Document:

exv10w1

 

EXHIBIT 10.1

EXECUTION COPY

$425,000,000

CREDIT AGREEMENT

among

UNITED COMPONENTS, INC.,

as Borrower,

The Several Lenders

from Time to Time Parties Hereto,

LEHMAN BROTHERS INC.

and

J.P. MORGAN SECURITIES INC.,

as Joint Lead Arrangers,

JPMORGAN CHASE BANK,

as Syndication Agent,

ABN AMRO BANK N.V.,

CREDIT LYONNAIS, NEW YORK BRANCH,

FLEET NATIONAL BANK

and

GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agents

and

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

Dated as of June 20, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	SECTION 1. DEFINITIONS	 	 	1	 
	 	 	
1.1
	 	Defined Terms
	 	 	1	 
	 	 	
1.2
	 	Other Definitional Provisions
	 	 	24	 
	SECTION 2. AMOUNT AND TERMS OF COMMITMENTS	 	 	25	 
	 	 	
2.1
	 	Term Loan Commitments
	 	 	25	 
	 	 	
2.2
	 	Procedure for Term Loan Borrowing
	 	 	25	 
	 	 	
2.3
	 	Repayment of Term Loans
	 	 	25	 
	 	 	
2.4
	 	Revolving Credit Commitments
	 	 	27	 
	 	 	
2.5
	 	Procedure for Revolving Credit Borrowing
	 	 	27	 
	 	 	
2.6
	 	Swing Line Commitment
	 	 	28	 
	 	 	
2.7
	 	Procedure for Swing Line Borrowing; Refunding of Swing Line Loans
	 	 	28	 
	 	 	
2.8
	 	Repayment of Loans; Evidence of Debt
	 	 	30	 
	 	 	
2.9
	 	Commitment Fees, etc
	 	 	31	 
	 	 	
2.10
	 	Termination or Reduction of Revolving Credit Commitments
	 	 	31	 
	 	 	
2.11
	 	Optional Prepayments
	 	 	31	 
	 	 	
2.12
	 	Mandatory Prepayments and Commitment Reductions
	 	 	31	 
	 	 	
2.13
	 	Conversion and Continuation Options
	 	 	33	 
	 	 	
2.14
	 	Minimum Amounts and Maximum Number of Eurodollar Tranches
	 	 	33	 
	 	 	
2.15
	 	Interest Rates and Payment Dates
	 	 	34	 
	 	 	
2.16
	 	Computation of Interest and Fees
	 	 	34	 
	 	 	
2.17
	 	Inability to Determine Interest Rate
	 	 	35	 
	 	 	
2.18
	 	Pro Rata Treatment and Payments
	 	 	35	 
	 	 	
2.19
	 	Requirements of Law
	 	 	37	 
	 	 	
2.20
	 	Taxes
	 	 	39	 
	 	 	
2.21
	 	Indemnity
	 	 	41	 
	 	 	
2.22
	 	Illegality
	 	 	41	 
	 	 	
2.23
	 	Change of Lending Office
	 	 	41	 
	 	 	
2.24
	 	Replacement of Lenders under Certain Circumstances
	 	 	42	 
	SECTION 3. LETTERS OF CREDIT	 	 	42	 
	 	 	
3.1
	 	L/C Commitment
	 	 	42	 
	 	 	
3.2
	 	Procedure for Issuance of Letter of Credit
	 	 	43	 
	 	 	
3.3
	 	Fees and Other Charges
	 	 	43	 
	 	 	
3.4
	 	L/C Participations
	 	 	43	 
	 	 	
3.5
	 	Reimbursement Obligation of the Borrower
	 	 	44	 
	 	 	
3.6
	 	Obligations Absolute
	 	 	45	 
	 	 	
3.7
	 	Letter of Credit Payments
	 	 	45	 
	 	 	
3.8
	 	Applications
	 	 	45	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES	 	 	46	 
	 	 	
4.1
	 	Financial Condition
	 	 	46	 
	 	 	
4.2
	 	No Change
	 	 	46	 
	 	 	
4.3
	 	Corporate Existence; Compliance with Law
	 	 	46	 
	 	 	
4.4
	 	Power; Authorization; Enforceable Obligations
	 	 	47	 
	 	 	
4.5
	 	No Legal Bar
	 	 	47	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	
4.6
	 	No Material Litigation
	 	 	47	 
	 	 	
4.7
	 	No Default
	 	 	47	 
	 	 	
4.8
	 	Ownership of Property; Liens
	 	 	48	 
	 	 	
4.9
	 	Intellectual Property
	 	 	48	 
	 	 	
4.10
	 	Taxes
	 	 	48	 
	 	 	
4.11
	 	Federal Regulations
	 	 	48	 
	 	 	
4.12
	 	Labor Matters
	 	 	48	 
	 	 	
4.13
	 	ERISA
	 	 	48	 
	 	 	
4.14
	 	Investment Company Act; Other Regulations
	 	 	49	 
	 	 	
4.15
	 	Subsidiaries
	 	 	49	 
	 	 	
4.16
	 	Use of Proceeds
	 	 	49	 
	 	 	
4.17
	 	Environmental Matters
	 	 	49	 
	 	 	
4.18
	 	Accuracy of Information, etc.
	 	 	50	 
	 	 	
4.19
	 	Security Documents
	 	 	51	 
	 	 	
4.20
	 	Solvency
	 	 	51	 
	 	 	
4.21
	 	Senior Indebtedness
	 	 	51	 
	 	 	
4.22
	 	Regulation H
	 	 	52	 
	SECTION 5. CONDITIONS PRECEDENT	 	 	52	 
	 	 	
5.1
	 	Conditions to Initial Extension of Credit
	 	 	52	 
	 	 	
5.2
	 	Conditions to Each Extension of Credit
	 	 	54	 
	SECTION 6. AFFIRMATIVE COVENANTS	 	 	55	 
	 	 	
6.1
	 	Financial Statements
	 	 	55	 
	 	 	
6.2
	 	Certificates; Other Information
	 	 	56	 
	 	 	
6.3
	 	Payment of Taxes,
etc.
	 	 	57	 
	 	 	
6.4
	 	Conduct of Business and Maintenance of Existence, etc.
	 	 	57	 
	 	 	
6.5
	 	Maintenance of Property; Insurance
	 	 	57	 
	 	 	
6.6
	 	Inspection of Property; Books and Records; Discussions
	 	 	58	 
	 	 	
6.7
	 	Notices
	 	 	58	 
	 	 	
6.8
	 	Environmental Laws
	 	 	59	 
	 	 	
6.9
	 	Interest Rate Protection
	 	 	59	 
	 	 	
6.10
	 	Additional Collateral, etc.
	 	 	59	 
	 	 	
6.11
	 	Further Assurances
	 	 	61	 
	 	 	
6.12
	 	Post-Closing Obligations
	 	 	61	 
	 	 	
6.13
	 	Collateral Covenants
	 	 	62	 
	SECTION 7. NEGATIVE COVENANTS	 	 	65	 
	 	 	
7.1
	 	Financial Condition Covenants
	 	 	65	 
	 	 	
7.2
	 	Limitation on Indebtedness
	 	 	66	 
	 	 	
7.3
	 	Limitation on Liens
	 	 	68	 
	 	 	
7.4
	 	Limitation on Fundamental Changes
	 	 	69	 
	 	 	
7.5
	 	Limitation on Disposition of Property
	 	 	69	 
	 	 	
7.6
	 	Limitation on Restricted Payments
	 	 	71	 
	 	 	
7.7
	 	Limitation on Capital Expenditures
	 	 	71	 
	 	 	
7.8
	 	Limitation on Investments
	 	 	72	 
	 	 	
7.9
	 	Limitation on Optional Payments and Modifications of Debt Instruments, etc.
	 	 	74	 
	 	 	
7.10
	 	Limitation on Transactions with Affiliates
	 	 	74	 
	 	 	
7.11
	 	Limitation on Sales and Leasebacks
	 	 	74	 

ii

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	
7.12
	 	Limitation on Changes in Fiscal Periods
	 	 	75	 
	 	 	
7.13
	 	Limitation on Negative Pledge Clauses
	 	 	75	 
	 	 	
7.14
	 	Limitation on Restrictions on Subsidiary Distributions
	 	 	75	 
	 	 	
7.15
	 	Limitation on Lines of Business
	 	 	76	 
	 	 	
7.16
	 	Limitation on Hedge Agreements
	 	 	76	 
	 	 	
7.17
	 	Limitation on Activities of Holdings
	 	 	76	 
	SECTION 8. EVENTS OF DEFAULT	 	 	77	 
	SECTION 9. THE AGENTS	 	 	80	 
	 	 	
9.1
	 	Appointment
	 	 	80	 
	 	 	
9.2
	 	Delegation of Duties
	 	 	80	 
	 	 	
9.3
	 	Exculpatory Provisions
	 	 	80	 
	 	 	
9.4
	 	Reliance by Agents
	 	 	80	 
	 	 	
9.5
	 	Notice of Default
	 	 	81	 
	 	 	
9.6
	 	Non-Reliance on Agents and Other Lenders
	 	 	81	 
	 	 	
9.7
	 	Indemnification
	 	 	82	 
	 	 	
9.8
	 	Agent in Its Individual Capacity
	 	 	82	 
	 	 	
9.9
	 	Successor Administrative Agent
	 	 	82	 
	 	 	
9.10
	 	Authorization to Release Liens and Guarantees
	 	 	83	 
	 	 	
9.11
	 	The Joint Lead Arrangers; the Syndication Agent; the Co-Documentation Agents
	 	 	83	 
	SECTION 10. MISCELLANEOUS	 	 	83	 
	 	 	
10.1
	 	Amendments and Waivers
	 	 	83	 
	 	 	
10.2
	 	Notices
	 	 	85	 
	 	 	
10.3
	 	No Waiver; Cumulative Remedies
	 	 	86	 
	 	 	
10.4
	 	Survival of Representations and Warranties
	 	 	86	 
	 	 	
10.5
	 	Payment of Expenses
	 	 	87	 
	 	 	
10.6
	 	Successors and Assigns; Participations and Assignments
	 	 	88	 
	 	 	
10.7
	 	Adjustments; Set-off
	 	 	91	 
	 	 	
10.8
	 	Counterparts
	 	 	92	 
	 	 	
10.9
	 	Severability
	 	 	92	 
	 	 	
10.10
	 	Integration
	 	 	92	 
	 	 	
10.11
	 	GOVERNING LAW
	 	 	92	 
	 	 	
10.12
	 	Submission To Jurisdiction; Waivers
	 	 	92	 
	 	 	
10.13
	 	Acknowledgments
	 	 	93	 
	 	 	
10.14
	 	Confidentiality
	 	 	93	 
	 	 	
10.15
	 	Release of Collateral and Guarantee Obligations
	 	 	94	 
	 	 	
10.16
	 	Accounting Changes
	 	 	94	 
	 	 	
10.17
	 	Delivery of Lender Addenda
	 	 	95	 
	 	 	
10.18
	 	WAIVERS OF JURY TRIAL
	 	 	95	 

iii

 

	 	 	 
	ANNEXES:	 	 
	A	 	
Pricing Grid
	 	 	 
	SCHEDULES:	 	 
	 	 	 
	1.1	 	
Mortgaged Property
	4.4	 	
Consents, Authorizations, Filings and Notices
	4.6	 	
Certain Litigation
	4.15	 	
Subsidiaries
	4.19(a)-1	 	
UCC Filing Jurisdictions
	4.19(a)-2	 	
UCC Financing Statements to Remain on File
	4.19(a)-3	 	
UCC Financing Statements to be Terminated
	4.19(b)	 	
Mortgage Filing Jurisdictions
	7.2(d)	 	
Existing Indebtedness
	7.3(f)	 	
Existing Liens
	7.8	 	
Existing Investments
	7.13	 	
Existing Restrictions on Liens
	 	 	 
	EXHIBITS:	 	 
	 	 	 
	A	 	
Form of Guarantee and Collateral Agreement
	B	 	
Form of Compliance Certificate
	C	 	
Form of Closing Certificate
	D	 	
Form of Mortgage
	E	 	
Form of Assignment and Acceptance
	F	 	
Form of Legal Opinion of Latham & Watkins
	G-1	 	
Form of Term Note
	G-2	 	
Form of Revolving Credit Note
	G-3	 	
Form of Swing Line Note
	H	 	
Form of Prepayment Option Notice
	I	 	
Form of Exemption Certificate
	J	 	
Form of Lender Addendum
	K	 	
Form of Borrowing Notice

 

 

     CREDIT AGREEMENT, dated as of June 20, 2003, among UNITED COMPONENTS, INC.
(f/k/a United Aftermarket, Inc.), a Delaware corporation (the “Borrower), the
several banks and other financial institutions or entities from time to time
parties to this Agreement (the “Lenders”), LEHMAN BROTHERS INC. and J.P. MORGAN
SECURITIES INC., as joint advisors, joint lead arrangers and joint bookrunners
(in such capacity, the “Joint Lead Arrangers”), JPMORGAN CHASE BANK, as
syndication agent (in such capacity, the “Syndication Agent”), ABN AMRO BANK
N.V., CREDIT LYONNAIS, NEW YORK BRANCH, FLEET NATIONAL BANK and GENERAL
ELECTRIC CAPITAL CORPORATION, as co-documentation agents (in such capacity, the
“Co-Documentation Agents”), and LEHMAN COMMERCIAL PAPER INC., as administrative
agent (in such capacity, the “Administrative Agent”).

W I T N E S S E T H :

     WHEREAS, pursuant to the Purchase Agreement, dated as of April 25, 2003,
among UIS, Inc. (“UIS”), UIS Industries, Inc. (“UIS Industries”; and together
with UIS, the “Sellers”) and the Borrower (the “Acquisition Agreement”), the
Borrower has agreed to acquire from the Sellers directly or through
Subsidiaries (the “Acquisition”) the motor vehicle replacement parts business
of the Sellers, consisting of all of the issued and outstanding common stock or
other equity interests of Champion Laboratories, Inc., Wells Manufacturing
Corp., Neapco Inc., Pioneer, Inc., Wells Manufacturing Canada Limited, UIS
Industries, Ltd. (the owner of 100% of the capital stock of Flexible Lamps
Ltd.), Mid-South Mfg. Inc., Airtex Products, S.A., Talleres Mecanicos
Montserrat S.A. de C.V., Brummer Seal de Mexico, S.A. de C.V., Brummer Mexicana
en Puebla, S.A. de C.V., Automotive Accessories Co. Ltd., Airtex Products, LLC
and Airtex Products, Inc. (collectively, the “Acquired Business”);

     WHEREAS, the Borrower has requested the Lenders to make available the
credit facilities described in this Agreement in order to finance a portion of
the purchase price of the Acquisition and the payment of certain fees and
expenses related to the Acquisition, and to provide for the ongoing working
capital and general corporate needs of the Borrower and its Subsidiaries;

     WHEREAS, the Lenders are willing to make such credit facilities available
upon and subject to the terms and conditions hereinafter set forth;

     NOW, THEREFORE, in consideration of the premises and the agreements
hereinafter set forth, the parties hereto hereby agree as follows:

SECTION 1. DEFINITIONS

     1.1 Defined Terms. As used in this Agreement, the terms listed in this
Section 1.1 shall have the respective meanings set forth in this Section 1.1.

     “Acquired Business”: as defined in the recitals hereto.

     “Acquisition”: as defined in the recitals hereto.

     “Acquisition Agreement”: as defined in the recitals hereto.

 

 

 2

     “Adjustment Date”: as defined in the Pricing Grid.

     “Administrative Agent”: as defined in the preamble hereto.

     “Affiliate”: as to any Person, any other Person that, directly or
indirectly, is in control of, 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 (a) vote 20% or more of the
securities having ordinary voting power for the election of directors (or
persons performing similar functions) of such Person or (b) direct or cause the
direction of the management and policies of such Person, whether by contract or
otherwise.

     “Agents”: the collective reference to the Syndication Agent, the
Co-Documentation Agents and the Administrative Agent.

     “Aggregate Exposure”: with respect to any Lender at any time, an amount
equal to (a) until the Closing Date, the aggregate amount of such Lender’s
Commitments at such time and (b) thereafter, the sum of (i) the aggregate then
unpaid principal amount of such Lender’s Term Loans and (ii) the amount of such
Lender’s Revolving Credit Commitment then in effect or, if the Revolving Credit
Commitments have been terminated, the amount of such Lender’s Revolving
Extensions of Credit then outstanding.

     “Aggregate Exposure Percentage”: with respect to any Lender at any time,
the ratio (expressed as a percentage) of such Lender’s Aggregate Exposure at
such time to the sum of the Aggregate Exposures of all Lenders at such time.

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

     “Applicable Margin”: for each Type of Loan under each Facility, the rate
per annum set forth opposite such Facility under the relevant column heading
below:

	 	 	 	 	 	 	 	 	 
	 	 	Base Rate	 	Eurodollar
	 	 	Loans	 	Loans
	 	 	
	 	

	Revolving Credit Facility
(including Swing Line Loans)
	 	 	2.25	%	 	 	3.25	%
	Tranche A Term Loan Facility
	 	 	2.25	%	 	 	3.25	%
	Tranche B Term Loan Facility
	 	 	2.25	%	 	 	3.25	%

provided, that on and after the first Adjustment Date occurring after the
completion of two full fiscal quarters of the Borrower after the Closing Date,
the Applicable Margins with respect to Revolving Credit Loans, Swing Line Loans
and Tranche A Term Loans will be determined pursuant to the Pricing Grid.

     “Application”: an application, in such form as the relevant Issuing
Lender may specify from time to time, requesting such Issuing Lender to issue a
Letter of Credit.

 

 

 3

     “Asset Sale”: any Disposition of Property or series of related
Dispositions of Property which yields Net Cash Proceeds to the Borrower or any
of its Subsidiaries in excess of $3,500,000, excluding (x) any such Disposition
permitted by clause (a), (b), (c), (d), (g), (h), (i), (j), (k) (except to the
extent the aggregate Net Cash Proceeds of such Disposition and all other
Dispositions made pursuant to such clause (k) since the date of this Agreement
exceed $20,000,000), (l) or (m) of Section 7.5 and (y) any Recovery Event.

     “Assignee”: as defined in Section 10.6(c).

     “Assignment and Acceptance”: an Assignment and Acceptance substantially
in the form of Exhibit E.

     “Assignor”: as defined in Section 10.6(c).

     “Available Revolving Credit Commitment”: with respect to any Revolving
Credit Lender at any time, an amount equal to the excess, if any, of (a) such
Lender’s Revolving Credit Commitment then in effect over
(b) such Lender’s
Revolving Extensions of Credit then outstanding; provided, that in calculating
any Lender’s Revolving Extensions of Credit for the purpose of determining such
Lender’s Available Revolving Credit Commitment pursuant to Section 2.9(a), the
aggregate principal amount of Swing Line Loans then outstanding shall be deemed
to be zero.

     “Base Rate”: for any day, a rate per annum (rounded upwards, if
necessary, to the next 1/100 of 1%) equal to the greater of (a) the Prime Rate
in effect on such day and (b) the Federal Funds Effective Rate in effect on
such day plus -1/2 of 1%. For purposes hereof: “Prime Rate” shall mean the
prime lending rate as set forth on the British Banking Association Telerate
Page 5 (or such other comparable page as may, in the reasonable opinion of the
Administrative Agent, replace such page for the purpose of displaying such
rate), as in effect from time to time. Any change in the Base Rate due to a
change in the Prime Rate or the Federal Funds Effective Rate shall be effective
as of the opening of business on the effective day of such change in the Prime
Rate or the Federal Funds Effective Rate, respectively.

     “Base Rate Loans”: Loans for which the applicable rate of interest is
based upon the Base Rate.

     “Benefitted Lender”: as defined in Section 10.7.

     “Board”: the Board of Governors of the Federal Reserve System of the
United States (or any successor).

     “Borrower”: as defined in the preamble hereto.

     “Borrowing Date”: any Business Day specified by the Borrower as a date on
which the Borrower requests the relevant Lenders to make Loans hereunder.

     “Borrowing Notice”: with respect to any request for borrowing of Loans
hereunder, a notice from the Borrower, substantially in the form of, and
containing the information prescribed by, Exhibit K, delivered to the
Administrative Agent.

 

 

 4

     “Business Day”: (a) for all purposes other than as covered by clause (b)
below, a day other than a Saturday, Sunday or other day on which commercial
banks in New York City are authorized or required by law to close and (b) with
respect to all notices and determinations in connection with, and payments of
principal and interest on, Eurodollar Loans, any day which is a Business Day
described in clause (a) and which is also a day for trading by and between
banks in Dollar deposits in the interbank eurodollar market.

     “Capital Expenditures”: for any period, with respect to any Person, the
aggregate of all cash expenditures by such Person for the acquisition or
leasing (pursuant to a capital lease, but excluding any amount representing
capitalized interest) of fixed or capital assets or additions to equipment
(including replacements, capitalized repairs and improvements during such
period) which are required to be capitalized under GAAP on a balance sheet of
such Person;  provided that Capital Expenditures shall in any event (a) exclude
the purchase price in connection with the acquisition of any Person or all or
substantially all of the assets, or a division, of any Person, and (b) exclude
amounts expended with the proceeds of any Recovery Event.

     “Capital Lease”: any lease of (or other arrangement conveying the right
to use) real or personal property, or a combination thereof, which obligations
are required to be classified and accounted for as capital leases on a balance
sheet of such Person under GAAP.

     “Capital Lease Obligations”: with respect to any Person, the obligations
of such Person to pay rent or other amounts under any Capital Lease; and, for
the purposes of this Agreement, the amount of such obligations at any time
shall be the capitalized amount thereof at such time determined in accordance
with GAAP.

     “Capital Stock”: any and all shares, interests, participations or other
equivalents (however designated) of capital stock of a corporation, any and all
equivalent ownership interests in a Person (other than a corporation) and any
and all warrants, rights or options to purchase any of the foregoing.

     “Cash Equivalents”: (a) marketable direct obligations issued by, 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 one year from the date of acquisition; (b)
certificates of deposit, time deposits, eurodollar time deposits or overnight
bank deposits having maturities of one year or less from the date of
acquisition issued by any Lender or by any commercial bank organized under the
laws of the United States of America or any state thereof having combined
capital and surplus of not less than $500,000,000; (c) commercial paper of an
issuer rated at least A-2 by Standard & Poor’s Ratings Services (“S&P”) or P-2
by Moody’s Investors Service, Inc. (“Moody’s”), or carrying an equivalent
rating by a nationally recognized rating agency, and maturing within one year
from the date of acquisition; (d) repurchase obligations of any Lender or of
any commercial bank satisfying the requirements of clause (b) of this
definition, having a term of not more than 30 days with respect to securities
issued or fully guaranteed or insured by the United States
government; (e) securities with maturities of one year or less from the
date of acquisition issued or fully guaranteed by any state, commonwealth or
territory of the United States, by any political subdivision or taxing
authority of any such state, commonwealth or territory or by any foreign
government, the securities of which state, commonwealth, territory, political
subdivision, taxing 

 

 

 5

authority or foreign government (as the case may be) are
rated at least A by S&P or A by Moody’s; (f) securities with maturities of six
months or less from the date of acquisition backed by standby letters of credit
issued by any Lender or any commercial bank satisfying the requirements of
clause (b) of this definition; and (g) shares of money market mutual or similar
funds which invest exclusively in assets satisfying the requirements of clauses
(a) through (f) of this definition.

     “Champion Capital Program": projects associated with increasing production
capacity and lowering labor, material, fringe and overhead costs at Champion
Laboratories.

     “Change of Control”: the occurrence of any of the following events: (a)
the Permitted Investors shall cease to own directly or indirectly (i) prior to
a Qualified Public Offering, at least 51% of the common voting stock of the
Borrower and (ii) on and after a Qualified Public Offering, at least 30% of the
common voting stock of Borrower or such higher percentage that exceeds the
highest percentage of common voting stock owned by any other “person” or
“group” (as such terms are used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended (the “Exchange Act”)); or (b) a Specified
Change of Control.

     “Closing Date”: the date on which the conditions precedent set forth in
Section 5.1 shall have been satisfied and the initial Loans hereunder shall
have been funded, which date shall be not later than October 31, 2003.

     “Code”: the Internal Revenue Code of 1986, as amended from time to time.

     “Co-Documentation Agents”: as defined in the preamble hereto.

     “Collateral”: all Property of the Loan Parties, now owned or hereafter
acquired, upon which a Lien is purported to be created by any Security
Document.

     “Commitment”: with respect to any Lender, each of the Tranche A Term Loan
Commitment, the Tranche B Term Loan Commitment and the Revolving Credit
Commitment of such Lender.

     “Commitment Fee Rate”: 1/2 of 1% per annum; provided, that on and after
the first Adjustment Date occurring after the completion of two full fiscal
quarters of the Borrower after the Closing Date, the Commitment Fee Rate will
be determined pursuant to the Pricing Grid.

     “Commonly Controlled Entity”: an entity, whether or not incorporated,
that is under common control with the Borrower within the meaning of Section
4001 of ERISA or is part of a group that includes the Borrower and that is
treated as a single employer under Section 414 of the Code.

     “Compliance Certificate”: a certificate duly executed by a Responsible
Officer, substantially in the form of Exhibit B.

 

 

 6

     “Consolidated Current Assets”: of any Person at any date, all amounts
(other than cash and Cash Equivalents) that would, in conformity with GAAP, be
set forth opposite the caption “ total current assets” (or any like caption) on
a consolidated balance sheet of such Person and its Subsidiaries at such date.

     “Consolidated Current Liabilities”: of any Person at any date, all
amounts that would, in conformity with GAAP, be set forth opposite the caption
“total current liabilities” (or any like caption) on a consolidated balance
sheet of such Person and its Subsidiaries at such date, but excluding, with
respect to the Borrower, (a) the current portion of any Funded Debt of the
Borrower and its Subsidiaries and (b), without duplication, all Indebtedness
consisting of Revolving Credit Loans or Swing Line Loans, to the extent
otherwise included therein.

