’s or A+ or better by Standard &
Poor’s.


 


“Permitted Liens” means:


 


(a)           Liens
securing the Obligations;


 


18

















 


(b)           Liens
for taxes, assessments and governmental charges the payment of which is not
required under Section 7.01(c);


 


(c)           Liens
imposed by law, such as carriers’, warehousemen’s, mechanics’, materialmen’s
and other similar Liens arising (provided they are subordinate to the
Collateral Agent’s Liens on Collateral) in the ordinary course of business and
securing obligations (other than Indebtedness for borrowed money) that are not
overdue by more than 30 days or are being contested in good faith and by
appropriate proceedings promptly initiated and diligently conducted, and a
reserve or other appropriate provision, if any, as shall be required by GAAP
shall have been made therefor;


 


(d)           Liens
described on Schedule 7.02(a), but not the extension of coverage thereof to
other property or the extension of maturity, refinancing or other modification
of the terms thereof or the increase of the Indebtedness secured thereby;


 


(e)           (i)            purchase money Liens on equipment
acquired or held by the Borrowers in the ordinary course of their business to
secure the purchase price of such equipment or Indebtedness incurred solely for
the purpose of financing the acquisition of such equipment or (ii) Liens
existing on such equipment at the time of its acquisition; provided, however,
that (A) no such Lien shall extend to or cover any other property of any
Loan Party, and (B) the aggregate principal amount of Indebtedness secured
by any or all such Liens described in clauses (i) and (ii) above shall not
exceed at any one time outstanding $5 million with respect to any such
Indebtedness incurred after the Effective Date;


 


(f)            deposits
and pledges securing (i) obligations incurred in respect of workers’
compensation, unemployment insurance or other forms of governmental insurance
or benefits, (ii) the performance of bids, tenders, leases, contracts
(other than for the payment of money) and statutory obligations or (iii)
obligations on surety or appeal bonds, but only to the extent such deposits or
pledges are incurred or otherwise arise in the ordinary course of business and
secure obligations not past due;


 


(g)           easements,
zoning restrictions and similar encumbrances on real property and minor
irregularities in the title thereto that do not (i) secure obligations for the
payment of money or (ii) materially impair the value of such property or its
use by any Loan Party or any of its Subsidiaries in the normal conduct of such
Person’s business;


 


(h)           Liens
securing Indebtedness evidencing Capitalized Lease Obligations described under
subsection (c) of the definition of Permitted Indebtedness;


 


(i)            the
Liens of the Indenture Trustee on the Indenture Collateral;


 


(j)            Liens
to secure the Indebtedness of foreign Subsidiaries permitted by clause (h) of
the definition of “Permitted Indebtedness,” provided that such Liens are
limited to the assets of such foreign Subsidiaries;


 


(k)           Liens
in cash collateral to secure Indebtedness permitted under clause (k) of the
definition of “Permitted Indebtedness”, provided that (i) such cash collateral is limited to


 


19

















 


the extent set
forth in such clause (k) and (ii) upon
the release of any such Lien, such cash collateral is used to prepay the
Revolving Loans in accordance with Section 2.05(c)(ii); and


 


(l)            Liens
created pursuant to the Receivable Purchase Documents.


 


“Person” means an individual,
corporation, limited liability company, partnership, association, joint-stock
company, trust, unincorporated organization, joint venture or Governmental
Authority.


 


“Physical Electronics” has the meaning
specified therefor in the preamble hereto.


 


“Pledge Agreement” means the Pledge
and Security Agreement, dated as of the Original Effective Date, as amended by
the Amendatory Agreement, made by the Parent in favor of the Collateral Agent
for the benefit of the Lenders, securing the Obligations and delivered to the
Collateral Agent.


 


“Post-Default Rate” means a rate of
interest per annum equal to the rate of interest otherwise in effect from time
to time pursuant to the terms of this Agreement plus 2.0%, or, if a rate of
interest is not otherwise in effect, the Reference Rate plus 4.5%.


 


“property” means any right or interest
in or to property of any kind whatsoever, whether real, personal or mixed and
whether tangible or intangible.


 


“Pro Rata Share” means:


 


(a)           with
respect to a Lender’s obligation to make Revolving Loans and receive payments
of interest, fees, and principal with respect thereto, the percentage obtained
by dividing (i) such Lender’s Revolving Credit Commitment, by
(ii) the Total Revolving Commitment, provided, that, if the Total
Revolving Credit Commitment has been reduced to zero, the numerator shall be
the aggregate unpaid principal amount of such Lender’s Revolving Loans
(including Collateral Agent Advances) and the denominator shall be the
aggregate unpaid principal amount of all of the Revolving Loans (including
Collateral Agent Advances), and


 


(b)           with
respect to all other matters (including, without limitation, the
indemnification obligations arising under Section 10.05), the percentage
obtained by dividing (i) the sum of such Lender’s Revolving Credit Commitment
and principal amount of Term Loans, by (ii) the sum of the Total Revolving
Credit Commitment and the aggregate principal amount of all Term Loans provided,
that if such Lender’s Revolving Credit Commitment shall have been reduced to
zero, such Lender’s Revolving Credit Commitment shall be deemed to be the
aggregate unpaid principal amount of such Lender’s Revolving Loans (including
Collateral Agent Advances) and if the Total Revolving Credit Commitment shall
have been reduced to zero, the Total Revolving Credit Commitment shall be
deemed to be the aggregate unpaid principal amount of all Revolving Loan
(including Collateral Agent Advances).


 


“Rating Agencies” has the meaning
specified therefor in Section 2.07.


 


“Receivable Purchase Documents” means
the Funding Corp. Financing Agreement, the Parent Purchase Agreement, the
Funding Purchase Agreement, the Receivable


 


20

















 


Purchase
Notes, each financing statement delivered pursuant thereto and each other
document delivered in connection therewith.


 


“Receivable Purchase Notes” means (i)
the Parent Note, (ii) the Originator Notes and (iii) the Demand Notes.


 


“Reference Bank” means JPMorgan Chase
Bank, N.A., its successors or any other commercial bank designated by the
Collateral Agent to the Parent from time to time.


 


“Reference Rate” means the greater of
(i) the rate of interest publicly announced by the Reference Bank in New
York, New York from time to time as its prime rate or base rate and
(ii) 7%.  The prime rate or base
rate is determined from time to time by the Reference Bank as a means of
pricing some loans to its borrowers and neither is tied to any external rate of
interest or index nor necessarily reflects the lowest rate of interest actually
charged by the Reference Bank to any particular class or category of
customers.  Each change in the Reference
Rate shall be effective from and including the date such change is publicly
announced as being effective.


 


“Register” has the meaning specified
therefor in Section 12.07(b)(ii).


 


“Registered Loan” has the meaning
specified therefor in Section 2.03(e).


 


“Registered Note” has the meaning
specified therefor in Section 2.03(e).


 


“Regulation T”, “Regulation U”
and “Regulation X” mean, respectively, Regulations T, U and X of the
Board or any successor, as the same may be amended or supplemented from time to
time.


 


“Related Rights” has the meaning specified therefor in the
Receivable Purchase Documents.


 


“Release” means any spilling, leaking,
pumping, pouring, emitting, emptying, discharging, injecting, escaping,
leaching, seeping, migrating, dumping or disposing of any Hazardous Material
(including the abandonment or discarding of barrels, containers and other
closed receptacles containing any Hazardous Material) into the indoor or
outdoor environment, including ambient air, soil, surface or ground water.


 


“Remedial Action” means all actions
taken to (i) clean up, remove, remediate, contain, treat, monitor, assess,
evaluate or in any other way address Hazardous Materials in the indoor or
outdoor environment; (ii) prevent or minimize a Release or threatened Release
of Hazardous Materials so they do not migrate or endanger or threaten to
endanger public health or welfare or the indoor or outdoor environment; (iii)
perform pre-remedial studies and investigations and post-remedial operation and
maintenance activities; or (iv) any other actions authorized by 42 U.S.C.
9601.


 


“Reportable Event” means an event
described in Section 4043 of ERISA (other than an event not subject to the
provision for 30-day notice to the PBGC under the regulations promulgated under
such Section).


 


21

















 


“Required Lenders” means Lenders whose
Pro Rata Shares aggregate at least 51%.


 


“Restricted Subsidiary” means each
Subsidiary of the Parent which is a “Restricted Subsidiary”, as such the term
is defined in the Indenture.


 


“Revolving Credit Commitment” means,
with respect to each Lender, the commitment of such Lender to make Revolving
Loans to the Borrowers in the amount set forth opposite such Lender’s name in
Schedule 1.01(A), as such amount may be terminated or reduced from time to
time in accordance with the terms of this Agreement.


 


“Revolving Loan” means a loan made by
a Lender to the Borrowers pursuant to Section 2.01(a)(iii).


 


“Revolving Loan Commitment Termination
Date” means the Final Maturity Date, or such earlier date on which the
Revolving Credit Commitment is terminated in full pursuant to Section 2.05
or 9.01.


 


“Revolving Loan Obligations” means any
Obligations with respect to the Revolving Loans (including without limitation,
the principal thereof, the interest thereon, and fees and expenses specifically
related thereto).


 


“Robicon” has the meaning specified
therefor in the preamble hereto.


 


“SEC” means the Securities and
Exchange Commission or any other similar or successor agency of the Federal
government administering the Securities Act.


 


“Securities Act” means the Securities
Act of 1933, as amended, or any similar Federal statute, and the rules and
regulations of the SEC thereunder, all as the same shall be in effect at the
time.


 


“Securitization” has the meaning
specified therefor in Section 2.07.


 


“Securitization Parties” has the
meaning specified therefor in Section 2.07.


 


“Security Agreements” means the
Security Agreements, each dated as of the Original Effective Date, as amended
by the Amendatory Agreement, made by each of the Loan Parties in favor of the
Collateral Agent for the benefit of the Lenders, securing the Obligations and
delivered to the Collateral Agent.


 


“Settlement Period” has the meaning
specified therefor in Section 2.02(d)(i).


 


“Solvent” means, with respect to any
Person on a particular date, that on such date (i) the fair value of the
property of such Person is not less than the total amount of the liabilities of
such Person, (ii) the present fair salable value of the assets of such
Person is not less than the amount that will be required to pay the probable
liability of such Person on its existing debts as they become absolute and
matured, (iii) such Person is able to realize upon its assets and pay its
debts and other liabilities, contingent obligations and other commitments as
they mature in the


 


22

















 


normal course
of business, (iv) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person’s ability to pay as
such debts and liabilities mature, and (v) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person’s property would constitute unreasonably
small capital.


 


“Specified Joint Venture” means
ULVAC-PHI, Incorporated, a corporation organized under the laws of Japan, the
Capital Stock of which is owned 50% by Physical Electronics and 50% by ULVAC
Japan, Ltd.


 


“Specified Joint Venture Agreement”
means the Basic Agreement dated August 1982, between Physical Electronics and
ULVAC Japan, Ltd., with respect to the Specified Joint Venture, as the same may
be amended or otherwise modified from time to time in accordance with this
Agreement.


 


“Standard & Poor’s” means Standard
& Poor’s Ratings Services, a division of The McGraw-Hill Companies,
Inc. and any successor thereto.


 


“Stewart Warner” has the meaning
specified therefor in the preamble hereto.


 


“Subordinated Indebtedness” means
Indebtedness of any Loan Party the terms of which are satisfactory to the
Collateral Agent and the Required Lenders and which has been expressly
subordinated in right of payment to all Indebtedness of the Loan Parties under
the Loan Documents (i) by the execution and delivery of a subordination
agreement, in form and substance satisfactory to the Collateral Agent and the
Required Lenders, or (ii) otherwise on terms and conditions (including,
without limitation, subordination provisions, payment terms, interest rates,
covenants, remedies, defaults and other material terms) satisfactory to the
Collateral Agent and the Required Lenders.


 


“Subsidiary” means, with respect to
any Person at any date, any corporation, limited or general partnership,
limited liability company, trust, association or other entity (i) the
accounts of which would be consolidated with those of such Person in such
Person’s consolidated financial statements if such financial statements were
prepared in accordance with GAAP or (ii) of which more than 50% of
(A) the outstanding Capital Stock having (in the absence of contingencies)
ordinary voting power to elect a majority of the board of directors of such
corporation, (B) the interest in the capital or profits of such
partnership or limited liability company or (C) the beneficial interest in
such trust or estate is, at the time of determination, owned or controlled
directly or indirectly through one or more intermediaries, by such Person, provided,
that, notwithstanding the foregoing, the term “Subsidiary” shall not include
any Excluded Subsidiary.


 


“Term Loan  “ has the meaning
specified therefor in Section 2.01(a).


 


“Term Loan Obligations” means any
Obligations with respect to the Term Loans (including, without limitation, the
principal thereof, the interest thereon, and fees and expenses specifically
related thereto).


 


23

















 


“Termination Event” means (i) a
Reportable Event with respect to any Employee Plan, (ii) any event that causes
any Borrower or any of ERISA Affiliates of a Borrower to incur liability under
Section 409, 502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of
ERISA or Section 4971 or 4975 of the Internal Revenue Code, (iii) the
filing of a notice of intent to terminate an Employee Plan or the treatment of
an Employee Plan amendment as a termination under Section 4041 of ERISA,
(iv) the institution of proceedings by the PBGC to terminate an Employee
Plan, or (v) any other event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment of a
trustee to administer, any Employee Plan.


 


“Title Insurance Policy” means the
mortgagee’s loan policy, together with all endorsements made from time to time
thereto, issued by or on behalf of a title insurance company satisfactory in
form and substance to the Collateral Agent, insuring the Lien created by the
Mortgages in an amount and on terms satisfactory to the Collateral Agent,
delivered to the Collateral Agent pursuant to Section 7.01(b).


 


“Total Revolving Credit Commitment”
means the sum of the amounts of the Lenders’ Revolving Credit Commitments.


 


“Unrestricted Subsidiary” means each
Subsidiary of the Parent which is as an “Unrestricted Subsidiary”, as such term
is defined in the Indenture.


 


“Unused Line Fee” has the meaning
specified therefor in Section 2.06(c).


 


“Vivirad-HVC” has the meaning
specified therefor in the preamble hereto.


 


“Voting Stock” means, with respect to
any Person and at any time, the Capital Stock of such Person, of any class or classes
(however designated), the holders of which are at such time entitled, as such holders, to vote for the election of
directors (or Persons performing similar functions) of such Person.


 


“WARN” has the meaning specified
therefor in Section 6.01(i).


 


“Wells Fargo” means Wells Fargo Bank,
N.A.


 


“Wells Fargo Letters of Credit” mean
the letters of credit described in Schedule 6.01(q) and issued by Wells Fargo.


 


“W.P. Carey Lease” means
the Lease Agreement by and between Corporate Property Associates 8, L.P.,
as landlord, and the Parent, as tenant, dated November 10, 1988, as
amended, for the premises in Sterling, Massachusetts and the Lease Agreement by
and between Corporate Property Associates 8, L.P., as landlord, and
Maxima, as tenant, dated November 10, 1988, as amended, for the premises
located in Lancaster, Pennsylvania.


 


Section 1.02           Terms Generally.  The definitions of terms herein shall apply
equally to the singular and plural forms of the terms defined.  Whenever the context may require, any
pronoun shall include the corresponding masculine, feminine and neuter
forms.  The words “include”, “includes”
and “including” shall be deemed to be followed by the phrase “without


 


24

















 


limitation”.  The word “will” shall be construed to have
the same meaning and effect as the word “shall”.  Unless the context requires otherwise, (a) any definition of or reference
to any agreement, instrument or other document herein shall be construed as
referring to such agreement, instrument or other document as from time to time
amended, supplemented or otherwise modified (subject to any restrictions on
such amendments, supplements or modifications set forth herein), (b) any
reference herein to any Person shall be construed to include such Person’s
successors and assigns, (c) the words “herein”, “hereof” and “hereunder”, and
words of similar import, shall be construed to refer to this Agreement in its
entirety and not to any particular provision hereof, (d) all references herein
to Articles, Sections, Exhibits and Schedules shall be construed to refer to
Articles and Sections of, and Exhibits and Schedules to, this Agreement and (e)
the words “asset” and “property” shall be construed to have the same meaning
and effect and to refer to any and all tangible and intangible assets and
properties, including cash, securities, accounts and contract rights.  References in this Agreement to
“determination” by any Agent include good faith estimates by such Agent (in the
case of quantitative determinations) and good faith beliefs by such Agent (in
the case of qualitative determinations).


 


Section 1.03           Accounting and Other Terms.  Unless otherwise expressly provided herein,
each accounting term used herein shall have the meaning given it under GAAP
applied on a basis consistent with those used in preparing the Financial
Statements.  All terms used in this Agreement which are defined in Article 8
or Article 9 of the Uniform Commercial Code in effect in the State of New York
on the date hereof and which are not otherwise defined herein shall have the
same meanings herein as set forth therein.


 


Section 1.04           Time References.  Unless otherwise indicated herein, all
references to time of day refer to Eastern standard time or Eastern daylight
saving time, as in effect in New York City on such day.  For purposes of the computation of a period
of time from a specified date to a later specified date, the word “from” means
“from and including” and the words “to” and “until” each means “to but
excluding”; provided, however, that with respect to a computation
of fees or interest payable to any Agent or any Lender, such period shall in
any event consist of at least one full day.


 


ARTICLE II



THE LOANS


 


Section 2.01           Existing Loans; Revolving Credit
Commitments.


 


(a)           (i)            Pursuant
to the provisions of the Existing Financing Agreement, there are outstanding
thereunder on the date hereof revolving loans in the aggregate original
principal amount of $25,000,000 (the “Existing Revolving Loans”).


 


Upon the occurrence of the Effective Date, (i) the aggregate
outstanding $25,000,000 principal amount of the Existing Revolving Loans shall
be allocated as follows among the Revolving Loans and the Term Loans, all of
which is outstanding hereunder:


 


	
  Revolving Credit Loans

  	
   

  	
  $

  	
  10,000,000

  	
   

  
	
  Term Loans

  	
   

  	
  $

  	
  15,000,000

  	
   

  



 


25

















 


and (ii) each Lender’s Revolving Loan Commitment shall be in the amount
set forth opposite such Lender’s name in Schedule 1.01(A);


 


(b)           Subject to the terms and conditions
and relying upon the representations and warranties herein set forth, each
Lender severally agrees to make Revolving Loans to the Borrowers at any time
and from time to time from the Effective Date to the Revolving Loan Commitment
Termination Date, or until the earlier reduction of its Revolving Credit
Commitment to zero in accordance with the terms hereof, in an aggregate
principal amount of Revolving Loans at any time outstanding not to exceed the
amount of such Lender’s Revolving Credit Commitment;


 


(c)           Notwithstanding the foregoing, the
aggregate principal amount of Revolving Loans outstanding at any time shall not
exceed the lesser of (i) the the Revolving Credit Commitment and (ii) the then
current Borrowing Base.  The Revolving
Credit Commitment of each Lender shall automatically and permanently be reduced
to zero on the Revolving Loan Commitment Termination Date.  Within the foregoing limits, the Borrower
may borrow, repay and reborrow, on or after the Effective Date and prior to the
Revolving Loan Commitment Termination Date, subject to the terms, provisions
and limitations set forth herein.


 


Section 2.02           Making the Revolving Loans.
 (a) 
The Parent shall give the Administrative Agent prior telephone notice
(immediately confirmed in writing, in substantially the form of Exhibit C
hereto (a “Notice of Borrowing”), not later than 1:00 p.m. (New
York City time) on the date which is five Business Days prior to the date of
the proposed Loan.  Such Notice of
Borrowing shall be irrevocable and shall specify (i) the principal amount
of the proposed Loan, (ii) the use of the proceeds of such proposed Loan, and
(iii) the proposed borrowing date, which must be a Business Day.  The Administrative  Agent and the Lenders may
act without liability upon the basis of written, telecopied or telephonic
notice believed by the Administrative Agent in good faith to be from the Parent
(or from any Authorized Officer thereof designated in writing purportedly from
the Parent to the Administrative Agent). 
The Borrowers hereby waive the right to dispute the Administrative
Agent’s record of the terms of any such telephonic Notice of Borrowing.  The
Administrative Agent and each Lender shall be entitled to rely conclusively on
any Authorized Officer’s authority to request a Loan on behalf of the Parent
until the Administrative Agent receives written notice to the contrary.  The Administrative Agent and the Lenders shall
have no duty to verify the authenticity of the signature appearing on any
written Notice of Borrowing.  Except as
otherwise provided in this Section 2.02, Loans shall be made ratably by
the Lenders in accordance with their respective Revolving Credit Commitments.


 


(b)           Each Notice of Borrowing pursuant to
this Section 2.02 shall be irrevocable and the Borrowers shall be bound to
make a borrowing in accordance therewith. 
Each Revolving Loan shall be made in a minimum amount of $1,000,000 and
shall be in an integral multiple of $100,000. 
The Borrowers will be limited to one borrowing per week, subject to the
other terms and conditions set forth herein.


 


(c)           (i) 
Except as otherwise provided in this subsection 2.02(c), all Loans
under this Agreement shall be made by the Lenders simultaneously and
proportionately to 


 


26

















 


their Pro Rata Shares of the Total Revolving
Credit Commitment, it being understood that no Lender shall be responsible for
any default by any other Lender in that other Lender’s obligations to make a
Loan requested hereunder, nor shall the Commitment of any Lender be increased
or decreased as a result of the default by any other Lender in that other
Lender’s obligation to make a Loan requested hereunder, and each Lender shall
be obligated to make the Loans required to be made by it by the terms of this
Agreement regardless of the failure by any other Lender.


 


(ii)           Notwithstanding any other provision
of this Agreement, and in order to reduce the number of fund transfers among
the Borrowers, the Agents and the Lenders, the Borrowers, the Agents and the
Lenders agree that the Administrative Agent may (but shall not be obligated
to), and the Borrowers and the Lenders hereby irrevocably authorize the
Administrative Agent to, fund, on behalf of the Lenders, Revolving Loans
pursuant to Section 2.01, subject to the procedures for settlement set
forth in subsection 2.02(d); provided, however, that (a) the
Administrative Agent shall in no event fund such Loans if the Administrative
Agent shall have received written notice from the Required Lenders on the
Business Day prior to the day of the proposed Loan that one or more of the
conditions precedent contained in Section 5.02 will not be satisfied on the
day of the proposed Loan, and (b) the Administrative Agent shall not
otherwise be required to determine that, or take notice whether, the conditions
precedent in Section 5.02 have been satisfied.  If the Parent gives a Notice of Borrowing requesting a Revolving
Loan and the Administrative Agent elects not to fund such Loan on behalf of the
Lenders, then promptly after receipt of the Notice of Borrowing requesting such
Loan, the Administrative Agent shall notify each Lender of the specifics of the
requested Loan and that it will not fund the requested Loan on behalf of the
Lenders.  If the Administrative Agent
notifies the Lenders that it will not fund a requested Revolving Loan on behalf
of the Lenders, each Lender shall make its Pro Rata Share of the Loan available
to the Administrative  Agent, in immediately available funds, at
the Payment Office no later than 3:00 p.m. (New York City time) (provided
that the Administrative  Agent requests payment from such Lender
not later than 2:00 p.m.) on the date of the proposed Loan.  The Administrative Agent will make the
proceeds of such Loans available to the Borrowers on the day of the proposed
Loan by causing an amount, in immediately available funds, equal to the
proceeds of all such Loans received by the Administrative  Agent at the Payment Office
or the amount funded by the Administrative  Agent on behalf of the Lenders to be
deposited in an account designated by the Parent.


 


(iii)          If the Administrative  Agent
has notified the Lenders that the Administrative  Agent, on behalf of the
Lenders, will fund a particular Loan pursuant to subsection 2.02(c)(ii), the
Administrative  Agent may assume that such Lender has made such amount
available to the Administrative  Agent on such day and the Administrative  Agent,
in its sole discretion, may, but shall not be obligated to, cause a
corresponding amount to be made available to the Borrowers on such day.  If the Administrative  Agent makes such
corresponding amount available to the Borrowers and such corresponding amount
is not in fact made available to the Administrative  Agent by such Lender, the
Administrative  Agent shall be entitled to recover such corresponding amount
on demand from such Lender together with interest thereon, for each day from
the date such payment was due until the date such amount is paid to the
Administrative  Agent, at the Federal Funds Rate for three Business Days and
thereafter at the Reference Rate. 
During the period in which such Lender has not paid such corresponding
amount to the Administrative  Agent, notwithstanding anything to the
contrary contained in this


 


27

















 


Agreement or any other Loan Document, the
amount so advanced by the Administrative  Agent to the Borrowers shall, for all
purposes hereof, be a Revolving Loan made by the Administrative Agent for its
own account.  Upon any such failure by a
Lender to pay the Administrative  Agent, the Administrative  Agent
shall promptly thereafter notify the Parent of such failure and the Borrowers
shall immediately pay such corresponding amount to the Administrative  Agent
for its own account.


 


(iv)          Nothing in this subsection 2.02(c)
shall be deemed to relieve any Lender from its obligations to fulfill its
Revolving Credit Commitments hereunder or to prejudice any rights that the
Administrative Agent or the Borrowers may have against any Lender as a result
of any default by such Lender hereunder.