     “Consolidated EBITDA”: of any Person for any period, Consolidated Net
Income of such Person and its Subsidiaries for such period plus, without
duplication and to the extent reflected as a charge in the statement of such
Consolidated Net Income for such period, the sum of (a) expenses for taxes
based on income, (b) total interest expense of such Person and its
Subsidiaries, amortization or writeoff of debt discount and debt issuance costs
and commissions, discounts and other fees and charges associated with letters
of credit, bankers’ acceptance financing or Indebtedness, (c) depreciation and
amortization expense, (d) amortization of intangibles (including, but not
limited to, goodwill) and organization costs, (e) any extraordinary, unusual or
non-recurring expenses or losses (including, whether or not otherwise
includable as a separate item in the statement of such Consolidated Net Income
for such period, losses on sales of assets outside of the ordinary course of
business), (f) any other non-cash charges, (g) payments under the Management
Agreement, (h) fees and expenses incurred in connection with the closing of the
Acquisition, the Senior Subordinated Notes and the Loan Documents, and minus,
to the extent included in the statement of such Consolidated Net Income for
such period, the sum of (a) interest income (except to the extent deducted in
determining Consolidated Interest Expense), (b) any extraordinary, unusual or
non-recurring income or gains (including, whether or not otherwise includable
as a separate item in the statement of such Consolidated Net Income for such
period, gains on the sales of assets outside of the ordinary course of
business) and (c) any other non-cash income, all as determined on a
consolidated basis. For purposes of determining compliance with the financial
covenants set forth in Section 7.1, any equity contribution made to the
Borrower by Holdings after the Closing Date and prior to the day that is 10
days after the day on which financial statements are required to be delivered
for a fiscal quarter will, at the request of the Borrower, be deemed to
increase, dollar for dollar, Consolidated EBITDA for such fiscal quarter for
the purposes of determining compliance with such financial covenants at the end
of such fiscal quarter and applicable subsequent periods (any such equity
contribution so included in the calculation of Consolidated EBITDA, a
“Specified Equity Contribution”), provided that (a) Specified Equity
Contributions may be made in no more than two fiscal quarters (which may be
consecutive) in an amount not to exceed $10,000,000 for either such fiscal
quarter and (b) the amount of any Specified Equity Contribution shall be no
greater than the amount required to cause the Borrower to be in compliance with
the financial covenants set forth in Section 7.1.

     “Consolidated Interest Coverage Ratio”: for any period, the ratio of (a)
Consolidated EBITDA of the Borrower and its Subsidiaries for such period to (b)
Consolidated Interest Expense of the Borrower and its Subsidiaries for such
period.

 

 

 7

     “Consolidated Interest Expense”: of any Person for any period, the
difference of (a) total interest expense due and payable in cash in such period
(including capitalized interest and interest attributable to Capital Lease
Obligations) or (without duplication), with respect to the Senior Subordinated
Notes, total interest expense accrued during such period, of such Person and
its Subsidiaries for such period with respect to all outstanding Indebtedness
of such Person and its Subsidiaries (including, without limitation, all
commissions, discounts and other fees and charges owed by such Person with
respect to letters of credit and bankers’ acceptance financing and, without
duplication, net costs of such Person due and payable in cash in such period
under Hedge Agreements in respect of interest rates to the extent such net
costs are allocable to such period in accordance with GAAP), but excluding,
however, amortization of deferred financing costs to the extent otherwise
included in Consolidated Interest Expense, minus (b) interest income received
by such Person in cash for such period (including, without limitation, net cash
income under Hedge Agreements in respect of interest rates to the extent such
net income is allocable to such period in accordance with GAAP).

     “Consolidated Leverage Ratio”: as at the last day of any period of four
consecutive fiscal quarters of the Borrower, the ratio of (a) Consolidated
Total Debt on such day to (b) Consolidated EBITDA of the Borrower and its
Subsidiaries for such period; provided that for purposes of calculating
Consolidated EBITDA of the Borrower and its Subsidiaries for any period, (i)
notwithstanding clause (a) of the definition of “Consolidated Net Income”, the
Consolidated EBITDA of any Person acquired by the Borrower or its Subsidiaries
during such period shall be included on a pro forma basis for such period
(assuming the consummation of such acquisition and the incurrence or assumption
of any Indebtedness in connection therewith occurred on the first day of such
period) and (ii) the Consolidated EBITDA of any Person Disposed of by the
Borrower or its Subsidiaries during such period shall be excluded for such
period (assuming the consummation of such Disposition and the repayment of any
Indebtedness in connection therewith occurred on the first day of such period).

     “Consolidated Net Income”: of any Person for any period, the consolidated
net income (or loss) of such Person and its Subsidiaries for such period,
determined on a consolidated basis in accordance with GAAP; provided, that in
calculating Consolidated Net Income of the Borrower and its consolidated
Subsidiaries for any period, there shall be excluded (a) the income (or
deficit) of any Person accrued prior to the date it becomes a Subsidiary of the
Borrower or is merged into or consolidated with the Borrower or any of its
Subsidiaries, (b) the income (or deficit) of any Person (other than a
Subsidiary of the Borrower) in which the Borrower or any of its Subsidiaries
has an ownership interest, except to the extent that any such income is
actually received by the Borrower or such Subsidiary in the form of dividends
or similar distributions and (c) the undistributed earnings of any Subsidiary
of the Borrower other than any Subsidiary Guarantor to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any Contractual Obligation (other
than under any Loan Document) or Requirement of Law applicable to such
Subsidiary or any Organizational Document of such Subsidiary.

     “Consolidated Total Debt”: at any date, the aggregate principal amount of
all Funded Debt of the Borrower and its Subsidiaries at such date, determined
on a consolidated basis in accordance with GAAP.

 

 

 8

     “Consolidated Working Capital”: at any date, the difference of (a)
Consolidated Current Assets of the Borrower on such date less (b) Consolidated
Current Liabilities of the Borrower on such date.

     “Contractual Obligation”: as to any Person, any provision of any security
issued by such Person or of any agreement, instrument or other undertaking to
which such Person is a party or by which it or any of its Property is bound.

     “Control Investment Affiliate”: as to any Person, any other Person that
(i) (a) directly or indirectly, is in control of, is controlled by, or is under
common control with, such Person and (b) is organized by such Person primarily
for the purpose of making or managing equity or debt investments in any other
Person or (ii) is managed or advised by such Person or such Person’s
Subsidiaries. For purposes of this definition, “control” of a Person means the
power, directly or indirectly, to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.

     “Default”: any of the events specified in Section 8, whether or not any
requirement for the giving of notice, the lapse of time, or both, has been
satisfied.

     “Derivatives Counterparty”: as defined in Section 7.6.

     “Disposition”: with respect to any Property, any sale, sale and
leaseback, assignment, conveyance, transfer or other disposition thereof; and
the terms “Dispose” and “Disposed of” shall have correlative meanings.

     “Dollars” and “$”: lawful currency of the United States of America.

     “Domestic Subsidiary”: any Subsidiary of the Borrower that (i) is
organized under the laws of any jurisdiction within the United States of
America and (ii) is not an Excluded Subsidiary.

     “ECF Percentage”: with respect to any fiscal year of the Borrower, 50%;
provided, that, with respect to any fiscal year of the Borrower, the ECF
Percentage shall be 25% if the Consolidated Leverage Ratio as of the last day
of such fiscal year is not greater than 3.25 to 1.0; provided, further, that,
with respect to any fiscal year of the Borrower, the ECF Percentage shall be 0%
if the Consolidated Leverage Ratio as of the last day of such fiscal year is
not greater than 2.50 to 1.0.

     “Environmental Laws”: any and all applicable laws, rules, orders,
regulations, statutes, ordinances, codes, decrees, or other legally enforceable
requirements (including, without limitation, common law) of any international
authority, foreign government, the United States, or any state, local,
municipal or other governmental authority, regulating, relating to or imposing
liability or standards of conduct concerning protection of the environment or
of human
health, or employee health and safety (in each case to the extent relating
to exposure to Materials of Environmental Concern), as has been, is now, or may
at any time hereafter be, in effect.

     “Environmental Permits”: any and all permits, licenses, approvals,
registrations, exemptions and other authorizations required under any
Environmental Law.

 

 

 9

     “ERISA”: the Employee Retirement Income Security Act of 1974, as amended
from time to time.

     “Eurocurrency Reserve Requirements”: for any day, the aggregate (without
duplication) of the maximum rates (expressed as a decimal fraction) of reserve
requirements in effect on such day (including, without limitation, basic,
supplemental, marginal and emergency reserves) under any regulations of the
Board or other Governmental Authority having jurisdiction with respect thereto
dealing with reserve requirements prescribed for eurocurrency funding
(currently referred to as “Eurocurrency Liabilities” in Regulation D of the
Board) maintained by a member bank of the Federal Reserve System.

     “Eurodollar Base Rate”: with respect to each day during each Interest
Period, the rate per annum determined on the basis of the rate for deposits in
Dollars for a period equal to such Interest Period commencing on the first day
of such Interest Period appearing on Page 3750 of the Telerate screen as of
11:00 A.M., London time, two Business Days prior to the beginning of such
Interest Period. In the event that such rate does not appear on Page 3750 of
the Telerate screen (or otherwise on such screen), the “Eurodollar Base Rate”
for purposes of this definition shall be determined by reference to such other
comparable publicly available service for displaying eurodollar rates as may be
selected by the Administrative Agent.

     “Eurodollar Loans”: Loans for which the applicable rate of interest is
based upon the Eurodollar Rate.

     “Eurodollar Rate”: with respect to each day during each Interest Period,
a rate per annum determined for such day in accordance with the following
formula (rounded upward to the nearest 1/100th of 1%):

Eurodollar Base Rate

1.00 - Eurocurrency Reserve Requirements

     “Eurodollar Tranche”: the collective reference to Eurodollar Loans the
then current Interest Periods with respect to all of which begin on the same
date and end on the same later date (whether or not such Loans shall originally
have been made on the same day).

     “Event of Default”: any of the events specified in Section 8, provided
that any requirement for the giving of notice, the lapse of time, or both, has
been satisfied.

     “Excess Cash Flow”: for any fiscal year of the Borrower, the difference,
if any, of (a) the sum, without duplication, of (i) Consolidated Net Income for
such fiscal year, (ii) the amount of all non-cash charges (including
depreciation and amortization) deducted in arriving at such Consolidated Net
Income, (iii) the amount of the decrease, if any, in Consolidated Working
Capital for such fiscal year, (iv) the aggregate net amount of non-cash loss on
the Disposition of
Property by the Borrower and its Subsidiaries during such fiscal year
(other than sales of inventory in the ordinary course of business), to the
extent deducted in arriving at such Consolidated Net Income and (v) the net
increase during such fiscal year (if any) in deferred tax accounts of the
Borrower minus (b) the sum, without duplication, of (i) the amount of all
non-cash credits included in arriving at such Consolidated Net Income, (ii) the
aggregate amount 

 

 

 10

actually paid by the Borrower and its Subsidiaries in cash
during such fiscal year on account of Capital Expenditures (minus the principal
amount of Indebtedness incurred in connection with such expenditures and minus
the amount of any such expenditures financed with the proceeds of any
Reinvestment Deferred Amount), (iii) the aggregate amount of all prepayments of
Revolving Credit Loans and Swing Line Loans during such fiscal year to the
extent accompanying permanent optional reductions of the Revolving Credit
Commitments and all optional prepayments of the Term Loans during such fiscal
year, (iv) the aggregate amount of all regularly scheduled principal payments
of Funded Debt (including, without limitation, the Term Loans) of the Borrower
and its Subsidiaries made during such fiscal year (other than in respect of any
revolving credit facility to the extent there is not an equivalent permanent
reduction in commitments thereunder), (v) the amount of the increase, if any,
in Consolidated Working Capital for such fiscal year, (vi) the aggregate net
amount of non-cash gain on the Disposition of Property by the Borrower and its
Subsidiaries during such fiscal year (other than sales of inventory in the
ordinary course of business), to the extent included in arriving at such
Consolidated Net Income, (vii) the net decrease during such fiscal year (if
any) in deferred tax accounts of the Borrower, (viii) fees and expenses
incurred in connection with the closing of the Acquisition, the Senior
Subordinated Notes or the Loan Documents, (ix) purchase price adjustments paid
in connection with the Acquisition or any Permitted Acquisition, (x) the net
amount of Investments permitted to be made pursuant to Section 7.8, and (xi)
the aggregate amount of cash payments made during such period in respect of
non-cash charges.

     “Excess Cash Flow Application Date”: as defined in Section 2.12(c).

     “Excluded Subsidiaries”: (a) any Foreign Subsidiary in respect of which
either (i) the pledge of all of the Capital Stock of such Subsidiary as
Collateral or (ii) the guaranteeing by such Subsidiary of the Obligations,
would, in the good faith judgment of the Borrower (as of the Closing Date or,
if later, as of the date of acquisition thereof directly or indirectly by the
Borrower), result in adverse tax consequences to the Borrower and (b) any
Subsidiary of a Subsidiary described in the foregoing clause (a).

     “Facility”: each of (a) the Tranche A Term Loan Commitments and the
Tranche A Term Loans made thereunder (the “Tranche A Term Loan Facility”), (b)
the Tranche B Term Loan Commitments and the Tranche B Term Loans made
thereunder (the “Tranche B Term Loan Facility”) and (c) the Revolving Credit
Commitments and the extensions of credit made thereunder (the “Revolving Credit
Facility”).

     “Federal Funds Effective Rate”: for any day, 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 the day of such transactions received by the Administrative
Agent from three federal funds brokers of recognized standing selected by it.

     “Foreign Cash Equivalents”: (a) certificates of deposit or bankers
acceptances of, and bank deposits with, any bank organized under the laws of
any country that is a member of the European Economic Community, whose
short-term commercial paper rating from S&P is at least A-1 or the equivalent
thereof or from Moody’s is at least P-1 or the equivalent thereof, in

 

 

 11

each case
with maturities of not more than six months from the date of acquisition, (b)
commercial paper maturing not more than one year from the date of creation
thereof and, at the time of acquisition, having the highest rating obtainable
from either S&P’s or Moody’s and (c) shares of any money market mutual fund
that has its assets invested continuously in the types of investments referred
to in clauses (a) and (b) above.

     “Foreign Subsidiary”: any Subsidiary of the Borrower that is not a
Domestic Subsidiary.

     “FQ1”, “FQ2”, “FQ3”, and “FQ4”: when used with a numerical year
designation, means the first, second, third or fourth fiscal quarters,
respectively, of such fiscal year of the Borrower. (e.g., FQ4 2003 means the
fourth fiscal quarter of the Borrower’s 2003 fiscal year, which ends December
31, 2003).

     “Funded Debt”: with respect to any Person, all Indebtedness of such
Person of the types described in clauses (a), (c) and (e) of the definition of
“Indebtedness” in this Section.

     “Funding Office”: the office specified from time to time by the
Administrative Agent as its funding office by notice to the Borrower and the
Lenders.

     “GAAP”: generally accepted accounting principles in the United States of
America as in effect from time to time.

     “Governmental Authority”: any nation or government, any state or other
political subdivision thereof and any other public entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.

     “Guarantee and Collateral Agreement”: the Guarantee and Collateral
Agreement to be executed and delivered by the Borrower, Holdings and each
Subsidiary Guarantor, substantially in the form of Exhibit A, as the same may
be amended, supplemented or otherwise modified from time to time.

     “Guarantee Obligation”: as to any Person (the “guaranteeing person”), any
obligation of such Person guaranteeing or intended to guarantee any
Indebtedness, leases, dividends or other obligations (the “primary
obligations”) of any other third Person (the “primary obligor”) in any manner,
whether directly or indirectly, including, without limitation, any obligation
of the guaranteeing person, whether or not contingent, (i) to purchase any such
primary obligation or any Property constituting direct or indirect security
therefor, (ii) 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, (iii) to purchase Property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such
primary obligation or (iv) otherwise to assure or hold harmless the owner of
any such primary obligation against loss in respect thereof; provided, however,
that the term Guarantee Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Guarantee Obligation of any guaranteeing person shall be deemed
to be the lower of (a) an amount equal to the stated or determinable amount of
the primary obligation in respect of which such Guarantee Obligation is

 

 

 12

made
and (b) the maximum amount for which such guaranteeing person may be liable
pursuant to the terms of the instrument embodying such Guarantee Obligation,
unless such primary obligation and the maximum amount for which such
guaranteeing person may be liable are not stated or determinable, in which case
the amount of such Guarantee Obligation shall be such guaranteeing person’s
maximum reasonably anticipated liability in respect thereof as determined by
the Borrower in good faith.

     “Hedge Agreements”: all interest rate or currency swaps, caps or collar
agreements, foreign exchange agreements, commodity contracts or similar
arrangements entered into by the Borrower or its Subsidiaries providing for
protection against fluctuations in interest rates, currency exchange rates,
commodity prices or the exchange of nominal interest obligations, either
generally or under specific contingencies.

     “Holdings”: UCI Acquisition Holdings, Inc., a Delaware corporation.

     “Indebtedness”: of any Person at any date, without duplication, (a) all
indebtedness of such Person for borrowed money, (b) all obligations of such
Person for the deferred purchase price of Property or services (other than
trade payables, accrued expenses and deferred compensation arrangements
incurred in the ordinary course of such Person’s business and progress and
advance payments received in the ordinary course of such Person’s business)
which in accordance with GAAP would be shown on the liability side of the
balance sheet of such Person, (c) all obligations of such Person evidenced by
notes, bonds, debentures or other similar instruments, (d) all indebtedness
created or arising under any conditional sale or other title retention
agreement with respect to Property acquired by such Person (even though the
rights and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such Property), (e) all
Capital Lease Obligations of such Person, (f) all obligations of such Person,
contingent or otherwise, as an account party or applicant under acceptance,
letter of credit or similar facilities, (g) all Guarantee Obligations of such
Person in respect of obligations of the kind referred to in clauses (a) through
(f) above and (h) all obligations of the kind referred to in clauses (a)
through (g) above secured by (or for which the holder of such obligation has an
existing right, contingent or otherwise, to be secured by) any Lien on Property
(including, without limitation, accounts and contract rights) owned by such
Person, whether or not such Person has assumed or become liable for the payment
of such obligation (provided, that, if such Person has not assumed or otherwise
become liable in respect of such Indebtedness, such Indebtedness shall be
deemed to be in an amount equal to the lesser of the amount of such
Indebtedness and the fair market value of the Property that is encumbered by
such Lien as determined in good faith by such Person).

     “Indebtedness for Borrowed Money”: to the extent the following would be
reflected on a consolidated balance sheet of the Borrower and its Subsidiaries
prepared in accordance with GAAP, the principal amount of all Indebtedness of
the Borrower and its Subsidiaries with respect to (i) borrowed money, evidenced
by debt securities, debentures, acceptances, notes or other similar
instruments, (ii) obligations under Capital Leases, (iii)
reimbursement obligations for letters of credit and financial guarantees
(without duplication), (other than ordinary course of business contingent
reimbursement obligations) or (iv) the deferred purchase price of property or
services (except for accounts payable, deferred 

 

 

 13

compensation arrangements and
accrued expenses and receipt of progress and advance payments related to such
purchase price, in each case arising in the ordinary course of business).

     “Indemnified Liabilities”: as defined in Section 10.5.

     “Indemnitee”: as defined in Section 10.5.

     “Insolvency”: with respect to any Multiemployer Plan, the condition that
such Plan is insolvent within the meaning of Section 4245 of ERISA.

     “Insolvent”: pertaining to a condition of Insolvency.

     “Intellectual Property”: the collective reference to all rights,
priorities and privileges relating to intellectual property, whether arising
under United States, multinational or foreign laws or otherwise, including,
without limitation, copyrights, copyright licenses, patents, patent licenses,
trademarks, trademark licenses, technology, know-how and processes, and all
rights to sue at law or in equity for any infringement or other impairment
thereof, including the right to receive all proceeds and damages therefrom.

     “Interest Payment Date”: (a) as to any Base Rate Loan, the last day of
each March, June, September and December to occur while such Loan is
outstanding and the final maturity date of such Loan, (b) as to any Eurodollar
Loan having an Interest Period of three months or shorter, the last day of such
Interest Period, (c) as to any Eurodollar Loan having an Interest Period longer
than three months, each day that is three months, or a whole multiple thereof,
after the first day of such Interest Period and the last day of such Interest
Period and (d) as to any Loan (other than any Revolving Credit Loan that is a
Base Rate Loan and any Swing Line Loan), the date of any repayment or
prepayment made in respect thereof.

     “Interest Period”: as to any Eurodollar Loan, (a) initially, the period
commencing on the borrowing or conversion date, as the case may be, with
respect to such Eurodollar Loan and ending one, two, three or six or (if
available to all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower in its notice of borrowing or notice of
conversion, as the case may be, given with respect thereto; and (b) thereafter,
each period commencing on the last day of the next preceding Interest Period
applicable to such Eurodollar Loan and ending one, two, three or six or (if
available to all Lenders under the relevant Facility) nine or twelve months
thereafter, as selected by the Borrower by irrevocable notice to the
Administrative Agent not less than three Business Days prior to the last day of
the then current Interest Period with respect thereto; provided that, all of
the foregoing provisions relating to Interest Periods are subject to the
following:

	 	 	 
	 	 	
(1) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the next
succeeding Business Day unless the result of such extension would
be to carry such Interest Period into another calendar month in
which event such Interest Period shall end on the immediately
preceding Business Day;
	 	 	 
	 	 	
(2) any Interest Period that would otherwise extend beyond the
Revolving Credit Termination Date or beyond the date final payment
is due on the Tranche A Term

 

 

 14

	 	 	 
	 	 	
Loans or the Tranche B Term Loans, as
the case may be, shall end on the Revolving Credit Termination Date
or such due date, as applicable; and
	 	 	 
	 	 	
(3) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of the calendar month at
the end of such Interest Period;

and provided, further, that, during the period from the Closing Date until the
date that is 30 days after the Closing Date, the Borrower shall be permitted to
select Interest Periods of one week’s or two weeks’ duration.

     “Investments”: as defined in Section 7.8.

     “Issuing Lender”: Credit Lyonnais, New York Branch, in its capacity as
issuer of Letters of Credit hereunder, and any other Revolving Credit Lender
from time to time designated by the Borrower as an Issuing Lender with the
consent of such Revolving Credit Lender and the Administrative Agent (such
consent of the Administrative Agent not to be unreasonably withheld or
delayed).

     “Joint Lead Arrangers”: as defined in the preamble hereto.

     “Joint Venture”: any entity in which the Borrower or one or more
Subsidiaries hold equity interests representing at least 20%, but not more than
80%, of the total outstanding equity interests of such entity.

     “L/C Commitment”: $15,000,000.

     “L/C Fee Payment Date”: the last day of each March, June, September and
December (commencing with September 30, 2003) and the last day of the Revolving
Credit Commitment Period.

     “L/C Obligations”: at any time, an amount equal to the sum of (a) the
aggregate then undrawn and unexpired amount of the then outstanding Letters of
Credit and (b) the aggregate amount of drawings under Letters of Credit that
have not then been reimbursed by or on behalf of any Loan Party.

     “L/C Participants”: with respect to any Letter of Credit, the collective
reference to all the Revolving Credit Lenders other than the Issuing Lender
that issued such letter of Credit.

     “Lehman Entity”: any of Lehman Commercial Paper Inc. or any of its
affiliates (including Syndicated Loan Funding Trust).

     “Lender Addendum”: with respect to any initial Lender, a Lender Addendum,
substantially in the form of Exhibit J, to be executed and delivered by such
Lender on the Closing Date as provided in Section 10.17.

 

 

 15

     “Lenders”: as defined in the preamble hereto.

     “Letters of Credit”: as defined in Section 3.1(a).

     “Lien”: any mortgage, pledge, hypothecation, encumbrance, lien (statutory
or other), or other security agreement of any kind or nature whatsoever
(including, without limitation, any conditional sale or other title retention
agreement, and any lease in the nature thereof having substantially the same
effect as any of the foregoing).

     “Loan”: any loan made by any Lender pursuant to this Agreement.

     “Loan Documents”: this Agreement, the Security Documents, the
Applications and the Notes.

     “Loan Parties”: the Borrower, Holdings and each Subsidiary Guarantor.

     “Majority Facility Lenders”: with respect to any Facility, the holders of
more than 50% of the aggregate unpaid principal amount of the Term Loans or the
Total Revolving Extensions of Credit, as the case may be, outstanding under
such Facility (or, in the case of the Revolving Credit Facility, prior to any
termination of the Revolving Credit Commitments, the holders of more than 50%
of the Total Revolving Credit Commitments).

     “Majority Revolving Credit Facility Lenders”: the Majority Facility
Lenders in respect of the Revolving Credit Facility.

     “Management Agreement”: the management agreement of the Borrower with the
Sponsor and/or Affiliates of the Sponsor as in effect on the Closing Date or as
modified from time to time with the consent of the Administrative Agent.

     “Material Adverse Effect”: a material adverse effect on (a) on or prior
to the Closing Date, the Acquisition, (b) the business, assets, property or
condition (financial or otherwise) of the Borrower and its Subsidiaries taken
as a whole or (c) the validity or enforceability of this Agreement or any of
the other Loan Documents or the rights or remedies of the Agents or the Lenders
hereunder or thereunder.

     “Materials of Environmental Concern”: any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products,
polychlorinated biphenyls, urea-formaldehyde insulation, asbestos, pollutants,
contaminants, radioactivity, and any other substances or forces of any kind,
whether or not any such substance or force is defined as hazardous or toxic
under any Environmental Law, that is regulated pursuant to or could give rise
to liability under any Environmental Law.

     “Material Subsidiary”: any Subsidiary of Borrower that holds assets
having a fair market value (as reasonably and in good faith determined by the
Board of Directors of the Borrower) of $10,000,000 or more.

     “Maximum Permitted Foreign Investment Amount” shall mean $35,000,000.

 

 

 16

     “Maximum Permitted JV Investment Amount” shall mean $10,000,000.

     “Mortgaged Properties”: the real properties listed on Schedule 1.1, as to
which the Administrative Agent for the benefit of the Secured Parties shall be
granted a Lien pursuant to one or more Mortgages.