 


(d)           (i) 
With respect to all periods for which the Administrative Agent has
funded Loans pursuant to subsection 2.02(c), on Friday of each week, or if the
applicable Friday is not a Business Day, then on the following Business Day, or
such shorter period as the Administrative Agent may from time to time select
(any such week or shorter period being herein called a “Settlement Period”),
the Administrative Agent shall notify each Lender of the unpaid principal
amount of the Revolving Loans outstanding as of the last day of each such
Settlement Period.  In the event that
such amount is greater than the unpaid principal amount of the Revolving Loans
outstanding on the last day of the Settlement Period immediately preceding such
Settlement Period (or, if there has been no preceding Settlement Period, the
amount of the Revolving Loans made on the date of such Lender’s initial
funding), each Lender shall promptly (and in any event not later than
2:00 p.m. if the Administrative Agent requests payment from such Lender
not later than 12:00 noon on such day) make available to the
Administrative Agent its Pro Rata Share of the difference in immediately
available funds.  In the event that such
amount is less than such unpaid principal amount, the Administrative Agent
shall promptly pay over to each Lender its Pro Rata Share of the difference in
immediately available funds.  In
addition, if the Administrative Agent shall so request at any time when a
Default or an Event of Default shall have occurred and be continuing, or any
other event shall have occurred as a result of which the Administrative Agent
shall determine that it is desirable to present claims against the Borrowers
for repayment, each Lender shall promptly remit to the Administrative Agent or,
as the case may be, the Administrative Agent shall promptly remit to each
Lender, sufficient funds to adjust the interests of the Lenders in the then
outstanding Revolving Loans to such an extent that, after giving effect to such
adjustment, each Lender’s interest in the then outstanding Revolving Loans will
be equal to its Pro Rata Share thereof. 
The obligations of the Administrative Agent and each Lender under this
subsection 2.02(d) shall be absolute and unconditional.  Each Lender shall only be entitled to
receive interest on its Pro Rata Share of the Revolving Loans which have been
funded by such Lender.


 


(ii)           In
the event that any Lender fails to make any payment required to be made by it
pursuant to subsection 2.02(d)(i), the Administrative Agent shall be entitled
to recover such corresponding amount on demand from such Lender together with
interest thereon, for each day from the date such payment was due until the
date such amount is paid to the Administrative Agent, at the Federal Funds Rate
for three Business Days and thereafter at the Reference Rate.  During the period in which such Lender has
not paid such corresponding amount to the Administrative Agent, notwithstanding
anything to the contrary contained in this Agreement or any other Loan
Document, the amount so advanced by the


 


28

















 


Administrative Agent to the
Borrowers shall, for all purposes hereof, be a Revolving Loan made by the
Administrative Agent for its own account. 
Upon any such failure by a Lender to pay the Administrative Agent, the
Administrative Agent shall promptly thereafter notify the Parent of such
failure and the Borrowers shall immediately pay such corresponding amount to
the Administrative Agent for its own account. 
Nothing in this subsection 2.02(d)(ii) shall be deemed to relieve any
Lender from its obligation to fulfill its Revolving Credit Commitments
hereunder or to prejudice any rights that the Administrative Agent or the
Borrowers may have against any Lender as a result of any default by such Lender
hereunder.


 


Section 2.03           Evidence of Debt; Repayment of
Loans.


 


(a)           Each Lender shall maintain in
accordance with its usual practice an account or accounts evidencing the
Indebtedness of the Borrowers to such Lender resulting from the Loan made by
such Lender, including the amounts of principal and interest payable and paid
to such Lender from time to time hereunder.


 


(b)           The Administrative Agent shall
maintain accounts in which it shall record (i) the amount of each Loan made
hereunder, (ii) the amount of any principal or interest due and payable or to
become due and payable from the Borrowers to each Lender hereunder and (iii)
the amount of any sum received by the Administrative Agent hereunder for the
account of the Lenders and each Lender’s share thereof.


 


(c)           The entries made in the accounts
maintained pursuant to paragraph (a) or (b) of this Section shall be prima facie
evidence of the existence and amounts of the obligations recorded therein;
provided that the failure of any Lender or the Administrative Agent to maintain
such accounts or any error therein shall not in any manner affect the
obligation of the Borrowers to repay the Loans in accordance with the terms of
this Agreement.


 


(d)           The outstanding principal of all
Revolving Loans and the Term Loans shall be due and payable on the Final
Maturity Date.


 


(e)           Each Loan recorded on the Register
referred to in Section 12.07(b) (a “Registered Loan”) may not be
evidenced by a promissory note other than a Registered Note as defined below
and, upon registration of the Loan, any Note (other than a Registered Note)
evidencing the same shall be null and void and shall be returned to the
Borrower.  The Borrowers agree, at the
request of any Lender, to execute and deliver to such Lender a promissory note
in registered form to evidence such Registered Loan and registered as provided
in Section 12.07(b) (a “Registered Note”), dated the date hereof,
payable to such Lender and otherwise duly completed.  Once recorded on the Register, the Loan or Loans evidenced by
such Note may not be removed from the Register so long as it remains
outstanding, and a Registered Note may not be exchanged for a promissory note
that is not a Registered Note.


 


Section 2.04           Interest.  (a) Revolving Loans.  Each Revolving Loan shall bear interest on
the principal amount thereof from time to time outstanding, from the date of
such Loan until such principal amount becomes due, at a rate per annum equal to
the Reference Rate plus the Applicable Margin.


 


29

















 


(b)             Term Loans.  Each Term Loan shall bear interest on the
principal amount thereof from time to time outstanding, from the Effective Date
of such Loan until such principal amount becomes due, at a rate per annum equal
to the Reference Rate plus the Applicable Margin.


 


(c)           Default Interest.  To the extent permitted by law, upon the
occurrence and during the continuance of an Event of Default, the principal of,
and all accrued and unpaid interest on, all Loans, and all fees, indemnities,
or any other Obligations of the Borrowers under this Agreement, and other Loan
Documents shall bear interest, from the date such Event of Default occurred
until such Event of Default is cured or waived in writing in accordance
herewith, at a rate per annum equal at all times to the Post-Default Rate.


 


(d)           Interest Payment.  Interest on each Loan shall be payable
monthly, in arrears, on the first day of each month, commencing on the first
day of the month following the month in which such Loan is made and at maturity
(whether upon demand, by acceleration or otherwise), provided  however;
that all accrued and unpaid interest and all other amounts due pursuant to the
Existing Financing Agreement shall be due and payable on January 1, 2003.  Interest at the Post-Default Rate shall be
payable on demand.  The Borrowers hereby
authorize the Administrative Agent to, and the Administrative Agent may, from
time to time, charge the Loan Account pursuant to Section 4.02 with the
amount of any interest payment due hereunder.


 


(e)           General.  All interest shall be computed on the basis
of a year of 360 days for the actual number of days, including the first day
but excluding the last day, elapsed.


 


Section 2.05           Reduction of Revolving Credit
Commitments; Prepayment of Loans.


 


(a)           Reduction of Revolving Credit
Commitments.  The Total Revolving
Credit Commitment shall terminate on the Revolving Loan Commitment Termination
Date.  The Borrowers may, without
premium or penalty, reduce the Total Revolving Credit Commitment to an amount
(which may be zero) not less than the sum of (A) the aggregate unpaid
principal amount of all Revolving Loans then outstanding and (B) the
aggregate principal amount of all Revolving Loans not yet made as to which a
Notice of Borrowing has been given by the Parent under Section 2.02.  Each such reduction shall be in a minimum amount
of $500,000 or an integral multiple thereof, shall be made by providing not
less than three Business Days’ prior written notice to the Administrative Agent
and shall be irrevocable.  Once reduced
the Total Revolving Credit Commitment may not be increased.  Each such reduction of the Total Revolving Credit
Commitment shall reduce the Revolving Credit Commitment of each Lender
proportionately in accordance with its Pro Rata Share thereof.


 


(b)           Optional Prepayment.  (i)  Revolving
Loans.  The Borrowers may prepay
without penalty or premium the principal of the Revolving Loans, in whole or in
part.


 


(ii)           Term Loans.  The Borrowers may, upon at least three (3)
Business Days’ prior written notice to the Administrative Agent, prepay without
penalty the principal of the Term Loans, in whole or in part.  Each prepayment made pursuant to this


 


30

















 


clause (b)(ii) shall be accompanied by
the payment of accrued interest to the date of such payment on the amount
prepaid and shall be made without penalty or premium.


 


(c)           Mandatory Prepayment.


 


(i)            The Borrowers will immediately
prepay the Revolving Loans at any time when the aggregate principal amount of
all Revolving Loans exceeds the lesser of (A) the Available Commitment and (B)
the Borrowing Base, to the full extent of any such excess.  On each day that any Revolving Loans are
outstanding, the Borrowers shall hereby be deemed to represent and warrant to
the Agents and the Lenders that each of the Available Commitment and the Borrowing
Base calculated as of such day equals or exceeds the aggregate principal amount
of all Revolving Loans outstanding on such day.  If at any time after the Borrowers have complied with the first
sentence of this Section 2.05(c).


 


(ii)           The Borrowers will immediately prepay
the outstanding principal amount of the Term Loans in the event that the Total
Revolving Credit Commitment is terminated for any reason.


 


(iii)          If at any time
Wells Fargo or Citizens Bank releases any cash collateral pledged to such bank
to secure any Wells Fargo Letter of Credit or Citizens Bank Letter of Credit,
the Borrowers shall cause the cash collateral so released to be paid directly
to the Agent to be applied to prepay any Revolving Loans outstanding at such
time (but the Commitments shall not be reduced thereby).


 


(iv)          During the
continuance of an Event of Default, on each Business Day the Originators shall
pay all proceeds from the sale of Accounts Receivable and Related Rights which
are payable to the Originators pursuant to the Parent Purchase Agreement or any
related Receivable Purchase Notes held by them to the Payment Office to be
applied to the payment of the outstanding Obligations in accordance with
Section 4.04.


 


(v)           Simultaneously with
the receipt by any Loan Party of any tax refund, the Borrowers shall deposit an
amount equal to such tax refund into the Cash Collateral Account.


 


(vi)          Simultaneously with
the receipt by any Loan Party of proceeds of any judgment, settlement or other
consideration of any kind in connection with any action, suit, arbitration or
proceeding by such Person, the Borrowers shall deposit an amount equal to the
net proceeds received into the Cash Collateral Account.


 


(vii)         Dispositions; Casualty Events.  Immediately upon any Disposition by any Loan
Party, the Borrowers shall deposit an amount equal to 100% of the Net Cash
Proceeds received by any Loan Party in connection with such Disposition into
the Cash Collateral Account.  Upon the
loss, destruction or taking by condemnation of any Collateral, the Borrowers
shall deposit an amount equal to 100% of the proceeds in excess of $750,000 in
the aggregate for any Fiscal Year received by any Loan Party in connection
therewith, net of any reasonable expenses incurred in collecting such proceeds,
into the Cash Collateral Account.


 


31

















 


(viii)        Upon the issuance or incurrence by any
Loan Party of any Indebtedness except as permitted by Section 7.02(b), or
the sale or issuance by the Borrowers or any other Loan Party of any shares of
its Capital Stock, the Borrowers shall deposit an amount equal to 100% of the
Net Cash Proceeds received by any Loan Party in connection therewith into the
Cash Collateral Account.


 


(ix)           Simultaneously
with the receipt by any Loan Party of proceeds of the ASI Performance Security
Deposit, the Borrowers shall deposit an amount equal to such proceeds, in
Dollars, into the Cash Collateral Account.


 


(x)            Within
15 days of the occurrence of a “Change of Control” as such term is defined in
the Indenture, the Borrowers shall prepay all outstanding Obligations at such
time and the Total Revolving Credit Commitment shall be terminated unless prior
to such date, the requisite holders of Indenture Notes have waived their
redemption rights resulting from a “Change of Control” (as defined in the
Indenture) as set forth in Section 4.19 of the Indenture (or any replacement
section).


 


The provisions of this subsection (c) shall not be deemed to be implied
consent to any such issuance, incurrence, disposition , transfer or sale
otherwise prohibited by the terms and conditions hereof.


 


(d)           Application of Deposits and
Payments.  In accordance with the
Cash Collateral Agreement, all amounts deposited in the Cash Collateral Account
(i) shall constitute Collateral for the Obligations and, at the option of the
Parent in the absence of a continuing Event of Default, may be applied, first
to the Term Loans and then to the Revolving Loans, (ii) may be withdrawn by the
Parent and used to pay the regularly scheduled interest payments payable by the
Parent pursuant to the Indenture Notes, provided that, both before and
immediately after giving effect to such payment (A) no Default or Event of
Default has occurred and is continuing and (B) Availability plus the
amount of the Borrowers’ cash on hand equals or exceeds $1 million,
(iii) solely in the case of a deposit made in connection with the loss,
destruction or taking by condemnation of Collateral in accordance with the
second sentence of Section 2.05(c)(vi), may be withdrawn by the Borrowers
to replace, repair or restore such Collateral, provided that
(A) such withdrawal must be made and such Collateral replaced, repaired or
restored within 180 days after the date of such loss, destruction or taking (or
in the case of a loss or destruction caused by earthquake or other natural
disaster, 360 days), (B) the amount withdrawn may not exceed the amount
deposited in connection with any loss, destruction or taking, and (C) no
Default or Event of Default shall have occurred and be continuing at the time of
such withdrawal and (iv) upon the occurrence and during the continuance of an
Event of Default, may be applied by the Collateral Agent to the Obligations in
accordance with Section 4.04(b). 
The Collateral Agent agrees to execute any written consent, promptly
following request by the Parent, to enable the Borrowers to withdraw deposits
from the Cash Collateral Account in accordance with, and to the extent
permitted by, this Section 2.05(d).


 


(e)           Interest and Fees.  Any prepayment made pursuant to this
Section 2.05 (other than payments pursuant to subsection (c)(iii) of this
Section 2.05) shall be accompanied by accrued interest on the principal
amount being prepaid to the date of prepayment, and if such prepayment would
reduce the amount of the outstanding Loans to zero at a time when


 


32

















 


the Revolving Credit Commitment has been
terminated, such prepayment shall be accompanied by the payment of the fees
accrued to such date pursuant to Section 2.06.


 


(f)            Cumulative Prepayments.  Except as otherwise expressly provided in
this Section 2.05, payments with respect to any subsection of this
Section 2.05 are in addition to payments made or required to be made under
any other subsection of this Section 2.05.


 


Section 2.06           Fees.  (a) Anniversary
Fee.  On November 30th of
each year, the Borrowers shall pay to the Administrative Agent for the account
of the Lenders a non-refundable anniversary fee (the “Anniversary Fee”) equal to 1% of
the Commitment on such date, payable and fully earned on each such date.


 


(b)           Unused Line Fee.  From and after the Effective Date and until
the Revolving Loan Commitment Termination Date, the Borrowers shall pay to the
Administrative Agent for the account of the Lenders in accordance with  their Pro Rata Shares a non-refundable
unused line fee (the “Unused Line Fee”), which shall accrue at the
rate per annum of 0.5% on the excess, if any, of the Available Commitment over
the sum of the average principal amount of Revolving Loans outstanding from
time to time and shall be payable monthly in arrears on the first day of each
month commencing January 1, 2003.


 


(c)           Loan Servicing Fee.  From and after the Effective Date and until
the Final Maturity Date, the Borrowers shall pay to the Administrative Agent for
the account of the Agents in accordance with a written agreement between such
Agents a non-refundable loan servicing fee (the “Loan Servicing Fee”)
equal to $20,000 each quarter, payable quarterly in advance on the first day of
each calendar quarter commencing on January 1, 2003.


 


Section 2.07           Securitization.  The
Borrowers hereby acknowledge that the Lenders and any of their Affiliates may
sell or securitize the Loans (a “Securitization”)
through the pledge of the Loans as collateral security for loans to the Lenders
or their Affiliates or through the sale of the Loans or the issuance of direct
or indirect interests in the Loans, which loans to the Lenders or their
Affiliates or direct or indirect interests will be rated by Moody’s, Standard
& Poor’s or one or more other rating agencies (the “Rating Agencies”).  The Borrowers shall cooperate with the
Lenders and their Affiliates to effect the Securitization including, without
limitation, by (a) amending this Agreement and the other Loan Documents,
and executing such additional documents, as reasonably requested by the Lenders
in connection with the Securitization, provided  that (i) any
such amendment or additional documentation does not impose material additional
costs on the Borrowers and (ii) any such amendment or additional
documentation does not materially adversely affect the rights, or materially
increase the obligations, of the Borrowers under the Loan Documents or change
or affect in a manner adverse to the Borrowers the financial terms of the Loans,
(b) providing such information as may be reasonably requested by the
Lenders in connection with the rating of the Loans or the Securitization, and
(c) providing in connection with any rating of the Loans a certificate
(i) agreeing to indemnify the Lenders and any of their Affiliates, any of
the Rating Agencies, or any party providing credit support or otherwise
participating in the Securitization (collectively, the “Securitization
Parties”) for any losses, claims, damages or liabilities (the “Liabilities”)
to which the Lenders, their Affiliates or such Securitization Parties may
become subject insofar as the Liabilities arise out of or are based upon any
untrue statement or alleged untrue statement of


 


33

















 


any material fact contained in any Loan Document made by or on behalf
of, or in any writing delivered by or on behalf of, the Borrowers and their
Affiliates to the Lenders in connection with any Loan Document or arise out of
or are based upon the omission or alleged omission to state therein a material
fact required to be stated therein, or necessary in order to make the
statements therein, in light of the circumstances under which they were made,
not misleading and such indemnity shall survive any transfer by the Lenders or
their successors or assigns of the Loans and (ii) agreeing to reimburse
the Lenders and any of their Affiliates for any legal or other expenses
reasonably incurred by such Persons in connection with defending the
Liabilities.


 


Section 2.08           Taxes.  (a)  All
payments made by the Borrowers hereunder, or under any other Loan Document
shall be made without set-off, counterclaim, deduction or other defense.  All such payments shall be made free and
clear of and without deduction for any present or future income, franchise,
sales, use, excise, stamp or other taxes, levies, imposts, deductions, charges,
fees, withholdings, restrictions or conditions of any nature now or hereafter
imposed, levied, collected, withheld or assessed by any jurisdiction (whether
pursuant to United States Federal, state, local or foreign law) or by any
political subdivision or taxing authority thereof or therein, and all interest,
penalties or similar liabilities, excluding taxes on the net income of, and
branch profit taxes of, any Lender or any Agent imposed by the jurisdiction in
which such Lender or such Agent is organized or any political subdivision
thereof or taxing authority thereof or any jurisdiction in which such Person’s
principal office or relevant lending office is located or any political
subdivision thereof or taxing authority thereof (such nonexcluded taxes being
hereinafter collectively referred to as “Taxes”).  If the Borrowers shall be required by law to
deduct or to withhold any Taxes from or in respect of any amount payable
hereunder,


 


(i)            the amount so payable shall be
increased to the extent necessary so that after making all required deductions
and withholdings (including Taxes on amounts payable to the Lenders pursuant to
this sentence) the Lenders receive an amount equal to the sum they would have
received had no such deductions or withholdings been made,


 


(ii)           the Borrowers shall make such
deductions or withholdings, and


 


(iii)          the Borrowers shall pay the full
amount deducted or withheld to the relevant taxation authority in accordance
with applicable law.  Whenever any Taxes
are payable by the Borrowers, as promptly as possible thereafter, the Parent
shall send the Lenders and the Agents an official receipt (or, if an official
receipt is not available, such other documentation as shall be satisfactory to
the Lenders or the Agents, as the case may be) showing payment.  In addition, the Borrowers agree to pay any
present or future taxes, charges or similar levies which arise from any payment
made hereunder or from the execution, delivery, performance, recordation or
filing of, or otherwise with respect to, this Agreement, the Loans or any other
Loan Document other than the foregoing excluded taxes (hereinafter referred to
as “Other Taxes”).


 


(b)           The Borrowers will indemnify the
Agents and the Lenders for the amount of Taxes or Other Taxes (including,
without limitation, any Taxes or Other Taxes imposed by any jurisdiction on
amounts payable under this Section 2.08) paid by any Agent or Lender and


 


34

















 


any liability (including penalties, interest
and expenses for nonpayment, late payment or otherwise) arising therefrom or
with respect thereto, whether or not such Taxes or Other Taxes were correctly
or legally asserted.  This
indemnification shall be paid within 30 days from the date on which such Agent
or Lender makes written demand which demand shall identify the nature and
amount of Taxes or Other Taxes for which indemnification is being sought and
the basis of the claim.


 


(c)           Each Lender that is organized in a
jurisdiction other than the United States, a State thereof or the District of
Columbia hereby agrees that:


 


(i)            it shall, no later than the
Effective Date (or, in the case of a Lender which becomes a party hereto
pursuant to Section 12.07 after the Effective Date, the date upon which such
Lender becomes a party hereto) deliver to the Parent and the Agents:  (A) two accurate, complete and signed
originals of U.S. Internal Revenue Service Form 4224 or successor form, or (B)
two accurate, complete and signed originals of U.S. Internal Revenue Service
Form 1001 or successor form, in each case indicating that such Lender is on the
date of delivery thereof entitled to receive payments of principal, interest and
fees for the account of its lending office under this Agreement free from
withholding of United States Federal income tax;


 


(ii)           if at any time such Lender changes
its lending office or offices or selects an additional lending office it shall,
at the same time or reasonably promptly thereafter, deliver to the Parent
through the Agents in replacement for, or in addition to, the forms previously
delivered by it hereunder:  (A) if such
changed or additional lending office is located in the United States, two
accurate, complete and signed originals of such Form 4224 or successor form, or
(B) two accurate, complete and signed originals of such Form 1001 or successor
form, in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees for the
account of such changed or additional lending office under this Agreement free
from withholding of United States Federal income tax; and


 


(iii)          it shall, promptly upon the Parent’s
reasonable request to that effect, deliver to the Parent such other forms or
similar documentation as may be required from time to time by any applicable
law, treaty, rule or regulation in order to establish such Lender’s tax status
for withholding purposes.


 


(d)           If the Borrowers fail to perform
their obligations under this Section 2.08, the Borrowers shall indemnify
the Agents and the Lenders for any taxes, interest or penalties that may become
payable as a result of any such failure.


 


35

















 


ARTICLE III



[INTENTIONALLY OMITTED]


 


ARTICLE IV



FEES, PAYMENTS AND OTHER COMPENSATION


 


Section 4.01           Audit and Collateral Monitoring
Fees.  The Loan Parties acknowledge
that the Agents may visit the Loan Parties and/or conduct audits, inspections,
valuations, appraisals and/or field examinations of the Loan Parties at any
time and from time to time in a manner so as to not unduly disrupt the business
of the Loan Parties.  The Borrowers
agree to pay $1,500 per day per examiner plus the examiner’s out-of-pocket
costs and reasonable expenses (including all charges of third party appraisers
and professionals employed by the Agents) incurred in connection with all such
visits, inspections, audits, valuations, appraisals and examinations (collectively,
“Field Examination Fees”).


 


Section 4.02           Payments; Computations and
Statements.  (a)  The Borrowers will make each payment under
the Loans not later than 2:00 p.m. (New York City time) on the day when
due, in lawful money of the United States of America and in immediately
available funds, to the Administrative Agent at the Payment Office.  All payments received by the Administrative
Agent after 2:00 p.m. (New York City time) on any Business Day will be
credited to the Loan Account on the next succeeding Business Day.  All payments shall be made by the Borrowers
without defense, set-off or counterclaim to the Agents and the Lenders.  Except as provided in Section 2.02, after
receipt, the Administrative Agent will promptly thereafter cause to be
distributed like funds relating to the payment of principal ratably to the
Lenders in accordance with their Pro Rata Shares and like funds relating to the
payment of any other amount payable to any Lender to such Lender, in each case
to be applied in accordance with the terms of this Agreement, provided
that the Administrative Agent will cause to be distributed all interest and
fees received from or for the account of the Borrowers not less than once each
month and in any event promptly after receipt thereof.  The Lenders and the Borrowers hereby
authorize the Administrative Agent to, and the Administrative Agent may, from
time to time, charge the Loan Account of the Borrowers with any amount due and
payable by the Borrowers under any Loan Document.  Each of the Lenders and the Borrowers agree that the
Administrative Agent shall have the right to make such charges whether or not
any Event of Default or Default shall have occurred and be continuing or
whether any of the conditions precedent in Section 5.02 have been satisfied.  Any amount charged to the Loan Account of
the Borrowers shall be deemed a Revolving Loan hereunder made by the Lenders to
the Borrowers, funded by the Administrative Agent on behalf of the Lenders and
subject to Section 2.02 of this Agreement.  The Lenders and the Borrowers confirm that any charges which the
Administrative Agent may so make to the Loan Account of the Borrowers as herein
provided will be made as an accommodation to the Borrowers and solely at the
Administrative Agent’s discretion, provided that the Administrative
Agent shall from time to time upon the request of the Collateral Agent, charge
the Loan Account of the Borrowers with any amount due and payable under any
Loan Document.  Whenever any payment to
be made under any such Loan Document shall be stated to be due on a day other
than a Business Day, such payment shall be made on the next succeeding Business
Day and such


 


36

















 


extension of time shall in such case be included in the computation of
interest or fees, as the case may be. 
All computations of fees shall be made by the Administrative Agent on
the basis of a year of 360 days for the actual number of days (including
the first day but excluding the last day) occurring in the period for which
such fees are payable.  Each
determination by the Administrative Agent of an interest rate or fees hereunder
shall be conclusive and binding for all purposes in the absence of manifest
error.