     “Mortgages”: each of the mortgages and deeds of trust made by any Loan
Party in favor of, or for the benefit of, the Administrative Agent for the
benefit of the Secured Parties, substantially in the form of Exhibit D (with
such changes thereto as shall be advisable under the law of the jurisdiction in
which such mortgage or deed of trust is to be recorded), as the same may be
amended, supplemented or otherwise modified from time to time.

     “Multiemployer Plan”: a Plan that is a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.

     “Net Cash Proceeds”: (a) in connection with any Asset Sale or any
Recovery Event, the proceeds thereof in the form of cash and Cash Equivalents
(including any such proceeds received by way of deferred payment of principal
pursuant to a note or installment receivable or purchase price adjustment
receivable or otherwise, but only as and when received) of such Asset Sale or
Recovery Event, net of attorneys’ fees, accountants’ fees, investment banking
fees, amounts required to be applied to the repayment of Indebtedness secured
by a Lien expressly permitted hereunder on any asset which is the subject of
such Asset Sale or Recovery Event (other than any Lien pursuant to a Security
Document) and other customary fees and expenses actually incurred in connection
therewith and net of taxes paid or reasonably estimated to be payable as a
result thereof (after taking into account any available tax credits or
deductions and any tax sharing arrangements) and (b) in connection with any
issuance or sale of equity securities or debt securities or instruments or the
incurrence of loans, the cash proceeds received from such issuance or
incurrence, net of attorneys’ fees, investment banking fees, accountants’ fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred in connection therewith.

     “Non-Excluded Taxes”: as defined in Section 2.20(a).

     “Non-U.S. Lender”: as defined in Section 2.20(d).

     “Note”: any promissory note evidencing any Loan.

     “Obligations”: the unpaid principal of and interest on (including,
without limitation, interest accruing after the maturity of the Loans and
Reimbursement Obligations and interest accruing after the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization
or like proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) the Loans,
the
Reimbursement Obligations and all other obligations and liabilities of the
Borrower to the Administrative Agent or to any Lender or any Qualified
Counterparty, whether direct or indirect, absolute or contingent, due or to
become due, or now existing or hereafter incurred, in each case which may arise
under, out of, or in connection with, this Agreement, any other Loan Document,
the Letters of Credit, any Specified Hedge Agreement or any other document
made, delivered or given in connection herewith or therewith, whether on
account of principal, interest,

 

 

 17

reimbursement obligations, fees, indemnities,
costs, expenses (including, without limitation, all fees, charges and
disbursements of counsel to the Administrative Agent or to any Lender that are
required to be paid by the Borrower pursuant hereto) or otherwise;
 provided,
that (i) obligations of the Borrower or any Subsidiary under any Specified
Hedge Agreement shall be secured and guaranteed pursuant to the Security
Documents only to the extent that, and for so long as, the other Obligations
are so secured and guaranteed and (ii) any release of Collateral or Guarantors
effected in the manner permitted by this Agreement shall not require the
consent of holders of obligations under Specified Hedge Agreements.

     “Organizational Document”: with respect to any Person, the Certificate of
Incorporation and By-Laws or other organizational or governing documents of
such Person.

     “Other Taxes”: any and all present or future stamp or documentary taxes
or any other excise or property taxes, charges or similar levies arising from
any payment made hereunder or from the execution, delivery or enforcement of,
or otherwise with respect to, this Agreement or any other Loan Document.

     “Participant”: as defined in Section 10.6(b).

     “Payment Office”: the office specified from time to time by the
Administrative Agent as its payment office by notice to the Borrower and the
Lenders.

     “PBGC”: the Pension Benefit Guaranty Corporation established pursuant to
Subtitle A of Title IV of ERISA (or any successor).

     “Permitted Acquisition”: any acquisition by the Borrower or any of its
Subsidiaries of all or substantially all of the Capital Stock of (or if the
remainder of such Capital Stock will be held by management, more than 80% of
the Capital Stock of), or all or substantially all of the assets constituting a
business unit of, any other Person so long as, with respect to any such
acquisition, the following conditions are satisfied:

		
	 	     (a) no Default or Event of Default shall have occurred and be
continuing or would result from such acquisition;
	 
	 	     (b) after giving effect to such acquisition, the Borrower shall be
in pro forma compliance with the financial covenants set forth in Section
7.1;
	 
	 	     (c) the target of such acquisition shall be in the same line of
business as the Borrower and its Subsidiaries or one reasonably related
thereto or a reasonable extension thereof;
	 
	 	     (d) in the case of the acquisition of the Common Stock of another
Person, such acquisition shall not be commenced by the Borrower or its
Subsidiaries unless the board of directors of the target of such
acquisition shall have consented thereto; and
	 
	 	     (e) concurrently with the consummation of such acquisition the
Borrower shall have complied with the requirements of Section 6.10 with
respect thereto.

 

 

 18

     “Permitted Investors”: the collective reference to the Sponsor, its
Control Investment Affiliates and members of management of Holdings, the
Borrower or any Subsidiary.

     “Permitted Foreign Investment Amount”: at the time of any determination
thereof, (without duplication) (a) the sum of (i) the aggregate fair market
value (as determined by the Borrower in good faith) of all assets Disposed of
by Loan Parties to Excluded Subsidiaries after the Closing Date (net of the
amount of any consideration received therefor), and (ii) the aggregate amount
of Investments made by Loan Parties in Excluded Subsidiaries after the Closing
Date (net of the amount of returns on such Investments, or if such Investment
is a loan or a guarantee, less any cash payments actually received in
reimbursement thereof); minus (b) (without duplication of any returns referred
to in clause (a)(ii) above) any dividend received by a Loan Party from an
Excluded Subsidiary.

     “Permitted JV Investment Amount”: at the time of any determination
thereof, (without duplication) (a) the sum of (i) the aggregate fair market
value (as determined by the Borrower in good faith) of all assets Disposed of
by the Borrower or any of its Subsidiaries to Joint Ventures after the Closing
Date (net of the amount of any consideration received therefor), and (ii) the
aggregate amount of Investments made by the Borrower or any of its Subsidiaries
in Joint Ventures after the Closing Date (net of the amount of returns on such
Investments, or if such Investment is a loan or a guarantee, less any cash
payments actually received in reimbursement thereof); minus (b) (without
duplication of any returns referred to in clause (a)(ii) above) any dividend
received by the Borrower or any of its Subsidiaries from a Joint Venture.

     “Permitted Seller Note”: a promissory note containing subordination and
other provisions reasonably acceptable to the Administrative Agent,
representing Indebtedness of the Borrower or any Subsidiary incurred in
connection with any acquisition permitted under Section 7.8(h) and payable to
the seller in connection therewith.

     “Person”: an individual, partnership, corporation, limited liability
company, business trust, joint stock company, trust, unincorporated
association, joint venture, Governmental Authority or other entity of whatever
nature.

     “Plan”: at a particular time, any employee benefit plan that is covered
by ERISA and in respect of which the Borrower or a Commonly Controlled Entity
is (or, if such plan were terminated at such time, would under Section 4069 of
ERISA be deemed to be) an “employer” as defined in Section 3(5) of ERISA.

     “Prepayment Date”: as defined in Section 2.18(d).

     “Prepayment Option Notice”: a notice from the Administrative Agent to
each Tranche B Term Loan Lender substantially in the form of Exhibit H.

     “Pricing Grid”: the pricing grid attached hereto as Annex A.

     “Pro Forma Balance Sheet”: as defined in Section 4.1(a).

 

 

 19

     “Property”: any right or interest in or to property of any kind
whatsoever, whether real, personal or mixed and whether tangible or intangible,
including, without limitation, Capital Stock of another Person.

     “Qualified Counterparty”: with respect to any Specified Hedge Agreement,
any counterparty thereto that, at the time such Specified Hedge Agreement was
entered into, was a Lender or an affiliate of a Lender.

     “Qualified Public Offering”: any underwritten public offering of the
common stock of the Borrower or Holdings which generates cash proceeds to the
Borrower or Holdings, as applicable, of at least $50,000,000.

     “Recovery Event”: any settlement of or payment in respect of any property
or casualty insurance claim or any condemnation proceeding relating to any
asset of the Borrower or any of its Subsidiaries.

     “Refunded Swing Line Loans”: as defined in Section 2.7.

     “Refunding Date”: as defined in Section 2.7.

     “Register”: as defined in Section 10.6(d).

     “Regulation H”: Regulation H of the Board as in effect from time to time.

     “Regulation U”: Regulation U of the Board as in effect from time to time.

     “Reimbursement Obligation”: the obligation of the Borrower to reimburse
each Issuing Lender pursuant to Section 3.5 for amounts drawn under Letters of
Credit issued by such Issuing Lender.

     “Reinvestment Deferred Amount”: with respect to any Reinvestment Event,
the aggregate Net Cash Proceeds received by the Borrower or any of its
Subsidiaries in connection therewith that are not applied to prepay the Term
Loans or reduce the Revolving Credit Commitments pursuant to Section 2.12(b) as
a result of the delivery of a Reinvestment Notice.

     “Reinvestment Event”: any Asset Sale or Recovery Event in respect of
which the Borrower has delivered a Reinvestment Notice.

     “Reinvestment Notice”: a written notice executed by a Responsible Officer
stating that no Event of Default under paragraph (a) of Section 8, paragraph
(c) of Section 8 (with respect to the Borrower’s obligations under Section 7.1
only) or paragraph (f) of Section 8 has occurred and is continuing and that the
Borrower (directly or indirectly through a Subsidiary) intends and expects to
use all or a specified portion of the Net Cash Proceeds of an Asset Sale or
Recovery Event to acquire assets (other than inventory (except in
connection with a Recovery Event that is itself related to Inventory)) useful
in its business.

     “Reinvestment Prepayment Amount”: with respect to any Reinvestment Event,
the Reinvestment Deferred Amount relating thereto less any amount expended
prior to the 

 

 

 20

relevant Reinvestment Prepayment Date (or contractually committed
on the relevant Reinvestment Prepayment Date to be expended within 90 days
after such Reinvestment Prepayment Date) to acquire assets (other than
inventory (except in connection with a Recovery Event that is itself related to
Inventory)) useful in the Borrower’s business.

     “Reinvestment Prepayment Date”: with respect to any Reinvestment Event,
the earlier of (a) the date occurring one year after such Reinvestment Event
and (b) with respect to any portion of a Reinvestment Deferred Amount, the date
on which the Borrower shall have determined not to acquire assets (other than
inventory (except in connection with a Recovery Event that is itself related to
Inventory)) useful in the Borrower’s business with such portion of such
Reinvestment Deferred Amount.

     “Related Fund”: with respect to any Lender, any fund that (x) invests in
commercial loans and (y) is managed or advised by the same investment advisor
as such Lender or an Affiliate of such investment advisor, or by such Lender or
an Affiliate of such Lender.

     “Reorganization”: with respect to any Multiemployer Plan, the condition
that such plan is in reorganization within the meaning of Section 4241 of
ERISA.

     “Reportable Event”: any of the events set forth in Section 4043(c) of
ERISA, other than those events as to which the thirty day notice period is
waived under subsections .27, .28, .29, .30, .31, .32, .34 or .35 of PBGC Reg.
§ 4043.

     “Required Lenders”: at any time, the holders of more than 50% of (a)
until the Closing Date, the Commitments and (b) thereafter, the sum of (i) the
aggregate unpaid principal amount of the Term Loans then outstanding and (ii)
the Total Revolving Credit Commitments then in effect or, if the Revolving
Credit Commitments have been terminated, the Total Revolving Extensions of
Credit then outstanding.

     “Requirement of Law”: as to any Person, any law, treaty, rule or
regulation or determination of an arbitrator or a court or other Governmental
Authority, in each case applicable to or binding upon such Person or any of its
Property or to which such Person or any of its Property is subject.

     “Responsible Officer”: with respect to financial matters, the chief
executive officer, president, chief financial officer, treasurer or controller
of the Borrower, and with respect to all other matters, any officer of the
Borrower or other applicable Loan Party.

     “Restricted Payments”: as defined in Section 7.6.

     “Revolving Credit Commitment”: as to any Lender, the obligation of such
Lender, if any, to make Revolving Credit Loans and participate in Swing Line
Loans and Letters of Credit, in an aggregate principal and/or face amount not
to exceed the amount set forth under
the heading “Revolving Credit Commitment” opposite such Lender’s name on
Schedule 1 to the Lender Addendum delivered by such Lender, or, as the case may
be, in the Assignment and Acceptance pursuant to which such Lender became a
party hereto, as the same may be changed from time to time pursuant to the
terms hereof. The original aggregate amount of the Total Revolving Credit
Commitments is $75,000,000.

 

 

 21

     “Revolving Credit Commitment Period”: the period from and including the
Closing Date to the Revolving Credit Termination Date.

     “Revolving Credit Facility”: as defined in the definition of “Facility”
in this Section 1.1.

     “Revolving Credit Lender”: each Lender that has a Revolving Credit
Commitment or that is the holder of Revolving Credit Loans.

     “Revolving Credit Loans”: as defined in Section 2.4.

     “Revolving Credit Note”: as defined in Section 2.8.

     “Revolving Credit Percentage”: as to any Revolving Credit Lender at any
time, the percentage which such Lender’s Revolving Credit Commitment then
constitutes of the Total Revolving Credit Commitments (or, at any time after
the Revolving Credit Commitments shall have expired or terminated, the
percentage which the aggregate amount of such Lender’s Revolving Extensions of
Credit then outstanding constitutes the amount of the Total Revolving
Extensions of Credit then outstanding).

     “Revolving Credit Termination Date”: June 30, 2009.

     “Revolving Extensions of Credit”: as to any Revolving Credit Lender at
any time, an amount equal to the sum of (a) the aggregate principal amount of
all Revolving Credit Loans made by such Lender then outstanding, (b) such
Lender’s Revolving Credit Percentage of the L/C Obligations then outstanding
and (c) such Lender’s Revolving Credit Percentage of the aggregate principal
amount of Swing Line Loans then outstanding.

     “SEC”: the Securities and Exchange Commission (or successors thereto or
an analogous Governmental Authority).

     “Secured Parties”: as defined in the Guarantee and Collateral Agreement.

     “Security Documents”: the collective reference to the Guarantee and
Collateral Agreement, the Mortgages and all other security documents hereafter
delivered to the Administrative Agent granting a Lien on any Property of any
Person to secure the obligations and liabilities of any Loan Party under any
Loan Document.

     “Senior Subordinated Note Indenture”: the Indenture entered into by the
Borrower and certain of its Subsidiaries in connection with the issuance of the
Senior Subordinated Notes, together with all material instruments and other
agreements entered into by
the Borrower or such Subsidiaries in connection therewith, as the same may
be amended, supplemented or otherwise modified from time to time in accordance
with Section 7.9.

     “Senior Subordinated Notes”: the subordinated notes of the Borrower
issued on the Closing Date and any exchange notes issued in replacement
thereof, in each case pursuant to the Senior Subordinated Note Indenture.

 

 

 22

     “Single Employer Plan”: any Plan that is covered by Title IV of ERISA,
but which is not a Multiemployer Plan.

     “Solvent”: with respect to any Person, as of any date of determination,
(a) the amount of the “present fair saleable value” of the assets of such
Person will, as of such date, exceed the amount of all “liabilities of such
Person, contingent or otherwise”, as of such date, as such quoted terms are
determined in accordance with applicable federal and state laws governing
determinations of the insolvency of debtors, (b) the present fair saleable
value of the assets of such Person will, as of such date, be greater than the
amount that will be required to pay the liability of such Person on its debts
as such debts become absolute and matured, (c) such Person will not have, as of
such date, an unreasonably small amount of capital with which to conduct its
business, and (d) such Person will be able to pay its debts as they mature.
For purposes of this definition, (i) “debt” means liability on a “claim”, and
(ii) “claim” means any (x) right to payment, whether or not such a right is
reduced to judgment, liquidated, unliquidated, fixed, contingent, matured,
unmatured, disputed, undisputed, legal, equitable, secured or unsecured or (y)
right to an equitable remedy for breach of performance if such breach gives
rise to a right to payment, whether or not such right to an equitable remedy is
reduced to judgment, fixed, contingent, matured or unmatured, disputed,
undisputed, secured or unsecured.

     “Specified Change of Control”: a “Change of Control”, as defined in the
Senior Subordinated Note Indenture.

     “Specified Hedge Agreement”: any Hedge Agreement entered into by the
Borrower or any Subsidiary Guarantor and any Qualified Counterparty.

     “Sponsor”: TC Group L.L.C. (which operates under the trade name “The
Carlyle Group”).

     “Subsidiary”: as to any Person, a corporation, partnership, limited
liability company or other entity of which shares of stock or other ownership
interests having ordinary voting power (other than stock or such other
ownership interests having such power only by reason of the happening of a
contingency) to elect a majority of the board of directors or other managers of
such corporation, partnership or other entity are at the time owned, directly
or indirectly through one or more intermediaries, or both, by such Person,
provided that “Subsidiary” shall in no event include any Joint Venture. Unless
otherwise qualified, all references to a “Subsidiary” or to “Subsidiaries” in
this Agreement shall refer to a Subsidiary or Subsidiaries of the Borrower.

     “Subsidiary Guarantor”: each Subsidiary of the Borrower other than any
Excluded Subsidiary.

     “Swing Line Commitment”: the obligation of the Swing Line Lender to make
Swing Line Loans pursuant to Section 2.6 in an aggregate principal amount at
any one time outstanding not to exceed $10,000,000.

     “Swing Line Lender”: Lehman Commercial Paper Inc., in its capacity as the
lender of Swing Line Loans.

 

 

 23

     “Swing Line Loans”: as defined in Section 2.6.

     “Swing Line Note”: as defined in Section 2.8.

     “Swing Line Participation Amount”: as defined in Section 2.7.

     “Syndication Agent”: as defined in the preamble hereto.

     “Term Loan Facilities”: the collective reference to the Tranche A Term
Loan Facility and the Tranche B Term Loan Facility.

     “Term Loan Lenders”: the collective reference to the Tranche A Term Loan
Lenders the Tranche B Term Loan Lenders.

     “Term Loans”: the collective reference to the Tranche A Term Loans and
Tranche B Term Loans.

     “Term Note”: as defined in Section 2.8.

     “Total Revolving Credit Commitments”: at any time, the aggregate amount
of the Revolving Credit Commitments then in effect.

     “Total Revolving Extensions of Credit”: at any time, the aggregate amount
of the Revolving Extensions of Credit of the Revolving Credit Lenders
outstanding at such time.

     “Tranche A Term Loan”: as defined in Section 2.1.

     “Tranche A Term Loan Commitment”: as to any Lender, the obligation of
such Lender, if any, to make a Tranche A Term Loan to the Borrower hereunder in
a principal amount not to exceed the amount set forth under the heading
“Tranche A Term Loan Commitment” opposite such Lender’s name on Schedule 1 to
the Lender Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Tranche A Term Loan Commitments is
$50,000,000.

     “Tranche A Term Loan Facility”: as defined in the definition of
“Facility” in this Section 1.1.

     “Tranche A Term Loan Lender”: each Lender that has a Tranche A Term Loan
Commitment or is the holder of a Tranche A Term Loan.

     “Tranche A Term Loan Percentage”: as to any Tranche A Term Loan Lender at
any time, the percentage which such Lender’s Tranche A Term Loan Commitment
then constitutes of the aggregate Tranche A Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender’s Tranche A Term Loans then outstanding constitutes of
the aggregate principal amount of the Tranche A Term Loans then outstanding).

 

 

 24

     “Tranche B Term Loan”: as defined in Section 2.1.

     “Tranche B Term Loan Commitment”: as to any Lender, the obligation of
such Lender, if any, to make a Tranche B Term Loan to the Borrower hereunder in
a principal amount not to exceed the amount set forth under the heading
“Tranche B Term Loan Commitment” opposite such Lender’s name on Schedule 1 to
the Lender Addendum delivered by such Lender, or, as the case may be, in the
Assignment and Acceptance pursuant to which such Lender became a party hereto,
as the same may be changed from time to time pursuant to the terms hereof. The
original aggregate amount of the Tranche B Term Loan Commitments is
$300,000,000.

     “Tranche B Term Loan Facility”: as defined in the definition of
“Facility” in this Section 1.1.

     “Tranche B Term Loan Lender”: each Lender that has a Tranche B Term Loan
Commitment or is the holder of a Tranche B Term Loan.

     “Tranche B Term Loan Percentage”: as to any Tranche B Term Loan Lender at
any time, the percentage which such Lender’s Tranche B Term Loan Commitment
then constitutes of the aggregate Tranche B Term Loan Commitments (or, at any
time after the Closing Date, the percentage which the aggregate principal
amount of such Lender’s Tranche B Term Loans then outstanding constitutes of
the aggregate principal amount of the Tranche B Term Loans then outstanding).

     “Transferee”: as defined in Section 10.14.

     “Type”: as to any Loan, its nature as a Base Rate Loan or a Eurodollar
Loan.

     “Wholly Owned Subsidiary”: as to any Person, any other Person all of the
Capital Stock of which (other than directors’ qualifying shares required by
law) is owned by such Person directly and/or through other Wholly Owned
Subsidiaries.

     “Wholly Owned Subsidiary Guarantor”: any Subsidiary Guarantor that is a
Wholly Owned Subsidiary of the Borrower.

     1.2 Other Definitional Provisions. (a) Unless otherwise specified
therein, all terms defined in this Agreement shall have the defined meanings
when used in the other Loan Documents or any certificate or other document made
or delivered pursuant hereto or thereto.

     (b)  As used herein and in the other Loan, Documents, and any certificate or
other document made or delivered pursuant hereto or thereto, accounting terms
relating to the Borrower and its Subsidiaries not defined in Section 1.1 and
accounting terms partly defined in Section 1.1, to the extent not defined,
shall have the respective meanings given to them under GAAP.

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

 

 

 25

particular provision of this Agreement, and Section, Schedule and
Exhibit references are to this Agreement unless otherwise specified.

     (d)  The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

     (e)  All calculations of financial ratios set forth in Section 7.1 and the
calculation of the Consolidated Leverage Ratio for purposes of determining the
Applicable Margin shall be calculated to the same number of decimal places as
the relevant ratios are expressed in. For example, if the relevant ratio is to
be calculated to the hundredth decimal place and the calculation of the ratio
is 5.126, the ratio will be 5.12.

SECTION 2. AMOUNT AND TERMS OF COMMITMENTS

     2.1 Term Loan Commitments. Subject to the terms and conditions hereof,
(a) the Tranche A Term Loan Lenders severally agree to make term loans (each, a
“Tranche A Term Loan”) to the Borrower on the Closing Date in an amount for
each Tranche A Term Loan Lender not to exceed the amount of the Tranche A Term
Loan Commitment of such Lender and (b) the Tranche B Term Loan Lenders
severally agree to make term loans (each, a “Tranche B Term Loan”) to the
Borrower on the Closing Date in an amount for each Tranche B Term Loan Lender
not to exceed the amount of the Tranche B Term Loan Commitment of such Lender.
The Term Loans may from time to time be Eurodollar Loans or Base Rate Loans, as
determined by the Borrower and notified to the Administrative Agent in
accordance with Sections 2.2 and 2.13.

     2.2 Procedure for Term Loan Borrowing. The Borrower shall deliver to the
Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 10:00 A.M., New York City time,
one Business Day prior to the anticipated Closing Date) requesting that the
Term Loan Lenders make the Term Loans on the Closing Date. The Term Loans made
on the Closing Date shall initially be Base Rate Loans, and no Term Loan may be
converted into or continued as a Eurodollar Loan having an Interest Period in
excess of one month prior to the date which is five Business Days after the
Closing Date. Upon receipt of such Borrowing Notice the Administrative Agent
shall promptly notify each Term Loan Lender thereof. Not later than 12:00
Noon, New York City time, on the Closing Date each Term Loan Lender shall make
available to the Administrative Agent at the Funding Office an amount in
immediately available funds equal to the Term Loan or Term Loans to be made by
such Lender. The Administrative Agent shall make available to the Borrower the
aggregate of the amounts made available to the
Administrative Agent by the Term Loan Lenders, in like funds as received
by the Administrative Agent.

     2.3 Repayment of Term Loans. (a) The Tranche A Term Loan of each Tranche
A Term Loan Lender shall mature in 22 consecutive quarterly installments,
commencing on March 31, 2004, each of which shall be in an amount equal to such
Lender’s Tranche A Term Loan Percentage multiplied by the percentage set forth
below opposite such installment of the aggregate principal amount of Tranche A
Term Loans made on the Closing Date:

 

 

 26

	 	 	 	 	 
	Installment	 	Percentage
	
	 	

	March 31, 2004
	 	 	1.25	%
	June 30, 2004
	 	 	1.25	 
	September 30, 2004
	 	 	1.25	 
	December 31, 2004
	 	 	1.25	 
	March 31, 2005
	 	 	1.25	 
	June 30, 2005
	 	 	1.25	 
	September 30, 2005
	 	 	1.25	 
	December 31, 2005
	 	 	1.25	 
	March 31, 2006
	 	 	2.50	 
	June 30, 2006
	 	 	2.50	 
	September 30, 2006
	 	 	2.50	 
	December 31, 2006
	 	 	2.50	 
	March 31, 2007
	 	 	5.00	 
	June 30, 2007
	 	 	5.00	 
	September 30, 2007
	 	 	5.00	 
	December 31, 2007
	 	 	5.00	 
	March 31, 2008
	 	 	10.00	 
	June 30, 2008
	 	 	10.00	 
	September 30, 2008
	 	 	10.00	 
	December 31, 2008
	 	 	10.00	 
	March 31, 2009
	 	 	10.00	 
	June 30, 2009
	 	 	10.00	 

     (b)  The Tranche B Term Loan of each Tranche B Term Loan Lender shall
mature in 27 consecutive quarterly installments, commencing on December 31,
2003, each of which shall be in an amount equal to such Lender’s Tranche B Term
Loan Percentage multiplied by the percentage set forth below opposite such
installment of the aggregate principal amount of Tranche B Term Loans made on
the Closing Date:

	 	 	 	 	 
	Installment	 	Percentage
	
	 	

	December 31, 2003
	 	 	0.25	%
	March 31, 2004
	 	 	0.25	 
	June 30, 2004
	 	 	0.25	 
	September 30, 2004
	 	 	0.25	 
	December 31, 2004
	 	 	0.25	 
	March 31, 2005
	 	 	0.25	 
	June 30, 2005
	 	 	0.25	 
	September 30, 2005
	 	 	0.25	 
	December 31, 2005
	 	 	0.25	 
	March 31, 2006
	 	 	0.25	 
	June 30, 2006
	 	 	0.25	 
	September 30, 2006
	 	 	0.25	 
	December 31, 2006
	 	 	0.25	 
	March 31, 2007
	 	 	0.25	 
	June 30, 2007
	 	 	0.25	 
	September 30, 2007
	 	 	0.25	 
	December 31, 2007
	 	 	0.25	 

 

 

 27

	 	 	 	 	 
	Installment	 	Percentage
	
	 	

	March 31, 2008
	 	 	0.25	 
	June 30, 2008
	 	 	0.25	 
	September 30, 2008
	 	 	0.25	 
	December 31, 2008
	 	 	0.25	 
	March 31, 2009
	 	 	0.25	 
	June 30, 2009
	 	 	0.25	 
	September 30, 2009
	 	 	23.5625	 
	December 31, 2009
	 	 	23.5625	 
	March 31, 2010
	 	 	23.5625	 
	June 30, 2010
	 	 	23.5625	 

     2.4 Revolving Credit Commitments. (a) Subject to the terms and conditions
hereof, the Revolving Credit Lenders severally agree to make revolving credit
loans (“Revolving Credit Loans”) to the Borrower from time to time during the
Revolving Credit Commitment Period in an aggregate principal amount at any one
time outstanding for each Revolving Credit Lender which, when added to such
Lender’s Revolving Credit Percentage of the sum of (i) the L/C Obligations then
outstanding and (ii) the aggregate principal amount of the Swing Line Loans
then outstanding, does not exceed the amount of such Lender’s Revolving Credit
Commitment. During the Revolving Credit Commitment Period the Borrower may use
the Revolving Credit Commitments by borrowing, prepaying the Revolving Credit
Loans in whole or in part, and reborrowing, all in accordance with the terms
and conditions hereof. The Revolving Credit Loans may from time to time be
Eurodollar Loans or Base Rate Loans, as determined by the Borrower and notified
to the Administrative Agent in accordance with Sections 2.5 and 2.13, provided
that no Revolving Credit Loan shall be made as a Eurodollar Loan after the day
that is one month prior to the Revolving Credit Termination Date.