 


(b)           The Administrative Agent shall
provide the Parent, promptly after the end of each calendar month, a summary
statement (in the form from time to time used by the Administrative Agent) of
the opening and closing daily balances in the Loan Account of the Borrowers
during such month,  the amounts and
dates on all Loans made to the Borrowers during such month, the amounts and
dates of all payments on account of the Loans to the Borrowers during such
month and the Loans to which such payments were applied, the amount of interest
accrued on the Loans to the Borrowers during such month, and the amount and
nature of any charges to such Loan Account made during such month on account of
fees, commissions, expenses and other Obligations.  All entries on any such statement shall, 30 days after the
same is sent, be presumed to be correct and shall be final and conclusive
absent manifest error.


 


Section 4.03           Sharing of Payments, Etc.  Except as provided in Section 2.02, if
any Lender shall obtain any payment (whether voluntary, involuntary, through
the exercise of any right of set-off, or otherwise) on account of any
Obligation in excess of its ratable share of payments on account of similar
obligations obtained by all the Lenders, such Lender shall forthwith purchase
from the other Lenders such participations in such similar obligations held by
them as shall be necessary to cause such purchasing Lender to share the excess
payment ratably with each of them; provided, however, that if all
or any portion of such excess payment is thereafter recovered from such
purchasing Lender, such purchase from each Lender shall be rescinded and such
Lender shall repay to the purchasing Lender the purchase price to the extent of
such recovery together with an amount equal to such Lender’s ratable share
(according to the proportion of (i) the amount of such Lender’s required
repayment to (ii) the total amount so recovered from the purchasing Lender of
any interest or other amount paid by the purchasing Lender in respect of the
total amount so recovered).  The
Borrowers agree that any Lender so purchasing a participation from another
Lender pursuant to this Section 4.03 may, to the fullest extent permitted by
law, exercise all its rights (including the Lender’s right of set-off) with
respect to such participation as fully as if such Lender were the direct
creditor of the Borrowers in the amount of such participation.


 


Section 4.04           Apportionment of Payments.  (a)  Subject
to Section 2.02 and to any written agreement among the Agents and the
Lenders, all payments of principal and interest in respect of outstanding
Loans, all payments of fees and all other payments in respect of any other
Obligations, shall be allocated by the Administrative Agent among such of the
Lenders or the Agents as are entitled thereto, in proportion to their
respective Pro Rata Shares or otherwise as provided herein or, in respect of
payments not made on account of Loans, as designated by the Person making
payment when the payment is made.


 


(b)           After the occurrence and during the
continuance of an Event of Default, all payments in respect of any Obligations
and all proceeds of the Collateral, shall, unless the Administrative Agent
shall otherwise agree, be applied, notwithstanding any other provision of


 


37

















 


this Agreement, (i) first, to pay the
Obligations in respect of any fees, expense reimbursements, indemnities and
other amounts then due to the Agents until paid in full; (ii) second,
ratably to pay the Revolving Loan Obligations (including Collateral Agent
Advances) in respect of any fees and indemnities then due to the Lenders until
paid in full; (iii) third, ratably to pay interest due in respect
of the Revolving Loans and Collateral Agent Advances until paid in full; (iv) fourth,
ratably to pay principal of the Revolving Loans (or, to the extent such
Obligations are contingent, to provide cash collateral in respect of such
Obligations) and Collateral Agent Advances until paid in full; (v) fifth,
ratably to pay the Term Loan Obligations in respect of any fees and indemnities
then due the Lenders until paid in full; (vi) sixth, ratably to pay
interest due in respect of the Term Loans until paid in full; (vii) seventh,
ratably to pay principal of the Term Loans until paid in full; and (viii) eighth,
to the ratable payment of all other Obligations then due and payable.


 


(c)           In each instance, so long as no Event
of Default has occurred and is continuing, Section 4.04(b) shall not be deemed
to apply to any payment by the Borrowers specified by the Borrowers to the
Administrative Agent to be for the payment of Term Loan Obligations then due
and payable under any provisions of this Agreement or the prepayment of all or
part of the principal of the Term Loans in accordance with the terms and
conditions of Section 2.05.


 


(d)           For purposes of Section 4.04(b),
“paid in full” with respect to interest shall include interest accrued after
the commencement of any Insolvency Proceeding irrespective of whether a claim
for such interest is allowable in such Insolvency Proceeding.


 


(e)           In the event of a direct conflict
between the priority provisions of this Section 4.04 and other provisions
contained in any other Loan Document, it is the intention of the parties hereto
that both such priority provisions in such documents shall be read together and
construed, to the fullest extent possible, to be in concert with each
other.  In the event of any actual,
irreconcilable conflict that cannot be resolved as aforesaid, the terms and
provisions of this Section 4.04 shall control and govern.


 


Section 4.05           Increased Costs and Reduced Return.  (a)  If
any Lender shall have determined that the adoption or implementation of, or any
change in, any law, rule, treaty or regulation, or any policy, guideline or
directive of, or any change in the interpretation or administration thereof by,
any court, central bank or other Administrative or Governmental Authority, or
compliance by any Lender or any Person controlling any such Lender with any
directive of or guideline from any central bank or other Governmental Authority
or the introduction of or change in any accounting principles applicable to any
Lender or any Person controlling any such Lender (in each case, whether or not
having the force of law), shall (i) change the basis of taxation of payments to
any Lender or any Person controlling any such Lender of any amounts payable
hereunder (except for taxes on the overall net income of any Lender or any
Person controlling any such Lender), (ii) impose, modify or deem applicable any
reserve, special deposit or similar requirement against any Loan or against
assets of or held by, or deposits with or for the account of, or credit
extended by, any Lender, or any Person controlling any such Lender or
(iii) impose on any Lender or any Person controlling any such Lender any
other condition regarding this Agreement or any Loan, and the result of any
event referred to in clauses (i), (ii) or (iii) above shall be to increase the
cost to any Lender of making any Loan or agreeing to make any Loan, or to
reduce any amount received or receivable by any


 


38

















 


Lender hereunder, then, upon demand by Lender, the Borrowers shall pay
to such Lender such additional amounts as will compensate such Lender for such
increased costs or reductions in amount.


 


(b)           If any Lender shall have determined
that any Capital Guideline or adoption or implementation of, or any change in,
any Capital Guideline by the Governmental Authority charged with the
interpretation or administration thereof, or compliance by any Lender or any
Person controlling any Lender with any Capital Guideline or with any request or
directive of any such Governmental Authority with respect to any Capital
Guideline, or the implementation of, or any change in, any applicable
accounting principles (in each case, whether or not having the force of law),
either (i) affects or would affect the amount of capital required or
expected to be maintained by any Lender or any Person controlling any Lender,
and any Lender determines that the amount of such capital is increased as a
direct or indirect consequence of any Loans made or maintained, or any Lender’s
or any such other controlling Person’s other obligations hereunder, or (ii) has
or would have the effect of reducing the rate of return on any Lender’s, any
such other controlling Person’s capital to a level below that which such Lender
or such controlling Person could have achieved but for such circumstances as a
consequence of any Loans made or maintained, or any guaranty or participation
with respect thereto or any agreement to make Loans, such Lender’s, such other
controlling Person’s other obligations hereunder (in each case, taking into
consideration such Lender’s or such other controlling Person’s policies with
respect to capital adequacy), then, upon demand by any Lender, the Borrowers
shall pay to or such Lender from time to time such additional amounts as will
compensate such Lender for such cost of maintaining such increased capital or
such reduction in the rate of return on such 
Lender’s or such other controlling Person’s capital.


 


(c)           All amounts payable under this
Section 4.05 shall bear interest from the date that is ten days after the date
of demand by a Lender until payment in full to such Lender at the Reference
Rate.  A certificate of any Lender
claiming compensation under this Section 4.05 specifying the event herein above
described and the nature of such event shall be submitted by such Lender to the
Parent, setting forth the additional amount due and an explanation of the
calculation thereof, such Lender’s reasons for invoking the provisions of this
Section 4.05, and shall be final and conclusive absent manifest error.


 


Section 4.06           Joint and Several Liability of the
Borrowers.  (a) Notwithstanding anything in this Agreement
or any other Loan Document to the contrary, each of the Borrowers hereby
accepts joint and several liability hereunder and under the other Loan
Documents in consideration of the financial accommodations to be provided by
the Agent and the Lenders under this Agreement and the other Loan Documents,
for the mutual benefit, directly and indirectly, of each of the Borrowers and
in consideration of the undertakings of the other Borrowers to accept joint and
several liability for the Obligations. 
Each of the Borrowers, jointly and severally, hereby irrevocably and
unconditionally accepts, not merely as a surety but also as a co-debtor, joint
and several liability with the other Borrowers, with respect to the payment and
performance of all of the Obligations (including, without limitation, any
Obligations arising under this Section 4.06), it being the intention of the
parties hereto that all the Obligations shall be the joint and several
obligations of each of the Borrowers without preferences or distinction among
them.  If and to the extent that any of
the Borrowers shall fail to make any payment with


 


39

















 


respect to any of the Obligations as and when due or to perform any of
the Obligations in accordance with the terms thereof, then in each such event
the other Borrowers will make such payment with respect to, or perform, such
Obligation.  Subject to the terms and
conditions hereof, the Obligations of each of the Borrowers under the provisions
of this Section 4.06 constitute the absolute and unconditional, full recourse
Obligations of each of the Borrowers enforceable against each such Person to
the full extent of its properties and assets, irrespective of the validity,
regularity or enforceability of this Agreement, the other Loan Documents or any
other circumstances whatsoever.


 


(b)           The provisions of this Section 4.06
are made for the benefit of the Agent, the Lenders and their successors and
assigns, and may be enforced by them from time to time against any or all of
the Borrowers as often as occasion therefor may arise and without requirement
on the part of the Agent, the Lenders or such successors or assigns first to
marshall any of its or their claims or to exercise any of its or their rights
against any of the other Borrowers or to exhaust any remedies available to it
or them against any of the other Borrowers or to resort to any other source or
means of obtaining payment of any of the Obligations hereunder or to elect any
other remedy.  The provisions of this
Section 4.06 shall remain in effect until all of the Obligations shall have
been paid in full or otherwise fully satisfied.


 


(c)           Each of the Borrowers hereby agrees
that it will not enforce any of its rights of contribution or subrogation
against the other Borrowers with respect to any liability incurred by it
hereunder or under any of the other Loan Documents, any payments made by it to
the Agent or the Lenders with respect to any of the Obligations or any
Collateral until such time as all of the Obligations have been paid in full in
cash.  Any claim which any Borrower may
have against any other Borrower with respect to any payments to the Agent or
the Lenders hereunder or under any other Loan Documents are hereby expressly
made subordinate and junior in right of payment, without limitation as to any
increases in the Obligations arising hereunder or thereunder, to the prior
payment in full in cash of the Obligations.


 


ARTICLE V



CONDITIONS TO EFFECTIVENESS AND LOANS


 


Section 5.01           Conditions Precedent to
Effectiveness.  This Agreement shall
become effective as of the Business Day (the ”Effective Date”) when
each of the following conditions precedent shall have been satisfied in a
manner satisfactory to the Agents:


 


(a)           Payment of Fees, Etc.  The Borrowers shall have paid on or
before the date of this Agreement all fees, costs, expenses and taxes then
payable pursuant to Sections 2.06 and 12.04.


 


(b)           Representations and Warranties; No
Event of Default.  The following
statements shall be true and correct: 
(i) the representations and warranties contained in Article VI
and in each other Loan Document, certificate or other writing delivered to the
Agents, the Lenders pursuant hereto or thereto on or prior to the Effective
Date are true and correct on and as of the Effective Date as though made on and
as of such date and (ii) no Default or Event of Default shall have
occurred and be continuing on the Effective Date or would result from this


 


40

















 


Agreement or the other Loan Documents
becoming effective in accordance with its or their respective terms.


 


(c)           Legality.  The making of the Loans shall not contravene
any law, rule or regulation applicable to the Agents or the Lenders.


 


(d)           Delivery of Documents.  The Collateral Agent shall have received on
or before the Effective Date the following, each in form and substance
satisfactory to the Collateral Agent and, unless indicated otherwise, dated the
Effective Date:


 


(i)            counterparts to this Agreement, duly
executed by each of the Borrowers, the Guarantors, the Agents and the Lenders;


 


(ii)           the Amendatory Agreement, duly
executed by the Collateral Agent, each Borrower and Guarantor;


 


(iii)          the Contribution Agreement, duly
executed by each of the Borrowers;


 


(iv)          appropriate financing statements on
Form UCC-1 and amendments on Form UCC-3, duly executed by each Loan Party
and duly filed in such office or offices as may be necessary or, in the opinion
of the Collateral Agent, desirable to perfect, or to continue the perfection
of, the security interests purported to be created by the Security Agreements;


 


(v)           certified copies of request for
copies of information on Form UCC-11, listing all effective financing
statements which name as debtor any Loan Party and which are filed in the
offices referred to in paragraph (v) above, together with copies of such
financing statements, none of which, except as otherwise agreed in writing by
the Collateral Agent and except for such financing statements for which
executed termination statements on Form UCC-3 have been delivered to the
Collateral Agent, shall cover any of the Collateral and the results of searches
for any tax Lien and judgment Lien filed against such Person or its property,
which results, except as otherwise agreed to in writing by the Collateral
Agent, shall not show any such Liens, other than Permitted Liens;


 


(vi)          a copy of the resolutions of each Loan
Party, certified as of the Effective Date by an Authorized Officer thereof,
authorizing (A) the borrowings hereunder and the transactions contemplated
by the Loan Documents to which such Loan Party is or will be a party, and
(B) the execution, delivery and performance by such Loan Party of each
Loan Document and the execution and delivery of the other documents to be
delivered by such Person in connection herewith and therewith;


 


(vii)         a certificate of an Authorized Officer
of each Loan Party, certifying the names and true signatures of the
representatives of such Loan Party authorized to sign each Loan Document to
which such Loan Party is or will be a party and the other documents to be
executed and delivered by such Loan Party in connection herewith and therewith,
together with evidence of the incumbency of such authorized officers;


 


41

















 


(viii)        a certificate of the appropriate
official(s) of the state of organization and each state of foreign
qualification of each Loan Party certifying as to the subsistence in good
standing of, and the payment of taxes by, such Loan Party in such states,
together with confirmation by telephone or telegram (where available) on the
Effective Date from such official(s) as to such matters;


 


(ix)           a true and complete copy of the
charter, certificate of formation, certificate of limited partnership or other
publicly filed organizational document of each Loan Party certified as of a
date not more than 30 days prior to the Effective Date by an appropriate
official of the state of organization of such Loan Party;


 


(x)            a certificate of an Authorized
Officer of each Loan Party, certified as of the Effective Date, certifying as
to the charter and by-laws, limited liability company agreement, operating
agreement, agreement of limited partnership or other organizational document of
each Loan Party;


 


(xi)           an opinion of Bingham McCutchen LLP,
counsel to the Loan Parties, substantially in the form of Exhibit E and as to
such other matters as the Collateral Agent may reasonably request;


 


(xii)          a certificate of an Authorized Officer
of each Loan Party, certifying as to the matters set forth in subsection (b) of
this Section 5.01;


 


(xiii)         a certificate of an Authorized Officer
of the Parent, certifying the names and true signatures of the persons that are
authorized to provide Notices of Borrowings, and all other notices under this
Agreement and the other Loan Documents;


 


(xiv)        copies of the Receivable Purchase
Documents, certified as true and correct copies thereof by an Authorized
Officer of the Parent, together with a certificate of an Authorized Officer of
the Parent stating that such agreements remain in full force and effect and
that the Parent and its Subsidiaries have not breached or defaulted in any of
their obligations under such agreements; and


 


(xv)         such other agreements, instruments,
approvals, opinions and other documents, each satisfactory to the Collateral
Agent in form and substance, as the Collateral Agent may reasonably request.


 


(e)           Material Adverse Change;
Litigation.  The Collateral Agent
shall have determined, in its sole judgment, that no material adverse change
shall have occurred in the business, operations, condition (financial or
otherwise), properties or prospects of the Loan Parties (taken as a whole)
since April 27, 2002; and there shall exist no claim, action, suit,
investigation, litigation or proceeding, pending or threatened in any court or
before any arbitrator or Governmental Authority which relates to the Loan
Documents or which, in the opinion of the Agents, has any reasonable likelihood
of having a material adverse effect on the condition (financial or otherwise),
operations, properties, business or prospects of the Loan Parties.


 


42

















 


(f)            Proceedings; Receipt of Documents.  All proceedings in connection with the
making of the initial Loans and the other transactions contemplated by this
Agreement and the other Loan Documents, and all documents incidental hereto and
thereto, shall be satisfactory to the Agents and their counsel, and the Agents
and their counsel shall have received all such information and such counterpart
originals or certified or other copies of such documents as the Agents or such
counsel may reasonably request.


 


(g)           Wells Fargo Letters of Credit and
Citizens Bank  Letters of Credit.  In the event that the Borrowers and Wells
Fargo and/or the Borrowers and Citizens Bank, enter into any cash collateral or
other arrangements with respect to the Wells Fargo Letters of Credit or the
Citizens Bank Letters of Credit (as applicable), such arrangements shall be
satisfactory to the Agents.


 


(h)           Approvals.  All governmental and third party consents
and approvals necessary in connection with the effectiveness of the Loan
Documents and the transactions contemplated thereby shall have been obtained
(without the imposition of any conditions that are not reasonably acceptable to
the Agents) and shall remain in effect and all applicable governmental filings
shall have been made and all applicable waiting periods shall have expired
without in either case any action being taken by any competent authority; and no
law or regulation shall be applicable in the judgment of the Agents that
restrains, prevents or impose materially adverse conditions on the performance
of the Loan Documents and the transactions contemplated thereby.


 


(i)            Receivable Purchase Documents.
 The Receivable Purchase Documents shall
have been executed and delivered by Ableco, the Parent, Funding Corp. and the
Originators and all proceedings in connection with the Receivable Purchase
Documents shall be satisfactory to the Agents.


 


Section 5.02           Conditions Precedent to all Loans.  The obligation of any Agent or any Lender to
make any Loan is subject to the fulfillment, in a manner satisfactory to the
Administrative Agent, of each of the following conditions precedent:


 


(a)           Payment of Fees, Etc.  The Borrowers shall have paid all fees,
costs, expenses and taxes then payable by the Borrowers pursuant to this
Agreement and the other Loan Documents, including, without limitation, Sections
2.06 and 12.04.


 


(b)           Representations and Warranties; No
Event of Default.  The following
statements shall be true and correct, and the submission by the Parent to the
Administrative Agent of a Notice of Borrowing with respect to each such Loan,
and the Borrowers’ acceptance of the proceeds of such Loan, shall each be deemed
to be a representation and warranty by the Borrowers on the date of such Loan
that:  (i) the representations and
warranties contained in Article VI and in each other Loan Document,
certificate or other writing delivered to the Agents pursuant hereto or thereto
on or prior to the date of such Loan are true and correct on and as of such
date as though made on and as of such date, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall be true and correct on and
as of such earlier date), (ii) at the time of and after giving effect to
the making of such Loan and the application of proceeds thereof, no Default or


 


43

















 


Event of Default has occurred and is
continuing or would result from the making of the Loan to be made, on such date
and (iii) the conditions set forth in this Section 5.02 have been
satisfied as of the date of such request.


 


(c)           Legality.  The making of such Loan shall not contravene
any law, rule or regulation applicable to the Agents or the Lenders.


 


(d)           Notices.  Except for Loans outstanding on the
Effective Date, the Administrative Agent shall have received (i) a Notice
of Borrowing pursuant to Section 2.02.


 


(e)           Delivery of Documents.  The Agents shall have received such other
agreements, instruments, approvals, opinions and other documents, each in form
and substance satisfactory to the Agents, as any Agent may reasonably request.


 


(f)            Proceedings; Receipt of Documents.  All proceedings in connection with the
making of such Loan and the other transactions contemplated by this Agreement
and the other Loan Documents, and all documents incidental hereto and thereto,
shall be satisfactory to the Agents and their counsel, and the Agents and such
counsel shall have received all such information and such counterpart originals
or certified or other copies of such documents, in form and substance
satisfactory to the Agents, as the Agents or such counsel may reasonably
request.


 


ARTICLE VI



REPRESENTATIONS AND WARRANTIES


 


Section 6.01           Representations and Warranties.  Each Loan Party hereby represents and
warrants to the Agents and the Lenders as follows:


 


(a)           Organization, Good Standing, Etc.  Each Loan Party (i) is a corporation,
limited liability company or limited partnership duly organized, validly
existing and in good standing under the laws of the state of its organization,
(ii) has all requisite power and authority to conduct its business as now
conducted and as presently contemplated and, in the case of the Borrowers, to
make the borrowings hereunder, and to execute and deliver each Loan Document to
which it is a party, and to consummate the transactions contemplated thereby,
and (iii) is duly qualified to do business and is in good standing in each
jurisdiction in which the character of the properties owned or leased by it or
in which the transaction of its business makes such qualification necessary.


 


(b)           Authorization, Etc.  The execution, delivery and performance by
each Loan Party of each Loan Document to which it is or will be a party, (i)
have been duly authorized by all necessary action, (ii) do not and will not
contravene its charter or by-laws, its limited liability company or operating agreement
or its certificate of partnership or partnership agreement, as applicable, or
any applicable law or any contractual restriction binding on or otherwise
affecting it or any of its properties, (iii) do not and will not result in or
require the creation of any Lien (other than pursuant to any Loan Document)
upon or with respect to any of its properties, and (iv) do not and will not
result in any suspension, revocation, impairment, forfeiture


 


44

















 


or nonrenewal of any permit, license,
authorization or approval applicable to its operations or any of its
properties.


 


(c)           Governmental Approvals.  No authorization or approval or other action
by, and no notice to or filing with, any Governmental Authority is required in
connection with the due execution, delivery and performance by any Loan Party
of any Loan Document to which it is or will be a party.


 


(d)           Enforceability of Loan Documents.  This Agreement is, and each other Loan
Document to which any Loan Party is or will be a party, when delivered
hereunder, will be, a legal, valid and binding obligation of such Person,
enforceable against such Person in accordance with its terms, except as may be
limited by applicable bankruptcy, insolvency, reorganization, moratorium or
other similar laws.


 


(e)           Subsidiaries.  Schedule 6.01(e) is a complete and correct
description of the name, jurisdiction of incorporation and ownership of the
outstanding Capital Stock of such Subsidiaries of the Parent in existence on
the date hereof.  All of the issued and
outstanding shares of Capital Stock of such Subsidiaries have been validly
issued and are fully paid and nonassessable, and the holders thereof are not
entitled to any preemptive, first refusal or other similar rights.  Except as indicated on such Schedule, all
such Capital Stock is owned by the Parent or one or more of its wholly-owned
Subsidiaries, free and clear of all Liens other than in favor of the Collateral
Agent.  Except as set forth on
Schedule 6.01(e), there are no outstanding debt or equity securities of
the Parent or any of its Subsidiaries and no outstanding obligations of the
Parent or any of its Subsidiaries convertible into or exchangeable for, or
warrants, options or other rights for the purchase or acquisition from the
Parent or any of its Subsidiaries, or other obligations of any Subsidiary to
issue, directly or indirectly, any shares of Capital Stock of any Subsidiary of
the Parent.


 


(f)            Litigation.  Except as set forth in
Schedule 6.01(f), there is no pending or, to the knowledge of any Loan
Party, threatened action, suit or proceeding affecting any Loan Party before
any court or other Governmental Authority or any arbitrator that (i) if
adversely determined, could have a Material Adverse Effect, (ii) relates
to the Indenture Documents, the Original Financing Agreement, the Existing
Financing Agreement, the Wells Fargo Letters of Credit, the Citizens Bank
Letters of Credit, the Existing Revolving Loans, the Receivable Purchase
Documents or any Material Contract, or (iii) relates to this Agreement or
any other Loan Document or any transaction contemplated hereby or thereby.


 


(g)           Financial Condition.


 


(i)            The Financial Statements, copies of
which have been delivered to the Agents and the Lenders, fairly present the
consolidated financial condition of the Parent
and its Subsidiaries as at the respective dates thereof and the
consolidated results of operations of the Parent
and its Subsidiaries for the fiscal periods ended on such respective
dates, all in accordance with GAAP, and since April 27, 2002, no event or
development has occurred that has had or could have a Material Adverse Effect.


 


45

















 


(ii)           The Parent has heretofore furnished
to the Lenders projected monthly balance sheets, income statements and
statements of cash flows of the Parent and its Subsidiaries for the period from
April 27, 2002, through April 26, 2003, as updated from time to time
pursuant to Section 7.01(a)(vii). 
Such projections, as so updated, are believed by the Parent at the time
furnished to be reasonable, have been prepared on a reasonable basis and in
good faith by the Parent, and have been based on assumptions believed by the
Parent to be reasonable at the time made and upon the best information then
reasonably available to the Parent, and the Parent is not aware of any facts or
information that would lead it to believe that such projections, as so updated,
are incorrect or misleading in any material respect.


 


(h)           Compliance with Law, Etc.  None of the Loan Parties is in violation of
its organizational documents, any law, rule, regulation, judgment or order of
any Governmental Authority applicable to it or any of its property or assets,
or any material term of any agreement or instrument (including, without
limitation, the Indenture Documents, the Receivable Purchase Documents or any
other Material Contract) binding on or otherwise affecting it or any of its
properties, and no Default or Event of Default has occurred and is continuing.


 


(i)            ERISA.  Except as set forth on
Schedule 6.01(i), (i) each Employee Plan is in substantial compliance with
ERISA and the Internal Revenue Code, (ii) no Termination Event has
occurred nor is reasonably expected to occur with respect to any Employee Plan,
(iii) the most recent annual report (Form 5500 Series) with respect to
each Employee Plan, including any required Schedule B (Actuarial
Information) thereto, copies of which have been filed with the Internal Revenue
Service and delivered to the Agents, is complete and correct and fairly
presents the funding status of such Employee Plan, and since the date of such
report there has been no material adverse change in such funding status,
(iv) no Employee Plan had an accumulated or waived funding deficiency or permitted
decreases which would create a deficiency in its funding standard account or
has applied for an extension of any amortization period within the meaning of
Section 412 of the Internal Revenue Code at any time during the previous
60 months, and (v) no Lien imposed under the Internal Revenue Code or
ERISA exists or is likely to arise on account of any Employee Plan within the
meaning of Section 412 of the Internal Revenue Code at any time during the
previous 60 months.  Except as set
forth on Schedule 6.01(i), none of the Loan Parties or any of their ERISA
Affiliates have incurred any withdrawal liability under ERISA with respect to
any Multiemployer Plan, or are aware of any facts indicating that the Loan
Parties or any of their ERISA Affiliates may in the future incur any such
withdrawal liability.  Except as
required by Section 4980B of the Internal Revenue Code, none of the Loan
Parties or any of their ERISA Affiliates maintains an employee welfare benefit
plan (as defined in Section 3(1) of ERISA) which provides health or welfare
benefits (through the purchase of insurance or otherwise) for any retired or
former employee of any Loan Party or any of its ERISA Affiliates or coverage
after a participant’s termination of employment.  None of the Loan Parties or any of their ERISA Affiliates has
incurred any liability or obligation under the Worker Adjustment and Retraining
Notification Act (“WARN”) or similar state law, which remains unpaid or
unsatisfied.


 


(j)            Taxes, Etc.  All Federal, state and local tax returns and
other reports required by applicable law to be filed by any Loan Party have
been filed, or extensions have been obtained, and all taxes, assessments and
other governmental charges imposed upon any Loan Party or any property of any
Loan Party and which have become due and payable on or prior to the date


 


46

















 


hereof have been paid, except to the extent
contested in good faith by proper proceedings which stay the imposition of any
penalty, fine or Lien resulting from the non-payment thereof and with respect
to which adequate reserves have been set aside for the payment thereof.


 


(k)           Regulation U.  None of the Loan Parties is nor will be
engaged in the business of extending credit for the purpose of purchasing or
carrying margin stock (within the meaning of Regulations T, U or X), and no
proceeds of any Loan will be used to purchase or carry any margin stock or to
extend credit to others for the purpose of purchasing or carrying any margin
stock.


 


(l)            Nature of Business.  None of the Loan Parties is engaged in any
business other than as described in the quarterly financial statement filed by
the Parent with the SEC on Form 10-Q for the fiscal quarter ending July
28, 2002.


 


(m)          Adverse Agreements, Etc.  Neither the Parent nor any other Loan Party
is a party to any agreement or instrument, or subject to any charter, limited
liability company agreement, partnership agreement or other corporate,
partnership or limited liability company restriction or any judgment, order,
regulation, ruling or other requirement of a court or other Governmental
Authority, which has, or in the future could have, a Material Adverse Effect.


 


(n)           Permits, Etc.  Each Loan Party has, and is in compliance
with, all permits, licenses, authorizations, approvals, entitlements and
accreditations required for such Person lawfully to own, lease, manage or
operate, or to acquire, each business currently owned, leased, managed or
operated, or to be acquired, by such Person. 
No condition exists or event has occurred which, in itself or with the
giving of notice or lapse of time or both, would result in the suspension,
revocation, impairment, forfeiture or non-renewal of any such permit, license,
authorization, approval, entitlement or accreditation, and there is no claim
that any thereof is not in full force and effect.


 


(o)           Properties.  (i)  Each
Loan Party has good and marketable title to, or valid leasehold interests in,
all property and assets material to its business, free and clear of all Liens
except Permitted Liens.  The properties
are in good working order and condition, ordinary wear and tear excepted.


 


(ii)           Schedule 6.01(o) sets forth a
complete and accurate list as of the Effective Date of the location, by state
and street address, of all real property owned or leased by each Loan Party
and, in the case of owned real property, a description of each mortgage Lien
affecting such real property.  As of the
Effective Date, each Loan Party has valid leasehold interests in the Leases
described on Schedule 6.01(o) to which it is a party.  Schedule 6.01(o) sets forth with
respect to each such Lease, the commencement date, termination date, renewal
options (if any) and annual base rents. 
Each such Lease is valid and enforceable in accordance with its terms in
all material respects and is in full force and effect.  No consent or approval of any landlord or
other third party in connection with any such Lease is necessary for any Loan
Party to enter into and execute the Loan Documents to which it is a party,
except as set forth on Schedule 6.01(o). 
To the knowledge of any Loan Party, no other party to any such Lease is
in default of its obligations thereunder, and none of the Loan Parties (or any
other party to any such Lease) has not at any time delivered or received any
notice of default which remains


 


47

















 


uncured under any such Lease and, as of the
Effective Date, no event has occurred which, with the giving of notice or the
passage of time or both, would constitute a default under any such Lease.


 


(p)           Full Disclosure.  Each Loan Party has disclosed to the Agents
all agreements, instruments and corporate or other restrictions to which it is
subject, and all other matters known to it, that, individually or in the
aggregate, could result in a Material Adverse Effect.  None of the other reports, financial statements, certificates or
other information furnished by or on behalf of any Loan Party to the Agents in
connection with the negotiation of this Agreement or delivered hereunder (as
modified or supplemented by other information so furnished) contains any
material misstatement of fact or omits to state any material fact necessary to
make the statements therein, in the light of the circumstances under which it
was made, not misleading; provided that, with respect to projected
financial information, each Loan Party represents only that such information
was prepared in good faith based upon assumptions believed to be reasonable at
the time.  There is no contingent
liability or fact that may have a Material Adverse Effect which has not been
set forth in a footnote included in the Financial Statements or a schedule
hereto.


 


(q)           Wells Fargo Letters of Credit;
Citizens Bank Letters of Credit. 
Schedule 6.01(q) sets forth the number, beneficiary, account, party,
undrawn amount and expiration date of each Wells Fargo Letter of Credit and
Citizens Bank Letter of Credit which has not terminated or expired on or prior
to the Effective Date.


 


 


(r)            Operating Lease Obligations.  On the Effective Date, none of the Loan
Parties has any obligations as lessee for the payment of rent for any personal
property (with annual lease payments in excess of $100,000) or real property
other than the Operating Lease Obligations set forth on Schedule 6.01(r).


 


(s)           Environmental Matters.  Except as set forth on
Schedule 6.01(s), (i) no properties currently owned by any Loan Party
or any of their Subsidiaries are currently being used, nor, to the Loan
Parties’ knowledge, have ever been used, for any activities involving, directly
or indirectly, the use, handling, generation, treatment, storage transportation
or disposal of any Hazardous Materials; (ii) the operations of each Loan
Party and any of their subsidiaries are in compliance with Environmental Laws
in all material respects; (iii) there has been no Release at, from, or, onto
any of the properties owned or operated by any Loan Party or any of its
Subsidiaries or a predecessor in interest at any disposal or treatment facility
which received Hazardous Materials generated by any Loan Party or any
predecessor in interest which could have a Material Adverse Effect; (iv) no
Environmental Action has been asserted against any Loan Party or any of its
Subsidiaries or, to any Loan Party’s knowledge, any predecessor in interest nor
does any Loan Party have knowledge or notice of any pending Environmental
Action against any Loan Party or any of their Subsidiaries or any predecessor
in interest which could have a Material Adverse Effect; (v) no Environmental
Actions have been asserted against any facilities that may have received
Hazardous Materials generated by any Loan Party or any predecessor in interest
which could have a Material Adverse Effect; and (vi) none of the Collateral is
subject to any existing or pending Environmental Action or Environmental Lien.


 


48

















 


(t)            Insurance.  Each Loan Party keeps its property
adequately insured and maintains (i) insurance to such extent and against
such risks, including fire, as is customary with companies in the same or
similar businesses, (ii) workmen’s compensation insurance in the amount
required by applicable law, (iii) public liability insurance, which shall
include product liability insurance, in the amount customary with companies in
the same or similar business against claims for personal injury or death on
properties owned, occupied or controlled by it, and (iv) such other insurance
as may be required by law or as may be reasonably required by the Collateral
Agent (including, without limitation, against larceny, embezzlement or other
criminal misappropriation).  Schedule
6.01(t) sets forth a list of all insurance maintained by each Loan Party on the
Effective Date.


 


(u)           Use of Proceeds.  The proceeds of the Loans shall be used to
(i) pay fees and expenses in connection with the transactions contemplated
hereby, (ii) fund working capital and general corporate requirements of
the Borrowers and (iii) to pay fees and expenses related to this Agreement.


 


(v)           Solvency.  After giving effect to the transactions
contemplated by this Agreement and before and after giving effect to each Loan,
each Loan Party is, and the Loan Parties on a consolidated basis are, Solvent.


 


(w)          Location of Bank Accounts.  Schedule 6.01(w) sets forth a complete and
accurate list as of the Effective Date of all deposit, checking and other bank
accounts, all securities and other accounts maintained with any broker dealer
and all other similar accounts maintained by each Loan Party, together with a
description thereof (i.e., the bank or broker dealer at which such
deposit or other account is maintained and the account number and the purpose
thereof).


 


(x)            Intellectual Property.  Except as set forth on
Schedule 6.01(x), each Loan Party owns or licenses or otherwise has the
right to use all licenses, permits, patents, patent applications, trademarks,
trademark applications, service marks, tradenames, copyrights, copyright
applications, franchises, authorizations and other intellectual property rights
that are necessary for the operations of its businesses, without infringement
upon or conflict with the rights of any other Person with respect thereto,
except for such infringements and conflicts which, individually or in the
aggregate, could not have a Material Adverse Effect.  Set forth on Schedule 6.01(x) is a complete and accurate
list as of the Effective Date of all such material licenses, permits, patents,
patent applications, trademarks, trademark applications, service marks,
tradenames, copyrights, copyright applications, franchises, authorizations and
other intellectual property rights of each Loan Party.  No slogan or other advertising device,
product, process, method, substance, part or other material now employed, or
now contemplated to be employed, by any Loan Party infringes upon or conflicts
with any rights owned by any other Person, and no claim or litigation regarding
any of the foregoing is pending or threatened, except for such infringements
and conflicts which could not have, individually or in the aggregate, a
Material Adverse Effect.  To the best
knowledge of each Loan Party, no patent, invention, device, application,
principle or any statute, law, rule, regulation, standard or code is pending or
proposed, which, individually or in the aggregate, could have a Material
Adverse Effect.


 


49

















 


(y)           Material Contracts.  Set forth on Schedule 6.01(y) is a
complete and accurate list as of the Effective Date of all Material Contracts
of each Loan Party, showing the parties and subject matter thereof and
amendments and modifications thereto. 
Each such Material Contract (i) is in full force and effect and is
binding upon and enforceable against each Loan Party that is a party thereto
and, to the best knowledge of such Loan Party, all other parties thereto in
accordance with its terms, (ii) has not been otherwise amended or
modified, and (iii) is not in default due to the action of any Loan Party or,
to the best knowledge of any Loan Party, any other party thereto.


 


(z)            Holding Company and Investment
Company Acts.  None of the Loan
Parties is (i) a “holding company” or a “subsidiary company” of a “holding
company” or an “affiliate” of a “holding company”, as such terms are defined in
the Public Utility Holding Company Act of 1935, as amended, or (ii) an
“investment company” or an “affiliated person” or “promoter” of, or “principal
underwriter” of or for, an “investment company”, as such terms are defined in
the Investment Company Act of 1940, as amended.


 


(aa)         Employee and Labor Matters.  (i) 
There is (A) no unfair labor practice complaint pending or, to the best
knowledge of any Loan Party, threatened against any Loan Party before any
Governmental Authority and no grievance or arbitration proceeding pending or
threatened against any Loan Party which arises out of or under any collective
bargaining agreement, (B) no strike, labor dispute, slowdown, stoppage or
similar action or grievance pending or threatened against any Loan Party and
(C) to the best knowledge of any Loan Party, no union representation question
existing with respect to the employees of any Loan Party and no union
organizing activity taking place with respect to any of the employees of any of
them.


 


(bb)         Customers and Suppliers.  There exists no actual or threatened
termination, cancellation or limitation of, or modification to or change in,
the business relationship between (A) any Loan Party, on the one hand, and any
customer or any group thereof, on the other hand, whose agreements with any
Loan Party are individually or in the aggregate material to the business or
operations of such Loan Party, or (B) any Loan Party, on the one hand, and
any material supplier thereof, on the other hand; and there exists no present
state of facts or circumstances that could give rise to or result in any such
termination, cancellation, limitation, modification or change.


 


(cc)         No Bankruptcy Filing.  None of the Loan Parties is contemplating
either the filing of a petition by it under any state or federal bankruptcy or
insolvency laws or the liquidation of all or a major portion of such Loan
Party’s assets or property, and none of the Loan Parties has any knowledge of
any Person contemplating the filing of any such petition against it.


 


(dd)         Location of Inventory; Place of
Business; Chief Executive Office. 
There is no location at which the Borrowers have any Inventory (except
for Inventory in transit) other than (i) those locations listed on
Schedule 6.01(ee) and (ii) any other locations approved in writing by
the Collateral Agent pursuant to the definition of “Eligible Inventory”.


Schedule 6.01(ee) hereto contains a
true, correct and complete list, as of the Effective Date, of the legal names
and addresses of each warehouse at which Inventory of each Loan Party is
stored.  None of the receipts received
by any Loan Party from any warehouse states that the goods covered thereby are
to be delivered to bearer or to the order of a named Person or to a named
Person and


 


50

















 


such named Person’s
assigns.  Schedule 6.01(ee) sets forth a
complete and accurate list as of the date hereof of (A) each place of
business of each Loan Party and (B) the chief executive office of each Loan
Party.


 


(ee)         Tradenames.  Schedule 6.01(ee) hereto sets forth a
complete and accurate list as of the Effective Date of all tradenames used by
each Loan Party.


 


(ff)           Security Interests.  Each Security Agreement and each Pledge
Agreement creates in favor of the Collateral Agent, for the benefit of the
Lenders, a legal, valid and enforceable security interest in the Collateral
secured thereby.  Upon the filing of the
UCC-1 financing statements and UCC-3 amendments to financing
statement described in Section 5.01(d)( iv) and the recording of the Assignment
for Security (Trademarks) and Assignment for Security (Patents), referred to in
each Security Agreement, in the United States Patent and Trademark Office, such
security interests in and Liens on the Collateral granted thereby shall be
perfected, first priority security interests, and no further recordings or
filings are or will be required in connection with the creation, perfection or
enforcement of such security interests and Liens, other than (i) the
filing of continuation statements in accordance with applicable law,
(ii) the recording of the Assignment for Security (Trademarks) and
Assignment for Security (Patents) pursuant to each Security Agreement in the
United States Patent and Trademark Office, with respect to after-acquired U.S. patent
and trademark applications and registrations, (iii) the recordation of
appropriate evidence of the security interest in the appropriate foreign
registry with respect to all foreign intellectual property, and (iv) the
registration of all U.S. copyrights and the recordation of the Assignment for
Security (Copyrights) in the United States Copyright Office.


 


(gg)         Schedules.  All of the information which is required to
be scheduled to this Agreement is set forth on the Schedules attached hereto,
is correct and accurate and does not omit to state any information material
thereto.


 


ARTICLE VII



COVENANTS OF THE BORROWER


 


Section 7.01           Affirmative Covenants.  So long as any principal of or interest on
any Loan, Reimbursement Obligation, or any other Obligations (whether or not
due) shall remain unpaid or any Lender shall have any Commitment hereunder, the
Loan Parties will, unless the Required Lenders shall otherwise consent in
writing:


 


(a)           Reporting Requirements.  Furnish to each Agent and each Lender:


 


(i)            as soon as available and in any
event within 45 days after the end of each fiscal quarter of the Parent,
consolidated and consolidating balance sheets, consolidated and consolidating
statements of operations and retained earnings and consolidated and
consolidating statements of cash flows of the Parent and its Subsidiaries as at
the end of such quarter, and for the period commencing at the end of the
immediately preceding Fiscal Year and ending with the end of such quarter,
setting forth in each case in comparative form the figures for the
corresponding date or period of the immediately preceding Fiscal Year, all in
reasonable detail and certified by an Authorized Officer as fairly presenting,
in all material respects, the


 


51

















 


financial position of the Parent and its
Subsidiaries as of the end of such quarter and the results of operations and
cash flows of the Parent and its Subsidiaries for such quarter, in accordance
with GAAP applied in a manner consistent with that of the most recent audited
financial statements of the Parent and its Subsidiaries furnished to the
Lenders, subject to normal year-end adjustments;


 


(ii)           as soon as available, and in any
event within 90 days after the end of each Fiscal Year consolidated and
consolidating balance sheets, consolidated and consolidating statements of
operations and retained earnings and consolidated and consolidating statements
of cash flows of the Parent and its Subsidiaries as at the end of such Fiscal
Year, setting forth in comparative form the corresponding figures for the
immediately preceding Fiscal Year, all in reasonable detail and prepared in
accordance with GAAP, and accompanied by a report and an unqualified opinion,
prepared in accordance with generally accepted auditing standards, of Grant
Thorton LLP or another independent certified public accountants of recognized
standing selected by the Parent and reasonably satisfactory to the Agents
(which opinion shall be without (A) a “going concern” or like qualification
or exception, (B) any qualification or exception as to the scope of such
audit (other than with regard to certain foreign Subsidiaries and Subsidiaries
acquired within the audit period where such accountant is relying on the
opinions or agreed upon procedures of other accountants or certified financial
statements prepared by other accountants or by such acquired Subsidiaries) or
(C) any qualification which relates to the treatment or classification of
any item and which, as a condition to the removal of such qualification, would
require an adjustment to such item, the effect of which would be to cause any
noncompliance with the provisions of  Section 7.03), together with a
written statement of such accountants (1) to the effect that, in making
the examination necessary for their certification of such financial statements,
they have not obtained any knowledge of the existence of an Event of Default or
a Default and (2) if such accountants shall have obtained any knowledge of
the existence of an Event of Default or such Default, describing the nature
thereof;


 


(iii)          as soon as available, and in any event
within 30 days of the end of each fiscal month of the Parent and its
Subsidiaries internally prepared consolidated and consolidating balance sheets,
consolidated and consolidating statements of operations and consolidated and
consolidating statements of cash flows for such fiscal month of the Parent and
its Subsidiaries for such fiscal month and for the period from the beginning of
such Fiscal Year to the end of such fiscal month, all in reasonable detail and
certified by an Authorized Officer as fairly presenting, in all material
respects, the financial position of the Parent and its Subsidiaries as of the
end of such fiscal month and the results of operations and cash flows of the
Parent and its Subsidiaries for such fiscal month, in accordance with GAAP
applied in a manner consistent with that of the most recent audited financial
statements furnished to the Lenders, subject to (A) normal year-end adjustments
and (B) in the case of the first and second fiscal month of each Fiscal Year,
such other customary adjustments as the Parent reasonably deems necessary as a
result of such financial statements having been prepared prior to the
completion of audited financial statements for the immediately preceding Fiscal
Year;


 


(iv)          simultaneously with the delivery of
the financial statements of the Parent required by clauses (i), (ii) and (iii)
of this Section 7.01(a), a certificate of an Authorized Officer (A)
stating that such Authorized Officer has reviewed the provisions of this


 


52

















 


Agreement and the other Loan Documents and
has made or caused to be made under his or her supervision a review of the
condition and operations of the Parent and its Subsidiaries during the period
covered by such financial statements with a view to determining whether the
Parent and its Subsidiaries were in compliance with all of the provisions of
such Loan Documents at the times such compliance is required by the Loan
Documents, and that such review has not disclosed, and such Authorized Officer
has no knowledge of, the existence during such period of an Event of Default or
Default or, if an Event of Default or Default existed, describing the nature
and period of existence thereof and the action which the Parent and its
Subsidiaries propose to take or have taken with respect thereto and (B)
attaching a schedule showing the calculations specified in Section 7.03;


 


(v)           as soon as available and in any event
within 10 Business Days of the end of each fiscal month of the Borrowers,
reports in detail satisfactory to the Agents and certified by an Authorized
Officer as being accurate and complete (1) listing all accounts payable of the
Loan Parties as of each such day which shall include the amount and age of each
account payable, the name and mailing address of each account creditor and such
other information as any Agent may request, and (2) listing all Inventory
of the Loan Parties as of each such day, and containing a breakdown of such
Inventory by type and amount, the cost and the current market value thereof (by
location), the date of acquisition, the warehouse and production facility
location and such other information as any Agent may request, all in detail and
in form satisfactory to the Agents;


 


(vi)          as soon as available and in any event
within 5 Business Days after the end of each month, a Borrowing Base
Certificate current as of the close of business on the last Business Day of
such month, supported by such schedules and other information as the
Administrative Agent may reasonably request from time to time, provided,
that (A) the Borrowing Base set forth in the Borrowing Base Certificate
shall be effective from and including the date such Borrowing Base Certificate
is duly received by the Administrative Agent but not including the date on
which a subsequent Borrowing Base Certificate is received by the Administrative
Agent, unless any Agent disputes the eligibility of any property for inclusion
in the calculation of the Borrowing Base or the valuation thereof by notice of
such dispute to the Parent and (B) in the event of any dispute about the
eligibility of any property for inclusion in the calculation of the Borrowing
Base or the valuation thereof, such Agent’s good faith judgment shall control;


 


(vii)         (A) on or before April 15 of each year,
(A) financial projections supplementing and superseding the financial
projections delivered pursuant to the Existing Financing Agreement or this
Agreement, prepared on a monthly basis and otherwise in form and substance
satisfactory to the Agents, for the immediately succeeding Fiscal Year for the
Parent and its Subsidiaries, all such financial projections to be reasonable,
to be prepared on a reasonable basis and in good faith, and to be based on
assumptions believed by the Parent to be reasonable at the time made and from
the best information then available to the Parent, and (B) a list of the fiscal
months for the Parent and its Subsidiaries for such immediately succeeding
Fiscal Year;


 


(viii)        promptly after submission to any
Government Authority, all documents and information furnished to such
Government Authority in connection with any


 


53

















 


investigation of any Loan Party other than
(A) routine inquiries by such Governmental Authority and (B) inquiries
regarding matters which are immaterial;


 


(ix)           as soon as possible, and in any event
within three days after the occurrence of an Event of Default or Default or the
occurrence of any event or development that could have a Material Adverse
Effect, the written statement of an Authorized Officer setting forth the
details of such Event of Default, Default, other event or Material Adverse
Effect and the action which the Parent and its Subsidiaries propose to take
with respect thereto;


 


(x)            (A) as soon as possible and in any
event (1) within 10 days after any Loan Party or any ERISA Affiliate thereof
knows or has reason to know that any Termination Event described in clause (i)
of the definition of Termination Event with respect to any Employee Plan has
occurred, (2) within 10 days after a Borrower or any ERISA Affiliate thereof
knows or has reason to know that any other Termination Event with respect to
any Employee Plan has occurred, or (3) within 10 days after any Loan Party or
any ERISA Affiliate thereof knows or has reason to know that an accumulated
funding deficiency has been incurred or an application has been made to the
Secretary of the Treasury for a waiver or modification of the minimum funding
standard (including installment payments) or an extension of any amortization
period under Section 412 of the Internal Revenue Code with respect to an
Employee Plan, a statement of an Authorized Officer setting forth the details
of such occurrence and the action, if any, which such Loan Party or such ERISA
Affiliate proposes to take with respect thereto, (B) promptly and in any event
within three days after receipt thereof by any Loan Party or any ERISA
Affiliate thereof from the PBGC, copies of each notice received by any Loan
Party or any ERISA Affiliate thereof of the PBGC’s intention to terminate any
Plan or to have a trustee appointed to administer any Plan, (C) promptly and in
any event within 10 days after the filing thereof with the Internal Revenue
Service if requested by the Agent, copies of each Schedule B (Actuarial
Information) to the annual report (Form 5500 Series) with respect to each
Employee Plan and Multiemployer Plan, (D) promptly and in any event within 10 days
after any Loan Party or any ERISA Affiliate thereof knows or has reason to know
that a required installment within the meaning of Section 412 of the Internal
Revenue Code has not been made when due with respect to an Employee Plan, (E)
promptly and in any event within three days after receipt thereof by any Loan
Party or any ERISA Affiliate thereof from a sponsor of a Multiemployer Plan or
from the PBGC, a copy of each notice received by any Loan Party or any ERISA
Affiliate thereof concerning the imposition or amount of withdrawal liability
under Section 4202 of ERISA or indicating that such Multiemployer Plan may
enter reorganization status under Section 4241 of ERISA, and (F) promptly and
in any event within 10 days after any Loan Party or any ERISA Affiliate thereof
send notice of a plant closing or mass layoff (as defined in WARN) to
employees, copies of each such notice sent by such Loan Party or such ERISA
Affiliate thereof;


 


(xi)           promptly after the commencement
thereof but in any event not later than 7 Business Days after service of
process with respect thereto on, or the obtaining of knowledge thereof by, any
Loan Party, notice of each action, suit or proceeding before any court or other
Governmental Authority or other regulatory body or any arbitrator which, if
adversely determined, could have a Material Adverse Effect;


 


54

















 


(xii)          as soon as possible and in any event
within 10 days after execution, receipt or delivery thereof, copies of any
material notices that any Loan Party delivers or receives in connection with
the Indenture Documents, the Receivable Purchase Documents, or any other
Material Contract;


 


(xiii)         promptly after the sending or filing
thereof, copies of all statements, reports and other information any Loan Party
sends to any holders of its Indebtedness or its securities or files with the
SEC or any national (domestic or foreign) securities exchange;


 


(xiv)        promptly upon receipt thereof, copies of
all financial reports (including, without limitation, management letters), if
any, submitted to any Loan Party by its auditors in connection with any annual
or interim audit of the books thereof; and


 


(xv)         promptly upon request, such other
information concerning the condition or operations, financial or otherwise, of
any Loan Party as any Agent may from time to time may reasonably request.