     (b)  The Borrower shall repay all outstanding Revolving Credit Loans on the
Revolving Credit Termination Date.

     2.5 Procedure for Revolving Credit Borrowing. The Borrower may borrow
under the Revolving Credit Commitments on any Business Day during the Revolving
Credit Commitment Period, provided that the Borrower shall deliver to the
Administrative Agent a Borrowing Notice (which Borrowing Notice must be
received by the Administrative Agent prior to 12:00 Noon, New York City
time, (a) three Business Days prior to the requested Borrowing Date, in the
case of Eurodollar Loans, or (b) one Business Day prior to the requested
Borrowing Date, in the case of Base Rate Loans). Any Revolving Credit Loans
made on the Closing Date shall initially be Base Rate Loans, and no Revolving
Credit Loan may be made as, converted into or continued as a Eurodollar Loan
having an Interest Period in excess of one month prior to the date which is
five Business Days after the Closing Date. Each borrowing of Revolving Credit
Loans under the Revolving Credit Commitments shall be in an amount equal to (x)
in the case of Base Rate Loans, $250,000 or a multiple of $50,000 in excess
thereof (or, if the then aggregate Available Revolving Credit Commitments are
less than $250,000, such lesser amount) and (y) in the case of Eurodollar
Loans, $1,000,000 or a multiple of $500,000 in excess thereof; provided, that
the Swing Line Lender may request, on behalf of the Borrower, borrowings of
Base Rate Loans under the Revolving Credit Commitments in other amounts
pursuant to Section 2.7 and the Borrower may request borrowings of Base Rate
Loans under the Revolving Credit

 

 

 28

Commitments in other amounts pursuant to
Section 3.5. Upon receipt of any such Borrowing Notice from the Borrower, the
Administrative Agent shall promptly notify each Revolving Credit Lender
thereof. Each Revolving Credit Lender will make its Revolving Credit
Percentage of the amount of each borrowing of Revolving Credit Loans available
to the Administrative Agent for the account of the Borrower at the Funding
Office prior to 12:00 Noon, New York City time, on the Borrowing Date requested
by the Borrower in funds immediately available to the Administrative Agent.
Such borrowing will then be made available to the Borrower by the
Administrative Agent in like funds as received by the Administrative Agent.

     2.6 Swing Line Commitment. (a) Subject to the terms and conditions
hereof, the Swing Line Lender agrees that, during the Revolving Credit
Commitment Period, it will make available to the Borrower in the form of swing
line loans (“Swing Line Loans”) a portion of the credit otherwise available to
the Borrower under the Revolving Credit Commitments; provided that (i) the
aggregate principal amount of Swing Line Loans outstanding at any time shall
not exceed the Swing Line Commitment then in effect (notwithstanding that the
Swing Line Loans outstanding at any time, when aggregated with the Swing Line
Lender’s other outstanding Revolving Credit Loans hereunder, may exceed the
Swing Line Commitment then in effect or such Swing Line Lender’s Revolving
Credit Commitment then in effect) and (ii) the Borrower shall not request, and
the Swing Line Lender shall not make, any Swing Line Loan if, after giving
effect to the making of such Swing Line Loan, the aggregate amount of the
Available Revolving Credit Commitments would be less than zero. During the
Revolving Credit Commitment Period, the Borrower may use the Swing Line
Commitment by borrowing, repaying and reborrowing, all in accordance with the
terms and conditions hereof. Swing Line Loans shall be Base Rate Loans only.

     (b)  The Borrower shall repay all outstanding Swing Line Loans on the
Revolving Credit Termination Date.

     2.7 Procedure for Swing Line Borrowing; Refunding of Swing Line Loans.
(a) The Borrower may borrow under the Swing Line Commitment on any Business
Day during the Revolving Credit Commitment Period, provided, the Borrower shall
give the Swing Line Lender irrevocable telephonic notice confirmed
promptly in writing (which telephonic notice must be received by the Swing Line
Lender not later than 12:00 Noon, New York City time, on the proposed Borrowing
Date), specifying (i) the amount to be borrowed and (ii) the requested
Borrowing Date. Each borrowing under the Swing Line Commitment shall be in an
amount equal to $100,000 or a whole multiple of $50,000 in excess thereof. Not
later than 2:00 P.M., New York City time, on the Borrowing Date specified in
the borrowing notice in respect of any Swing Line Loan, the Swing Line Lender
shall make available to the Administrative Agent at the Funding Office an
amount in immediately available funds equal to the amount of such Swing Line
Loan. The Administrative Agent shall make the proceeds of such Swing Line Loan
available to the Borrower on such Borrowing Date in like funds as received by
the Administrative Agent.

     (b)  The Swing Line Lender, at any time and from time to time in its sole
and absolute discretion may, on behalf of the Borrower (which hereby
irrevocably directs the Swing Line Lender to act on its behalf), on one
Business Day’s notice given by the Swing Line Lender no later than 12:00 Noon,
New York City time, request each Revolving Credit Lender to make, 

 

 

 29

and each
Revolving Credit Lender hereby agrees to make, a Revolving Credit Loan (which
shall initially be a Base Rate Loan), in an amount equal to such Revolving
Credit Lender’s Revolving Credit Percentage of the aggregate amount of the
Swing Line Loans (the “Refunded Swing Line Loans”) outstanding on the date of
such notice, to repay the Swing Line Lender. Each Revolving Credit Lender
shall make the amount of such Revolving Credit Loan available to the
Administrative Agent at the Funding Office in immediately available funds, not
later than 10:00 A.M., New York City time, one Business Day after the date of
such notice. The proceeds of such Revolving Credit Loans shall be made
immediately available by the Administrative Agent to the Swing Line Lender for
application by the Swing Line Lender to the repayment of the Refunded Swing
Line Loans.

     (c)  If prior to the time a Revolving Credit Loan would have otherwise been
made pursuant to Section 2.7(b), one of the events described in Section 8(f)
shall have occurred and be continuing with respect to the Borrower, or if for
any other reason, as determined by the Swing Line Lender in its sole
discretion, Revolving Credit Loans may not be made as contemplated by Section
2.7(b), each Revolving Credit Lender shall, on the date such Revolving Credit
Loan was to have been made pursuant to the notice referred to in Section 2.7(b)
(the “Refunding Date”), purchase for cash an undivided participating interest
in the then outstanding Swing Line Loans by paying to the Swing Line Lender an
amount (the “Swing Line Participation Amount”) equal to (i) such Revolving
Credit Lender’s Revolving Credit Percentage times (ii) the sum of the aggregate
principal amount of Swing Line Loans then outstanding which were to have been
repaid with such Revolving Credit Loans.

     (d)  Whenever, at any time after the Swing Line Lender has received from
any Revolving Credit Lender such Lender’s Swing Line Participation Amount, the
Swing Line Lender receives any payment on account of the Swing Line Loans, the
Swing Line Lender will distribute to such Lender its Swing Line Participation
Amount (appropriately adjusted, in the case of interest payments, to reflect
the period of time during which such Lender’s participating interest was
outstanding and funded and, in the case of principal and interest payments, to
reflect such Lender’s pro rata portion of such payment if such payment is not
sufficient to pay the principal of and interest on all Swing Line Loans then
due); provided, however, that in the event
that such payment received by the Swing Line Lender is required to be
returned, such Revolving Credit Lender will return to the Swing Line Lender any
portion thereof previously distributed to it by the Swing Line Lender.

     (e) Each Revolving Credit Lender’s obligation to make the Loans referred
to in Section 2.7(b) and to purchase participating interests pursuant to
Section 2.7(c) shall be absolute and unconditional and shall not be affected by
any circumstance, including, without limitation, (i) any setoff, counterclaim,
recoupment, defense or other right which such Revolving Credit Lender or the
Borrower may have against the Swing Line Lender, the Borrower or any other
Person for any reason whatsoever; (ii) the occurrence or continuance of a
Default or an Event of Default or the failure to satisfy any of the other
conditions specified in Section 5; (iii) any adverse change in the condition
(financial or otherwise) of the Borrower; (iv) any breach of this Agreement or
any other Loan Document by the Borrower, any other Loan Party or any other
Revolving Credit Lender; or (v) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing.

 

 

 30

     2.8 Repayment of Loans; Evidence of Debt. (a) The Borrower hereby
unconditionally promises to pay to the Administrative Agent for the account of
the appropriate Revolving Credit Lender or Term Loan Lender, as the case may
be, (i) the then unpaid principal amount of each Revolving Credit Loan of such
Revolving Credit Lender on the Revolving Credit Termination Date (or on such
earlier date on which the Loans become due and payable pursuant to Section 8),
(ii) the then unpaid principal amount of each Swing Line Loan of such Swing
Line Lender on the Revolving Credit Termination Date (or on such earlier date
on which the Loans become due and payable pursuant to Section 8) and (iii) the
principal amount of each Term Loan of such Term Loan Lender in installments
according to the amortization schedule set forth in Section 2.3 (or on such
earlier date on which the Loans become due and payable pursuant to Section 8);
provided that to the extent not otherwise paid in full, all principal and
interest outstanding in respect of the Term Loans shall be paid on the date of
the last installment thereof. The Borrower hereby further agrees to pay
interest on the unpaid principal amount of the Loans from time to time
outstanding from the date hereof until payment in full thereof at the rates per
annum, and on the dates, set forth in Section 2.15.

     (b)  Each Lender shall maintain in accordance with its usual practice an
account or accounts evidencing indebtedness of the Borrower to such Lender
resulting from each Loan of such Lender from time to time, including the
amounts of principal and interest payable and paid to such Lender from time to
time under this Agreement.

     (c)  The Administrative Agent, on behalf of the Borrower, shall maintain
the Register pursuant to Section 10.6(d), and a subaccount therein for each
Lender, in which shall be recorded (i) the amount of each Loan made hereunder
and any Note evidencing such Loan, the Type of such Loan and each Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) both the amount of any sum received by the Administrative Agent
hereunder from the Borrower and each Lender’s share thereof.

     (d)  The entries made in the Register and the accounts of each Lender
maintained pursuant to Section 2.8(b) shall, to the extent permitted by
applicable law, be presumptively correct, absent manifest error, as to the
existence and amounts of the obligations of the Borrower therein recorded;
provided, however, that the failure of any Lender or the Administrative Agent
to maintain the Register or any such account, or any error therein, shall not
in any manner affect the obligation of the Borrower to repay (with applicable
interest) the Loans made to the Borrower by such Lender in accordance with the
terms of this Agreement.

     (e) The Borrower agrees that, upon the request to the Administrative Agent
by any Lender, the Borrower will promptly execute and deliver to such Lender a
promissory note of the Borrower evidencing any Term Loans, Revolving Credit
Loans or Swing Line Loans, as the case may be, of such Lender, substantially in
the forms of Exhibit G-1, G-2 or G-3, respectively (a “Term Note”, “Revolving Credit Note” or “Swing Line Note”, respectively), with appropriate insertions
as to date and principal amount; provided, that delivery of Notes shall not be
a condition precedent to the occurrence of the Closing Date or the making of
the Loans on the Closing Date.

 

 

 31

     2.9 Commitment Fees, etc. (a) The Borrower agrees to pay to the
Administrative Agent for the account of each Revolving Credit Lender a
commitment fee for the period from and including the Closing Date to the last
day of the Revolving Credit Commitment Period, computed at the Commitment Fee
Rate on the average daily amount of the Available Revolving Credit Commitment
of such Lender during the period for which payment is made, payable quarterly
in arrears on the last day of each March, June, September and December and on
the Revolving Credit Termination Date, commencing on September 30, 2003.

     (b)  The Borrower agrees to pay to the Administrative Agent, the
Syndication Agent and the Joint Lead Arrangers the fees in the amounts and on
the dates previously agreed to in writing by the Borrower and the
Administrative Agent, the Syndication Agent and the Joint Lead Arrangers (or
any of them individually).

     2.10 Termination or Reduction of Revolving Credit Commitments. The
Borrower shall have the right, upon not less than one Business Day’s notice to
the Administrative Agent, to terminate the Revolving Credit Commitments or,
from time to time, to reduce the aggregate amount of the Revolving Credit
Commitments; provided that no such termination or reduction of Revolving Credit
Commitments shall be permitted if, after giving effect thereto and to any
prepayments of the Revolving Credit Loans and Swing Line Loans made on the
effective date thereof, the Total Revolving Extensions of Credit would exceed
the Total Revolving Credit Commitments. Any such reduction shall be in an
amount equal to $500,000, or a multiple of $50,000 in excess thereof, and shall
reduce permanently the Revolving Credit Commitments then in effect.

     2.11 Optional Prepayments. The Borrower may at any time and from time to
time prepay the Loans, in whole or in part, without premium or penalty (except
as otherwise provided herein), upon notice
delivered to the Administrative Agent at least three Business Days prior
thereto in the case of Eurodollar Loans and at least one Business Day prior
thereto in the case of Base Rate Loans, which notice shall specify the date and
amount of such prepayment, whether such prepayment is of Term Loans or
Revolving Credit Loans, and whether such prepayment is of Eurodollar Loans or
Base Rate Loans; provided, that (i) if a Eurodollar Loan is prepaid on any day
other than the last day of the Interest Period applicable thereto, the Borrower
shall also pay any amounts owing pursuant to Section 2.21 and (ii) no prior
notice is required for the prepayment of Swing Line Loans. Any notice of
prepayment given pursuant to this Section shall be irrevocable, provided, that
such notice may state that it is conditioned upon the effectiveness of other
credit facilities, in which case such notice may be revoked if such condition
is not satisfied. Upon receipt of any such notice the Administrative Agent
shall promptly notify each relevant Lender thereof. If any such notice is
given, the amount specified in such notice shall be due and payable on the date
specified therein, together with (except in the case of Revolving Credit Loans
that are Base Rate Loans and Swing Line Loans) accrued interest to such date on
the amount prepaid. Partial prepayments of Term Loans and Revolving Credit
Loans shall be in an aggregate principal amount of $500,000 or a multiple of
$50,000 in excess thereof. Partial prepayments of Swing Line Loans shall be in
an aggregate principal amount of $100,000 or a whole multiple thereof.

     2.12 Mandatory Prepayments and Commitment Reductions. (a) Unless the
Required Lenders shall otherwise agree, if (i) any Capital Stock shall be
issued by Holdings or

 

 

 32

the Borrower (other than any issuance to Holdings or any
of its other Subsidiaries), excluding any such Capital Stock issued by the
Borrower or Holdings (A) to any Permitted Investor or (B) the proceeds of which
are used within 360 days after receipt thereof by the Borrower or any
Subsidiary to make Investments permitted by Section 7.8(h) or Capital
Expenditures permitted by this Agreement, (provided that (x) the Borrower shall
have notified the Administrative Agent in writing of such intended use not
later than the ten days after the date of receipt of such proceeds and (y) any
such proceeds not so used within such 360-day period shall be applied to the
prepayment of the Term Loans on the last day of such period), or (ii) any
Funded Debt is incurred by the Borrower or any other Loan Party (excluding
Indebtedness permitted by Section 7.2), then on the date of such issuance or
incurrence, as the case may be, the Term Loans shall be prepaid by an amount
equal to the amount 50% of the Net Cash Proceeds of such issuance of Capital
Stock or 100% of the Net Cash Proceeds of such incurrence of Indebtedness, as
the case may be. The provisions of this Section do not constitute a consent to
the issuance of any equity securities by any entity whose equity securities are
pledged pursuant to the Guarantee and Collateral Agreement, or a consent to the
incurrence of any Indebtedness by the Borrower or any of its Subsidiaries.

     (b)  Unless the Required Lenders shall otherwise agree, if on any date the
Borrower or any other Loan Party shall receive Net Cash Proceeds from any Asset
Sale (including any Disposition of any Capital Stock of any Subsidiary, whether
by the issuer or the Loan Party that is the owner thereof, other than any such
Disposition excluded from being an Asset Sale by the exclusions contained in
the definition of “Asset Sale” in Section 1.1) or Recovery Event yielding Net
Cash Proceeds in excess of $3,500,000 then, unless a Reinvestment Notice shall
be delivered in respect thereof, within three Business Days after the date of
receipt by such Loan Party of such Net Cash Proceeds, the Term Loans shall be
prepaid, and/or the Revolving Credit Commitments shall be reduced, by an amount
equal to the amount of such Net
Cash Proceeds, as set forth in Section 2.12(d); provided, that,
notwithstanding the foregoing, (i) the aggregate Net Cash Proceeds of Asset
Sales that may be excluded from the foregoing requirement pursuant to a
Reinvestment Notice shall not exceed $15,000,000 in any fiscal year of the
Borrower, (ii) on each Reinvestment Prepayment Date the Term Loans shall be
prepaid, and/or the Revolving Credit Commitments shall be reduced, by an amount
equal to the Reinvestment Prepayment Amount with respect to the relevant
Reinvestment Event, as set forth in Section 2.12(d), and (iii) in any event the
Term Loans shall be prepaid and/or the Revolving Credit Commitments shall be
reduced, by an amount equal to any Net Cash Proceeds of any Asset Sale,
Recovery Event or other Disposition of property of any Loan Party that would
otherwise be required to be used to prepay the Senior Subordinated Notes, on
the date such prepayment of the Senior Subordinated Notes would otherwise be
required to be made, as set forth in Section 2.12(d). The provisions of this
Section do not constitute a consent to the consummation of any Disposition not
permitted by Section 7.5.

     (c)  Unless the Required Lenders shall otherwise agree, if, for any fiscal
year of the Borrower commencing with the fiscal year ending December 31, 2004,
there shall be Excess Cash Flow, then, on the relevant Excess Cash Flow
Application Date, the Term Loans shall be prepaid by an amount equal to the ECF
Percentage of such Excess Cash Flow. Each such prepayment and commitment
reduction shall be made on a date (an “Excess Cash Flow Application Date”) no
later than five days after the date on which the financial statements of the

 

 

 33

Borrower referred to in Section 6.1(a), for the fiscal year with respect to
which such prepayment is made, are required to be delivered to the Lenders.

     (d)  Amounts to be applied in connection with prepayments and Commitment
reductions made pursuant to Section 2.12(b) shall be applied, first, to the
prepayment of the Term Loans until the Term Loans are repaid in full and,
second, to reduce permanently the Revolving Credit Commitments. Any such
reduction of the Revolving Credit Commitments shall be accompanied by
prepayment of the Revolving Credit Loans and/or Swing Line Loans to the extent,
if any, that the Total Revolving Extensions of Credit exceed the amount of the
Total Revolving Credit Commitments as so reduced, provided that if the
aggregate principal amount of Revolving Credit Loans and Swing Line Loans then
outstanding is less than the amount of such excess (because L/C Obligations
constitute a portion thereof), the Borrower shall, to the extent of the balance
of such excess, replace outstanding Letters of Credit and/or deposit an amount
in cash in a cash collateral account established with the Administrative Agent
for the benefit of the Secured Parties on terms and conditions reasonably
satisfactory to the Administrative Agent.

     2.13 Conversion and Continuation Options. (a) The Borrower may elect
from time to time to convert Eurodollar Loans to Base Rate Loans by giving the
Administrative Agent at least one Business Day’s prior irrevocable notice of
such election. The Borrower may elect from time to time to convert Base Rate
Loans to Eurodollar Loans by giving the Administrative Agent at least three
Business Days’ prior irrevocable notice of such election (which notice shall
specify the length of the initial Interest Period therefor), provided that no
Base Rate Loan under a particular Facility may be converted into a Eurodollar
Loan (i) when any Event of Default has occurred and is continuing and the
Administrative Agent has, or the Majority Facility Lenders in respect of such
Facility have, determined in its or their sole discretion not to permit such
conversions or (ii) after the date
that is one month prior to the final scheduled termination or maturity
date of such Facility. Upon receipt of any such notice the Administrative
Agent shall promptly notify each relevant Lender thereof.

     (b)  The Borrower may elect to continue any Eurodollar Loan as such upon
the expiration of the then current Interest Period with respect thereto by
giving irrevocable notice to the Administrative Agent, in accordance with the
applicable provisions of the term “Interest Period” set forth in Section 1.1,
of the length of the next Interest Period to be applicable to such Loans,
provided that no Eurodollar Loan under a particular Facility may be continued
as such when any Event of Default has occurred and is continuing and the
Administrative Agent has, or the Majority Facility Lenders in respect of such
Facility have, determined in its or their sole discretion not to permit such
continuations, and provided, further, that if the Borrower shall fail to give
any required notice as described above in this paragraph or if such
continuation is not permitted pursuant to the preceding proviso, such Loans
shall be converted automatically to Base Rate Loans on the last day of such
then expiring Interest Period. Upon receipt of any such notice the
Administrative Agent shall promptly notify each relevant Lender thereof.

     2.14 Minimum Amounts and Maximum Number of Eurodollar Tranches.
Notwithstanding anything to the contrary in this Agreement, all borrowings,
conversions, continuations and optional prepayments of Eurodollar Loans and all
selections of Interest Periods shall be in such amounts and be made pursuant to
such elections so that, (a) after giving effect thereto, the aggregate
principal amount of the Eurodollar Loans comprising each Eurodollar

 

 

 34

Tranche
shall be equal to $1,000,000 or a whole multiple of $500,000 in excess thereof
and (b) no more than nine Eurodollar Tranches shall be outstanding at any one
time.

     2.15 Interest Rates and Payment Dates. (a) Each Eurodollar Loan shall
bear interest for each day during each Interest Period with respect thereto at
a rate per annum equal to the Eurodollar Rate determined for such day plus the
Applicable Margin in effect for such day.

     (b)  Each Base Rate Loan shall bear interest for each day on which it is
outstanding at a rate per annum equal to the Base Rate in effect for such day
plus the Applicable Margin in effect for such day.

     (c)  (i) If all or a portion of the principal amount of any Loan or
Reimbursement Obligation shall not be paid when due (whether at the stated
maturity, by acceleration or otherwise), such overdue amount shall bear
interest at a rate per annum that is equal to (x) in the case of the Loans, the
rate that would otherwise be applicable thereto pursuant to the foregoing
provisions of this Section plus 2% or (y) in the case of Reimbursement
Obligations, the rate applicable to Base Rate Loans under the Revolving Credit
Facility plus 2%, and (ii) if all or a portion of any interest payable on any
Loan or Reimbursement Obligation or any commitment fee or other amount payable
hereunder shall not be paid when due (whether at the stated maturity, by
acceleration or otherwise), such overdue amount shall bear interest at a rate
per annum equal to the rate then applicable to Base Rate Loans under the
relevant Facility plus 2% (or, in the case of any such other amounts that do
not relate to a particular Facility, the
rate then applicable to Base Rate Loans under the Revolving Credit
Facility plus 2%), in each case, with respect to clauses (i) and (ii) above,
from the date of such non-payment until such amount is paid in full (after as
well as before judgment).

     (d)  Interest shall be payable in arrears on each Interest Payment Date,
provided that interest accruing pursuant to paragraph (c) of this Section shall
be payable from time to time on demand.

     2.16 Computation of Interest and Fees. (a) Interest, fees and
commissions payable pursuant hereto shall be calculated on the basis of a
360-day year for the actual days elapsed, except that, with respect to Base
Rate Loans on which interest is calculated on the basis of the Prime Rate, the
interest thereon shall be calculated on the basis of a 365- (or 366-, as the
case may be) day year for the actual days elapsed. The Administrative Agent
shall as soon as practicable notify the Borrower and the relevant Lenders of
each determination of a Eurodollar Rate. Any change in the interest rate on a
Loan resulting from a change in the Base Rate or the Eurocurrency Reserve
Requirements shall become effective as of the opening of business on the day on
which such change becomes effective. The Administrative Agent shall as soon as
practicable notify the Borrower and the relevant Lenders of the effective date
and the amount of each such change in interest rate.

     (b) Each determination of an interest rate by the Administrative Agent
pursuant to any provision of this Agreement shall be presumptively correct in
the absence of manifest error. The Administrative Agent shall, at the request
of the Borrower, deliver to the Borrower a statement showing the quotations
used by the Administrative Agent in determining any interest rate pursuant to
Section 2.15(a).