 


(b)           Additional Guaranties and
Collateral Security.


 


(i)            Cause each domestic Subsidiary of any Loan Party which either (x) is not in
existence on the Effective Date or (y) is in existence on the Effective Date,
is designated at such time as an Excluded Subsidiary and ceases at any time
thereafter to be an Excluded Subsidiary, to execute and deliver to the
Collateral Agent promptly and in any event within three days after the
formation, acquisition or change in status thereof and in form and substance
satisfactory to the Collateral Agent (A) a Guaranty guaranteeing the
Obligations, (B) a Security Agreement, (C) if such Subsidiary owns or
leases any real property such that a Mortgage would be required to be delivered
for such property under Section 7.01(o), (x) promptly deliver a notice to the
Collateral Agent setting forth with specificity a description of such real
property, the location of such real property, any structures or improvements
thereon and either an appraisal or the Parent’s good-faith estimate of the
current value of such real property, and (y) if requested by the Collateral
Agent, promptly execute and deliver one or more Mortgages creating on such real
property a perfected, first priority Lien on such real property, and, if the
same would be required under Section 7.01(o), a Title Insurance Policy covering
such real property, a current ALTA survey thereof and a surveyor’s certificate,
each in form and substance satisfactory to the Collateral Agent, together with
such other agreements, instruments and documents as the Collateral Agent may
require whether comparable to the documents required under Section 7.01(o)
or otherwise, and (D) such other agreements, instruments, approvals, legal
opinions or other documents reasonably requested by the Collateral Agent in
order to create, perfect, establish the first priority of or otherwise protect
any Lien purported to be covered by any such Security Agreement or Mortgage or
otherwise to effect the intent that such Subsidiary shall become bound by all
of the terms, covenants and agreements contained in the Loan Documents and that
all property and assets of such Subsidiary shall become Collateral for the
Obligations.


 


(ii)           If
the value of the Inventory owned by the Borrowers in the State of Texas as of
January 1, 2002 exceeds $500,000 in the aggregate, deliver to the Lenders the


 


55

















 


legal opinion of Texas
local counsel to the Loan Parties, and as to such other matters as the
Collateral Agent may reasonably request.


 


(c)           Compliance with Laws, Etc.  Comply, and cause each of their Subsidiaries
to comply, in all material respects with all applicable laws, rules, regulations
and orders (including, without limitation, all Environmental Laws), such
compliance to include, without limitation, (i) paying before the same become
delinquent all taxes, assessments and governmental charges or levies imposed
upon it or upon its income or profits or upon any of its properties, and
(ii) paying all lawful claims which if unpaid might become a Lien or
charge upon any of its properties; except in each case to the extent contested
in good faith by proper proceedings which stay the imposition of any penalty,
fine or Lien resulting from the non-payment thereof and with respect to which
adequate reserves have been set aside for the payment thereof.


 


(d)           Preservation of Existence, Etc.  Except as otherwise expressly permitted by
Section 7.02(c) (i) maintain and preserve, and cause each of their Subsidiaries
to maintain and preserve, their existence, rights and privileges, and (ii)
become or remain duly qualified and in good standing in each jurisdiction in
which the character of the properties owned or leased by them or in which the
transaction of their business makes such qualification necessary, except, in
the case of this clause (ii), where the failure to become or remain so
qualified could not reasonably be expected to have a Material Adverse Effect.


 


(e)           Keeping of Records and Books of
Account.  Keep, and cause each
of their Subsidiaries to keep, adequate records and books of account, with
complete entries made in accordance with GAAP.


 


(f)            Inspection Rights.  Permit, and cause each of their Subsidiaries
to permit, the Agents or any agents or representatives thereof at any time and
from time to time during normal business hours and so as not to unduly disrupt
the normal operations of the Borrowers, at the expense of the Borrowers, to
examine and make copies of and abstracts from their records and books of
account, to visit and inspect their properties, to verify materials, leases,
notes, accounts receivable, deposit accounts and other assets of the Loan
Parties and their Subsidiaries, to conduct audits, physical counts, valuations,
appraisals, environmental assessments or examinations and to discuss their
affairs, finances and accounts with any of the directors, officers, managerial
employees, independent accountants or other representatives thereof.  The Borrowers agree to pay the reasonable
cost of such audits, counts, valuations, appraisals, assessments or
examinations.  So long as no Default or
Event of Default shall have occurred and be continuing, the Agents shall
provide the Parent with at least one Business Day notice prior to exercising
the rights set forth in this subsection (f). 
With respect to business valuations, the Loan Parties shall assist the
Collateral Agent in obtaining, at the sole cost and expense of the Borrowers, a
business valuation of the Parent and its Subsidiaries performed by a third
party reasonably acceptable to the Collateral Agent at such times as the
Collateral Agent shall determine, provided that so long as no Default or
Event of Default shall have occurred and be continuing, such business
valuations shall be obtained no more frequently than one time during any twelve
month period.


 


(g)           Maintenance of Properties, Etc.  Maintain and preserve, and cause each of
their Subsidiaries to maintain and preserve, all of their properties which are
necessary or useful in the proper conduct of their business in good working
order and condition, ordinary wear


 


56

















 


and tear excepted, and comply, and cause each
of their Subsidiaries to comply, at all times with the provisions of all leases
to which each of them is a party as lessee or under which each of them occupies
property, so as to prevent any loss or forfeiture thereof or thereunder which
reasonably could be expected to have a Material Adverse Effect.


 


(h)           Maintenance of Insurance.  Maintain, and cause each of their
Subsidiaries to maintain, insurance with responsible and reputable insurance
companies or associations (including, without limitation, comprehensive general
liability, hazard, rent and business interruption insurance) with respect to
their properties (including all real properties leased or owned by them) and
business, in such amounts and covering such risks as is required by any
Governmental Authority having jurisdiction with respect thereto or as is
carried generally in accordance with sound business practice by companies in
similar businesses similarly situated and in any event in amount, adequacy and
scope reasonably satisfactory to the Collateral Agent.  All policies covering the Collateral are to
be made payable to the Collateral Agent for the benefit of the Lenders, as its
interests may appear, in case of loss, under a standard non-contributory
“lender” or “secured party” clause and are to contain such other provisions as
the Collateral Agent may require to fully protect the Lenders’ interest in the
Collateral and to any payments to be made under such policies.  All certificates of insurance are to be
delivered to the Collateral Agent and the policies are to be premium prepaid,
with the loss payable and additional insured endorsement in favor of Collateral
Agent, and shall provide for not less than 30 days’ prior written notice to the
Collateral Agent of the exercise of any right of cancellation.  If the Loan Parties or any of their
Subsidiaries fail to maintain such insurance, the Collateral Agent may arrange
for such insurance, but at the Borrowers’ expense and without any
responsibility on the Collateral Agent’s part for obtaining the insurance, the
solvency of the insurance companies, the adequacy of the coverage, or the
collection of claims.  Upon the
occurrence of an Event of Default, the Collateral Agent shall have the sole
right, in the name of the Lenders, the Loan Parties and their Subsidiaries, to
file claims under any insurance policies, to receive, receipt and give
acquittance for any payments that may be payable thereunder, and to execute any
and all endorsements, receipts, releases, assignments, reassignments or other
documents that may be necessary to effect the collection, compromise or
settlement of any claims under any such insurance policies.


 


(i)            Obtaining of Permits, Etc.  (i) Obtain, maintain and preserve, and cause
each of their Subsidiaries to obtain, maintain and preserve, all permits,
licenses, authorizations, approvals, entitlements and accreditations which are
necessary in the proper conduct of its business and (ii) become or remain, and
cause each of their Subsidiaries to become or remain, duly qualified and in
good standing in each jurisdiction in which the character of the properties
owned or leased by it or in which the transaction of its business makes such
qualification necessary, except, in the case of this clause (ii), where the
failure to become or remain so qualified could not reasonably be expected to
have a Material Adverse Effect.


 


(j)            Environmental.  (i)  Keep any property either
owned or operated by them or any of their Subsidiaries free of any
Environmental Liens; (ii) comply, and cause their Subsidiaries to comply,
in all material respects with Environmental Laws and provide to the Collateral
Agent documentation of such compliance which the Collateral Agent reasonably
requests; (iii) promptly notify the Agents of any Release of a Hazardous
Material in excess of any reportable quantity from or onto property owned or
operated by the Loan Parties or any of their


 


57

















 


Subsidiaries and take any Remedial Actions
required to abate said Release; (iv) promptly provide the Agents with
written notice within 10 days of the receipt of any of the following:  (A) notice that an Environmental Lien
has been filed against any property of any Loan Party or any of its
Subsidiaries securing a liability in excess of $500,000; (B) commencement
of any Environmental Action or notice that an Environmental Action will be
filed against any Loan Party or any of its Subsidiaries; and (C) notice of
any violation, citation, request for information or other Administrative order
which could reasonably be expected to have a Material Adverse Effect and
(v) defend, indemnify and hold harmless the Agents and the Lenders and
their transferees, and their respective employees, agents, officers and
directors (“Indemnified Parties”), from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs or expenses
(including, without limitation, attorney and consultant fees, investigation and
laboratory fees, court costs and litigation expenses) (“Costs”) arising
out of (A) the presence, disposal, Release or threatened Release of any
Hazardous Materials on any property at any time owned or occupied by any Loan
Party, or any of its Subsidiaries or its respective predecessors in interest or
title, (B) any personal injury (including wrongful death) or property
damage (real or personal) arising out of or related to such Hazardous
Materials, (C) any investigation, Environmental Action brought or
threatened, settlement reached or government order relating to such Hazardous
Materials and/or (D) any violation of any Environmental Law, but excluding
any Costs finally determined by a court of competent jurisdiction to have been
caused solely by the gross negligence or willful misconduct of any of the
Indemnified Parties.


 


(k)           Further Assurances.  Take such action and execute, acknowledge
and deliver, and cause each of their Subsidiaries to take such action and
execute, acknowledge and deliver, at their sole cost and expense, such
agreements, instruments or other documents as each Agent may require from time
to time in order (i) to carry out more effectively the purposes of this
Agreement and the other Loan Documents, (ii) to subject to valid and
perfected first priority Liens any of the Collateral or any other property of
the Loan Parties and their Subsidiaries, (iii) to establish and maintain
the validity and effectiveness of any of the Loan Documents and the validity,
perfection and priority of the Liens intended to be created thereby, and
(iv) to better assure, convey, grant, assign, transfer and confirm unto
each Agent the rights now or hereafter intended to be granted to the Agents and
the Lenders under this Agreement or any other Loan Document.


 


(l)            Change in Collateral; Collateral
Records.  (i)  Give the Collateral Agent not less than
30 days’ prior written notice of any change in the location of any
Collateral, other than to locations set forth on Schedule 7.01(l) and with
respect to which the Collateral Agent has filed financing statements and
otherwise fully perfected its Liens thereon, (ii) advise the Collateral
Agent promptly, in sufficient detail, of any material adverse change relating
to the type, quantity or quality of the Collateral or the Lien granted thereon
and (iii) execute and deliver, and cause each of their Subsidiaries to
execute and deliver, to the Collateral Agent for the benefit of the Lenders
from time to time, solely for the Collateral Agent’s convenience in maintaining
a record of Collateral, such written statements and schedules as the Collateral
Agent may reasonably require, designating, identifying or describing the
Collateral.


 


(m)          Landlord Waivers; Mortgagee
Waivers; Collateral Access Agreements. 
(i) Use best efforts to deliver to the Collateral Agent (A) a landlord
waiver for each


 


58

















 


real property location leased by any Loan
Party on or after the Original Effective Date and described in Schedule
7.01(m), executed by the owner of such real property, (B) a mortgagee waiver
for each real property location owned by any Loan Party on or after the
Original Effective Date and described in Schedule 7.01(m) which is subject to a
mortgage, executed by the mortgagee under such mortgage, and (C) a collateral
access agreement, executed by each Person (other than a Loan Party) that has
possession of any Collateral on or after the Original Effective Date at a
location described in Schedule 7.01(m), each such document to be in form and
substance reasonably satisfactory to the Collateral Agent.


 


(ii)           Obtain at the time any Loan Party
enters into a lease or mortgage for real property not occupied on or after the
Original Effective Date or delivers possession of Collateral to Persons that
did not have possession of Collateral on or after the Original Effective Date a
landlord’s waiver from the landlord of such real property (which waiver may be
contained in such lease), a mortgagee waiver from the mortgagee for such real
property or a collateral access agreement from the Person that has possession
of such Collateral, each in form and substance reasonably satisfactory to the
Collateral Agent.


 


(n)           Subordination. Cause all
Indebtedness and other obligations now or hereafter owed by any Loan Party to
any of its Affiliates, other than the Indebtedness evidenced by the
Intercompany Notes and pledged to the Indenture Trustee pursuant to the
Indenture Pledge Agreement, to be subordinated in right of payment and security
to the Indebtedness and other Obligations owing to the Agents and the Lenders
in accordance with a subordination agreement in form and substance satisfactory
to the Agents.


 


(o)           After Acquired Real Property.  Upon the acquisition by any Loan Party or
any of its Subsidiaries after the date hereof of any interest (whether fee or
leasehold) in any real property (wherever located) (each such interest being an
“After Acquired Property”) (x) with a Current Value (as defined
below) in excess of $1.00 in the case of a fee interest, or (y) requiring
the payment of annual rent exceeding in the aggregate $500,000 in the case of
leasehold interest, promptly so notify the Collateral Agent, setting forth with
specificity a description of the interest acquired, the location of the real
property, any structures or improvements thereon and either an appraisal or
such Loan Party’s good-faith estimate of the current value of such real
property (for purposes of this Section, the “Current Value”).  The Collateral Agent shall notify such Loan
Party whether it intends to require a Mortgage and the other documents referred
to below or in the case of leasehold, a leasehold Mortgage or landlord’s waiver
(pursuant to Section 7.01(m) hereof). 
Upon receipt of such notice requesting a Mortgage, the Person which has
acquired such After Acquired Property shall promptly furnish to the Collateral
Agent the following, each in form and substance satisfactory to the Collateral
Agent:  (i) a Mortgage with respect
to such real property and related assets located at the After Acquired
Property, each duly executed by such Person and in recordable form,
(ii) evidence of the recording of the Mortgage referred to in clause (i)
above in such office or offices as may be necessary or, in the opinion of the
Collateral Agent, desirable to create and perfect a valid and enforceable first
priority lien on the property purported to be covered thereby or to otherwise
protect the rights of the Agents and the Lenders thereunder, (iii) if the
Current Value of such real property exceeds $1 million, (A) a Title Insurance
Policy, (B) a survey of such real property, certified to the Collateral
Agent and to the issuer of the Title Insurance Policy by a licensed
professional survey or


 


59

















 


reasonably satisfactory to the Collateral
Agent, and (C) Phase I environmental assessment reports with respect to
such real property, certified to the Collateral Agent by a company reasonably
satisfactory to the Collateral Agent, (iv) in the case of a leasehold
interest, a certified copy of the lease between the landlord and such Person
with respect to such real property in which such Person has a leasehold
interest, and the certificate of occupancy with respect thereto, (v) in
the case of a leasehold interest, an attornment and nondisturbance agreement
between the landlord (and any fee mortgagee) with respect to such real property
and the Collateral Agent, and (vi) such other documents or instruments
(including guarantees and opinions of counsel) as the Collateral Agent may
reasonably require.  The Loan Parties
shall pay all fees and expenses, including reasonable attorneys’ fees and expenses,
and all title insurance charges and premiums, in connection with their
obligations under this Section 7.01(o).


 


(p)           Fiscal Year.  Cause the Fiscal Year of the Parent and its
Subsidiaries to end on the last Saturday in April, or May 1, if such date is a
Saturday, of each calendar year unless the Agents consent to a change in such
Fiscal Year (and appropriate related changes to this Agreement).


 


(q)           Borrowing Base; Other Requirements.  Maintain all Revolving Loans in compliance
with the then current Borrowing Base and Section 2.01 hereof.


 


Section 7.02           Negative Covenants.  So long as any principal of or interest on
any Loan, Reimbursement Obligation, or any other Obligation (whether or not
due) shall remain unpaid or any Lender shall have any Commitment hereunder, the
Loan Parties shall not, unless the Required Lenders shall otherwise consent in
writing:


 


(a)           Liens, Etc.  Create, incur, assume or suffer to exist, or
permit any of their Subsidiaries to create, incur, assume or suffer to exist
any Lien upon or with respect to any of their properties, whether now owned or
hereafter acquired, to file or suffer to exist under the Uniform Commercial
Code or any similar law or statute of any jurisdiction, a financing statement
(or the equivalent thereof) that names any Loan Party or any of its
Subsidiaries as debtor, to sign or suffer to exist any security agreement
authorizing any secured party thereunder to file such financing statement (or
the equivalent thereof), to sell any of its property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable) with recourse to
any Loan Party or any of its Subsidiaries or assign or otherwise transfer, or
permit any of its Subsidiaries to assign or otherwise transfer, any account or
other right to receive income, other than Permitted Liens.


 


(b)           Indebtedness.  Create, incur, assume, guarantee or suffer
to exist, or otherwise become or remain liable with respect to, or permit any of
their Subsidiaries to create, incur, assume, guarantee or suffer to exist or
otherwise become or remain liable with respect to, any Indebtedness, other than
Permitted Indebtedness.


 


(c)           Fundamental Changes.  Wind-up, liquidate or dissolve (or permit or
suffer any Subsidiary thereof) or merge, consolidate or amalgamate with any
Person, convey, sell, lease or sublease, transfer or otherwise dispose of,
whether in one transaction or a series of related transactions, all or any part
of their business, property or assets, whether now owned or hereafter acquired,
or (agree to do any of the foregoing) or purchase or otherwise acquire, whether
in one


 


60

















 


transaction or a series of related
transactions, all or substantially all of the assets of any Person (or any
division thereof) (or agree to do any of the foregoing), or permit any of their
Subsidiaries to do any of the foregoing; provided, however, that


 


(i)            (x) any Subsidiary of the Parent may
be merged into the Parent or another Loan Party that is wholly owned by the
Parent or may consolidate with the Parent or another Loan Party that is wholly
owned by the Parent and (y) any Borrower may be merged into another Borrower or
may consolidate with another Borrower, so long as (A)  the Parent gives
the Agent at least 60 days’ prior written notice of such merger or
consolidation, (B) no Event of Default shall have occurred and be
continuing either before or after giving effect to such transaction,
(C) the Lenders’ rights in any Collateral, including, without limitation,
the existence, perfection and priority of any Lien thereon, are not adversely
affected by such merger or consolidation, and (D) the surviving entity is
a party to this Agreement or a Guaranty and a Security Agreement, in each case
which is in full force and effect on the date of and immediately after giving
effect to such merger or consolidation;


 


(ii)           any of the Loan Parties and their
Subsidiaries may (A) sell Inventory in the ordinary course of business, (B)
dispose of obsolete or worn-out equipment in the ordinary course of business,
(C) sell the Facility for a cash purchase price not less than the lesser of (x)
$2 million and (y) the fair market value thereof, provided that the Net
Cash Proceeds of such sale are deposited into the Cash Collateral Account
pursuant to Section 2.05(d), (D) sell the Ophir Investment for a cash purchase
price not less than the fair market value thereof, provided that the Net
Cash Proceeds of such sale are deposited into the Cash Collateral Account
pursuant to Section 2.05(d), (E) sell or otherwise dispose of other property or
assets for cash in an aggregate amount not less than the fair market value of
such property or assets, provided that the Net Cash Proceeds of such
Dispositions do not exceed $1 million in the aggregate in any twelve-month
period and are deposited into the Cash Collateral Account pursuant to
Section 2.05(d), and (F) sell Accounts Receivable and Related Rights
pursuant to the Receivable Purchase Documents, provided that all
proceeds of any such sale which are payable to any of the Originators pursuant
to the Parent Purchase Agreement or any related Receivable Purchase Notes held
by them shall be paid to the Administrative Agent for the benefit of the
Lenders to the extent provided in Section 2.05(c)(iv).


 


(d)           Change in Nature of Business.  Make, or permit any of their Subsidiaries to
make, any change in the nature of its business as carried on at the date
hereof.


 


(e)           Loans, Advances, Investments, Etc.  Make or commit or agree to make any loan,
advance guarantee of obligations, other extension of credit or capital
contributions to, or hold or invest in or commit or agree to hold or invest in,
or purchase or otherwise acquire or commit or agree to purchase or otherwise
acquire any shares of the Capital Stock, bonds, notes, debentures or other
securities of, or make or commit or agree to make any other investment in, any
other Person (including any Excluded Subsidiary), or purchase or own any
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 permit any of its Subsidiaries to do any of the foregoing, except
for:  (i) Investments existing on
the date hereof, as set forth on Schedule 7.02(e) hereto, but not any
increase in the amount thereof as set forth in such Schedule or any other
modification of the terms thereof, (ii) loans and advances by any Loan
Party to its Subsidiaries and by such


 


61

















 


Subsidiaries to such Loan Party, made in the
ordinary course of business and constituting Permitted Indebtedness under
clause (k) of the definition thereof, (iii) Permitted Investments,
(iv) loans and investments evidenced by the Intercompany Notes and the
Receivable Purchase Notes, (v) loans to employees for relocation expenses in an
aggregate outstanding amount not to exceed $500,000 at any time and (vi) other
investments not to exceed $500,000 in the aggregate at any time outstanding.


 


(f)            Lease Obligations.  Create, incur or suffer to exist, or permit
any of their Subsidiaries to create, incur or suffer to exist, any obligations
as lessee (i) for the payment of rent for any real or personal property in
connection with any sale and leaseback transaction, or (ii) for the
payment of rent for any real or personal property under leases or agreements to
lease other than (A) Capitalized Lease Obligations which would not cause
the aggregate amount of all obligations under Capitalized Leases entered into
after the Effective Date owing by the Loan Parties and their Subsidiaries in
any Fiscal Year to exceed the amounts set forth in Section 7.02(g), and
(B) Operating Lease Obligations which would not cause the aggregate amount
of all Operating Lease Obligations owing by the Loan Parties and their
Subsidiaries in any Fiscal Year to exceed $5 million.


 


(g)           Capital Expenditures.  Make or commit or agree to make, or permit
any of their Subsidiaries to make or commit or agree to make, any Capital
Expenditure (by purchase or Capitalized Lease) that would cause the aggregate
amount of all such Capital Expenditures made by the Loan Parties and their
Subsidiaries to exceed:  (i) for
the Fiscal Year ending April 26, 2003, $14,200,000; provided, however,
that notwithstanding the foregoing, in no event shall the Capital Expenditures
made by the Loan Parties and their Subsidiaries during any fiscal quarter
exceed $8,000,000.