 

 

 35

     2.17 Inability to Determine Interest Rate. If prior to the first day of
any Interest Period:

     (a)  the Administrative Agent shall have determined (which determination
shall be conclusive and binding upon the Borrower) that, by reason of
circumstances affecting the relevant market, adequate and reasonable means do
not exist for ascertaining the Eurodollar Rate for such Interest Period, or

     (b)  the Administrative Agent shall have received notice from the Majority
Facility Lenders in respect of the relevant Facility that the Eurodollar Rate
determined or to be determined for such Interest Period will not adequately and
fairly reflect the cost to such Lenders (as conclusively certified by such
Lenders) of making or maintaining their affected Loans during such Interest
Period,

the Administrative Agent shall give telecopy or telephonic notice thereof to
the Borrower and the relevant Lenders as soon as practicable thereafter. If
such notice is given (x) any Eurodollar Loans under the relevant Facility
requested to be made on the first day of such Interest Period shall be made as
Base Rate Loans, (y) any Loans under the relevant Facility that were to have
been converted on the first day of such Interest Period to Eurodollar Loans
shall be continued as Base Rate Loans and (z) any outstanding Eurodollar Loans
under the relevant Facility shall be
converted, on the last day of the then current Interest Period with respect
thereto, to Base Rate Loans. Until such notice has been withdrawn by the
Administrative Agent (which the Administrative Agent shall do promptly after
the circumstances giving rise to such event no longer exist), no further
Eurodollar Loans under the relevant Facility shall be made or continued as
such, nor shall the Borrower have the right to convert Loans under the relevant
Facility to Eurodollar Loans.

     2.18 Pro Rata Treatment and Payments. (a) Each borrowing by the Borrower
from the Lenders hereunder, each payment by the Borrower on account of any
commitment fee or Letter of Credit fee, and any reduction of the Commitments of
the Lenders, shall be made pro rata according to the respective Tranche A Term
Loan Percentages, Tranche B Term Loan Percentages or Revolving Credit
Percentages, as the case may be, of the relevant Lenders. Each payment (other
than prepayments) in respect of principal or interest in respect of the Term
Loans and each payment in respect of fees payable hereunder shall be applied to
the amounts of such obligations then due and owing to the Lenders pro rata
according to the respective amounts then due and owing to the Lenders.

     (b)  Subject to Section 2.18(d), each mandatory prepayment required by
Section 2.12 to be applied to Term Loans shall be allocated among the Term Loan
Facilities pro rata according to the respective outstanding principal amounts
of Term Loans under such Facilities. Each optional prepayment in respect of
the Term Loans shall be allocated among the Term Loan Facilities in accordance
with the Borrower’s instructions. Each payment (including each prepayment) of
the Term Loans outstanding under any Term Loan Facility shall be allocated
among the Term Loan Lenders holding such Term Loans pro rata based on the
principal amount of such Term Loans held by such Term Loan Lenders, and shall
be applied to the installments of such Term Loans first, in direct order of the
next four scheduled installments thereof to become due under Section 2.3(a) or
(b), and thereafter, pro rata based on the remaining 

 

 

 36

outstanding principal
amount of the remaining installments. Amounts repaid or prepaid on account of
the Term Loans may not be reborrowed.

     (c)  Each payment (including each prepayment) by the Borrower on account of
principal of and interest on the Revolving Credit Loans shall be made pro rata
according to the respective outstanding principal amounts of the Revolving
Credit Loans then held by the Revolving Credit Lenders. Each payment in respect
of Reimbursement Obligations in respect of any Letter of Credit shall be made
to the Issuing Lender that issued such Letters of Credit.

     (d)  Notwithstanding anything to the contrary in Sections 2.11, 2.12 or
2.18(b), so long as any Tranche A Term Loans are outstanding, each Tranche B
Term Loan Lender may, at its option, decline up to 100% of the portion of any
mandatory payment applicable to the Tranche B Term Loans of such Lender;
accordingly, with respect to the amount of any mandatory prepayment described
in Section 2.12 that is allocated to Tranche B Term Loans (such amount, the
“Mandatory Prepayment Amount”), at any time when Tranche A Term Loans remain
outstanding, the Borrower will, on the date specified in Section 2.12 for such
prepayment, (A) give the Administrative Agent telephonic notice (promptly
confirmed in writing) requesting that the Administrative Agent prepare and
provide to each Tranche B Term Loan Lender a Prepayment Option Notice as
described below and (B) deposit with the
Administrative Agent the Mandatory Prepayment Amount. As promptly as
practicable after receiving such notice from the Borrower, the Administrative
Agent will send to each Tranche B Term Loan Lender a Prepayment Option Notice,
which shall be substantially in the form of Exhibit H, and shall include an
offer by the Borrower to prepay on the date which is five Business Days after
the date of such Prepayment Option Notice (the “Prepayment Date”) the Tranche B
Term Loans of such Lender by an amount equal to the portion of the Mandatory
Prepayment Amount indicated in such Lender’s Prepayment Option Notice as being
applicable to such Lender’s Tranche B Term Loans. On the Prepayment Date, the
Administrative Agent shall (i) apply the Mandatory Prepayment Amount toward
prepayment of the outstanding Tranche B Term Loans in respect of which Lenders
have accepted mandatory prepayment as described above and (ii) apply the
remaining portion of the Mandatory Prepayment Amount not accepted by the
Tranche B Term Loan Lenders toward prepayment of the Tranche A Term Loans. The
procedures described above in this paragraph shall not be applicable in the
case of a prepayment in full of all Term Loans.

     (e)  The application of any payment of Loans under any Facility (including
optional and mandatory prepayments) shall be made, first, to Base Rate Loans
under such Facility and, second, to Eurodollar Loans under such Facility. Each
payment of the Loans (except in the case of Swing Line Loans and Revolving
Credit Loans that are Base Rate Loans) shall be accompanied by accrued interest
to the date of such payment on the amount paid.

     (f)  All payments (including prepayments) to be made by the Borrower
hereunder, whether on account of principal, interest, fees or otherwise, shall
be made without setoff or counterclaim and shall be made prior to 1:00 P.M.,
New York City time, on the due date thereof to the Administrative Agent, for
the account of the relevant Lenders, at the Payment Office, in Dollars and in
immediately available funds. Any payment made by the Borrower after 1:00 P.M.,
New York City time, on any Business Day shall be deemed to have been on the
next following Business Day. The Administrative Agent shall distribute such
payments to the Lenders

 

 

 37

promptly upon receipt in like funds as received. If
any payment hereunder (other than payments on the Eurodollar Loans) becomes due
and payable on a day other than a Business Day, such payment shall be extended
to the next succeeding Business Day. If any payment on a Eurodollar Loan
becomes due and payable on a day other than a Business Day, the maturity
thereof shall be extended to the next succeeding Business Day unless the result
of such extension would be to extend such payment into another calendar month,
in which event such payment shall be made on the immediately preceding Business
Day. In the case of any extension of any payment of principal pursuant to the
preceding two sentences, interest thereon shall be payable at the then
applicable rate during such extension.

     (g)  Unless the Administrative Agent shall have been notified in writing by
any Lender prior to a borrowing that such Lender will not make the amount that
would constitute its share of such borrowing available to the Administrative
Agent, the Administrative Agent may assume that such Lender is making such
amount available to the Administrative Agent, and the Administrative Agent may,
in reliance upon such assumption, make available to the Borrower a
corresponding amount. If such amount is not made available to the
Administrative Agent by the required time on the Borrowing Date therefor, such
Lender shall pay to the Administrative Agent, on demand, such amount with
interest thereon at a rate equal to the daily average Federal Funds Effective
Rate for the period until such Lender makes such amount immediately available
to the Administrative Agent. A certificate of the Administrative Agent
submitted to any Lender with respect to any amounts owing under this paragraph
shall be conclusive in the absence of manifest error. If such Lender’s share
of such borrowing is not made available to the Administrative Agent by such
Lender within three Business Days after such Borrowing Date, the Administrative
Agent shall also be entitled to recover such amount with interest thereon at
the rate per annum applicable to Base Rate Loans under the relevant Facility,
within three Business Days after demand therefor, from the Borrower.

     (h)  Unless the Administrative Agent shall have been notified in writing by
the Borrower prior to the date of any payment due to be made by the Borrower
hereunder that the Borrower will not make such payment to the Administrative
Agent, the Administrative Agent may assume that the Borrower is making such
payment, and the Administrative Agent may, but shall not be required to, in
reliance upon such assumption, make available to the Lenders their respective
pro rata shares of a corresponding amount. If such payment is not made to the
Administrative Agent by the Borrower within three Business Days after such due
date, the Administrative Agent shall be entitled to recover, on demand, from
each Lender to which any amount which was made available pursuant to the
preceding sentence, such amount with interest thereon at the rate per annum
equal to the daily average Federal Funds Effective Rate. Nothing herein shall
be deemed to limit the rights of the Administrative Agent or any Lender against
the Borrower.

     2.19 Requirements of Law. (a) If the adoption of or any change in any
Requirement of Law or in the interpretation or application thereof or
compliance by any Lender with any request or directive (whether or not having
the force of law) from any central bank or other Governmental Authority first
made subsequent to the date hereof:

			
	 	     (i) 	shall subject any Lender to any tax
of any kind whatsoever with respect to this Agreement,
any Letter of Credit, any Application or

 

 

 38

			
	 	 	any Eurodollar
Loan made by it, or change the basis of taxation of
payments to such Lender in respect thereof (except for
Non-Excluded Taxes covered by Section 2.20 and changes
in the rate of tax on the overall net income, or net
profits or capital (if either is imposed in lieu of net
income taxes), of such Lender);
	 	 	 
	 	(ii)	shall impose, modify or hold
applicable any reserve, special deposit, compulsory loan
or similar requirement against assets held by, deposits
or other liabilities in or for the account of, advances,
loans or other extensions of credit by, or any other
acquisition of funds by, any office of such Lender that
is not otherwise included in the determination of the
Eurodollar Rate hereunder; or
	 	 	
	 	(iii)	shall impose on such Lender any
other condition;

and the result of any of the foregoing is to increase the cost to such Lender,
by an amount which such Lender reasonably deems to be material, of making,
converting into, continuing or
maintaining Eurodollar Loans or issuing or participating in Letters of Credit,
or to reduce any amount receivable hereunder in respect thereof, then, in any
such case, the Borrower shall promptly pay such Lender, within 30 days after
receipt of a reasonably detailed request therefor, any additional amounts
necessary to compensate such Lender for such increased cost or reduced amount
receivable. If any Lender becomes entitled to claim any additional amounts
pursuant to this Section, it shall promptly notify the Borrower (with a copy to
the Administrative Agent) of the event by reason of which it has become so
entitled.

     (b)  If any Lender shall have determined that the adoption of or any change
in any Requirement of Law regarding capital adequacy or in the interpretation
or application thereof or compliance by such Lender or any corporation
controlling such Lender with any request or directive regarding capital
adequacy (whether or not having the force of law) from any Governmental
Authority first made subsequent to the date hereof shall have the effect of
reducing the rate of return on such Lender’s or such corporation’s capital as a
consequence of its obligations hereunder or under or in respect of any Letter
of Credit to a level below that which such Lender or such corporation could
have achieved but for such adoption, change or compliance (taking into
consideration such Lender’s or such corporation’s policies with respect to
capital adequacy) by an amount deemed by such Lender to be material, then from
time to time, within 30 days after submission by such Lender to the Borrower of
a reasonably detailed request therefor (with a copy to the Administrative
Agent) of a written request therefor, the Borrower shall pay to such Lender
such additional amount or amounts as will compensate such Lender or such
corporation for such reduction; provided that the Borrower shall not be
required to compensate a Lender pursuant to this paragraph for any amounts
incurred more than six months prior to the date that such Lender notifies the
Borrower of such Lender’s intention to claim compensation therefor; and
provided further that, if the circumstances giving rise to such claim have a
retroactive effect, then such six-month period shall be extended to include the
period of such retroactive effect.

     (c)  A certificate as to any additional amounts payable pursuant to this
Section submitted by any Lender to the Borrower (with a copy to the
Administrative Agent) shall be

 

 

 39

conclusive in the absence of manifest error.
The obligations of the Borrower pursuant to this Section shall survive the
termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

     2.20 Taxes. (a) Except as required by applicable law, all payments made
by the Borrower under this Agreement to any Agent or Lender shall be made free
and clear of, and without deduction or withholding for or on account of, any
present or future income, stamp or other taxes, levies, imposts, duties,
charges, fees, deductions or withholdings, now or hereafter imposed, levied,
collected, withheld or assessed by any Governmental Authority, excluding income
taxes and franchise taxes imposed on or measured by any Agent’s or Lender’s net
income, or net profits or capital if either is imposed in lieu of net income
taxes, as a result of a present or former connection between such Agent or such
Lender and the jurisdiction of the Governmental Authority imposing such tax or
any political subdivision or taxing authority thereof or therein (other than
any such connection arising solely from such Agent’s or such Lender’s having
executed, delivered or performed its obligations or received a payment under,
or
enforced, this Agreement or any other Loan Document). If any such
non-excluded taxes, levies, imposts, duties, charges, fees, deductions or
withholdings (“Non-Excluded Taxes”) or any Other Taxes are required to be
withheld from any amounts payable to any Agent or any Lender hereunder, the
amounts so payable to such Agent or such Lender shall be increased to the
extent necessary to yield to such Agent or such Lender (after payment of all
Non-Excluded Taxes and Other Taxes) interest or any such other amounts payable
hereunder at the rates or in the amounts specified in this Agreement; provided,
however, that the Borrower shall not be required to increase any such amounts
payable to any Agent or any Lender with respect to any Non-Excluded Taxes (i)
that are attributable to such Agent or Lender’s failure to comply with the
requirements of paragraph (d) or (e) of this Section or (ii) that are United
States withholding taxes imposed on amounts payable to such Agent or Lender at
the time such Agent or Lender becomes a party to this Agreement, except to the
extent that such Agent’s or Lender’s assignor (if any) was entitled, at the
time of assignment, to receive additional amounts from the Borrower with
respect to such Non-Excluded Taxes pursuant to this paragraph (a).

     (b)  In addition, the Borrower shall pay any Other Taxes to the relevant
Governmental Authority in accordance with applicable law.

     (c) Whenever any Non-Excluded Taxes or Other Taxes are payable by the
Borrower, as promptly as reasonably possible thereafter the Borrower shall send
to the Administrative Agent for the account of the relevant Agent or Lender, as
the case may be, (i) a certified copy of an original official receipt received
by the Borrower showing payment thereof or (ii) if the Borrower determines that
it is unable to provide a certified copy of such receipt, a certificate as to
the amount of such payment. If the Borrower fails to pay any Non-Excluded
Taxes or Other Taxes when due to the appropriate taxing authority or fails to
remit to the Administrative Agent copies of the required receipts or other
required documentary evidence, the Borrower shall indemnify the Agents and the
Lenders for any incremental taxes, interest or penalties that may become
payable by any Agent or any Lender as a result of any such failure. The
agreements in this Section shall survive the termination of this Agreement and
the payment of the Loans and all other amounts payable hereunder.

 

 

 40

     (d)  Each Lender (or Transferee) that is not a United States person as
defined in Section 7701(a)(30) of the Code (a “Non-U.S. Lender”) shall deliver
to the Borrower and the Administrative Agent (or, in the case of a Participant,
to the Borrower and the Lender from which the related participation shall have
been purchased) two copies of either U.S. Internal Revenue Service Form W-8BEN
claiming eligibility for benefits of an income tax treaty to which the United
States is a party or Form W-8ECI, or, in the case of a Non-U.S. Lender claiming
exemption from U.S. federal withholding tax under Section 871(h) or 881(c) of
the Code with respect to payments of “portfolio interest” a statement
substantially in the form of Exhibit I and two copies of Form W-8BEN, or any
subsequent versions thereof or successors thereto properly completed and duly
executed by such Non-U.S. Lender claiming complete exemption from, or a reduced
rate of, U.S. federal withholding tax on all payments by the Borrower under
this Agreement and the other Loan Documents. Such forms shall be delivered by
each Non-U.S. Lender on or before the date it becomes a party to this Agreement
(or, in the case of any Participant, on or before the date such Participant
purchases the related participation). In addition, each Non-U.S. Lender agrees
that it will deliver to the Borrower (and the Administrative Agent) updated
versions of the foregoing documentation and such other
forms as may be required to confirm or establish the entitlement of the
Non-U.S. Lender to a continued exemption from or reduction in withholding tax
with respect to payments under this Agreement or under any Loan Document and
each Non-U.S. Lender shall deliver such forms promptly upon the obsolescence or
invalidity of any form previously delivered by such Non-U.S. Lender. Each
Non-U.S. Lender shall promptly notify the Borrower at any time it determines
that it is no longer in a position to provide any previously delivered
certificate to the Borrower (or any other form of certification adopted by the
U.S. taxing authorities for such purpose). Notwithstanding any other provision
of this paragraph, a Non-U.S. Lender shall not be required to deliver any form
pursuant to this paragraph that such Non-U.S. Lender is not legally able to
deliver.

     (e)  A Lender that is entitled to an exemption from or reduction of
non-U.S. withholding tax under the law of the jurisdiction in which the
Borrower is located, or any treaty to which such jurisdiction is a party, with
respect to payments under this Agreement shall deliver to the Borrower (with a
copy to the Administrative Agent), at the time or times prescribed by
applicable law or reasonably requested by the Borrower, such properly completed
and executed documentation prescribed by applicable law as will permit such
payments to be made without withholding or at a reduced rate, provided that
such Lender is legally entitled to complete, execute and deliver such
documentation and in such Lender’s reasonable judgment such completion,
execution or submission would not materially prejudice the legal position of
such Lender.

     (f)  Any Lender that is United States person as defined in section
7701(a)(30) of the Code shall deliver to the Borrower (with a copy to the
Administrative Agent) a statement signed by an authorized signatory of the
Lender that it is a United States person and, if necessary to avoid U.S. backup
withholding, a duly completed and signed Internal Revenue Service Form W-9 (or
successor form) establishing that the Lender is organized under the laws of the
United States and is not subject to backup withholding.

     (g)  If any Agent or Lender determines, in its good faith judgment, that it
has received a refund of, any Non-Excluded Taxes or Other Taxes as to which it
has been 

 

 

 41

indemnified by the Borrower or with respect to which the Borrower has
paid additional amounts pursuant to Section 2.20(a) or Section 2.20(b), it
shall pay over such refund to the Borrower within thirty Business Days of the
receipt of such refund to the extent that it determines that it can do so
without prejudice to the retention of such refund; provided, however, that the
Borrower agrees promptly to return such refund (together with any interest with
respect thereto due to the relevant taxing authority) (free of all Non-Excluded
Taxes) to the applicable Agent or Lender, as the case may be, upon receipt of a
notice that such refund is required to be repaid to the relevant taxing
authority. This section shall not be construed to require any Agent or Lender
to make available its tax returns (or any other information relating to its
taxes that it deems confidential) to the Borrower or to any other Person.

     2.21 Indemnity. The Borrower agrees to indemnify each Lender for, and to
hold each Lender harmless from, any loss or expense that such Lender may
actually sustain or incur as a consequence of (a) default by the Borrower in
making a borrowing of, conversion into or
continuation of Eurodollar Loans after the Borrower has given a notice
requesting the same in accordance with the provisions of this Agreement (other
than by operation of Section 2.17 or 2.22), (b) default by the Borrower in
making any prepayment after the Borrower has given a notice thereof in
accordance with the provisions of this Agreement (whether or not such notice
has been revoked or withdrawn by the Borrower) or (c) the making of a
prepayment or conversion of Eurodollar Loans on a day that is not the last day
of an Interest Period with respect thereto. A certificate as to any amounts
payable pursuant to this Section submitted to the Borrower by any Lender shall
be conclusive in the absence of manifest error. This covenant shall survive
the termination of this Agreement and the payment of the Loans and all other
amounts payable hereunder.

     2.22 Illegality. Notwithstanding any other provision herein, if the
adoption after the date hereof of, or any change after the date hereof in, any
Requirement of Law or in the interpretation or application thereof shall make
it unlawful for any Lender to make or maintain Eurodollar Loans as contemplated
by this Agreement, (a) the commitment of such Lender hereunder to make
Eurodollar Loans, continue Eurodollar Loans as such and convert Base Rate Loans
to Eurodollar Loans shall forthwith be suspended until such time as it is no
longer unlawful for such Lender to make or maintain Eurodollar Loans as
contemplated by this Agreement and (b) such Lender’s Loans then outstanding as
Eurodollar Loans, if any, shall be converted automatically to Base Rate Loans
on the respective last days of the then current Interest Periods with respect
to such Loans or within such earlier period as required by law. If any such
conversion of a Eurodollar Loan occurs on a day which is not the last day of
the then current Interest Period with respect thereto, the Borrower shall pay
to such Lender such amounts, if any, as may be required pursuant to Section
2.21.

     2.23 Change of Lending Office. Each Lender agrees that, upon the
occurrence of any event giving rise to the operation of Section 2.19, 2.20(a)
or 2.22 with respect to such Lender, it will, if requested by the Borrower, use
reasonable efforts (subject to overall policy considerations of such Lender) to
designate another lending office for any Loans affected by such event with the
object of avoiding the consequences of such event;  provided, that such
designation is made on terms that, in the sole judgment of such Lender, cause
such Lender and its lending office(s) to suffer no economic, legal or
regulatory disadvantage, and  provided,

 

 

 42

further, that nothing in this Section
shall affect or postpone any of the obligations of any Borrower or the rights
of any Lender pursuant to Section 2.19, 2.20(a) or 2.22.

     2.24 Replacement of Lenders under Certain Circumstances. The Borrower
shall be permitted to replace with a replacement financial institution any
Lender (a) that requests reimbursement for amounts owing pursuant to Section
2.19 or 2.20 or gives a notice of illegality pursuant to Section 2.22, (b) that
defaults in its obligation to make Loans hereunder or (c) that has refused to
consent to any waiver or amendment with respect to any Loan Document that has
been consented to by the Required Lenders; provided that (i) such replacement
does not conflict with any Requirement of Law, (ii)
prior to any such replacement pursuant to clause (a) above, such Lender
shall have taken no action under Section 2.23 so as to eliminate the continued
need for payment of amounts owing pursuant to Section 2.19 or 2.20 or to
eliminate the illegality referred to in such notice of illegality given
pursuant to Section 2.22, (iii) the replacement financial institution shall
purchase, at par, all Loans and other amounts owing to such replaced Lender on
or prior to the date of replacement, (iv) the Borrower shall be liable to such
replaced Lender under Section 2.21 (as though Section 2.21 were applicable) if
any Eurodollar Loan owing to such replaced Lender shall be purchased other than
on the last day of the Interest Period relating thereto, (v) the replacement
financial institution, if not already a Lender, shall be reasonably
satisfactory to the Administrative Agent, (vi) the replaced Lender shall be
obligated to make such replacement in accordance with the provisions of Section
10.6 (provided that the Borrower or the assignee Lender shall be obligated to
pay the registration and processing fee referred to therein), (vii) the
Borrower shall pay all additional amounts (if any) required pursuant to Section
2.19 or 2.20, as the case may be, in respect of any period prior to the date on
which such replacement shall be consummated, and (viii) any such replacement
shall not be deemed to be a waiver of any rights that the Borrower, the
Administrative Agent or any other Lender shall have against the replaced
Lender.

SECTION 3. LETTERS OF CREDIT

     3.1 L/C Commitment. (a) Subject to the terms and conditions hereof, each
Issuing Lender, in reliance on the agreements of the other Revolving Credit
Lenders set forth in Section 3.4(a), agrees to issue letters of credit
(“Letters of Credit”) for the account of the Borrower, or for the joint and
several account of the Borrower and any Subsidiary, on any Business Day during
the Revolving Credit Commitment Period in such form as may be approved from
time to time by such Issuing Lender; provided, that no Issuing Lender shall
have any obligation to issue any Letter of Credit if, after giving effect to
such issuance, (i) the L/C Obligations would exceed the L/C Commitment or (ii)
the aggregate amount of the Available Revolving Credit Commitments would be
less than zero. Each Letter of Credit shall (i) be denominated in Dollars and
(ii) expire no later than the earlier of (x) the first anniversary of its date
of issuance and (y) the date which is three Business Days prior to the
Revolving Credit Termination Date; provided that any Letter of Credit with a
one-year term may provide for the renewal thereof for additional one-year
periods (which shall in no event extend beyond the date referred to in clause
(y) above).

     (b) No Issuing Lender shall at any time be obligated to issue any Letter
of Credit hereunder if such issuance would conflict with any applicable
Requirement of Law.

 

 

 43

     3.2 Procedure for Issuance of Letter of Credit. The Borrower may from
time to time request that an Issuing Lender issue a Letter of Credit by
delivering to such Issuing Lender at its address for notices specified herein
an Application with a copy to the Administrative Agent therefor, completed to
the reasonable satisfaction of such Issuing Lender, and such other
certificates, documents and other papers and information as such Issuing Lender
may reasonably request. Upon receipt of any Application, an Issuing Lender
will process such Application and the certificates, documents and other papers
and information delivered to it in connection therewith in accordance with
its customary procedures and shall promptly issue the Letter of Credit
requested thereby by issuing the original of such Letter of Credit to the
beneficiary thereof or as otherwise may be agreed to by such Issuing Lender and
the Borrower (but in no event shall any Issuing Lender be required to issue any
Letter of Credit earlier than three Business Days after its receipt of the
Application with a copy to the Administrative Agent therefor and all such other
certificates, documents and other papers and information relating thereto).
Promptly after issuance by an Issuing Lender of a Letter of Credit, such
Issuing Lender shall furnish a copy of such Letter of Credit to the Borrower.
Each Issuing Lender shall promptly give notice to the Administrative Agent of
the issuance of each Letter of Credit issued by such Issuing Lender (including
the amount thereof).