 


(h)           Restricted Payments.  (i)  Declare
or pay any dividend or other distribution, direct or indirect, on account of
any Capital Stock of any Loan Party or any of its Subsidiaries, now or
hereafter outstanding, (ii) make any repurchase, redemption, retirement,
defeasance, sinking fund or similar payment, purchase or other acquisition for
value, direct or indirect, of any Capital Stock of any Loan Party or now or
hereafter outstanding, (iii) make any payment to retire, or to obtain the
surrender of, any outstanding warrants, options or other rights for the
purchase or acquisition of shares of any class of Capital Stock of any Loan
Party, now or hereafter outstanding, (iv) return any of capital to any
shareholders or other equity holders of any Loan Party or any of its
Subsidiaries, or make any other distribution of property, assets, shares of
Capital Stock, warrants, rights, options, obligations or securities thereto as
such or (v) pay any management fees or any other fees or expenses (including
the reimbursement thereof by any Loan Party or any of its Subsidiaries)
pursuant to any management, consulting or other services agreement to any of
the shareholders or other equity holders of any Loan Party or any of its
Subsidiaries or other Affiliates, or to any other Subsidiaries or Affiliates of
any Loan Party; provided, however, (i)  any Subsidiaries of
the Loan Parties may pay dividends or make distributions to the Loan Parties,
(ii) the Parent may pay dividends in the form of common Capital Stock, and
(iii) the Parent and its Subsidiaries may pay to Hyde Park Holdings, Inc.,
Clifford Press, Laurence S. Levy and their Affiliates (x) management fees in
accordance with the management agreements among such parties so long as the
aggregate amount of all such management fees paid by the Parent or any of its
Subsidiaries to such Persons shall not exceed $750,000 in the aggregate


 


62

















 


during any Fiscal Year of the Parent and (y)
other compensation (including bonuses but excluding reasonable and customary
expense reimbursements) so long as the aggregate amount of all such other
compensation paid by the Parent or any of its Subsidiaries to such Persons,
when aggregated with all management fees paid to such Persons in accordance
with the preceding subclause (x), shall not exceed $2,200,000 in the aggregate
during any Fiscal Year of the Parent, provided that (A) no management
fees shall be made pursuant to subclause (x) of this clause (iii) if an Event
of Default shall have occurred and be continuing or would result from the
making of any such payment or, if either immediately before or after giving
effect to any such payment, the Revolving Loans exceed the Borrowing Base and
(B) any such payment not permitted to be made under the preceding sub-clause
(A) may be paid after such Event Default has been cured or waived in writing in
accordance with this Agreement if at such time Availability plus the Borrowers’
cash on hand exceeds $5,000,000.


 


(i)            Federal Reserve Regulations.  Permit any Loan or the proceeds of any Loan
under this Agreement to be used for any purpose that would cause such Loans to
be margin loans under the provisions of Regulation T, U or X of the Board.


 


(j)            Transactions with Affiliates.  Except as set forth in
Schedule 7.02(j), enter into, renew, extend or be a party to, or permit
any of their Subsidiaries to enter into, renew, extend or be a party to any
transaction or series of related transactions (including, without limitation,
the purchase, sale, lease, transfer or exchange of property or assets of any
kind or the rendering of services of any kind) with any Affiliate, except
(i) in the ordinary course of business in a manner and to an extent
consistent with past practice and necessary or desirable for the prudent
operation of its business, for fair consideration and on terms no less favorable
to the Loan Parties or such Subsidiaries than would be obtainable in a
comparable arm’s length transaction with a Person that is not an Affiliate
thereof, (ii) transactions among the Loan Parties, and (iii) the
payment of management fees and other compensation, including salaries and
bonuses, to Hyde Park Holdings, Inc., Clifford Press, Laurence S. Levy and
their Affiliates to the extent permitted in clause (iii) of the proviso to
Section 7.02(h).


 


(k)           Limitations on Dividends and Other
Payment Restrictions Affecting Subsidiaries.  Create or otherwise cause, incur, assume, suffer or permit to
exist or become effective any consensual encumbrance or restriction of any kind
on the ability of any of Subsidiaries of the Parent (i) to pay dividends
or to make any other distribution on any shares of Capital Stock of such
Subsidiary owned by the Parent or any of its Subsidiaries, (ii) to pay or
prepay or to subordinate any Indebtedness owed to the Parent or any of its
Subsidiaries, (iii) to make loans or advances to the Parent or any of its
Subsidiaries or (iv) to transfer any of its property or assets to the
Parent or any of its Subsidiaries, or permit any of its Subsidiaries to do any
of the foregoing; provided,  however,  that nothing in any of
clauses (i) through (iv) of this Section 7.02(k) shall prohibit or
restrict:


 


(A)          this Agreement and the other Loan
Documents;


 


(B)           any agreements in effect on the date
of this Agreement and described on Schedule 7.02(k), including, without
limitation, the Indenture;


 


63

















 


(C)           any applicable law, rule or
regulation (including, without limitation, applicable currency control laws and
applicable state corporate statutes restricting the payment of dividends in
certain circumstances);


 


(D)          in the case of clause (iv) any
agreement setting forth customary restrictions on the subletting, assignment or
transfer of any property or asset that is a lease, license, conveyance or
contract of similar property or assets; or


 


(E)           in the case of clause (iv) any holder
of a Permitted Lien from restricting on customary terms the transfer of any
property or assets subject thereto.


 


(l)            Limitation on Issuance of Capital
Stock.  Permit any Subsidiaries of
the Parent to issue or sell or enter into any agreement or arrangement for the
issuance and sale of any shares of its Capital Stock, any securities
convertible into or exchangeable for its Capital Stock or any warrants.


 


(m)          Modifications of Indebtedness,
Organizational Documents and Certain Other Agreements; Etc.  (i) Amend, modify or otherwise change (or
permit the amendment, modification or other change in any manner of) any of the
provisions of any Indebtedness of the Loan Parties or any of their Subsidiaries
or of any instrument or agreement (including, without limitation, any purchase
agreement, indenture, loan agreement or security agreement) relating to any
such Indebtedness if such amendment, modification or change would shorten the
final maturity or average life to maturity of, or require any payment to be
made earlier than the date originally scheduled on, such Indebtedness, would
increase the interest rate applicable to such Indebtedness, or would change the
subordination provision, if any, of such Indebtedness, or would otherwise be
adverse to the issuer of such Indebtedness in any respect, (ii) except for
the Obligations, make any voluntary or optional payment, prepayment, redemption
defeasance, including fund payment or other acquisition for value of any
Indebtedness of the Loan Parties or any of their Subsidiaries (including,
without limitation, by way of depositing money or securities with the trustee
therefor before the date required for the purpose of paying any portion of such
Indebtedness when due), or refund, refinance, replace or exchange any other
Indebtedness for any such Indebtedness, or make any prepayment, redemption
defeasance, including fund payment or repurchase of any outstanding
Indebtedness as a result of any asset sale, change of control, issuance and
sale of debt or equity securities or similar event, or give any notice with
respect to any of the foregoing, or (iii) amend, modify or otherwise
change their certificate of incorporation or bylaws (or other similar
organizational documents), including, without limitation, by the filing or
modification of any certificate of designation, or any agreement or arrangement
entered into by them, with respect to any of their Capital Stock (including any
shareholders’ agreement), or enter into any new agreement with respect to any
of their Capital Stock, except any such amendments, modifications or changes or
any such new agreements or arrangements pursuant to this clause (iii) that
either individually or in the aggregate, could not have a Material Adverse
Effect.


 


(n)           Investment Company Act of 1940.  Engage in any business, enter into any
transaction, use any securities or take any other action or permit any of their
Subsidiaries to do any of the foregoing, that would cause them or any of their
Subsidiaries to become subject to the registration requirements of the
Investment Company Act of 1940, as amended, by virtue of


 


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being an “investment company” or a company
“controlled” by an “investment company” not entitled to an exemption within the
meaning of such Act.


 


(o)           Environmental.  Permit the use, handling, generation,
storage, treatment, release or disposal of Hazardous Materials at any property
owned or leased by the Loan Parties or any of their Subsidiaries except in
compliance with Environmental Laws and so long as such use, handling,
generation, storage, treatment, release or disposal of Hazardous Materials does
not result in a Material Adverse Effect.


 


(p)           Certain Agreements.  Agree to any material amendment or other
material change to or material waiver of any of its rights under the Indenture
Documents or any other Material Contract.


 


Section 7.03           Financial Covenants.  So long as any principal of or interest on
any Loan, Reimbursement Obligation, or any other Obligation (whether or not
due) shall remain unpaid or any Lender shall have any Commitment hereunder, the
Loan Parties shall not, unless the Required Lenders shall otherwise consent in
writing:


 


(a)           Leverage Ratio.  Permit the ratio of Consolidated Funded
Indebtedness to Consolidated EBITDA of the Parent and its Subsidiaries as of
the end of each period of twelve (12) consecutive Fiscal Months, tested as of
the last day of each Fiscal Month to be greater than 12.0 to 1.0.


 


(b)           Tangible Net Worth.  Permit Consolidated Tangible Net Worth of
the Parent and its Subsidiaries at any time to be less than ($175,000,000).


 


(c)           Fixed Charge Coverage Ratio.  Permit the Fixed Charge Coverage Ratio for
each period of twelve (12) consecutive Fiscal Months, tested as of the last day
of each Fiscal Month, to be less than .45 to 1.


 


(d)           Consolidated EBITDA.  Permit Consolidated EBITDA of the Parent and
its Subsidiaries for each period of twelve (12) consecutive Fiscal Months
ending on the last day of a Fiscal Month to be less than $16,500,000.


 


ARTICLE VIII



MANAGEMENT, COLLECTION AND STATUS OF COLLATERAL


 


Section 8.01           Management of Collateral.


 


(a)           After the occurrence and during the
continuance of an Event of Default, any Agent may send a notice of assignment
and/or notice of the Lenders’ security interest to any and third parties
holding or otherwise concerned with any of the Collateral, and thereafter the
Agents shall have the sole right to collect and/or take possession of the
Collateral and the books and records relating thereto.


 


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(b)           Nothing herein contained shall be
construed to constitute any Agent as agent of the Borrowers for any purpose
whatsoever, and the Agents shall not be responsible or liable for any shortage,
discrepancy, damage, loss or destruction of any part of the Collateral wherever
the same may be located and regardless of the cause thereof (other than from
acts or omissions of the Agents constituting gross negligence or willful
misconduct as determined by a final judgment of a court of competent
jurisdiction).  The Agents, by anything
herein or in any assignment or otherwise, do not assume any of the obligations
under any contract or agreement assigned to any Agent and shall not be responsible
in any way for the performance by the Borrowers of any of the terms and
conditions thereof.


 


(c)           Notwithstanding any other terms set
forth in the Loan Documents, the rights and remedies of the Agents and the
Lenders herein provided, and the obligations of the Loan Parties set forth herein,
are cumulative of, may be exercised singly or concurrently with, and are not
exclusive of, any other rights, remedies or obligations set forth in any other
Loan Document or as provided by law.


 


Section 8.02           Status of Collateral.  With respect to Collateral of any Loan Party
at the time the Collateral becomes subject to the Collateral Agent’s Lien, each
Loan Party covenants, represents and warrants: 
(a) such Loan Party shall be the sole owner, free and clear of all Liens
(except for the Liens granted in the favor of the Collateral Agent for the
benefit of the Lenders and Permitted Liens), and fully authorized to sell,
transfer, pledge and/or grant a security interest in each and every item of
said Collateral; (b)  such Loan Party
shall maintain books and records pertaining to said Collateral in such detail,
form and scope as the Agents shall reasonably require; (c) such Loan Party
will, immediately upon learning thereof, report to the Agents any material loss
or destruction of, or substantial damage to, any of the Collateral, and any
other matters affecting the value, enforceability or collectibility of any of
the Collateral; (d) if any Collateral is evidenced by a promissory note
or other instrument, such promissory note or instrument shall be immediately
pledged, endorsed, assigned and delivered to the Collateral Agent for the
benefit of the Lenders as additional Collateral; (e) such Loan Party shall
conduct a physical count of its Inventory at such intervals as the Collateral
Agent may request and such Loan Party shall promptly supply the Agents with a
copy of such count accompanied by a report of the value (based on the lower of
cost (on a first in first out basis) and market value) of such Inventory; and
(f) such Loan Party is not and shall not be entitled to pledge the Agents’ or
the Lenders’ credit on any purchases or for any purpose whatsoever.


 


Section 8.03           Collateral Custodian.  Upon the occurrence and during the
continuance of any Default or Event of Default, the Collateral Agent may at any
time and from time to time employ and maintain on the premises of any Loan
Party a custodian selected by the Collateral Agent who shall have full
authority to do all acts necessary to protect the Agents’ and the Lenders’
interests.  Each Loan Party hereby
agrees to, and to cause its Subsidiaries to, cooperate with any such custodian
and to do whatever the Collateral Agent may reasonably request to preserve the
Collateral.  All costs and expenses
incurred by the Collateral Agent by reason of the employment of the custodian
shall be the responsibility of the Borrowers and charged to the Loan Account.


 


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ARTICLE IX



EVENTS OF DEFAULT


 


Section 9.01           Events of Default.  If any of the following Events of Default
shall occur and be continuing:


 


(a)           the Borrowers shall fail to pay (i)
any principal of any Loan, any Collateral Agent Advance or any Reimbursement
Obligation when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) or (ii) any interest, fee, indemnity or
other amount payable under this Agreement or any other Loan Document when due
and, in the case of this clause (ii), such failure remains uncured for a period
of three days;


 


(b)           any representation or warranty made
or deemed made by or on behalf of any Loan Party or by any officer of the
foregoing under or in connection with any Loan Document or under or in
connection with any report, certificate, or other document delivered to the
Agents or the Lenders pursuant to any Loan Document shall have been incorrect
in any material respect when deemed made;


 


(c)           (i) any Loan Party shall fail to
perform or comply with any covenant or agreement contained in Article VII or
Article VIII, or (ii) any Loan Party shall fail to perform or comply
with any covenant or agreement contained in Section 5 of any Security
Agreement to which it is a party, Section 6 of any Pledge Agreement to which it
is a party or Section 5 of any Mortgage to which it is a party, or (ii) a
“Termination Event” as defined in the Funding Corp. Finance Agreement, shall
have occurred and be continuing;


 


(d)           any Loan Party shall fail to perform
or comply with any other term, covenant or agreement contained in any Loan
Document to be performed or observed by it and, except as set forth in
subsections (a), (b) and (c) of this Section 9.01, such failure, if
capable of being remedied, shall remain unremedied for 15 days after the
earlier of the date a senior officer of any Loan Party becomes aware of such
failure and the date written notice of such default shall have been given by
the Collateral Agent to such Loan Party;


 


(e)           any Loan Party shall fail to pay any
principal of or interest on any of its Indebtedness (excluding Indebtedness
evidenced by the Notes) in excess of $500,000, or any interest or premium
thereon, when due (whether by scheduled maturity, required prepayment,
acceleration, demand or otherwise) and such failure shall continue after the
applicable grace period, if any, specified in the agreement or instrument relating
to such Indebtedness, or any other default under any agreement or instrument
relating to any such Indebtedness, or any other event, shall occur and shall
continue after the applicable grace period, if any, specified in such agreement
or instrument, if the effect of such default or event is to accelerate, or to
permit the acceleration of, the maturity of such Indebtedness; or any such
Indebtedness shall be declared to be due and payable, or required to be prepaid
(other than by a regularly scheduled required prepayment), redeemed, purchased
or defeased or an offer to prepay, redeem, purchase or defease such
Indebtedness shall be required to be made, in each case prior to the stated
maturity thereof;


 


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(f)            any Loan Party (i) shall institute
any proceeding or voluntary case seeking to adjudicate it a bankrupt or
insolvent, or seeking dissolution, liquidation, winding up, reorganization,
arrangement, adjustment, protection, relief or composition of it or its debts
under any law relating to bankruptcy, insolvency, reorganization or relief of
debtors, or seeking the entry of an order for relief or the appointment of a
receiver, trustee, custodian or other similar official for any such Person or
for any substantial part of its property, (ii) shall be generally not paying
its debts as such debts become due or shall admit in writing its inability to
pay its debts generally, (iii) shall make a general assignment for the benefit
of creditors, or (iv) shall take any action to authorize or effect any of the
actions set forth above in this subsection (f);


 


(g)           any proceeding shall be instituted
against any Loan Party seeking to adjudicate it a bankrupt or insolvent, or
seeking dissolution, liquidation, winding up, reorganization, arrangement,
adjustment, protection, relief of debtors, or seeking the entry of an order for
relief or the appointment of a receiver, trustee, custodian or other similar
official for any such Person or for any substantial part of its property, and
either such proceeding shall remain undismissed or unstayed for a period of 30
days or any of the actions sought in such proceeding (including, without
limitation, the entry of an order for relief against any such Person or the
appointment of a receiver, trustee, custodian or other similar official for it
or for any substantial part of its property) shall occur;


 


(h)           any provision of any Loan Document
shall at any time for any reason (other than pursuant to the express terms
thereof) cease to be valid and binding on or enforceable against any Loan Party
intended to be a party thereto, or the validity or enforceability thereof shall
be contested by any party thereto, or a proceeding shall be commenced by any
Loan Party or any Governmental Authority having jurisdiction over any of them,
seeking to establish the invalidity or unenforceability thereof, any Loan Party
shall deny in writing that it has any liability or obligation purported to be
created under any Loan Document;


 


(i)            any Security Agreement, Pledge
Agreement or Mortgage or any other security document, after delivery thereof
pursuant hereto, shall for any reason fail or cease to create a valid and
perfected and, except to the extent permitted by the terms hereof or thereof,
first priority Lien in favor of the Collateral Agent for the benefit of the
Lenders on any Collateral purported to be covered thereby;


 


(j)            one or more judgments or orders for
the payment of money exceeding $500,000 in the aggregate in excess of any
applicable insurance coverage (but only to the extent the insurer has
acknowledged in writing its liability therefor) shall be rendered against any
Loan Party and remain unsatisfied and either (i) enforcement proceedings
shall have been commenced by any creditor upon any such judgment or order, or
(ii) there shall be a period of 10 consecutive days after entry thereof
during which a stay of enforcement of any such judgment or order, by reason of
a pending appeal or otherwise, shall not be in effect; provided, however,
that any such judgment or order shall not give rise to an Event of Default
under this subsection (j) if and for so long as (A) the amount of such judgment
or order is covered by a valid and binding policy of insurance between the
defendant and the insurer covering full payment thereof and (B) such
insurer has been notified, and has not disputed the claim made for payment, of
the amount of such judgment or order;


 


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(k)           any Loan Party or any of its ERISA
Affiliates shall have made a complete or partial withdrawal from a
Multiemployer Plan, and, as a result of such complete or partial withdrawal any
Loan Party or such ERISA Affiliate incurs a withdrawal liability in an annual
amount exceeding $500,000; or a Multiemployer Plan enters reorganization status
under Section 4241 of ERISA, and, as a result thereof such Loan Party’s,
or such ERISA Affiliate’s annual contribution requirement with respect to such
Multiemployer Plan increases in an annual amount exceeding $500,000;


 


(l)            any Termination Event with respect
to any Employee Plan shall have occurred, and, 30 days after notice thereof
shall have been given to any Loan Party by the Agent, (i) such Termination
Event (if correctable) shall not have been corrected, and (ii) the then current
value of such Employee Plan’s vested benefits exceeds the then current value of
assets allocable to such benefits in such Employee Plan by more than $500,000
(or, in the case of a Termination Event involving liability under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA or
Section 4971 or 4975 of the Internal Revenue Code, the liability is in excess
of such amount);


 


(m)          a Change of Control shall have
occurred; or


 


(n)           an event or development occurs which
has a Material Adverse Effect;


 


then, and in any such event, the Collateral Agent may, and shall at the
request of the Required Lenders, by notice to the Parent, (i) terminate the
Commitments, whereupon the Commitments shall terminate immediately, (ii)
declare all Loans then outstanding to be due and payable, whereupon the
aggregate principal of such Loans, all accrued and unpaid interest thereon, all
fees and all other amounts payable under this Agreement shall become due and
payable immediately, without presentment, demand, protest or further notice of
any kind, all of which are hereby expressly waived by each Loan Party and
(iii) exercise any and all of its other rights and remedies under
applicable law, hereunder and under the other Loan Documents; provided, however,
that upon the occurrence of any Event of Default described in subsection (f) or
(g) of this Section 9.01, without any notice to any Loan Party or any
other Person or any act by any Agent or any Lender, the Commitments shall
automatically terminate and the Loans then outstanding, together with all
accrued and unpaid interest thereon, all fees and all other amounts due under
this Agreement shall become due and payable automatically and immediately,
without presentment, demand, protest or notice of any kind, all of which are
expressly waived by each Loan Party.


 


ARTICLE X



AGENTS


 


Section 10.01         Appointment.  Each Lender (and each subsequent holder of
any Note by its acceptance thereof) hereby irrevocably appoints and authorizes
the Administrative Agent and the Collateral Agent to perform the duties of each
such Agent as set forth in this Agreement including:  (i) to receive on behalf of each Lender any payment of
principal of or interest on the Loans outstanding hereunder and all other
amounts accrued hereunder for the


 


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account of the Lenders and paid to such Agent, and, subject to
Section 2.02, to distribute promptly to each Lender its Pro Rata Share of
all payments so received; (ii) to distribute to each Lender copies of all
material notices and agreements received by such Agent and not required to be
delivered to each Lender pursuant to the terms of this Agreement, provided
that the Agents shall not have any liability to the Lenders for the Agents’ inadvertent
failure to distribute any such notices or agreements to the Lenders; (iii) to
maintain, in accordance with its customary business practices, ledgers and
records reflecting the status of the Obligations, the Loans, and related
matters and to maintain, in accordance with its customary business practices,
ledgers and records reflecting the status of the Collateral and related
matters; (iv) to execute or file any and all financing or similar
statements or notices, amendments, renewals, supplements, documents,
instruments, proofs of claim, notices and other written agreements with respect
to this Agreement or any other Loan Document; (v) to make the Loans and
Collateral Agent Advances, for such Agent or on behalf of the applicable
Lenders as provided in this Agreement or any other Loan Document; (vi) to
perform, exercise, and enforce any and all other rights and remedies of the
Lenders with respect to the Loan Parties, the Obligations, or otherwise related
to any of same to the extent reasonably incidental to the exercise by such
Agent of the rights and remedies specifically authorized to be exercised by
such Agent by the terms of this Agreement or any other Loan Document;
(vii)  to incur and pay such fees necessary or appropriate for the
performance and fulfillment of its functions and powers pursuant to the Loan
Document; and (viii) subject to
Section 10.03, to take such action as such Agent deems appropriate on its
behalf to administer the Loans and the Loan Documents and to exercise such
other powers delegated to such Agent by the terms hereof or the Loan Documents
(including, without limitation, the power to give or to refuse to give notices,
waivers, consents, approvals and instructions and the power to make or to
refuse to make determinations and calculations) together with such powers as
are reasonably incidental thereto to carry out the purposes hereof and
thereof.  As to any matters not
expressly provided for by this Agreement and the other Loan Documents (including,
without limitation, enforcement or collection of the Loans), the Agents shall
not be required to exercise any discretion or take any action, but shall be
required to act or to refrain from acting (and shall be fully protected in so
acting or refraining from acting) upon the instructions of the Required
Lenders, and such instructions of the Required Lenders shall be binding upon
all Lenders and all holders of Notes; provided, however, that the
Agents shall not be required to take any action which, in the reasonable
opinion of any Agent, exposes such Agent to liability or which is contrary to
this Agreement or any Loan Document or applicable law.


 


Section 10.02         Nature of Duties.  The Agents shall have no duties or
responsibilities except those expressly set forth in this Agreement or in the Loan
Documents.  The duties of the Agents
shall be mechanical and administrative in nature.  The Agents shall not have by reason of this Agreement or any Loan
Document a fiduciary relationship in respect of any Lender.  Nothing in this Agreement or any of the Loan
Documents, express or implied, is intended to or shall be construed to impose
upon the Agents any obligations in respect of this Agreement or any of the Loan
Documents except as expressly set forth herein or therein.  Each Lender shall make its own independent
investigation of the financial condition and affairs of the Loan Parties in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the Loan Parties and the
value of the Collateral, and the Agents shall have no duty or responsibility,
either initially or on a continuing basis, to provide any Lender with any
credit or other information with respect thereto, whether


 


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coming into its possession before the initial Loan hereunder or at any
time or times thereafter, provided that, upon the reasonable request of
a Lender, each Agent shall provide to such Lender any documents or reports
delivered to such Agent by the Loan Parties pursuant to the terms of this
Agreement or any Loan Document.  If any
Agent seeks the consent or approval of the Required Lenders to the taking or
refraining from taking any action hereunder, such Agent shall send notice
thereof to each Lender.  Each Agent
shall promptly notify each Lender any time that the Required Lenders have
instructed such Agent to act or refrain from acting pursuant hereto.


 


Section 10.03         Rights, Exculpation, Etc.  The Agents and their directors, officers,
agents or employees shall not be liable for any action taken or omitted to be
taken by them under or in connection with this Agreement or the other Loan
Documents, except for their own gross negligence or willful misconduct as
determined by a final judgment of a court of competent jurisdiction.  Without limiting the generality of the
foregoing, the Agents (i) may treat the payee of any Note as the holder
thereof until the Agents receive written notice of the assignment or transfer
thereof, pursuant to Section 12.07, signed by such payee and in form
satisfactory to the Agent; (ii) may consult with legal counsel (including,
without limitation, counsel to such Agent or counsel to the Loan Parties),
independent public accountants, and other experts selected by it and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel or experts; (iii) make no
warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, certificates, warranties or representations made in
or in connection with this Agreement or the other Loan Documents;
(iv) shall not have any duty to ascertain or to inquire as to the
performance or observance of any of the terms, covenants or conditions of this
Agreement or the other Loan Documents on the part of any Person, the existence
or possible existence of any Default or Event of Default, or to inspect the
Collateral or other property (including, without limitation, the books and
records) of any Person; (v) shall not be responsible to any Lender for the
due execution, legality, validity, enforceability, genuineness, sufficiency or
value of this Agreement or the other Loan Documents or any other instrument or
document furnished pursuant hereto or thereto; and (vi) shall not be deemed to
have made any representation or warranty regarding the existence, value or
collectability of the Collateral, the existence, priority or perfection of the
Collateral Agent’s Lien thereon, or any certificate prepared by any Loan Party
in connection therewith, nor shall the Collateral Agent be responsible or
liable to the Lenders for any failure to monitor or maintain any portion of the
Collateral.  The Agents shall not be
liable for any apportionment or distribution of payments made in good faith
pursuant to Sections 2.05 and 4.04, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to
recover from other Lenders any payment in excess of the amount which they are
determined to be entitled.  The Agents
may at any time request instructions from the Lenders with respect to any
actions or approvals which by the terms of this Agreement or of any of the Loan
Documents the Agents are permitted or required to take or to grant, and if such
instructions are promptly requested, the Agents shall be absolutely entitled to
refrain from taking any action or to withhold any approval under any of the
Loan Documents until it shall have received such instructions from the Required
Lenders.  Without limiting the
foregoing, no Lender shall have any right of action whatsoever against any
Agent as a result of such Agent acting or refraining from acting under this
Agreement, or any of the other Loan Documents in accordance with the
instructions of the Required Lenders.