     3.3 Fees and Other Charges. (a) The Borrower will pay a fee on the
aggregate drawable amount of all outstanding Letters of Credit at a per annum
rate equal to the Applicable Margin then in effect with respect to Eurodollar
Loans under the Revolving Credit Facility (less the percentage per annum at
which the Fronting Fee (as defined below) is paid in respect of such Letter of
Credit), shared ratably among the Revolving Credit Lenders in accordance with
their respective Revolving Credit Percentages and payable quarterly in arrears
on each L/C Fee Payment Date after the issuance date. In addition, the
Borrower shall pay to the relevant Issuing Lender for its own account a
fronting fee (the “Fronting Fee”) on the aggregate drawable amount of all
outstanding Letters of Credit issued by it of 0.25% per annum, payable
quarterly in arrears on each L/C Fee Payment Date after the issuance date.

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

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

 

 

 44

L/C Participant’s Revolving Credit
Percentage of the amount of such draft, or any part thereof, that is not so
reimbursed.

     (b)  If any amount required to be paid by any L/C Participant to an Issuing
Lender pursuant to Section 3.4(a) in respect of any unreimbursed portion of any
payment made by such Issuing Lender under any Letter of Credit is paid to such
Issuing Lender within three Business Days after the date such payment is due,
such L/C Participant shall pay to such Issuing Lender on demand an amount equal
to the product of (i) such amount, times (ii) the daily average Federal Funds
Effective Rate during the period from and including the date such payment is
required to the date on which such payment is immediately available to such
Issuing Lender, times (iii) a fraction the numerator of which is the number of
days that elapse during such period and the denominator of which is 360. If
any such amount required to be paid by any L/C Participant pursuant to Section
3.4(a) is not made available to such Issuing Lender by such L/C Participant
within three Business Days after the date such payment is due, such Issuing
Lender shall be entitled to recover from such L/C Participant, on demand, such
amount with interest thereon calculated from such due date at the rate per
annum applicable to Base Rate Loans under the Revolving Credit Facility. A
certificate of such Issuing Lender submitted to any L/C Participant with
respect to any such amounts owing under this Section shall be conclusive in the
absence of manifest error.

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

     3.5 Reimbursement Obligation of the Borrower. The Borrower agrees to
reimburse each Issuing Lender, on each date on which such Issuing Lender
notifies the Borrower of the date and amount of a draft presented under any
Letter of Credit and paid by such Issuing Lender, for the amount of (a) such
draft so paid and (b) any taxes, fees, charges or other costs or expenses
incurred by such Issuing Lender in connection with such payment (the amounts
described in the foregoing clauses (a) and (b) in respect of any drawing,
collectively, the “Payment Amount”). Each such payment shall be made to such
Issuing Lender at its address for notices specified herein in lawful money of
the United States of America and in immediately available funds. Interest
shall be payable on each Payment Amount from the date of the applicable drawing
until payment in full at the rate set forth in (i) until the third Business Day
following the date of the applicable drawing, Section 2.15(b) and (ii)
thereafter, Section 2.15(c). Each drawing under any Letter of Credit shall
(unless an event of the type described in clause (i) or (ii) of Section 8(f)
shall have occurred and be continuing with respect to the Borrower, in which
case the procedures specified in Section 3.4 for funding by L/C Participants
shall apply, or unless the Borrower otherwise notifies the Administrative Agent
and the relevant Issuing Lender and reimburses such Issuing Lender before a
Loan would otherwise be made pursuant to this sentence) constitute a request by
the Borrower to the Administrative Agent for a borrowing

 

 

 45

pursuant to Section 2.5 of Base Rate Loans (or, at the option of the Administrative
Agent and the
Swing Line Lender in their sole discretion, a borrowing pursuant
to Section 2.7 of Swing Line Loans) in the amount of such drawing. The
Borrowing Date with respect to such borrowing shall be the first date on which
a borrowing of Revolving Credit Loans (or, if applicable, Swing Line Loans)
could be made, pursuant to Section 2.5 (or, if applicable, Section 2.7), if the
Administrative Agent had received a notice of such borrowing at the time the
Administrative Agent receives notice from the relevant Issuing Lender of such
drawing under such Letter of Credit.

     3.6 Obligations Absolute. The Borrower’s obligations under this Section 3
shall be absolute and unconditional under any and all circumstances and
irrespective of any setoff, counterclaim or defense to payment that the
Borrower may have or have had against any Issuing Lender, any beneficiary of a
Letter of Credit or any other Person. The Borrower also agrees with each
Issuing Lender that, unless resulting from the gross negligence or willful
misconduct of such Issuing Lender, such Issuing Lender shall not be responsible
for, and the Borrower’s Reimbursement Obligations under Section 3.5 shall not
be affected by, among other things, the validity or genuineness of documents or
of any endorsements thereon, even though such documents shall in fact prove to
be invalid, fraudulent or forged, or any dispute between or among the Borrower
and any beneficiary of any Letter of Credit or any other party to which such
Letter of Credit may be transferred or any claims whatsoever of the Borrower
against any beneficiary of such Letter of Credit or any such transferee. No
Issuing Lender shall be liable for any error, omission, interruption or delay
in transmission, dispatch or delivery of any message or advice, however
transmitted, in connection with any Letter of Credit, except for errors or
omissions found by a final and nonappealable decision of a court of competent
jurisdiction to have resulted from the gross negligence or willful misconduct
of such Issuing Lender. The Borrower agrees that any action taken or omitted
by an Issuing Lender under or in connection with any Letter of Credit issued by
it or the related drafts or documents, if done in the absence of gross
negligence or willful misconduct and in accordance with the standards or care
specified in the Uniform Commercial Code of the State of New York, shall be
binding on the Borrower and shall not result in any liability of such Issuing
Lender to the Borrower.

     3.7 Letter of Credit Payments. If any draft shall be presented for
payment under any Letter of Credit, the relevant Issuing Lender shall promptly
notify the Borrower of the date and amount thereof. The responsibility of the
relevant Issuing Lender to the Borrower in connection with any draft presented
for payment under any Letter of Credit, in addition to any payment obligation
expressly provided for in such Letter of Credit issued by such Issuing Lender,
shall be limited to determining that the documents (including each draft)
delivered under such Letter of Credit in connection with such presentment
appear on their face to be in conformity with such Letter of Credit.

     3.8 Applications. To the extent that any provision of any Application
related to any Letter of Credit is inconsistent with the provisions of this
Section 3, the provisions of this Section 3 shall apply.

 

 

46

SECTION 4. REPRESENTATIONS AND WARRANTIES

     To induce the Agents and the Lenders to enter into this Agreement and to
make the Loans and issue or participate in the Letters of Credit, the Borrower
hereby represents and warrants to each Agent and each Lender that, as of the
Closing Date (after giving effect to the Acquisition) and as of any other date
on which the representations and warranties set forth in this Section 4 are
repeated pursuant to Section 5.2:

     4.1 Financial Condition. (a) The unaudited pro forma consolidated balance
sheet of the Borrower and its consolidated Subsidiaries as at March 31, 2003
(including the notes thereto) (the “Pro Forma Balance Sheet”), copies of which
have heretofore been furnished to each Lender, has been prepared giving effect
(as if such events had occurred on such date) to (i) the consummation of the
Acquisition, (ii) the Loans to be made and the Senior Subordinated Notes to be
issued on the Closing Date and the use of proceeds thereof and (iii) the
payment of fees and expenses in connection with the foregoing. The Pro Forma
Balance Sheet has been prepared based on information believed by the Borrower
to be reasonable and correct as of the date of delivery thereof, and presents
fairly the Borrower’s good faith estimate on a pro forma basis of the financial
position of Borrower and its consolidated Subsidiaries as at March 31, 2003,
assuming that the events specified in the preceding sentence had actually
occurred at such date.

     (b)  The audited consolidated balance sheet of the Acquired Business as at
December 31, 2002, and the related consolidated statements of income and of
cash flows for the fiscal year ended on such date, reported on by and
accompanied by an unqualified report from Grant Thornton, present fairly in all
material respects the consolidated financial condition of the Acquired Business
as at such date, and the consolidated results of its operations and its
consolidated cash flows for the fiscal year then ended. The unaudited
consolidated balance sheet of the Acquired Business as at March 31, 2003, and
the related unaudited consolidated statements of income and cash flows for the
three-month period ended on such date, present fairly in all material respects
the consolidated financial condition of the Acquired Business as at such date,
and the consolidated results of its operations and its consolidated cash flows
for the three-month period then ended (subject to normal year-end audit
adjustments). All such financial statements, including the related schedules
and notes thereto, have been prepared in accordance with GAAP applied
consistently throughout the periods involved (except as approved by the
aforementioned firm of accountants and disclosed therein). During the period
from December 31, 2002 to and including the date hereof there has been no
Disposition by the Acquired Business of any material part of its business or
Property.

     4.2 No Change. Since December 31, 2002 there has been no development or
event that has had or could reasonably be expected to have a Material Adverse
Effect.

     4.3 Corporate Existence; Compliance with Law. Each of Holdings, the
Borrower and its Subsidiaries (a) is duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (b) has
the corporate power and authority, and the legal right, to own and operate its
Property, to lease the Property it operates as lessee and to conduct the
business in which it is currently engaged, (c) is duly qualified as a foreign
corporation and in good standing under the laws of each jurisdiction where its
ownership, lease

 

 

47

or operation of Property or the conduct of its business requires such
qualification and (d) is in compliance with all Requirements of Law, except, in
the case of the foregoing clauses (c) and (d), to the extent that the failure
to be so qualified or to comply with such Requirements of Law, as the case may
be, could not, in the aggregate, reasonably be expected to have a Material
Adverse Effect.

     4.4 Power; Authorization; Enforceable Obligations. Each Loan Party has
the corporate or other power and authority, and the legal right, to make,
deliver and perform the Loan Documents to which it is a party and, in the case
of the Borrower, to borrow hereunder. Each Loan Party has taken all necessary
corporate or other organizational action to authorize the execution, delivery
and performance of the Loan Documents to which it is a party and, in the case
of the Borrower, to authorize the borrowings on the terms and conditions of
this Agreement. Except as could not reasonably be expected to have a Material
Adverse Effect, no consent or authorization of, filing with, notice to or other
act by or in respect of, any Governmental Authority or any other Person is
required in connection with the Acquisition, the borrowings hereunder or the
execution, delivery, performance, validity or enforceability of this Agreement
or any of the other Loan Documents, except (i) consents, authorizations,
filings and notices described in Schedule 4.4, which consents, authorizations,
filings and notices have been obtained or made and are in full force and effect
and (ii) the filings referred to in Section 4.19. Each Loan Document has been
duly executed and delivered on behalf of each Loan Party that is a party
thereto. This Agreement constitutes, and each other Loan Document upon
execution will constitute, a legal, valid and binding obligation of each Loan
Party that is a party thereto, enforceable against each such Loan Party in
accordance with its terms, except as enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or similar laws
affecting the enforcement of creditors’ rights generally and by general
equitable principles (whether enforcement is sought by proceedings in equity or
at law).

     4.5 No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents, the issuance of Letters of Credit, the
borrowings hereunder and the use of the proceeds thereof (a) will not violate
the Organizational Documents of any of the Loan Parties or (b) except as could
not reasonably be expected to have a Material Adverse Effect, violate any
Requirement of Law applicable to, or any Contractual Obligation of, Holdings,
the Borrower or any of its Subsidiaries, or result in, or require, the creation
or imposition of any Lien on any of their respective properties or revenues
pursuant to any Requirement of Law or any such Contractual Obligation (other
than the Liens created by the Security Documents).

     4.6 No Material Litigation. Except as set forth on Schedule 4.6, no
litigation, investigation or proceeding of or before any arbitrator or
Governmental Authority is pending or, to the knowledge of the Borrower,
threatened by or against Holdings, the Borrower or any of its Subsidiaries or
against any of their respective properties or revenues (a) with respect to any
of the Loan Documents or any of the transactions contemplated hereby or
thereby, or (b) that could reasonably be expected to have a Material Adverse
Effect.

     4.7 No Default. No Default or Event of Default has occurred and is
continuing.

 

 

48

     4.8 Ownership of Property; Liens. Each of the Borrower and each of its
Subsidiaries has title in fee simple to, or a valid leasehold interest in, all
its real property, and good title to, or a valid leasehold interest in, all its
other Property, in each case, except where the failure to do so would not have
a Material Adverse Effect, and none of such Property is subject to any Lien
except as permitted by Section 7.3.

     4.9 Intellectual Property. Except as all of the following in the
aggregate could not reasonably be expected to have a Material Adverse Effect:
(a) the Borrower and each of its Subsidiaries owns, or is licensed to use, all
Intellectual Property necessary for the conduct of its business as currently
conducted; (b) no material claim has been asserted and is pending by any Person
challenging or questioning the use of any material Intellectual Property of the
Borrower or its Subsidiaries or the validity or effectiveness of any such
material Intellectual Property; and (c) the use of Intellectual Property by the
Borrower and its Subsidiaries does not infringe on the rights of any Person.

     4.10 Taxes. Each of the Borrower and each of its Subsidiaries has filed
or caused to be filed all material tax returns that are required to be filed
and has paid all taxes shown to be due and payable on said returns and all
other material taxes, fees or other charges imposed on it or any of its
Property by any Governmental Authority (other than any the amount or validity
of which are currently being contested in good faith by appropriate proceedings
and with respect to which any reserves required in conformity with GAAP have
been provided on the books of the Borrower or its Subsidiaries, as the case may
be). To the knowledge of the Borrower, no claim is being asserted with respect
to any such tax, fee or other charge described in the proceeding sentence,
except as could not reasonably be expected to have a Material Adverse Effect.

     4.11 Federal Regulations. No part of the proceeds of any Loans will be
used for “purchasing” or “carrying” any “margin stock” within the respective
meanings of each of the quoted terms under Regulation U as now and from time to
time hereafter in effect or for any purpose that violates the provisions of the
Regulations of the Board. If requested by any Lender (through the
Administrative Agent) or the Administrative Agent, the Borrower will furnish to
the Administrative Agent and each Lender a statement to the foregoing effect in
conformity with the requirements of FR Form G-3 or FR Form U-1 referred to in
Regulation U.

     4.12 Labor Matters. There are no strikes or other labor disputes against
the Borrower or any of its Subsidiaries pending or, to the knowledge of the
Borrower, threatened that (individually or in the aggregate) could reasonably
be expected to have a Material Adverse Effect. Hours worked by and payment
made to employees of the Borrower and its Subsidiaries have not been in
violation of the Fair Labor Standards Act or any other applicable Requirement
of Law dealing with such matters that (individually or in the aggregate) could
reasonably be expected to have a Material Adverse Effect. All payments due
from the Borrower or any of its Subsidiaries on account of employee health and
welfare insurance that (individually or in the aggregate) could reasonably be
expected to have a Material Adverse Effect if not paid have been paid or
accrued as a liability on the books of the Borrower or the relevant Subsidiary.

     4.13 ERISA. Other than exceptions to any of the following that could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect: (a)

 

 

49

neither a Reportable Event nor an “accumulated funding deficiency” (within
the meaning of Section 412 of the Code or Section 302 of ERISA) has occurred
during the five-year period prior to the date on which this representation is
made or deemed made with respect to any Plan, and each Plan has complied in all
respects with the applicable provisions of ERISA and the Code; (b) no
termination of a Single Employer Plan has occurred, and no Lien in favor of the
PBGC or a Plan has arisen, during such five-year period; (c) the present value
of all accrued benefits under each Single Employer Plan (based on those
assumptions used to fund such Plans) did not, as of the last annual valuation
date prior to the date on which this representation is made or deemed made,
exceed the value of the assets of such Plan allocable to such accrued benefits;
(d) neither the Borrower nor any Commonly Controlled Entity has had a complete
or partial withdrawal from any Multiemployer Plan that has resulted or could
reasonably be expected to result in a liability under ERISA; and (e) no such
Multiemployer Plan is in Reorganization or Insolvent.

     4.14 Investment Company Act; Other Regulations. No Loan Party is an
“investment company”, or a company “controlled” by an “investment company”,
within the meaning of the Investment Company Act of 1940, as amended. No Loan
Party is subject to regulation under any Requirement of Law which limits its
ability to incur the Indebtedness to be incurred by it hereunder and under the
other Loan Documents.

     4.15 Subsidiaries. (a) The Subsidiaries listed on Schedule 4.15 constitute
all the Subsidiaries of Holdings and the Borrower as of the Closing Date.
Schedule 4.15 sets forth as of the Closing Date the name and jurisdiction of
incorporation of each Subsidiary and, as to each Subsidiary, the percentage of
each class of Capital Stock owned by each Loan Party.

     (b)  As of the Closing Date, there are no outstanding subscriptions,
options, warrants, calls, rights or other agreements or commitments (other than
stock options granted to employees or directors and directors’ qualifying
shares) of any nature relating to any Capital Stock of Holdings, the Borrower
or any Subsidiary, except as disclosed on Schedule 4.15.

     4.16 Use of Proceeds. The proceeds of the Term Loans shall be used to
finance a portion of the Acquisition and to pay related fees and expenses. The
proceeds of the Revolving Credit Loans and the Swing Line Loans, and the
Letters of Credit, shall be used for general corporate purposes.

     4.17 Environmental Matters. Other than exceptions to any of the following
that could not, individually or in the aggregate, reasonably be expected to
have a Material Adverse Effect:

     (a)  The Borrower and its Subsidiaries: (i) are, and within the period of
all applicable statutes of limitation have been, in compliance with all
applicable Environmental Laws; (ii) hold all Environmental Permits (each of
which is in full force and effect) required for any of their current operations
or for any property owned, leased, or otherwise operated by any of them; and
(iii) are, and within the period of all applicable statutes of limitation have
been, in compliance with all of their Environmental Permits.

     (b)  Materials of Environmental Concern are not present at, on, under, in,
or about any real property now or formerly owned, leased or operated by the
Borrower or any of its

 

 

50

Subsidiaries, or at any other location (including, without limitation, any
location to which Materials of Environmental Concern have been sent for re-use
or recycling or for treatment, storage, or disposal) which could reasonably be
expected to (i) give rise to liability of the Borrower or any of its
Subsidiaries under any applicable Environmental Law or otherwise result in
costs to the Borrower or any of its Subsidiaries, or (ii) interfere with the
Borrower’s or any of its Subsidiaries’ continued operations, or (iii) impair
the fair saleable value of any real property owned or leased by the Borrower or
any of its Subsidiaries.

     (c)  There is no judicial, administrative, or arbitral proceeding
(including any notice of violation or alleged violation) under or relating to
any Environmental Law to which the Borrower or any of its Subsidiaries is, or
to the knowledge of the Borrower or any of its Subsidiaries will be, named as a
party that is pending or, to the knowledge of the Borrower or any of its
Subsidiaries, threatened.

     (d)  Neither the Borrower nor any of its Subsidiaries has received any
written request for information, or been notified that it is a potentially
responsible party under or relating to the federal Comprehensive Environmental
Response, Compensation, and Liability Act or any similar Environmental Law, or
with respect to any Materials of Environmental Concern.

     (e)  Neither the Borrower nor any of its Subsidiaries has entered into or
agreed to any consent decree, order, or settlement or other agreement, or is
subject to any judgment, decree, or order or other agreement, in any judicial,
administrative, arbitral, or other forum for dispute resolution, relating to
compliance with or liability under any Environmental Law.

     (f)  Neither the Borrower nor any of its Subsidiaries has assumed or
retained, by contract or operation of law, any liabilities of any kind, fixed
or contingent, known or unknown, under any Environmental Law or with respect to
any Materials of Environmental Concern.

     4.18 Accuracy of Information, etc. No statement or information contained
in this Agreement, any other Loan Document or any certificate furnished to the
Administrative Agent or the Lenders or any of them, by or on behalf of any Loan
Party for use in connection with the transactions contemplated by this
Agreement or the other Loan Documents, when taken as a whole, contained as of
the date such information or certificate was so furnished, any untrue statement
of a material fact or omitted to state a material fact necessary in order to
make the statements contained herein or therein not misleading in light of the
circumstances under which such statements were made; provided, however that the
Borrower makes no representation and warranty in respect of any third-party
reports. The projections and pro forma financial information contained in the
materials referenced above are based upon good faith estimates and assumptions
believed by management of the Borrower to be reasonable at the time made, it
being recognized by the Lenders that such financial information as it relates
to future events is not to be viewed as fact and that actual results during the
period or periods covered by such financial information may differ from the
projected results set forth therein by a material amount. As of the Closing
Date, the Borrower has not intentionally withheld, either individually or in
the aggregate, any facts from the Agents in regard to any matters which could
reasonably be expected to have a Material Adverse Effect.

 

 

51

     4.19 Security Documents. (a) The Guarantee and Collateral Agreement is
effective to create in favor of the Administrative Agent, for the benefit of
the Secured Parties, a legal, valid and enforceable security interest in the
Collateral described therein and proceeds thereof. In the case of the Pledged
Stock described in the Guarantee and Collateral Agreement, when any stock
certificates representing such Pledged Stock are delivered to the
Administrative Agent, and in the case of the other Collateral described in the
Guarantee and Collateral Agreement, when financing statements in appropriate
form are filed in the offices specified on Schedule 4.19(a)-1 (which financing
statements have been duly completed and delivered to the Administrative Agent),
or, with respect to after-acquired property, when the requirements set forth in
Section 6.10 have been complied with, the Administrative Agent shall have a
fully perfected Lien on, and security interest in, all right, title and
interest of the Loan Parties in such Collateral and the proceeds thereof, as
security for the Obligations (as defined in the Guarantee and Collateral
Agreement), in each case prior and superior in right to any other Person
(except, in the case of Collateral other than Pledged Stock, Liens permitted by
Section 7.3), in each case to the extent required by the Guarantee and
Collateral Agreement. As of the date hereof, Schedule 4.19(a)-2 lists each UCC
Financing Statement that (i) names any Loan Party as debtor and (ii) will
remain on file after the Closing Date. As of the date hereof, Schedule
4.19(a)-3 lists each UCC Financing Statement that (i) names any Loan Party as
debtor and (ii) will be terminated on or prior to the Closing Date; and on or
prior to the Closing Date, the Borrower will have delivered to the
Administrative Agent (or will have made appropriate arrangements for the
delivery thereof to the Administrative Agent), or caused to be filed, duly
completed UCC termination statements, together with the authorization of the
relevant secured party to file such termination statements, in respect of each
UCC Financing Statement listed in Schedule 4.19(a)-3.

     (b)  Each of the Mortgages is effective to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a legal, valid
and enforceable Lien on the Mortgaged Properties described therein and proceeds
thereof; and when the Mortgages are filed in the offices specified on Schedule
4.19(b) (in the case of the Mortgages to be executed and delivered pursuant to
Section 6.12) or in the recording office designated by the Borrower (in the
case of any Mortgage to be executed and delivered pursuant to Section 6.10(b)),
the Administrative Agent will have a fully perfected Lien on, and security
interest in, all right, title and interest of the Loan Parties in the Mortgaged
Properties described therein and the proceeds thereof, as security for the
Obligations (as defined in the relevant Mortgage), in each case prior and
superior in right to any other Person (other than Persons holding Liens or
other encumbrances or rights permitted by Section 7.3). As of the Closing
Date, the Mortgaged Properties constitute all fee interests in real property
held by any Loan Party having a value (together with improvements thereof) of
at least $5,000,000.

     4.20 Solvency. Each Loan Party is, and after giving effect to the
Acquisition and the incurrence of all Indebtedness and obligations being
incurred in connection herewith and therewith will be and will continue to be,
Solvent.

     4.21 Senior Indebtedness. The Obligations constitute “Senior
Indebtedness” of the Borrower under and as defined in the Senior Subordinated
Note Indenture. The obligations of each Subsidiary Guarantor under the
Guarantee and Collateral Agreement constitute “Guarantor Senior Indebtedness”
of such Subsidiary Guarantor under and as defined in the Senior Subordinated
Note Indenture.

 

 

52

     4.22 Regulation H. No Mortgage encumbers improved real property which is
located in an area that has been identified by the Secretary of Housing and
Urban Development as an area having special flood hazards and in which flood
insurance has been made available under the National Flood Insurance Act of
1968 (except any Mortgaged Properties as to which such flood insurance as
required by Regulation H has been obtained and is in full force and effect as
required by this Agreement).

SECTION 5. CONDITIONS PRECEDENT

     5.1 Conditions to Initial Extension of Credit. The agreement of each
Lender to make the initial extension of credit requested to be made by it
hereunder is subject to the satisfaction, prior to or concurrently with the
making of such extension of credit on the Closing Date, of the following
conditions precedent:

     (a)  Loan Documents. The Administrative Agent shall have received (i) this
Agreement, executed and delivered by a duly authorized officer of the Borrower,
(ii) the Guarantee and Collateral Agreement, executed and delivered by a duly
authorized officer of the Borrower and each Subsidiary Guarantor, and (iii) a
Lender Addendum executed and delivered by each Lender and accepted by the
Borrower.

     (b)  Acquisition, etc. The following transactions shall have been
consummated:

	 	 	 	 	 
	 	 	
(i)
	 	The Acquisition shall have been
consummated in accordance with the terms of the
Acquisition Agreement, and the Administrative Agent
shall have received satisfactory evidence thereof;
	 	 	 	 	 
	 	 	
(ii)
	 	The Borrower shall have received at
least $250,000,000 from the proceeds of common equity
issued by the Borrower to Holdings, which shall have
obtained such funds through the issuance of its common
stock to the Sponsor, Control Investment Affiliates of
the Sponsor and members of management of the Borrower;
and
	 	 	 	 	 
	 	 	
(iii)
	 	the Borrower shall have received at
least $230,000,000 in gross cash proceeds from the
issuance of the Senior Subordinated Notes.

     (c)  Pro Forma Balance Sheet; Financial Statements. The Lenders shall have
received (i) the Pro Forma Balance Sheet, (ii) audited consolidated financial
statements of the Acquired Business for the 2002 and 2001 fiscal years and
(iii) unaudited interim consolidated financial statements of the Acquired
Business for each quarterly period ended subsequent to the date of the latest
applicable financial statements delivered pursuant to clause (ii) of this
paragraph and not less than 45 days prior to the Closing Date.

     (d)  Approvals. All material governmental and third party approvals
necessary in connection with the Acquisition and the transactions contemplated
hereby shall have been obtained and be in full force and effect, and all
applicable waiting periods shall have expired without any action being taken or
threatened by any competent authority which would

 

 

53

restrain, prevent or otherwise impose material adverse conditions on the
Acquisition or the financing contemplated hereby.