 


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Section 10.04         Reliance.  Each Agent shall be entitled to rely upon
any written notices, statements, certificates, orders or other documents or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it.


 


Section 10.05         Indemnification.  To the extent that any Agent is not
reimbursed and indemnified by any Loan Party, the Lenders will reimburse and
indemnify such Agent from and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses,
advances or disbursements of any kind or nature whatsoever which may be imposed
on, incurred by, or asserted against such Agent in any way relating to or
arising out of this Agreement or any of the Loan Documents or any action taken
or omitted by such Agent under this Agreement or any of the Loan Documents, in
proportion to each Lender’s Pro Rata Share, including, without limitation,
advances and disbursements made pursuant to Section 10.08; provided,
however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses, advances or disbursements for which there has been a
final judicial determination that such resulted from any Agent’s gross
negligence or willful misconduct.  The
obligations of the Lenders under this Section 10.05 shall survive the
payment in full of the Loans and the termination of this Agreement.


 


Section 10.06         Agents Individually.  With respect to its Pro Rata Share of the
Total Revolving Commitment hereunder, the Loans made by it and the Notes issued
to or held by it, each Agent shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender or holder of a Note.  The terms “Lenders” or “Required Lenders” or
any similar terms shall, unless the context clearly otherwise indicates, include
each Agent in its individual capacity as a Lender or one of the Required
Lenders.  Each Agent and its Affiliates
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with the Borrowers as if it were not acting as
an Agent pursuant hereto without any duty to account to the Lenders.


 


Section 10.07         Successor Agent.  (a)  Each Agent may resign from
the performance of all its functions and duties hereunder and under the other
Loan Documents at any time by giving at least thirty (30) Business Days prior
written notice to the Parent and each Lender. 
Such resignation shall take effect upon the acceptance by a successor
Agent of appointment pursuant to clauses (b) and (c) below or as otherwise
provided below.


 


(b)           Upon any such notice of resignation,
the Required Lenders shall appoint a successor Agent who, in the absence of a
continuing Event of Default, shall be reasonably satisfactory to the
Borrowers.  Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations under this Agreement and the other Loan
Documents.  After any Agent’s
resignation hereunder as the Agent, the provisions of this Article X shall
inure to its benefit as to any actions taken or omitted to be taken by it while
it was Agent under this Agreement and the other Loan Documents.


 


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(c)           If a successor Agent shall not have
been so appointed within said thirty (30) Business Day period, the retiring
Agent, with the consent of the other Agent and, if an Event of Default is not
continuing, the Parent, shall then appoint a successor Agent who shall serve as
Agent until such time, if any, as the Required Lenders, with the consent of
other Agent and, if an Event of Default is not continuing, the Parent, appoint
a successor Agent as provided above.


 


Section 10.08         Collateral Matters.


 


(a)           The Collateral Agent may from time to
time, make such disbursements and advances (“Collateral Agent Advances”)
which the Collateral Agent, in its sole discretion, deems necessary or desirable
to preserve or protect the Collateral or any portion thereof, to enhance the
likelihood or maximize the amount of repayment by the Borrowers of the Loans,
and other Obligations or to pay any other amount chargeable to the Borrowers
pursuant to the terms of this Agreement, including, without limitation, costs,
fees and expenses as described in Section 12.04.  The Collateral Agent Advances shall be repayable on demand and be
secured by the Collateral.  The
Collateral Agent Advances shall constitute Obligations hereunder.  The Collateral Agent shall notify each
Lender and the Parent in writing of each such Collateral Agent Advance, which
notice shall include a description of the purpose of such Collateral Agent Advance.  Without limitation to its obligations
pursuant to Section 10.05, each Lender agrees that it shall make available
to the Collateral Agent, upon the Collateral Agent’s demand, in Dollars in
immediately available funds, the amount equal to such Lender’s Pro Rata Share
of each such Collateral Agent Advance. 
If such funds are not made available to the Collateral Agent by such
Lender the Collateral Agent shall be entitled to recover such funds, on demand
from such Lender together with interest thereon, for each day from the date
such payment was due until the date such amount is paid to the Collateral
Agent, at the Federal Funds Rate for three Business Days and thereafter at the
Reference Rate.


 


(b)           The Lenders hereby irrevocably
authorize the Collateral Agent, at its option and in its discretion, to release
any Lien granted to or held by the Collateral Agent upon any Collateral upon
termination of the Total Revolving Commitments and payment and satisfaction of
all Loans, and all other Obligations which have matured and which the
Collateral Agent has been notified in writing are then due and payable; or the
Disposition of property in compliance with the terms of Section 7.02(c) the
other Loan Documents; or constituting property in which the Loan Parties owned
no interest at the time the Lien was granted or at any time thereafter; or if
approved, authorized or ratified in writing by the Lenders.  Upon request by the Collateral Agent at any
time, the Lenders will confirm in writing the Collateral Agent’s authority to
release particular types or items of Collateral pursuant to this
Section 10.08(b).


 


(c)           Without in any manner limiting the
Collateral Agent’s authority to act without any specific or further
authorization or consent by the Lenders (as set forth in
Section 10.08(b)), each Lender agrees to confirm in writing, upon request
by the Collateral Agent, the authority to release Collateral conferred upon the
Collateral Agent under Section 10.08(b). 
Upon receipt by the Collateral Agent of confirmation from the Lenders of
its authority to release any particular item or types of Collateral, and upon
prior written request by any Loan Party, the Collateral Agent shall (and is
hereby irrevocably authorized by the Lenders to) execute such documents as may
be necessary to evidence the release of the Liens granted to the Collateral
Agent for the benefit of the Lenders upon such Collateral; provided, however,
that (i) the Collateral Agent


 


73

















 


shall not be required to execute any such
document on terms which, in the Collateral Agent’s opinion, would expose the
Collateral Agent to liability or create any obligations or entail any
consequence other than the release of such Liens without recourse or warranty,
and (ii) such release shall not in any manner discharge, affect or impair the
Obligations or any Lien upon (or obligations of any Loan Party in respect of)
all interests in the Collateral retained by any Loan Party.


 


(d)           The Collateral Agent shall have no
obligation whatsoever to any Lenders to assure that the Collateral exists or is
owned by the Loan Parties or is cared for, protected or insured or has been
encumbered or that the Lien granted to the Collateral Agent pursuant to this
Agreement has been properly or sufficiently or lawfully created, perfected, protected
or enforced or is entitled to any particular priority, or to exercise at all or
in any particular manner or under any duty of care, disclosure or fidelity, or
to continue exercising, any of the rights, authorities and powers granted or
available to the Collateral Agent in this Section 10.08 or in any of the
Loan Documents, it being understood and agreed that in respect of the
Collateral, or any act, omission or event related thereto, the Collateral Agent
may act in any manner it may deem appropriate, in its sole discretion, given
the Collateral Agent’s own interest in the Collateral as one of the Lenders and
that the Collateral Agent shall have no duty or liability whatsoever to any
other Lender.


 


Section 10.09         Collateral Sub-Agents.  Each Lender and the Administrative Agent, by
its execution and delivery of this Agreement (or any joinder hereto or any
Assignment hereunder), agrees that, in the event it shall hold any monies or
other investments on account of the Borrowers or any other Loan Party, such
monies or other investments shall be held in the name and under the control of
such Lender or the Administrative Agent (as applicable), and such Lender or the
Administrative Agent (as applicable) shall hold such monies or other
investments as a collateral sub-agent for the Collateral Agent under this
Agreement and the other Loan Documents. 
Each Loan Party by its execution and delivery of this Agreement hereby
consents to the foregoing.


 


ARTICLE XI



GUARANTY


 


Section 11.01         Guaranty; Limitation of Liability.  The Guarantors, jointly and severally,
hereby unconditionally and irrevocably guarantee the punctual payment when due,
whether at stated maturity, by acceleration or otherwise, of all obligations of
the Borrowers now or hereafter existing under any Loan Document, whether for
principal, interest, fees, expenses or otherwise (such obligations, to the
extent not paid by the Borrowers, being the “Guaranteed Obligations”),
and agree to pay any and all expenses (including reasonable counsel fees and
expenses) incurred by the Agents, the Lenders in enforcing any rights under the
guaranty set forth in this Article. 
Without limiting the generality of the foregoing, the Guarantors’ joint
and several liability shall extend to all amounts that constitute part of the
Guaranteed Obligations and would be owed by the Borrowers to the Agents and the
Lenders under any Loan Document but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving the Borrowers.


 


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Section 11.02         Guaranty Absolute.  The Guarantors, jointly and severally,
guarantee that the Guaranteed Obligations will be paid strictly in accordance
with the terms of the Loan Documents, regardless of any law, regulation or
order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Agents and the Lenders with respect thereto.  The joint and several obligations of the
Guarantors under this Article are independent of the Guaranteed Obligations,
and a separate action or actions may be brought and prosecuted against any
Guarantor to enforce such obligations, irrespective of whether any action is
brought against the Borrowers or any other Guarantor or whether any Borrower is
joined in any such action or actions. 
The liability of each Guarantor under this Article shall be irrevocable,
absolute and unconditional irrespective of, and each Guarantor hereby irrevocably
waives any defenses it may now or hereafter have in any way relating to, any or
all of the following:


 


(a)           any lack of validity or
enforceability of any Loan Document or any agreement or instrument relating
thereto;


 


(b)           any change in the time, manner or
place of payment of, or in any other term of, all or any of the Guaranteed
Obligations, or any other amendment or waiver of or any consent to departure
from any Loan Document, including, without limitation, any increase in the
Guaranteed Obligations resulting from the extension of additional credit to the
Borrowers or otherwise;


 


(c)           any taking, exchange, release or
non-perfection of any Collateral, or any taking, release or amendment or waiver
of or consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations;


 


(d)           any change, restructuring or
termination of the corporate, limited liability company or partnership  structure or existence of any Borrower; or


 


(e)           any other circumstance (including,
without limitation, any statute of limitations) or any existence of or reliance
on any representation by the Agents or the Lenders that might otherwise
constitute a defense available to, or a discharge of, any Guarantor or Borrower
or any other guarantor or surety.


 


This Article shall continue to be effective or be reinstated, as the
case may be, if at any time any payment of any of the Guaranteed Obligations is
rescinded or must otherwise be returned by the Lender or any other Person upon
the insolvency, bankruptcy or reorganization of the Borrowers or otherwise, all
as though such payment had not been made.


 


Section 11.03         Waiver.  The Guarantors hereby waive promptness,
diligence, notice of acceptance and any other notice with respect to any of the
Guaranteed Obligations and this Article and any requirement that the Agents or
the Lenders exhaust any right or take any action against the Borrowers or any
other Person or any collateral.  Each
Guarantor acknowledges that it will receive direct and indirect benefits from
the financing arrangements contemplated herein and that the waiver set forth in
this Section 11.03 is knowingly made in contemplation of such
benefits.  The Guarantors hereby waive
any right to revoke this Article, and acknowledges that this Article is
continuing in nature and applies to all Guaranteed Obligations, whether
existing now or in the future.


 


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Section 11.04         Continuing Guaranty; Assignments.  This Article is a continuing guaranty and
shall (a) remain in full force and effect until the later of (i) the cash
payment in full of the Guaranteed Obligations (other than indemnification
obligations as to which no claim has been made) and all other amounts payable
under this Article and (ii) the Revolving Credit Termination Date, (b) be
binding upon each Guarantor, its successors and assigns and (c) inure to the
benefit of and be enforceable by the Agents and the Lenders and their
successors, pledgees, transferees and assigns. 
Without limiting the generality of the foregoing clause (c), any Lender
may pledge, assign or otherwise transfer all or any portion of its rights and
obligations under this Agreement (including, without limitation, all or any
portion of its Commitments, the Loans  owing
to it and any Note held by it) to any other Person, and such other Person shall
thereupon become vested with all the benefits in respect thereof granted such
Lender herein or otherwise, in each case as provided in Section 12.07.


 


Section 11.05         Subrogation.  None of the Guarantors will exercise any
rights that such Guarantor may now or hereafter acquire against any Borrower or
any other Guarantor that arise from the existence, payment, performance or
enforcement of such Guarantor’s obligations under this Article, including,
without limitation, any right of subrogation, reimbursement, exoneration,
contribution or indemnification and any right to participate in any claim or
remedy of the Agents and the Lenders against the Borrowers or such other
Guarantor or any Collateral, whether or not such claim, remedy or right arises
in equity or under contract, statute or common law, including, without
limitation, the right to take or receive from the Borrowers or any other
Guarantor, directly or indirectly, in cash or other property or by set-off or
in any other manner, payment or security solely on account of such claim,
remedy or right, unless and until all of the Guaranteed Obligations and all
other amounts payable under this Article shall have been paid in full in cash
and the Final Maturity Date shall have occurred.  If any amount shall be paid to a Guarantor in violation of the
immediately preceding sentence at any time prior to the later of the payment in
full in cash of the Guaranteed Obligations and all other amounts payable under
this Article and the Final Maturity Date, such amount shall be held in trust
for the benefit of the Agents and the Lenders and shall forthwith be paid to
the Agents and the Lenders to be credited and applied to the Guaranteed
Obligations and all other amounts payable under this Article, whether matured
or unmatured, in accordance with the terms of this Agreement, or to be held as
collateral for any Guaranteed Obligations or other amounts payable under this
Article thereafter arising.  If
(i) the Guarantors shall make payment to the Agents and the Lenders of all
or any part of the Guaranteed Obligations, (ii) all of the Guaranteed
Obligations and all other amounts payable under this Article shall be paid in
full in cash and (iii) the Final Maturity Date shall have occurred, the
Agents and the Lenders will, at the Guarantors’ request and expense, execute
and deliver to the Guarantors appropriate documents, without recourse and
without representation or warranty, necessary to evidence the transfer by
subrogation to the Guarantors of an interest in the Guaranteed Obligations
resulting from such payment by the Guarantors.


 


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ARTICLE XII



MISCELLANEOUS


 


Section 12.01         Notices, Etc.  All notices and other communications
provided for hereunder shall be in writing and shall be mailed, telecopied or
delivered, if to any Loan Party, at the following address:


 


	
  High Voltage Engineering Corporation

  
	
  401 Edgewater Park,

  
	
  Suite 680

  
	
  Wakefield, MA 01880

  
	
  Attention:

  	
  Joseph W. McHugh, Jr.,

  
	
   

  	
  Chief Financial Officer

  
	
  Telephone:  (781) 224-1001
  Ext. 102

  
	
  Telecopier:  (781) 224-1011

  
	
   

  	
   

  
	
  with a copy to:

  
	
   

  	
   

  
	
  Bingham McCutchen LLP

  
	
  150 Federal Street

  
	
  Boston, MA 02110

  
	
  Attention:

  	
  Sula R. Fiszman, Esq.

  
	
  Telephone: 
  (617) 951-8443

  
	
  Telecopier:  (617) 951-8736

  
	
   

  	
   

  
	
  if to the Administrative  Agent, to it at the following address:

  
	
   

  	
   

  
	
  Ableco Finance LLC

  
	
  450 Park Avenue

  
	
  28th Floor

  
	
  New York, NY  10022

  
	
  Attention:

  	
  Tim Fording

  
	
  Telephone: 
  (212) 891-2147

  
	
  Telecopier:  (212) 909-1421

  
	
   

  	
   

  
	
  if to the Collateral Agent, to it at the following address:

  
	
   

  	
   

  
	
  Ableco Finance LLC

  
	
  450 Park Avenue

  
	
  28th Floor

  
	
  New York, NY  10022

  
	
  Attention:

  	
  Tim Fording

  
	
  Telephone: 
  (212) 891-2147

  
	
  Telecopier:  (212) 909-1421

  



 


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  with a copy to:

  
	
   

  	
   

  
	
  Schulte Roth & Zabel LLP

  
	
  919 Third Avenue

  
	
  New York, NY  10022

  
	
  Attention:

  	
  Frederic L. Ragucci, Esq.

  
	
  Telephone:  (212) 756-2000

  
	
  Telecopier:  (212) 593-5955

  



 


or, as to each party, at such other address as shall be designated by
such party in a written notice to the other party complying as to delivery with
the terms of this Section 12.01. 
All such notices and other communications shall be effective, (i) if
mailed, when received or three days after deposited in the mails, whichever
occurs first, (ii) if telecopied, when transmitted and confirmation received,
or (iii) if delivered, upon delivery, except that notices to any Agent
pursuant to Article II shall not be effective until received by such
Agent.


 


Section 12.02         Amendments, Etc.  No
amendment or waiver of any provision of this Agreement or any Note, and no
consent to any departure by the Borrowers or any other Loan Party therefrom,
shall in any event be effective unless the same shall be in writing and signed
by the Agents with the consent of the Required Lenders, and then such waiver or
consent shall be effective only in the specific instance and for the specific
purpose for which given provided, however, that no amendment,
waiver or consent shall (i) increase the Revolving Credit Commitment of
any Lender, reduce the principal of, or interest on, the Loans payable to any
Lender, reduce the amount of any fee payable for the account of any Lender, or
postpone or extend any date fixed for any payment of principal of, or interest
or fees on or the Loans payable to any Lender, in each case without the written
consent of any Lender affected thereby, (ii) increase the Total Revolving
Commitment without the written consent of each Lender, (iii) change the
percentage of the Revolving Credit Commitments or of the aggregate unpaid
principal amount of the Revolving Credit Loans that is required for the Lenders
or any of them to take any action hereunder, (iv) amend the definition of
“Required Lenders” or “Pro Rata Share”, (v) release all or a substantial
portion of the Collateral (except as otherwise provided in this Agreement and
the other Loan Documents) or subordinate any Lien granted in favor of the
Collateral Agent for the benefit of the Lenders, or release the Borrowers or
any Guarantor, (vi) amend, modify or waive Section 4.04 or this Section 12.02,
or (vii) amend the definition of “Eligible Inventory” or “Borrowing Base”,
in each case without the written consent of each Lender.  Notwithstanding the foregoing, no amendment,
waiver or consent shall, unless in writing and signed by an Agent, affect the
rights or duties of such Agent (but not in its capacity as a Lender) under this
Agreement or the other Loan Documents.


 


Section 12.03         No Waiver; Remedies, Etc.  No failure on the part of any Agent or any
Lender to exercise, and no delay in exercising, any right hereunder or under
any other Loan Document shall operate as a waiver thereof; nor shall any single
or partial exercise of any right under any Loan Document preclude any other or
further exercise thereof or the exercise of any other right.  The rights and remedies of the Agents and
the Lenders provided herein and in the other Loan Documents are cumulative and
are in addition to, and not exclusive of, any rights or remedies provided by
law.  The rights of the Agents and the
Lenders under any Loan Document against any party thereto are not conditional
or contingent on any attempt by the Agents and the


 


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Lenders to exercise any of their rights under any other Loan Document
against such party or against any other Person.


 


Section 12.04         Expenses; Taxes; Attorneys’ Fees.  The Borrowers will pay on demand, all costs
and expenses incurred by or on behalf of the Agents (and, in the case of
clauses (c) through (m) below, the Lenders), regardless of whether the
transactions contemplated hereby are consummated, including, without
limitation, reasonable fees, costs, client charges and expenses of counsel for
the Agents (and, in the case of clauses (c) through (m) below, the Lenders),
accounting, due diligence, periodic field audits, physical counts, valuations,
investigations, searches and filings, monitoring of assets, appraisals of
Collateral, title searching, environmental assessments, miscellaneous
disbursements, examination, travel, lodging and meals, arising from or relating
to:  (a) the negotiation, preparation,
execution, delivery, performance and administration of this Agreement and the
other Loan Documents (including, without limitation, the preparation of any
additional Loan Documents, pursuant to Section 7.01(b), Section 7.01(m) or
Section 7.01(o) or the review of any of the agreements, instruments and
documents referred to in such Sections), (b) any requested amendments,
waivers or consents to this Agreement or the other Loan Documents whether or
not such documents become effective or are given, (c) the preservation and
protection of any of the Lenders’ rights under this Agreement or the other Loan
Documents, (d) the defense of any claim or action asserted or brought against
the Agents or the Lenders by any Person that arises from or relates to this
Agreement, any other Loan Document, the Agents’ or the Lenders’ claims against
the Borrowers and each other Loan Party, or any and all matters in connection
therewith, (e) the commencement or defense of, or intervention in, any court
proceeding arising from or related to this Agreement or any other Loan
Document, (f) the filing of any petition, complaint, answer, motion or
other pleading by the Agents or the Lenders, or the taking of any action in
respect of the Collateral or other security, in connection with this Agreement
or any other Loan Document, (g) the protection, collection, lease, sale, taking
possession of or liquidation of, any Collateral or other security in connection
with this Agreement or any other Loan Document, (h) any attempt to enforce any
Lien or security interest in any Collateral or other security in connection
with this Agreement or any other Loan Document, (i) any attempt to collect from
the Borrowers or any other Loan Party, (j) the receipt by the Agents or the
Lenders of any advice from professionals with respect to any of the foregoing,
(k) all liabilities and costs arising from or in connection with the past,
present or future operations of the Borrowers and each other Loan Party
involving any damage to real or personal property or natural resources or harm
or injury alleged to have resulted from any Release of Hazardous Materials on,
upon or into such property, (l) any Environmental Liabilities and Costs
incurred in connection with the investigation, removal, cleanup and/or
remediation of any Hazardous Materials present or arising out of the operations
of any facility of the Borrowers and any other Loan Party, or (m) any
Environmental Liabilities and Costs incurred in connection with any
Environmental Lien.  Without limitation
of the foregoing or any other provision of any Loan Document:  (x) the Borrowers agree to pay all stamp,
document, transfer, recording or filing taxes or fees and similar impositions
now or hereafter determined by any Agent or any Lender to be payable in
connection with this Agreement or any other Loan Document, and the Borrowers
agree to save the Agents and the Lenders harmless from and against any and all
present or future claims, liabilities or losses with respect to or resulting
from any omission to pay or delay in paying any such taxes, fees or
impositions, (y) the Borrowers agree to pay all broker fees that may become due
in connection


 


79

















 


with the transactions contemplated by this Agreement, and (z) if the
Borrowers fail to perform any covenant or agreement contained herein or in any
other Loan Document, any Agent may itself perform or cause performance of such
covenant or agreement, and the expenses of the such Agent incurred in
connection therewith shall be reimbursed on demand by the Borrowers.


 


Section 12.05         Right of Set-off.  Upon the occurrence and during the
continuance of any Event of Default, any Lender may, and is hereby authorized
to, at any time and from time to time, without notice to the Borrowers (any
such notice being expressly waived by the Borrowers) and to the fullest extent
permitted by law, set off and apply any and all deposits (general or special,
time or demand, provisional or final) at any time held and other indebtedness
at any time owing by such Lender to or for the credit or the account of the
Borrowers against any and all obligations of either now or hereafter existing
under any Loan Document, irrespective of whether or not such Lender shall have
made any demand hereunder or thereunder and although such obligations may be
contingent or unmatured.  Each Lender
agrees to notify the Parent promptly after any such set-off and application
made by such Lender provided that the failure to give such notice shall not
affect the validity of such set-off and application.


 


Section 12.06         Severability.   Any provision of this Agreement, which is
prohibited or unenforceable in any jurisdiction shall, as to such jurisdiction,
be ineffective to the extent of such prohibition or unenforceability without
invalidating the remaining portions hereof or affecting the validity or
enforceability of such provision in any other jurisdiction.


 


Section 12.07         Assignments and Participations.   (a)  This
Agreement and the Notes shall be binding upon and inure to the benefit of the
Borrowers and the other Loan Parties and each Agent and each Lender and their
respective successors and assigns; provided, however, that each of the
Borrowers and the other Loan Parties may not assign or transfer any of their
rights hereunder, or under the Notes, without the prior written consent of each
Lender and any such assignment without the Lenders’ prior written consent shall
be null and void.