     (e)  Related Agreements. The Administrative Agent shall have received (in
a form reasonably satisfactory to the Administrative Agent), true and correct
copies, certified as to authenticity by the Borrower, of (i) the Senior
Subordinated Note Indenture (in a form reasonably satisfactory to the Joint
Lead Arrangers) and (ii) the Acquisition Agreement.

     (f)  Fees. The Administrative Agent, the Syndication Agent and the Joint
Lead Arrangers shall have received all fees required to be paid, and all
reasonable out-of-pocket expenses for which invoices have been presented
(including reasonable fees, disbursements and other charges of counsel to the
Agents), on or before the Closing Date.

     (g)  Pro Forma EBITDA. The Administrative Agent shall have received a
certificate from the chief financial officer of the Borrower certifying that
(i) consolidated EBITDA of the Borrower from planned continuing operations
(calculated on a pro forma basis containing only such adjustments as have been
agreed between the Borrower and the Joint Lead Arrangers) (“Pro Forma EBITDA”)
for the 12-month period ended on the date of the most recent financial
statements delivered pursuant to clause (iii) of Section 5.1(c) shall be not
less than $129,000,000 and (ii) the ratio of Consolidated Total Debt of the
Borrower (after giving pro forma effect to the consummation of the Acquisition,
the issuance of the Senior Subordinated Notes and the incurrence of the Loans
to be incurred on the Closing Date) as of the date of such financial statements
to Pro Forma EBITDA for such 12-month period shall be not greater than
4.54:1.00, and the Borrower shall provide support for such calculations of a
nature that is reasonably satisfactory to the Administrative Agent and the
Joint Lead Arrangers.

     (h)  Lien Searches. The Administrative Agent shall have received the
results of a recent lien search in each of the jurisdictions in which Uniform
Commercial Code financing statement or other filings or recordations should be
made to evidence or perfect security interests in all assets of the Loan
Parties, and such search shall reveal no liens on any of the assets of the Loan
Party, except for Liens permitted by Section 7.3 and Liens to be discharged on
or prior to the Closing Date.

     (i)  Closing Certificate. The Administrative Agent shall have received a
certificate of each Loan Party, dated the Closing Date, substantially in the
form of Exhibit C, with appropriate insertions and attachments.

     (j)  Legal Opinions. The Administrative Agent shall have received the
following executed legal opinions:

	 	 	 	 	 
	 	 	
(i)
	 	the legal opinion of
Latham & Watkins, counsel to the Borrower and its Subsidiaries,
substantially in the form of Exhibit F;
	 	 	 	 	 
	 	 	
(ii)
	 	to the extent consented to by the
relevant counsel, each legal opinion, if any, delivered
in connection with the Acquisition Agreement,
accompanied by a reliance letter in favor of the
Lenders; and

 

 

54

	 	 	 	 	 
	 	 	
(iii)
	 	such legal opinions of local counsel
as may be reasonably requested by the Administrative
Agent, in each case covering such matters as the
Administrative Agent shall reasonably request.

     (k)  Pledged Stock; Stock Powers; Acknowledgment and Consent; Pledged
Notes. The Administrative Agent shall have received (i) the certificates, if
any, representing the shares of Capital Stock pledged pursuant to the Guarantee
and Collateral Agreement, together with an undated stock power for each such
certificate executed in blank by a duly authorized officer of the pledgor
thereof and (ii) each promissory note pledged pursuant to the Guarantee and
Collateral Agreement endorsed (without recourse) in blank (or accompanied by an
executed transfer form in blank satisfactory to the Administrative Agent) by
the pledgor thereof.

     (l)  Filings, Registrations and Recordings. Each document (including,
without limitation, any Uniform Commercial Code financing statement) required
by the Security Documents or reasonably requested by the Administrative Agent
to be filed, registered or recorded in order to create in favor of the
Administrative Agent, for the benefit of the Secured Parties, a perfected Lien
on the Collateral described therein, prior and superior in right to any other
Person (other than with respect to Liens expressly permitted by Section 7.3),
shall have been filed, registered or recorded or shall have been delivered to
the Administrative Agent be in proper form for filing, registration or
recordation.

     (m)  Insurance. The Administrative Agent shall have received insurance
certificates satisfying the requirements of Section 6.5.

     (n)  Credit Ratings. The Facilities shall have received ratings from
Standard and Poor’s Ratings Service and Moody’s Investors Service of at least
B+ and B1, respectively, and if either such rating is at such minimum level, it
is not on credit watch with negative implication.

     5.2 Conditions to Each Extension of Credit. The agreement of each Lender
to make any extension of credit requested to be made by it hereunder on any
date (including, without limitation, its initial extension of credit) is
subject to the satisfaction of the following conditions precedent:

     (a)  Representations and Warranties. Each of the representations and
warranties made by any Loan Party in or pursuant to the Loan Documents that is
qualified by materiality shall be true and correct on and as of such date as if
made on and as of such date, and each of the representations and warranties
made by any Loan Party in or pursuant to the Loan Documents that is not
qualified by materiality shall be true and correct in all material respects on
and as of such date as if made on and as of such date, except, in each case, to
the extent that such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties shall be true
and correct, or true and correct in all material respects, as the case may be,
as of such earlier date.

     (b)  No Default. No Default or Event of Default shall have occurred and be
continuing on such date or after giving effect to the extensions of credit
requested to be made on such date.

 

 

55

     Each borrowing by and issuance of a Letter of Credit on behalf of the
Borrower hereunder shall constitute a representation and warranty by the
Borrower as of the date of such extension of credit that the conditions
contained in this Section 5.2 have been satisfied.

SECTION 6. AFFIRMATIVE COVENANTS

     The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall and shall cause
each of its Subsidiaries to:

     6.1 Financial Statements. Furnish to the Administrative Agent (which
shall make available such items to the Lenders):

     (a)  as soon as available, but in any event within 90 days (or, if the
Borrower is not at such time required to file with the SEC an Annual Report on
Form 10-K with respect to such fiscal year, 120 days) after the end of each
fiscal year of the Borrower, a copy of the audited consolidated balance sheet
of the Borrower and its consolidated Subsidiaries as at the end of such year
and the related audited consolidated statements of income and of cash flows for
such year, setting forth in each case, commencing with the statements for the
period ending December 31, 2003, in comparative form the figures as of the end
of and for the previous year, reported on without a “going concern” or like
qualification or exception, or qualification arising out of the scope of the
audit, by Grant Thornton or other independent certified public accountants of
nationally recognized standing;

     (b)  as soon as available, but in any event not later than 45 days after
the end of each of the first three quarterly periods of each fiscal year of the
Borrower (or 60 days after the end of the fiscal quarter ending June 30, 2003),
the unaudited consolidated balance sheet of the Borrower and its consolidated
Subsidiaries as at the end of such quarter and the related unaudited
consolidated statements of income and of cash flows for such quarter and the
portion of the fiscal year through the end of such quarter, setting forth in
each case, commencing with the statements for the period ending September 30,
2003, in comparative form the figures as of the end of and for the
corresponding period in the previous year, certified by a Responsible Officer
as being fairly stated in all material respects (subject to normal year-end
audit adjustments and the absence of footnote disclosure); and

     (c)  all such financial statements to be complete and correct in all
material respects and to be prepared in reasonable detail and in accordance
with GAAP (subject, in the case of quarterly financial statements, to normal
year-end audit adjustments and the absence of footnote disclosure) applied
consistently throughout the periods reflected therein and with prior periods
(except as approved by such accountants or officer, as the case may be, and
disclosed therein). Notwithstanding the foregoing, (i) in the event that the
Borrower delivers to the Administrative Agent an Annual Report for Borrower on
Form 10-K for such fiscal year, as filed with the SEC, within 90 days after the
end of such fiscal year, such Form 10-K shall satisfy all requirements of
paragraph (a) of this Section and (ii) in the event that the Borrower delivers
to the Administrative Agent a Quarterly Report for Borrower on Form 10-Q for
such fiscal quarter, as filed with the SEC, within 45 days after the end of
such fiscal quarter (or 60 days after the end

 

 

56

of the fiscal quarter ending June 30, 2003), such Form 10-Q shall satisfy
all requirements of paragraph (b) of this Section.

     6.2 Certificates; Other Information. Furnish to the Administrative Agent
(which shall make available such items to the Lenders):

     (a)  concurrently with the delivery of the financial statements referred to
in Section 6.1(a), a certificate of the independent certified public
accountants reporting on such financial statements stating that in making the
examination necessary therefor no knowledge was obtained of any Default or
Event of Default, except as specified in such certificate (it being understood
that such certificate shall be limited to the items that independent certified
public accountants are permitted to cover in such certificates pursuant to
their professional standards and customs of the profession);

     (b)  concurrently with the delivery of any financial statements pursuant to
Section 6.1, (i) a certificate of a Responsible Officer stating that such
Responsible Officer is not aware of any Default or Event of Default except as
specified in such certificate, (ii) beginning with the date of delivery of
financial statements for the fiscal quarter ending September 30, 2003, a
Compliance Certificate containing all information and calculations necessary
for determining compliance by the Borrower and its Subsidiaries with the
provisions of this Agreement referred to therein as of the last day of the
fiscal quarter or fiscal year of the Borrower, as the case may be (or, in the
case of the Compliance Certificate for the fiscal quarter ending September 30,
2003, containing all information and calculations that would be necessary for
determining compliance with such provisions if such provisions were measured as
of the last day of such period (provided that, only for the purposes of
determining the Consolidated Interest Coverage Ratio for the period of four
fiscal quarters ending September 30, 2003 to be set forth on such certificate,
Consolidated Interest Expense for each relevant fiscal quarter of 2002 and 2003
shall be deemed to be $9,300,000)) and (iii) to the extent not previously
disclosed to the Administrative Agent, a listing of any material patents,
trademarks or copyrights (to the extent recorded in the Patent and Trademark
Office or Copyright Office) acquired by any Loan Party since the date of the
most recent list delivered pursuant to this clause (iii) (or, in the case of
the first such list so delivered, since the Closing Date);

     (c)  as soon as available, and in any event no later than 45 days after the
end of each fiscal year of the Borrower, a detailed consolidated budget for the
following fiscal year (including a projected consolidated balance sheet of the
Borrower and its Subsidiaries as of the end of the following fiscal year, and
the related consolidated statements of projected cash flow, projected changes
in financial position and projected income);

     (d)  no later than five Business Days prior to the effectiveness thereof,
copies of substantially final drafts of any proposed amendment, supplement,
waiver or other modification adverse to the Lenders with respect to the Senior
Subordinated Note Indenture or the Acquisition Agreement;

     (e)  promptly after the same are sent, copies of all financial statements
and reports that the Borrower sends to the holders of any class of its debt
securities or public equity

 

 

57

securities and, promptly after the same are filed, copies of all financial
statements and reports that the Borrower may make to, or file with, the SEC;

     (f)  promptly, such additional financial and other information as any
Lender, through the Administrative Agent, may from time to time reasonably
request.

     6.3 Payment of Taxes, etc. Pay, discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all
material taxes, fees or other charges imposed on it or any of its Property by
any Governmental Authority, except where the amount or validity thereof is
currently being contested in good faith by appropriate proceedings and any
required reserves in conformity with GAAP with respect thereto have been
provided on the books of the Borrower or its Subsidiaries, as the case may be.

     6.4 Conduct of Business and Maintenance of Existence, etc. (a) (i)
Preserve, renew and keep in full force and effect its corporate or other
organizational existence and (ii) take all reasonable action to maintain all
rights, privileges and franchises necessary or desirable in the normal conduct
of its business, except, in each case, as otherwise permitted by Section 7.4
and except, in the case of clause (ii) above, to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect; and (b)
comply with all Requirements of Law, except to the extent that failure to
comply therewith could not, in the aggregate, reasonably be expected to have a
Material Adverse Effect.

     6.5 Maintenance of Property; Insurance. (a) (i) Keep all Property and systems
useful and necessary in its business in reasonably good working order and
condition, ordinary wear and tear excepted and (ii) maintain with financially sound
and reputable insurance companies insurance on all its Property in at least
such amounts and against at least such risks as are usually insured against in
the same general area by companies engaged in the same or a similar business.

     (b)  Maintain, with financially sound and reputable companies, insurance
policies (i) insuring the Mortgaged Properties and the Inventory and Equipment
constituting Collateral against loss by fire, explosion, theft and such other
casualties as may be reasonably satisfactory to the Administrative Agent and (ii)
to the extent requested by the Administrative Agent, insuring the applicable
Loan Party and the Administrative Agent for the benefit of the Secured Parties
against liability for personal injury and property damage relating to such
Inventory and Equipment, such policies to be in such form and amounts and
having such coverage as may be reasonably satisfactory to the Administrative
Agent. All such insurance shall (i) provide that no cancellation, material
reduction in amount or material change in coverage thereof shall be effective
until at least 30 days after receipt by the Administrative Agent of written
notice thereof, (ii) name the Administrative Agent as insured party or loss
payee and (iii) be reasonably satisfactory in all other respects to the
Administrative Agent.

     (c)  Deliver to the Administrative Agent a report of a reputable insurance
broker with respect to insurance maintained by the Loan Parties on the
Collateral substantially concurrently with the delivery by the Borrower to the
Administrative Agent of its audited financial statements for each fiscal year,
and such supplemental reports with respect thereto as the Administrative Agent
may from time to time reasonably request.

 

 

58

     6.6 Inspection of Property; Books and Records; Discussions. (a) Keep proper
books of records and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all material
dealings and transactions in relation to its business and activities and (b)
permit representatives of any Lender, upon reasonable notice, to visit and
inspect any of its properties and examine and make abstracts from any of its
books and records at any reasonable time during normal business hours and as
often as may reasonably be desired and to discuss the business, operations,
properties and financial and other condition of the Borrower and its
Subsidiaries with officers and employees of the Borrower and its Subsidiaries
and with its independent certified public accountants; provided, the Lenders
shall coordinate such visits through the Administrative Agent such that, in the
absence of any Event of Default that has occurred and is continuing, not more
than one such visit shall occur in any calendar year.

     6.7 Notices. Promptly after any Responsible Officer obtains knowledge
thereof, give notice to the Administrative Agent and each Lender of:

     (a)  the occurrence of any Default or Event of Default;

     (b)  any litigation, investigation or proceeding which may exist at any
time between the Borrower or any of its Subsidiaries and any Governmental
Authority, that in either case, if not cured or if adversely determined, as the
case may be, could reasonably be expected to have a Material Adverse Effect;

     (c)  any litigation or proceeding affecting the Borrower or any of its
Subsidiaries in which the amount involved is $1,000,000 or more and not covered
by insurance or in which injunctive or similar relief is sought;

     (d)  the following events, as soon as possible and in any event within 30
days after the Borrower knows or has reason to know thereof: (i) the
occurrence of any Reportable Event with respect to any Plan, a failure to make
any required material contribution to a Plan, the creation of any Lien in favor
of the PBGC or a Plan or any withdrawal from, or the termination,
Reorganization or Insolvency of, any Multiemployer Plan or (ii) the institution
of proceedings or the taking of any other action by the PBGC or the Borrower or
any Commonly Controlled Entity or any Multiemployer Plan with respect to the
withdrawal from, or the termination, Reorganization or Insolvency of, any Plan;

     (e)  the acquisition by the Borrower or any of its Subsidiaries of any fee
interest in real property having a value (together with improvements thereof)
of at least $5,000,000 (other than any such real property owned by an Excluded
Subsidiary or subject to a Lien expressly permitted by Section 7.3(g)); and

     (f)  any development or event that has had or could reasonably be expected
to have a Material Adverse Effect.

Each notice pursuant to this Section shall be accompanied by a statement of a
Responsible Officer setting forth details of the occurrence referred to therein
and stating what action the Borrower or the relevant Subsidiary proposes to
take with respect thereto.

 

 

59

     6.8 Environmental Laws. (a) Except as would not have a Material Adverse
Effect, comply in all material respects with all applicable Environmental Laws,
and obtain and comply in all material respects with and maintain any and all
material licenses, approvals, notifications, registrations or permits required
by applicable Environmental Laws.

     (b)  Except as would not have a Material Adverse Effect, conduct and
complete all investigations, studies, sampling and testing, and all remedial,
removal and other actions lawfully required under applicable Environmental Laws
and promptly comply in all material respects with all lawful orders and
directives of all Governmental Authorities regarding Environmental Laws
provided that the foregoing shall not prohibit Borrower from challenging in
good faith any such order, regulation or statute requiring investigation,
remediation or other actions (provided such challenge would not reasonably be
expected to result in a Material Adverse Effect).

     6.9 Interest Rate Protection. In the case of the Borrower, within 120
days after the Closing Date, enter into Hedge Agreements to the extent
necessary to provide that at least 60% of the aggregate principal amount of the
Senior Subordinated Notes and the Term Loans is subject to either a fixed
interest rate or interest rate protection for a period of not less than two
years on a weighted average basis, which Hedge Agreements shall have terms and
conditions reasonably satisfactory to the Administrative Agent.

     6.10 Additional Collateral, etc. (a) With respect to any Property acquired
after the Closing Date by the Borrower or any of its Subsidiaries (other than
(x) any Property described in paragraph (b) or paragraph (c) of this Section or
any other interest in real property, (y) any Property subject to a Lien
expressly permitted by Section 7.3(g) and (z) Property acquired by an Excluded
Subsidiary) as to which the Administrative Agent, for the benefit of the
Secured Parties, does not have a perfected Lien, promptly (i) execute and
deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement or such other documents as the Administrative Agent deems
necessary to grant to the Administrative Agent, for the benefit of the Secured
Parties, a security interest in such Property and (ii) take all actions
necessary to grant to the Administrative Agent, for the benefit of the Secured
Parties, a perfected first priority security interest in such Property,
including without limitation, the filing of Uniform Commercial Code financing
statements in such jurisdictions as may be required by the Guarantee and
Collateral Agreement or as may be requested by the Administrative Agent.

     (b)  With respect to any fee interest in any real property (including a fee
interest in improvements which are subject to a ground lease) having a value
(together with improvements thereof) of at least $5,000,000 acquired after the
Closing Date by the Borrower or any of its Subsidiaries (other than any such
real property owned by an Excluded Subsidiary or subject to a Lien expressly
permitted by Section 7.3(g)), promptly (i) execute and deliver a first priority
Mortgage in favor of the Administrative Agent, for the benefit of the Secured
Parties, covering such real property, (ii) if requested by the Administrative
Agent, provide the Lenders with (or in the case of clause (y) use all
commercially reasonable efforts to provide the Lenders with) (x) title and
extended coverage insurance covering such real property in an amount at least
equal to the purchase price of such real property (or such other amount as
shall be reasonably specified by the Administrative Agent) as well as a current
ALTA survey thereof, together with a surveyor’s certificate and (y) any
consents or estoppels reasonably deemed necessary by the

 

 

60

Administrative Agent in connection with such Mortgage, each of the
foregoing in form and substance reasonably satisfactory to the Administrative
Agent and (iii) if requested by the Administrative Agent, deliver to the
Administrative Agent legal opinions relating to the matters described above,
which opinions shall be in form and substance, and from counsel, reasonably
satisfactory to the Administrative Agent; provided, that the Borrower shall not
be required to comply with the foregoing provisions of this paragraph (b) in
respect of any parcel of real property as to which the Administrative Agent
shall have determined that the cost of the foregoing actions is
disproportionate (taking into account any potential environmental issues with
respect to such parcel) to the value of such parcel as Collateral.

     (c)  With respect to any new Subsidiary (other than an Excluded Subsidiary)
created or acquired after the Closing Date (which, for the purposes of this
paragraph, shall include any existing Subsidiary that ceases to be an Excluded
Subsidiary), by the Borrower or any of its Subsidiaries, promptly (i) execute
and deliver to the Administrative Agent such amendments to the Guarantee and
Collateral Agreement as the Administrative Agent reasonably deems necessary to
grant to the Administrative Agent, for the benefit of the Secured Parties, a
perfected first priority security interest in the Capital Stock of such new
Subsidiary that is owned by the Borrower or any of its Subsidiaries, (ii)
deliver to the Administrative Agent the certificates, if any, representing such
Capital Stock, together with undated stock powers, in blank, executed and
delivered by a duly authorized officer of the Borrower or such Subsidiary, as
the case may be, (iii) cause such new Subsidiary (A) to become a party to the
Guarantee and Collateral Agreement and (B) to take such actions reasonably
deemed necessary by the Administrative Agent to grant to the Administrative
Agent for the benefit of the Secured Parties a perfected first priority
security interest in the Collateral described in the Guarantee and Collateral
Agreement with respect to such new Subsidiary, including, without limitation,
the filing of Uniform Commercial Code financing statements in such
jurisdictions as may be required by the Guarantee and Collateral Agreement or
as may be requested by the Administrative Agent, and (iv) if reasonably
requested by the Administrative Agent, deliver to the Administrative Agent
legal opinions relating to the matters described above, which opinions shall be
in form and substance, and from counsel, reasonably satisfactory to the
Administrative Agent.

     (d)  With respect to any new Excluded Subsidiary created or acquired after
the Closing Date by the Borrower or any of its Subsidiaries (other than any
Excluded Subsidiaries), promptly (i) execute and deliver to the Administrative
Agent such amendments to the Guarantee and Collateral Agreement or such other
documents as the Administrative Agent deems necessary in order to grant to the
Administrative Agent, for the benefit of the Secured Parties, a perfected first
priority security interest in the Capital Stock of such new Subsidiary that is
owned by the Borrower or any of its Subsidiaries (other than any Excluded
Subsidiaries), (provided that in no event shall more than 65% of the total
outstanding Capital Stock of any such new Excluded Subsidiary be required to be
so pledged), (ii) deliver to the Administrative Agent the certificates, if any,
representing such Capital Stock, together with undated stock powers, in blank,
executed and delivered by a duly authorized officer of the Borrower or such
Subsidiary, as the case may be, and take such other action as may be necessary
or, in the opinion of the Administrative Agent, desirable to perfect the Lien
of the Administrative Agent thereon, and (iii) if reasonably requested by the
Administrative Agent, deliver to the Administrative Agent legal opinions

 

 

61

relating to the matters described above, which opinions shall be in form
and substance, and from counsel, reasonably satisfactory to the Administrative
Agent.

     6.11 Further Assurances. From time to time execute and deliver, or cause
to be executed and delivered, such additional instruments, certificates or
documents, and take such actions, as the Administrative Agent may reasonably
request for the purposes of implementing or effectuating the provisions of this
Agreement and the other Loan Documents, or of more fully perfecting or renewing
the rights of the Administrative Agent and the Lenders with respect to the
Collateral (or with respect to any additions thereto or replacements or
proceeds thereof or with respect to any other property or assets hereafter
acquired by the Borrower or any Subsidiary which may be deemed to be part of
the Collateral) pursuant hereto or thereto. Upon the exercise by the
Administrative Agent of any power, right, privilege or remedy pursuant to this
Agreement or the other Loan Documents which requires any consent, approval,
recording, qualification or authorization of any Governmental Authority, the
Borrower will execute and deliver, or will cause the execution and delivery of,
all applications, certifications, instruments and other documents and papers
that the Administrative Agent may be required to obtain from the Borrower or
any of its Subsidiaries for such governmental consent, approval, recording,
qualification or authorization.

     6.12 Post-Closing Obligations. (a) Within 60 days after the Closing Date
(or such later date as the Administrative Agent may agree and notify the
Lenders of), deliver to the Administrative Agent a Mortgage covering each of
the Mortgaged Properties, executed and delivered by a duly authorized officer
of each party thereto; and in connection therewith, by such 60th day after the
Closing Date (or such later agreed date), cause the following conditions to be
satisfied:

		
	 	     (i) If requested by the Administrative Agent, the Administrative
Agent shall have received, and the title insurance company issuing the
policy referred to in clause (ii) below (the “Title Insurance Company”)
shall have received, maps or plats of an as-built survey of the sites of
the Mortgaged Properties certified to the Administrative Agent and the
Title Insurance Company in a manner reasonably satisfactory to them,
dated a date reasonably satisfactory to the Administrative Agent and the
Title Insurance Company by an independent professional licensed land
surveyor reasonably satisfactory to the Administrative Agent and the
Title Insurance Company, which maps or plats and the surveys on which
they are based shall be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established and
adopted by the American Land Title Association and the American Congress
on Surveying and Mapping in 1992.

		
	 	     (ii) The Administrative Agent shall have received in respect of each
Mortgaged Property a mortgagee’s title insurance policy (or policies) or
marked up unconditional binder for such insurance. Each such policy
shall (A) be in an amount reasonably satisfactory to the Administrative
Agent; (B) be issued at ordinary rates; (C) insure that the Mortgage
insured thereby creates a valid first Lien on such Mortgaged Property
free and clear of all defects and encumbrances, except as disclosed
therein; (D) name the Administrative Agent for the benefit of the Secured
Parties as the insured thereunder; (E) be in the form of ALTA Loan Policy
- 1970 (Amended 10/17/70 and

 

 

62

		
	 	10/17/84) (or equivalent policies); (F) contain such endorsements
and affirmative coverage as the Administrative Agent may reasonably
request and (G) be issued by title companies reasonably satisfactory to
the Administrative Agent (including any such title companies acting as
co-insurers or reinsurers, at the option of the Administrative Agent).
The Administrative Agent shall have received evidence reasonably
satisfactory to it that all premiums in respect of each such policy, all
charges for mortgage recording tax, and all related expenses, if any,
have been paid.

		
	 	     (iii) If requested by the Administrative Agent, the Administrative
Agent shall have received (A) a policy of flood insurance, to the extent
such property is located in a flood zone that (1) covers any parcel of
improved real property that is encumbered by any Mortgage (2) is written
in an amount not less than the outstanding principal amount of the
indebtedness secured by such Mortgage that is reasonably allocable to
such real property or the maximum limit of coverage made available with
respect to the particular type of property under the National Flood
Insurance Act of 1968, whichever is less, and (3) has a term ending not
later than the maturity of the indebtedness secured by such Mortgage or
that may be extended to such maturity date and (B) confirmation that the
Borrower has received the notice required pursuant to Section 208(e)(3)
of Regulation H of the Board.