 


(b)           Each Lender may assign to one or more
of its Affiliates or any fund or account managed by such Lender, to another
Lender or, with the written consent of the Collateral Agent, other lenders or
other entities all or a portion of its rights and obligations under this
Agreement (including, without limitation, all or a portion of its Commitments,
the Loans made by it, the Notes held by it); provided, however,
that (1) such assignment is in an amount which is at least $5,000,000 or a
multiple of $1,000,000 in excess thereof (or the remainder of such Lender’s
Commitment), (except such minimum amount shall not apply to any Affiliate of a
Lender or any fund or account managed by a Lender) and (2) the parties to
each such assignment shall execute and deliver to the Collateral Agent, for its
acceptance, an Assignment and Acceptance, together with any Note subject to
such assignment, and such parties shall deliver to the Collateral Agent a
processing and recordation fee of $5,000 (except the payment of such fee shall
not be required if the assignee is an Affiliate of a Lender or to any fund or
account managed by a Lender).  Upon such
execution, delivery and acceptance, from and after the effective date specified
in each Assignment and Acceptance, which effective date shall be at least three
Business Days after the delivery thereof to the Collateral Agent (or such
shorter period as shall be agreed to by the Collateral Agent and the parties to
such assignment), (x) the assignee thereunder shall become a “Lender”
hereunder and, in addition to the rights and obligations hereunder held by it
immediately prior to such effective date, have the rights and obligations
hereunder that have been assigned to it


 


80

















 


pursuant to such Assignment and Acceptance
and (y) the assigning Lender thereunder shall, to the extent that rights
and obligations hereunder have been assigned by it pursuant to such Assignment
and Acceptance, relinquish its rights and be released from its obligations
under this Agreement (and, in the case of an Assignment and Acceptance covering
all or the remaining portion of an assigning Lender’s rights and obligations
under this Agreement, such Lender shall cease to be a party hereto).


 


(i)            By executing and delivering an
Assignment and Acceptance, the assigning Lender and the assignee thereunder
confirm to and agree with each other and the other parties hereto as
follows:  (A) other than as
provided in such Assignment and Acceptance, the assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document furnished pursuant hereto; (B) the assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to the financial condition of the Loan Parties or any of their Subsidiaries or
the performance or observance by the Loan Parties of any of their obligations
under this Agreement or any other Loan Document furnished pursuant hereto;
(C) such assignee confirms that it has received a copy of this Agreement
and the other Loan Documents, together with such other documents and
information it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Acceptance; (D) such assignee
will, independently and without reliance upon the Assigning Lender, any Agent
or any Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement and the other Loan Documents;
(E) such assignee appoints and authorizes the Agents to take such action
as agents on its behalf and to exercise such powers under this Agreement and
the other Loan Documents as are delegated to the Agents by the terms thereof,
together with such powers as are reasonably incidental thereto; and (F) such
assignee agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement and the other Loan Documents
are required to be performed by it as a Lender.


 


(ii)           The Collateral Agent shall, on behalf
of the Borrowers, maintain, or cause to be maintained at the Payment Office, a
copy of each Assignment and Acceptance delivered to and accepted by it and a
register for the recordation of the names and addresses of the Lenders and the
Commitments of, and principal amount of the Loans owing to each Lender from
time to time (the “Register”).  The entries in the Register shall be
conclusive and binding for all purposes, absent manifest error, and the
Borrowers, the Agents and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement.  The Register shall be
available for inspection by the Parent and any Lender at any reasonable time
and from time to time upon reasonable prior notice.  In the case of any assignment permitted under Section 12.07(b)
that is not reflected in the Register, the assigning Lender shall maintain a
comparable Register.


 


(iii)          Upon its receipt of an Assignment and
Acceptance executed by an assigning Lender and an assignee, together with the
Loans and Notes subject to such assignment, the Collateral Agent shall, if the
Collateral Agent consents to such assignment


 


81

















 


and if such Assignment and Acceptance has
been completed (A) accept such Assignment and Acceptance, (B) give
prompt notice thereof to the Parent (except no such notice shall be required if
the assignee is an Affiliate of the assigning Lender or a fund or account
managed by such Lender), (C) record the information contained therein in
the Register, and (D) prepare and distribute to each Lender and the Parent
a revised Schedule 1.01(A) after giving effect to such assignment, which
revised Schedule 1.01(A) shall replace the prior Schedule 1.01(A) and
become part of this Agreement (except no such revised Schedule 1.01(A) shall be
distributed if the assignee is an Affiliate of the assigning Lender or a fund
or account managed by such Lender).


 


(iv)          A Registered Loan (and the Registered
Note, if any, evidencing the same) may be assigned or sold in whole or in part
only by registration of such assignment or sale on the Register (and each
Registered Note shall expressly so provide). 
Any assignment or sale of all or part of such Registered Loan (and the
Registered Note, if any, evidencing the same) may be effected only by
registration of such assignment or sale on the Register, together with the
surrender of the Registered Note, if any, evidencing the same duly endorsed by
(or accompanied by a written instrument of assignment or sale duly executed by)
the holder of such Registered Note, whereupon, at the request of the designated
assignee(s) or transferee(s), one or more new Registered Notes in the same
aggregate principal amount shall be issued to the designated assignee(s) or
transferee(s).  Prior to the
registration of assignment or sale of any Registered Loan (and the Registered
Note, if any evidencing the same), the Agents shall treat the Person in whose
name such Loan (and the Registered Note, if any, evidencing the same) is
registered as the owner thereof for the purpose of receiving all payments
thereon and for all other purposes, notwithstanding notice to the contrary.


 


(v)           In the event that any Lender sells
participations in the Registered Loan, such Lender shall maintain a register on
which it enters the name of all participants in the Registered Loans held by it
(the “Participant Register”). 
A Registered Loan (and the Registered Note, if any, evidencing the same)
may be participated in whole or in part only by registration of such
participation on the Participant Register (and each Registered Note shall
expressly so provide).  Any
participation of such Registered Loan (and the Registered Note, if any,
evidencing the same) may be effected only by the registration of such
participation on the Participant Register.


 


(vi)          Any foreign Person who purchases or is
assigned or participates in any portion of such Loan shall provide the Agents
(in the case of a purchase or assignment) or the Lender (in the case of a
participation) with a completed Internal Revenue Service Form W-8 (Certificate
of Foreign Status) or a substantially similar form for such purchaser,
participant or any other affiliate who is a holder of beneficial interests in
the Loan.


 


(c)           Each Lender may sell participations
to one or more banks or other entities in or to all or a portion of its rights
and obligations under this Agreement and the other Loan Documents (including,
without limitation, all or a portion of its Commitments and the Loans made by
it); provided, that (i) such Lender’s obligations under this Agreement
(including without limitation, its Commitments hereunder) and the other Loan
Documents shall remain unchanged; (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, and the Borrowers, the Agents and the other Lenders shall continue
to deal solely


 


82

















 


and directly with such Lender in connection
with such Lender’s rights and obligations under this Agreement  and the other Loan Documents, and (iii) a
participant shall not be entitled to require such Lender to take or omit to
take any action hereunder except (A) action directly effecting an extension of
the maturity dates or decrease in the principal amount of the Loans, or (B)
action directly effecting an extension of the due dates or a decrease in the
rate of interest payable on the Loans or the fees payable under this Agreement,
or (C) actions directly effecting a release of all or a substantial portion of
the Collateral or the Borrowers or any Guarantor (except as set forth in
Section 10.08 or any Loan Document).


 


Section 12.08         Counterparts.  This Agreement may be executed in any number
of counterparts and by different parties hereto in separate counterparts, each
of which shall be deemed to be an original, but all of which taken together
shall constitute one and the same agreement.


 


Section 12.09         GOVERNING LAW.  THIS AGREEMENT, THE NOTES AND THE OTHER LOAN
DOCUMENTS SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAW OF
THE STATE OF NEW YORK APPLICABLE TO CONTRACTS MADE AND TO BE PERFORMED IN THE
STATE OF NEW YORK.


 


Section 12.10         CONSENT TO JURISDICTION; SERVICE OF
PROCESS AND VENUE.  ANY LEGAL ACTION
OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE
BROUGHT IN THE COURTS OF THE STATE OF NEW YORK IN THE COUNTY OF NEW YORK OR OF
THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY
EXECUTION AND DELIVERY OF THIS AGREEMENT, EACH LOAN PARTY HEREBY IRREVOCABLY
ACCEPT IN RESPECT OF ITS PROPERTY, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS. 
EACH LOAN PARTY FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS
OUT OF ANY OF THE AFOREMENTIONED COURTS AND IN ANY SUCH ACTION OR PROCEEDING BY
THE MAILING OF COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID,
TO SUCH LOAN PARTY AT ITS ADDRESS FOR NOTICES AS SET FORTH IN
SECTION 12.01, SUCH SERVICE TO BECOME EFFECTIVE TEN (10) DAYS AFTER SUCH
MAILING.  EACH LOAN PARTY HEREBY
IRREVOCABLY APPOINTS THE SECRETARY OF STATE OF THE STATE OF NEW YORK AS ITS
AGENT FOR SERVICE OF PROCESS IN RESPECT OF ANY SUCH ACTION OR PROCEEDING.  NOTHING HEREIN SHALL AFFECT THE RIGHT OF THE
AGENTS OR THE LENDERS TO SERVICE OF PROCESS IN ANY OTHER MANNER PERMITTED BY
LAW OR TO COMMENCE LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST EACH LOAN
PARTY IN ANY OTHER JURISDICTION.  EACH
LOAN PARTY HEREBY EXPRESSLY AND IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE
JURISDICTION OR LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH
COURT REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT
IN AN INCONVENIENT FORUM.  TO THE EXTENT
THAT EACH LOAN PARTY HAS OR HEREAFTER MAY ACQUIRE ANY IMMUNITY FROM
JURISDICTION OF ANY COURT OR FROM ANY


 


83

















 


LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT PRIOR TO
JUDGMENT, ATTACHMENT IN AID OF EXECUTION OR OTHERWISE) WITH RESPECT TO ITSELF
OR ITS PROPERTY, EACH LOAN PARTY HEREBY IRREVOCABLY WAIVES SUCH IMMUNITY IN
RESPECT OF ITS OBLIGATIONS UNDER THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS.


 


Section 12.11         WAIVER OF JURY TRIAL, ETC.  EACH LOAN PARTY, THE AGENTS AND THE LENDERS
HEREBY WAIVE ANY RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR
COUNTERCLAIM CONCERNING ANY RIGHTS UNDER THIS AGREEMENT, THE NOTES OR OTHER
LOAN DOCUMENTS, OR UNDER ANY AMENDMENT, WAIVER, CONSENT, INSTRUMENT, DOCUMENT OR
OTHER AGREEMENT DELIVERED OR WHICH IN THE FUTURE MAY BE DELIVERED IN CONNECTION
THEREWITH, OR ARISING FROM ANY FINANCING RELATIONSHIP EXISTING IN CONNECTION
WITH THIS AGREEMENT, AND AGREE THAT ANY SUCH ACTION, PROCEEDINGS OR
COUNTERCLAIM SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.  EACH LOAN PARTY CERTIFIES THAT NO OFFICER,
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT ANY AGENT OR ANY LENDER WOULD NOT, IN THE EVENT OF
ANY ACTION, PROCEEDING OR COUNTERCLAIM, SEEK TO ENFORCE THE FOREGOING
WAIVERS.  EACH LOAN PARTY HEREBY
ACKNOWLEDGES THAT THIS PROVISION IS A MATERIAL INDUCEMENT FOR THE LENDERS
ENTERING INTO THIS AGREEMENT.


 


Section 12.12         Consent by the Agents and Lenders.  Except as otherwise expressly set forth
herein to the contrary, if the consent, approval, satisfaction, determination,
judgment, acceptance or similar action (an “Action”) of any Agent or any
Lender shall be permitted or required pursuant to any provision hereof or any
provision of any other agreement to which the Borrowers and any other Loan
Party are parties and to which any Agent or any Lender has succeeded thereto,
such Action shall be required to be in writing and may be withheld or denied by
such Agent or such Lender, in its sole discretion, with or without any reason,
and without being subject to question or challenge on the grounds that such
Action was not taken in good faith.


 


Section 12.13         No Party Deemed Drafter.  Each of the parties hereto agrees that no
party hereto shall be deemed to be the drafter of this Agreement.


 


Section 12.14         Reinstatement; Certain Payments.  If any claim is ever made upon any Agent or
any Lender for repayment or recovery of any amount or amounts received by such
Agent or such Lender in payment or on account of any of the Obligations, such
Agent or such Lender shall give prompt notice of such claim to each other Agent
and Lender and the Parent, and if such Agent or such Lender repays all or part
of such amount by reason of (i) any judgment, decree or order of any court
or Administrative body having jurisdiction over such Agent or such Lender or
any of their property, or (ii) any good faith settlement or compromise of
any such claim effected by such Agent or such Lender with any such claimant,
then and in such event each Loan Party agrees that (A) any such judgment,
decree, order, settlement or compromise shall be binding upon it
notwithstanding the cancellation of any Note or other instrument evidencing the
Obligations or the other Loan Documents or the termination of this


 


84

















 


Agreement or the other Loan Documents, and (B) it shall be and
remain liable to such Agent or such Lender hereunder for the amount so repaid
or recovered to the same extent as if such amount had never originally been
received by such Agent or such Lender.


 


Section 12.15         Indemnification.  In addition to each Loan Party’s other
Obligations under this Agreement, each Loan Party agrees to, jointly and
severally, defend, protect, indemnify and hold harmless each Agent and each
Lender, and all of their respective officers, directors, employees, attorneys,
consultants and agents (collectively called the “Indemnitees”) from
and against any and all losses, damages, liabilities, obligations, penalties,
fees, reasonable costs and expenses (including, without limitation, reasonable
attorneys’ fees, costs and expenses) incurred by such Indemnitees, whether
prior to or from and after the Effective Date, whether direct, indirect or consequential,
as a result of or arising from or relating to or in connection with any of the
following:  (i) the negotiation,
preparation, execution or performance or enforcement of this Agreement, any
other Loan Document or of any other document executed in connection with the
transactions contemplated by this Agreement, (ii) any Agent’s or any
Lender’s furnishing of funds to the Borrowers, including, without limitation,
the management of any such Loans, (iii) any matter relating to the
financing transactions contemplated by this Agreement or the other Loan
Documents or by any document executed in connection with the transactions
contemplated by this Agreement or the other Loan Documents, or (iv) any
claim, litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto (collectively,
the “Indemnified Matters”); provided, however, that
the Loan Parties shall not have any obligation to any Indemnitee under this
Section 12.15 for any Indemnified Matter caused by the gross negligence or
willful misconduct of such Indemnitee, as determined by a final judgment of a
court of competent jurisdiction.  Such
indemnification for all of the foregoing losses, damages, fees, costs and
expenses of the Indemnitees are chargeable against the Loan Account.  To the extent that the undertaking to
indemnify, pay and hold harmless set forth in this Section 12.15 may be
unenforceable because it is violative of any law or public policy, each Loan
Party shall, jointly and severally, contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.  This Indemnity shall survive the repayment
of the Obligations and the discharge of the Liens granted under the Loan
Documents.


 


Section 12.16         Parent as Agent for Borrowers.  Each Borrower hereby irrevocably appoints
Parent as the borrowing agent and attorney-in-fact for the Borrowers
(i) to provide the Agents with all notices with respect to Loans obtained
for the benefit of any Borrower and all other notices and instructions under
this Agreement and (ii) to take such action as the Parent deems
appropriate on its behalf to obtain Loans and to exercise such other powers as
are reasonably incidental thereto to carry out the purposes of this
Agreement.  It is understood that the
handling of the Loan Account and Collateral of the Borrowers in a combined
fashion, as more fully set forth herein, is done solely as an accommodation to the
Borrowers in order to utilize the collective borrowing powers of the Borrowers
in the most efficient and economical manner and at their request, and that
neither the Agents nor the Lenders shall incur liability to the Borrowers as a
result thereof.  Each of the Borrowers
expects to derive benefit, directly or indirectly, from the handling of the
Loan Account and the Collateral in a combined fashion since the successful
operation of each Borrower is dependent on the continued successful performance


 


85

















 


of the integrated group.  To
induce the Agents and the Lenders to do so, and in consideration thereof, each
of the Borrowers hereby jointly and severally agrees to indemnify the
Indemnitees and hold the Indemnitees harmless against any and all liability,
expense, loss or claim of damage or injury, made against such Indemnitee by any
of the Borrowers or by any third party whosoever, arising from or incurred by
reason of (a) the handling of the Loan Account and Collateral of the Borrowers
as herein provided, (b) the Agents and the Lenders relying on any
instructions of the Parent, or (c) any other action taken by the Agents or
any Lender hereunder or under the other Loan Documents.


 


Section 12.17         Joint and Several.  The obligations of the Loan Parties
hereunder are joint and several.  The
Agents may, in their sole and absolute discretion, enforce the provisions
hereof against one or more of the Loan Parties and shall not be required to
proceed against all of the Loan Parties jointly or seek payment from the Loan
Parties ratably.  In addition, the
Collateral Agent may, in its sole and absolute discretion, select the
Collateral of one or more of the Loan Parties for sale or application to the
Obligations, without regard to the ownership of such Collateral, and shall not
be required to make such selection ratably from the Collateral owned by any
Loan Parties.  The release or discharge
of any Loan Party by the Collateral Agent shall not release or discharge any
other Loan Party from the obligations of such Person hereunder.


 


Section 12.18         Records.  The unpaid principal of and interest on the
Loans, the interest rate or rates applicable to such unpaid principal and
interest, the duration of such applicability, the Commitments, and the accrued
and unpaid fees payable pursuant to Section 2.06, including, without
limitation, the Closing Fee, Loan Servicing Fee, the Anniversary Fee, the
Unused Line Fee, and the Field Examination Fees, shall at all times be
ascertained from the records of the Agents, which shall be conclusive and
binding absent manifest error.


 


Section 12.19         Binding Effect.  This Agreement shall become effective when
it shall have been executed by the Borrowers, the Guarantors, each Agent and
each Lender and when the conditions precedent set forth in Section 5.01
hereof have been satisfied or waived in writing by the Agents, and thereafter
shall be binding upon and inure to the benefit of the Borrowers, the
Guarantors, each Agent and each Lender, and their respective successors and
assigns, except that neither the Borrowers nor any other Loan Party shall have
the right to assign its rights hereunder or any interest herein without the
prior written consent of each Lender, and any assignment by any Lender shall be
governed by Section 12.07.


 


Section 12.20         Confidentiality.  Each Agent and each Lender agrees (on behalf
of itself and each of its affiliates, directors, officers, employees and
representatives) to use reasonable precautions to keep confidential, in accordance
with its customary procedures for handling confidential information of this
nature and in accordance with safe and sound practices of comparable commercial
finance companies, any non-public information supplied to it by the Loan
Parties pursuant to this Agreement or the other Loan Documents which is
identified by the Loan Parties as being confidential at the time the same is
delivered to such Person (and which at the time is not, and does not thereafter
become, publicly available or available to such Person from another source not
known to be subject to a confidentiality obligation to such Person not to
disclose such information), provided that nothing herein shall limit the
disclosure of any such information (i) to the extent required by statute,
rule, regulation or judicial process, (ii) to


 


86

















 


counsel for any Agent or any Lender, (iii) to examiners, auditors,
accountants or Securitization Parties, (iv) in connection with any
litigation to which any Agent or any Lender is a party or (v) to any
assignee or participant (or prospective assignee or participant) so long as
such assignee or participant (or prospective assignee or participant) first
agrees, in writing, to be bound by confidentiality provisions similar in
substance to this Section 12.20. 
Each Agent and each Lender agrees that, upon receipt of a request or
identification of the requirement for disclosure pursuant to clause
(iv) hereof, it will make reasonable efforts to keep the Loan Parties informed
of such request or identification, provided that the each Loan Party
acknowledges that each Agent and each Lender may make disclosure as required or
requested by any Governmental Authority or representative thereof and that each
Agent and each Lender may be subject to review by Securitization Parties or
other regulatory agencies and may be required to provide to, or otherwise make
available for review by, the representatives of such parties or agencies any
such non-public information.


 


Section 12.21         Interest.  It is the intention of the parties hereto
that the Agents and each Lender shall conform strictly to usury laws applicable
to it.  Accordingly, if the transactions
contemplated hereby or by any other Loan Document would be usurious as to the
Agents or any Lender under laws applicable to it (including the laws of the
United States of America and the State of New York or any other jurisdiction
whose laws may be mandatorily applicable to the Agents or such Lender
notwithstanding the other provisions of this Agreement), then, in that event,
notwithstanding anything to the contrary in this Agreement or any other Loan
Document or any agreement entered into in connection with or as security for
the Obligations, it is agreed as follows: 
(i) the aggregate of all consideration which constitutes interest under
law applicable to the Agents or any Lender that is contracted for, taken,
reserved, charged or received by the Agents or such Lender under this Agreement
or any other Loan Document or agreements or otherwise in connection with the
Obligations shall under no circumstances exceed the maximum amount allowed by
such applicable law, any excess shall be canceled automatically and if
theretofore paid shall be credited by the Agents or such Lender on the principal
amount of the Obligations (or, to the extent that the principal amount of the
Obligations shall have been or would thereby be paid in full, refunded by the
Agents or such Lender, as applicable, to the Borrowers); and (ii) in the event
that the maturity of the Obligations is accelerated by reason of any Event of
Default under this Agreement or otherwise, or in the event of any required or
permitted prepayment, then such consideration that constitutes interest under
law applicable to the Agents or any Lender may never include more than the
maximum amount allowed by such applicable law, and excess interest, if any,
provided for in this Agreement or otherwise shall be canceled automatically by
the Agents or such Lender, as applicable, as of the date of such acceleration
or prepayment and, if theretofore paid, shall be credited by the Agents or such
Lender, as applicable, on the principal amount of the Obligations (or, to the
extent that the principal amount of the Obligations shall have been or would
thereby be paid in full, refunded by the Agents or such Lender to the
Borrowers).  All sums paid or agreed to
be paid to the Agents or any Lender for the use, forbearance or detention of
sums due hereunder shall, to the extent permitted by law applicable to the
Agents or such Lender, be amortized, prorated, allocated and spread throughout
the full term of the Loans until payment in full so that the rate or amount of
interest on account of any Loans hereunder does not exceed the maximum amount
allowed by such applicable law.  If at
anytime and from time to time (i) the amount of interest payable to the Agents
or any Lender on any date shall be computed at the Highest Lawful Rate
applicable to the


 


87

















 


Agents or such Lender pursuant to this Section 12.21 and
(ii) in respect of any subsequent interest computation period the amount
of interest otherwise payable to the Agents or such Lender would be less than
the amount of interest payable to the Agents or such Lender computed at the
Highest Lawful Rate applicable to the Agents or such Lender, then the amount of
interest payable to the Agents or such Lender in respect of such subsequent
interest computation period shall continue to be computed at the Highest Lawful
Rate applicable to the Agents or such Lender until the total amount of interest
payable to the Agents or such Lender shall equal the total amount of interest
which would have been payable to the Agents or such Lender if the total amount
of interest had been computed without giving effect to this Section 12.21.


 


Section 12.22         No Recourse.  Each of the Agents and the Lenders
acknowledges and agrees that Funding Corp. shall not have any obligation or
liability with respect to the Obligations and that it shall not have any direct
recourse to Funding Corp. or its respective assets with respect thereto;
provided, however, that the foregoing shall not be construed to affect any
rights that any Lender or Agent may have pursuant to the Loan Documents to
enforce the rights of the Borrowers pursuant to the Receivables Purchase
Documents or pursuant to the Funding Corp. Financing Agreement.


 


88

















 


IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective officers thereunto duly authorized, as of the date
first above written.


 


	
   

  	
  BORROWERS:

  
	
   

  	
   

  
	
   

  	
  HIGH VOLTAGE ENGINEERING CORPORATION

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  MAXIMA TECHNOLOGIES, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  STEWART WARNER INSTRUMENT CORPORATION

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  ROBICON CORPORATION

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  PHYSICAL ELECTRONICS, INC.

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


89

















 


	
   

  	
  VIVIRAD - HIGH VOLTAGE CORPORATION

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  CHARLES EVANS & ASSOCIATES

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  GUARANTORS:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  HIVEC HOLDINGS, INC.

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  COLLATERAL AGENT, ADMINISTRATIVE

  AGENT AND LENDER:

  
	
   

  	
   

  
	
   

  	
  ABLECO FINANCE LLC

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A3 FUNDING LP

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  A3 Funding Management LLC

  	
   

  
	
   

  	
  Its:

  	
  General Partner

  	
   

  



 


90

















 


	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  LENDER:

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  A4 FUNDING LP

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
  A4 Funding Management LLC

  	
   

  
	
   

  	
  Its:

  	
  General Partner

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
   

  
	
   

  	
   

  	
  Title:

  	
   

  



 


91

















 


SCHEDULE 1.01(A)


 


Lenders and Lenders’ Commitments


 


	
  Lender

  	
   

  	
  Revolving
  Credit

  Commitment

  	
   

  
	
  Ableco Finance LLC

  	
   

  	
  $

  	
  5,000,000

  	
   

  
	
  A3 Funding LP

  	
   

  	
  $

  	
  1,647,493

  	
   

  
	
  A4 Funding LP

  	
   

  	
  $

  	
  3,352,507

  	
   

  
	
  Total

  	
   

  	
  $

  	
  10,000,000

  	
   

  



 


Lenders’ Term Loan Allocation


 


	
  Lender

  	
   

  	
  Term Loan

  Allocation

  	
   

  
	
  Ableco Finance LLC

  	
   

  	
  $

  	
  7,500,000

  	
   

  
	
  A3 Funding LP

  	
   

  	
  $

  	
  2,471,239.50

  	
   

  
	
  A4 Funding LP

  	
   

  	
  $

  	
  5,028,760.50

  	
   

  
	
  Total Term Loan

  	
   

  	
  $

  	
  15,000,000