		
	 	     (iv) The Administrative Agent shall have received a copy of all
recorded documents referred to, or listed as exceptions to title in, the
title policy or policies referred to in clause (ii) above.

            (b)  Within 30 days after the Closing Date, deliver to the Administrative
Agent an Acknowledgment and Consent, substantially in the form of Annex II to
the Guarantee and Collateral Agreement, duly executed by any issuer of Capital
Stock pledged pursuant to the Guarantee and Collateral Agreement that is not
itself a party to the Guarantee and Collateral Agreement.

            6.13 Collateral Covenants. Take the following actions with respect to the
Borrower’s Collateral, and cause each other Loan Party to take the following
actions with respect to the Collateral of such Loan Party:

            (a)  If any amount in excess of $1,000,000 payable under or in connection
with any of the Collateral shall be or become evidenced by any Instrument,
Certificated Security or Chattel Paper, forthwith deliver such Instrument,
Certificated Security or Chattel Paper to the Administrative Agent, duly
indorsed in a manner satisfactory to the Administrative Agent, to be held as
Collateral pursuant to the Guarantee and Collateral Agreement.

            (b)  Maintain the security interest created by the Guarantee and Collateral
Agreement as a perfected security interest having at least the priority
described in Section 4.19 of this Agreement and defend such security interest
against the claims and demands of all Persons whomsoever (other than holders of
Permitted Liens).

            (c)  At any time and from time to time, upon the written request of the
Administrative Agent, and at the sole expense of the Borrower, promptly and
duly execute and

 

 

63

deliver, and have recorded, such further instruments and documents and
take such further actions as the Administrative Agent may reasonably request
for the purpose of obtaining or preserving the full benefits of the Guarantee
and Collateral Agreement and of the rights and powers therein granted,
including, without limitation, (i) the filing of any financing or continuation
statements under the Uniform Commercial Code (or other similar laws) in effect
in any jurisdiction with respect to the security interests created by the
Guarantee and Collateral Agreement and (ii) in the case of Investment Property with
a fair market value in excess of $1,000,000, taking any actions necessary to
enable the Administrative Agent to obtain “control” (within the meaning of the
applicable Uniform Commercial Code) with respect thereto.

     (d)  If any Loan Party becomes entitled to receive or receives any
certificate (including, without limitation, any certificate representing a
dividend or a distribution in connection with any reclassification, increase or
reduction of capital or any certificate issued in connection with any
reorganization) in respect of the Capital Stock of any Issuer, whether in
addition to, in substitution of, as a conversion of, or in exchange for, any
shares of the Pledged Stock, or otherwise in respect thereof, deliver the same
forthwith to the Administrative Agent in the exact form received, duly indorsed
by such Loan Party to the Administrative Agent, if required, together with an
undated stock power covering such certificate duly executed in blank by such
Loan Party, to be held by the Administrative Agent, subject to the terms of the
Guarantee and Collateral Agreement, as additional collateral security for the
Obligations. If any sums are paid upon or in respect of the Investment
Property upon the liquidation or dissolution of any Issuer, cause such sums to
be paid over to the Administrative Agent to be held by it under the Guarantee
and Collateral Agreement as additional collateral security for the Obligations,
and in case any distribution of capital shall be made on or in respect of the
Investment Property, or any property shall be distributed upon or with respect
to the Investment Property pursuant to the recapitalization or reclassification
of the capital of any Issuer or pursuant to the reorganization thereof, cause
the property so distributed, unless otherwise subject to a perfected security
interest in favor of the Administrative Agent, to be delivered to the
Administrative Agent to be held by it under the Guarantee and Collateral
Agreement as additional collateral security for the Obligations. If any sums
of money or property so paid or distributed in respect of the Investment
Property shall be received by any Loan Party, hold such money or property in
trust for the Secured Parties, segregated from other funds of such Loan Party,
as additional collateral security for the Obligations, until such money or
property is paid or delivered to the Administrative Agent,. Notwithstanding
the foregoing, the Loan Parties shall not be required to pay over to the
Administrative Agent or deliver to the Administrative Agent as Collateral any
proceeds of any liquidation or dissolution of any Issuer, or any distribution
of capital or property in respect of any Investment Property, to the extent
that the proceeds thereof are applied toward prepayment of Loans and reduction
of Commitments if and to the extent required by this Agreement.

     (e) 
In the case of each Loan Party which is an Issuer, (i) comply with the
terms of this Agreement and the Guarantee and Collateral Agreement relating to
the Pledged Securities issued by it insofar as such terms are
applicable to it, (ii)
notify the Administrative Agent promptly in writing of the occurrence of any
of the events described in Section 6.13(d) with respect to the Pledged
Securities issued by it and (iii) the terms of Sections 6.3(c) of the Guarantee and
Collateral Agreement shall apply to it, mutatis mutandis, with respect to all
actions that may be required of it pursuant to Section 6.3(c) of the Guarantee
and Collateral Agreement with respect to the Pledged Securities issued by it.

 

 

64

     (f)  In the case of each Loan Party which is an Issuer and is also a
partnership or a limited liability company (i) ensure that none of the terms of
any equity interest issued by it provides that such equity interest is a
“security” within the meaning of Sections 8-102 and 8-103 of the New York
Uniform Commercial Code (a “Security”), (ii) refrain from taking any action to
cause or permit any such equity interest to become a Security and
(iii) refrain from
issuing any certificate representing any such equity interest, unless, in each
case, all required actions have been or substantially concurrently are taken
to cause the Administrative Agent to have “control” (within the meaning of
Section 8-106 of the UCC) of such Security.

     (g)  Except as could not reasonably be expected to have a Material Adverse
Effect, either itself or through licensees (i) continue to use each Trademark in
order to maintain such Trademark in full force free from any claim of
abandonment for non-use, (ii) maintain the quality of products and services offered
under such Trademark, (iii) use such Trademark with the appropriate notice of
registration and all other notices and legends required by applicable
Requirements of Law, (iv) not adopt or use any mark which is confusingly similar or
a colorable imitation of such Trademark unless the Administrative Agent, for
the ratable benefit of the Secured Parties, shall obtain a perfected security
interest in such mark pursuant to the Guarantee and Collateral Agreement, and
(v) not do any act or knowingly omit to do any act whereby such Trademark may
become invalidated or impaired in any way.

     (h)  Except as could not reasonably be expected to have a Material Adverse
Effect, not do any act, or omit to do any act, whereby any Patent may become
forfeited, abandoned or dedicated to the public.

     (i)  Except as could not reasonably be expected to have a Material Adverse
Effect, (i) employ each Copyright, (ii) not do any act or knowingly omit to do any act
whereby any of the Copyrights may become invalidated or otherwise impaired and
(iii) not do any act whereby any of the Copyrights may fall into the public domain.

     (j)  Except as could not reasonably be expected to have a Material Adverse
Effect, take all reasonable and necessary steps, including, without limitation,
in any proceeding before the United States Patent and Trademark Office, the
United States Copyright Office or any similar office or agency in any other
country or any political subdivision thereof, to maintain and pursue each
application relating to any Intellectual Property (and to obtain the relevant
registration) and to maintain each registration of the Intellectual Property,
including, without limitation, filing of applications for renewal, affidavits
of use and affidavits of incontestability.

     (k)  In the event that any material Intellectual Property is infringed,
misappropriated or diluted by a third party, (i) take such actions as the Borrower
shall reasonably deem appropriate under the circumstances to protect such
Intellectual Property and (ii) if such infringement, misappropriation or dilution
could reasonably be expected to have a Material Adverse Effect, promptly notify
the Administrative Agent after it learns thereof.

     (l)  If any Loan Party shall at any time commence a suit, action or
proceeding with respect to any Commercial Tort Claim held by it with a value
which such Loan Party reasonably believes to be of $1,000,000 or more, promptly
notify the Administrative Agent thereof in a writing signed by such Loan Party
and describing the details thereof and grant to the

 

 

65

Administrative Agent for the benefit of the Secured Parties in such
writing a security interest therein and in the proceeds thereof, all upon the
terms of the Guarantee and Collateral Agreement.

SECTION 7. NEGATIVE COVENANTS

     The Borrower hereby agrees that, so long as the Commitments remain in
effect, any Letter of Credit remains outstanding or any Loan or other amount is
owing to any Lender or any Agent hereunder, the Borrower shall not, and shall
not permit any of its Subsidiaries to, directly or indirectly:

     7.1 Financial Condition Covenants.

     (a) Consolidated Leverage Ratio. Permit the Consolidated Leverage Ratio
as at the last day of any period of four consecutive fiscal quarters of the
Borrower ending with any fiscal quarter set forth below to exceed the ratio set
forth below opposite such fiscal quarter:

	 	 	 
	 	 	Consolidated
	Fiscal Quarter	 	Leverage Ratio
	
	 	

	FQ4 2003	 	
5.25:1.00
	FQ1 2004	 	
5.25:1.00
	FQ2 2004	 	
5.25:1.00
	FQ3 2004	 	
5.25:1.00
	FQ4 2004	 	
5.00:1.00
	FQ1 2005	 	
5.00:1.00
	FQ2 2005	 	
5.00:1.00
	FQ3 2005	 	
5.00:1.00
	FQ4 2005	 	
4.90:1.00
	FQ1 2006	 	
4.75:1.00
	FQ2 2006	 	
4.60:1.00
	FQ3 2006	 	
4.50:1.00
	FQ4 2006	 	
4.40:1.00
	FQ1 2007	 	
4.10:1.00
	FQ2 2007	 	
3.75:1.00
	FQ3 2007	 	
3.75:1.00
	FQ4 2007	 	
3.50:1.00
	FQ1 2008	 	
3.50:1.00
	FQ2 2008	 	
3.25:1.00
	FQ3 2008	 	
3.25:1.00
	FQ4 2008 and thereafter	 	
3.00:1.00

     (b)  Consolidated Interest Coverage Ratio. Permit the Consolidated
Interest Coverage Ratio for any period of four consecutive fiscal quarters of
the Borrower ending with any fiscal quarter set forth below to be less than the
ratio set forth below opposite such fiscal quarter:

 

 

66

	 	 	 
	 	 	Consolidated Interest
	Fiscal Quarter	 	Coverage Ratio
	
	 	

	FQ4 2003	 	
2.25:1.00
	FQ1 2004	 	
2.25:1.00
	FQ2 2004	 	
2.25:1.00
	FQ3 2004	 	
2.25:1.00
	FQ4 2004	 	
2.25:1.00
	FQ1 2005	 	
2.30:1.00
	FQ2 2005	 	
2.40:1.00
	FQ3 2005	 	
2.50:1.00
	FQ4 2005	 	
2.50:1.00
	FQ1 2006	 	
2.50:1.00
	FQ2 2006	 	
2.60:1.00
	FQ3 2006	 	
2.65:1.00
	FQ4 2006	 	
2.75:1.00
	FQ1 2007	 	
2.80:1.00
	FQ2 2007 and thereafter	 	
3.00:1.00

; provided, that for the purposes of determining the ratio described in clause
(b) above for the applicable periods, Consolidated Interest Expense for each of
the first three fiscal quarters of 2003 shall be deemed to be $9,300,000.

     7.2 Limitation on Indebtedness. Create, incur, assume or suffer to exist
any Indebtedness, except:

     (a)  Indebtedness of any Loan Party pursuant to any Loan Document;

     (b)  Indebtedness of the Borrower to any Subsidiary and of any Subsidiary
Guarantor to the Borrower or any other Subsidiary;

     (c)  Indebtedness (including, without limitation, Capital Lease
Obligations) secured by Liens permitted by Section 7.3(g) in an aggregate
principal amount not to exceed $10,000,000 at any one time outstanding;

     (d)  Indebtedness outstanding on the date hereof and listed on Schedule
7.2(d) and any refinancings, refundings, renewals or extensions thereof
(without any increase in the principal amount thereof or any shortening of the
maturity of any principal amount thereof);

     (e)  Guarantee Obligations made in the ordinary course of business by the
Borrower or any of its Subsidiaries of obligations of the Borrower or any
Subsidiary Guarantor;

     (f)  (i) (x) Indebtedness of the Borrower in respect of the Senior
Subordinated Notes in an aggregate principal amount not to exceed $230,000,000
and (y) Guarantee Obligations of any Subsidiary Guarantor in respect of such
Indebtedness (provided that such Guarantee Obligations are subordinated to the
obligations of such Subsidiary Guarantor under the Guarantee and Collateral
Agreement to the same extent as the obligations of the Borrower in respect of
the Senior Subordinated Notes are subordinated to the Obligations) and (ii) and
any

 

 

67

refinancings, refundings, renewals or extensions of any Indebtedness
described in the foregoing clause (i) (provided that (A) the principal amount
thereof is not increased, (B) the weighted average life to maturity of the
principal amount thereof is not decreased, nor the final maturity thereof
shortened, (C) the obligations of the Borrower and its Subsidiaries in respect
of such Indebtedness are subordinated to the Obligations to the same extent as
the obligations of the Borrower and its Subsidiaries in respect of the Senior
Subordinated Notes, (D) the interest rate applicable to and fees payable in
connection with such Indebtedness is not in excess of that payable in respect
of the Senior Subordinated Notes, and (E) such Indebtedness otherwise contains
terms which are, when taken as a whole, at least as favorable to the Borrower
and its Subsidiaries as the terms of the Indebtedness described in the
foregoing clause (i));

     (g)  Indebtedness of any Loan Party pursuant to the Acquisition Agreement
as in effect on the Closing Date or pursuant to the agreement for any other
acquisition permitted under Section 7.8(h);

     (h)  Indebtedness of Excluded Subsidiaries in respect of local lines of
credit, letters of credit, bank guarantees, factoring arrangements,
sale/leaseback transactions and similar extensions of credit not to exceed an
aggregate outstanding principal amount of $20,000,000 at any time;

     (i)  Indebtedness of Excluded Subsidiaries owing to any Loan Party,
provided that the aggregate outstanding Permitted Foreign Investment Amount at
such time after giving effect to the incurrence thereof does not exceed the
Maximum Permitted Foreign Investment Amount;

     (j)  (i) Guarantee Obligations by Loan Parties of obligations of Excluded
Subsidiaries, provided that the aggregate outstanding Permitted Foreign
Investment Amount at such time after giving effect to the incurrence thereof
does not exceed the Maximum Permitted Foreign Investment Amount, (ii) Guarantee
Obligations by the Borrower or any of its Subsidiaries of obligations of Joint
Ventures, provided that the aggregate outstanding Permitted JV Investment
Amount at such time after giving effect to the incurrence thereof does not
exceed the Maximum Permitted JV Investment Amount, and (iii) Guarantee
Obligations by Excluded Subsidiaries of obligations of Excluded Subsidiaries;

     (k)  Indebtedness of the Borrower under a Permitted Seller Note issued as
consideration in connection with an acquisition permitted under Section 7.8(h);

     (l)  Indebtedness of the Borrower or any of its Subsidiaries in respect of
workers’ compensation claims, self-insurance obligations, performance, bid and
surety bonds and completion guaranties, in each case in the ordinary course of
business;

     (m)  Indebtedness of the Borrower or any of its Subsidiaries arising from
the honoring by a bank or other financial institution of a check, draft or
similar instrument inadvertently drawn by the Borrower or such Subsidiary in
the ordinary course of business against insufficient funds, so long as such
Indebtedness is repaid within five Business Days;

 

 

68

     (n)  additional unsecured indebtedness of the Borrower or any of its
Subsidiaries not to exceed an aggregate outstanding principal amount of
$10,000,000 at any time.

     7.3 Limitation on Liens. Create, incur, assume or suffer to exist any
Lien upon any of its Property, whether now owned or hereafter acquired, except
for:

     (a)  Liens for taxes not yet due or which are being contested in good faith
by appropriate proceedings, provided that adequate reserves with respect
thereto (if required by GAAP) are maintained on the books of the Borrower or
its Subsidiaries, as the case may be, in conformity with GAAP;

     (b)  carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or
other like Liens arising in the ordinary course of business which are not
overdue for a period of more than 30 days or that are being contested in good
faith by appropriate proceedings;

     (c)  pledges or deposits in connection with workers’ compensation,
unemployment insurance and other social security legislation;

     (d)  deposits to secure the performance of bids, trade contracts (other
than for borrowed money), leases, subleases, statutory obligations, surety and
appeal bonds, performance bonds and other obligations of a like nature incurred
in the ordinary course of business;

     (e)  easements, rights-of-way, restrictions and other similar encumbrances
incurred in the ordinary course of business that, in the aggregate, are not
substantial in amount and which do not in any case materially detract from the
value of the Property subject thereto or materially interfere with the ordinary
conduct of the business of the Borrower or any of its Subsidiaries;

     (f)  Liens in existence on the date hereof listed on Schedule 7.3(f),
securing Indebtedness permitted by Section 7.2(d) or obligations described on
Schedule 7.3(f), provided that no such Lien is spread to cover any additional
Property after the Closing Date and that the amount of Indebtedness secured
thereby is not increased;

     (g)  Liens securing Indebtedness of the Borrower or any other Subsidiary
incurred pursuant to Section 7.2(c) to finance the acquisition of fixed or
capital assets, provided that (i) such Liens shall be created substantially
simultaneously with the acquisition of such fixed or capital assets and (ii)
such Liens do not at any time encumber any Property other than the Property
financed by such Indebtedness and the proceeds thereof;

     (h)  Liens created pursuant to the Security Documents;

     (i)  any interest or title of a lessor under any lease entered into by the
Borrower or any other Subsidiary in the ordinary course of its business and
covering only the assets so leased;

     (j)  Liens arising from judgments in circumstances not constituting an
Event of Default under Section 8(h);

 

 

69

     (k)  Liens on property or assets acquired pursuant to an acquisition
permitted under Section 7.8(h) (and proceeds thereof) or assets of a Subsidiary
of Borrower in existence at the time such Subsidiary is acquired pursuant to an
acquisition permitted under Section 7.8(h) (and proceeds thereof);

     (l)  Liens on Property or assets of Excluded Subsidiaries securing
Indebtedness permitted by this Agreement to be incurred by such Subsidiaries;

     (m)  receipt of progress payments and advances from customers in the
ordinary course of business to the extent same creates a Lien on the related
inventory and proceeds thereof;

     (n)  Borrower and its Subsidiaries may sell and grant Liens in receivables
and related assets (including proceeds thereof) arising from goods and services
provided to Honeywell International, Inc. and its affiliates, pursuant to
factoring arrangements entered into in the ordinary course of business; and

     (o)  other Liens with respect to obligations that do not exceed $5,000,000
at any one time outstanding.

     7.4 Limitation on Fundamental Changes. Enter into any merger,
consolidation or amalgamation, or liquidate, wind up or dissolve itself (or
suffer any liquidation or dissolution), or Dispose of all or substantially all
of its Property or business, except that:

     (a)  any Subsidiary of the Borrower may be merged or consolidated with or
into the Borrower (provided that the Borrower shall be the continuing or
surviving corporation) or with or into any Subsidiary Guarantor (provided that
(i) the Subsidiary Guarantor shall be the continuing or surviving corporation
or (ii) simultaneously with such transaction, the continuing or surviving
corporation shall become a Subsidiary Guarantor and the Borrower shall comply
with Section 6.10 in connection therewith);

     (b)  any Subsidiary of the Borrower may Dispose of any or all of its assets
(upon voluntary liquidation or otherwise) to the Borrower or any Subsidiary
Guarantor;

     (c)  acquisitions permitted under Section 7.8(h) may be consummated;

     (d)  any Excluded Subsidiary of the Borrower may be merged or consolidated
with or into, or be liquidated into, another Excluded Subsidiary of the
Borrower;

     (e)  any Excluded Subsidiary of the Borrower may Dispose of any or all of
its assets (upon voluntary liquidation or otherwise) to any other Excluded
Subsidiary; and

     (f)  Dispositions permitted by Section 7.5 may be consummated.

     7.5 Limitation on Disposition of Property. Dispose of any of its Property
(including, without limitation, receivables and leasehold interests), whether
now owned or hereafter acquired, or, in the case of any Subsidiary, issue or
sell any shares of such Subsidiary’s Capital Stock to any Person, except:

 

 

70

     (a)  the Disposition of obsolete or worn out property in the ordinary
course of business;

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

     (c)  Dispositions permitted by Section 7.4(a), (b), (d) or (e), Section 7.6
or Section 7.8;

     (d)  the sale or issuance of any Subsidiary’s Capital Stock to the Borrower
or any Subsidiary Guarantor (or, in the case of the Capital Stock of an
Excluded Subsidiary, to any other Subsidiary);

     (e)  the Disposition of other assets having a fair market value not to
exceed $20,000,000 in the aggregate while this Agreement is in effect (provided
that any such Disposition must be for at least 75% cash which is received at
the time of closing thereof), provided that the Net Cash Proceeds of any such
Disposition are applied to the prepayment of the Loans to the extent required
by Section 2.12(b);

     (f)  any Recovery Event, provided, that the requirements of Section 2.12(b)
are complied with in connection therewith;

     (g)  the sale by Excluded Subsidiaries (without recourse) of receivables
(and related assets) pursuant to factoring arrangements entered into in the
ordinary course of business;

     (h)  leases, occupancy agreements and subleases of real property in the
ordinary course of business;

     (i)  licenses or sublicenses in the ordinary course of business of
intellectual property;

     (j)  the Disposition by any Excluded Subsidiary of any of its Property in
an arms’-length transaction for the fair market value thereof;

     (k)  the Disposition by the Borrower or any Subsidiary of any of its
Property to any Excluded Subsidiary or Joint Venture; provided that, (i) to the
extent the consideration paid by such Excluded Subsidiary or Joint Venture is
less than the fair market value thereof, the Borrower shall be in compliance
with the provisions of Section 7.8(k) or (l), as applicable and (ii) any Net
Cash Proceeds of any such Disposition are applied to the prepayment of the
Loans to the extent required by Section 2.12(b);

     (l)  the Disposition by any Loan Party of any equity interest of any
Excluded Subsidiary held by such Loan Party in an arms’-length transaction for
the fair market value thereof; and

     (m)  Borrower and its Subsidiaries may sell and grant Liens in receivables
and related assets (including proceeds thereof) arising from goods and services
provided to Honeywell International, Inc. and its affiliates, pursuant to
factoring arrangements entered into in the ordinary course of business.

 

 

71

     7.6 Limitation on Restricted Payments. Declare or pay any dividend on, or
make any payment on account of, or set apart assets for a sinking or other
analogous fund for, the purchase, redemption, defeasance, retirement or other
acquisition of, any Capital Stock of the Borrower or any Subsidiary, whether
now or hereafter outstanding, or make any other distribution in respect
thereof, either directly or indirectly, whether in cash or property or in
obligations of the Borrower or any Subsidiary, or enter into any derivatives or
other transaction with any financial institution, commodities or stock exchange
or clearinghouse (a “Derivatives Counterparty”) obligating the Borrower or any
Subsidiary to make payments to such Derivatives Counterparty as a result of any
change in market value of any such Capital Stock (collectively, “Restricted
Payments”), except that:

     (a)  any Subsidiary may make Restricted Payments to the Borrower or any
Subsidiary Guarantor;

     (b)  the Borrower may make Restricted Payments in the form of common stock
of the Borrower;

     (c)  the Borrower may purchase the Borrower’s common stock or common stock
options from present or former officers or employers of the Borrower or any
Subsidiary upon the death, disability of termination of employment of such
officer or employer, provided, that the aggregate amount of payments under this
paragraph subsequent to the date hereof (net of any proceeds received by the
Borrower subsequent to the date hereof in connection with resales of any common
stock or common stock options so purchased) shall not exceed $10,000,000;

     (d)  the Borrower may pay dividends to Holdings to permit Holdings to (i)
pay corporate overhead expenses incurred in the ordinary course of business not
to exceed $1,000,000 in any fiscal year and (ii) pay any taxes which are due
and payable by Holdings and the Borrower as part of a consolidated group;

     (e)  any non-Wholly Owned Subsidiary of the Borrower may declare and pay
cash dividends to its equity holders generally so long as the Borrower or its
respective Subsidiary which owns the equity interests in the Subsidiary paying
such dividends receives at least its proportionate share thereof (based upon
its relative holding of the equity interests in the Subsidiary paying such
dividends and taking into account the relative preferences, if any, of the
various classes of equity interest of such Subsidiary);

     (f)  Excluded Subsidiaries may make Restricted Payments to other Excluded
Subsidiaries; and

     (g)  so long as no Default or Event of Default has occurred and is
continuing, the Borrower may purchase fractional shares of the Borrower’s
common stock arising out of stock dividends, splits or combinations or business
combinations.

     7.7 Limitation on Capital Expenditures. Make any Capital Expenditure
(other than Capital Expenditures with respect to the Champion Capital Program
through the end of fiscal year 2006 in an aggregate amount not to exceed
$40,000,000), except Capital Expenditures of the Borrower and its Subsidiaries
in the ordinary course of business not exceeding for any

 

 

72

fiscal year or other period set forth below the amount set forth below
opposite such fiscal year or other period:

	 	 	 	 	 
	Period	 	Capital Expenditures
	
	 	

	2003	 	 	
$33,000,000	 
	2004	 	 	
$35,000,000	 
	2005	 	 	
$40,000,000	 
	2006	 	 	
$40,000,000	 
	2007	 	 	
$40,000,000	 
	2008	 	 	
$40,000,000	 
	2009	 	 	
$40,000,000	 
	January 1, 2010 through June 30, 2010	 	 	
$20,000,000	 

; provided, that (i) up to 50% of any such amount referred to above for any
period specified above, if not so expended in the period for which it is
permitted, may be carried over for expenditure in the next succeeding such
period and (ii) Capital Expenditures made during any period specified above
shall be deemed made, first, in respect of amounts permitted for such period as
provided above and second, in respect of amounts carried over from the prior
period pursuant to subclause (i) above.

     7.8 Limitation on Investments. Make any advance, loan, extension of
credit (by way of guaranty or otherwise) or capital contribution to, or
purchase any Capital Stock, bonds, notes, debentures or other debt securities
of, or any assets constituting an ongoing business from, or make any other
investment in, any other Person (all of the foregoing, “Investments”), except:

     (a)  extensions of trade credit in the ordinary course of business;

     (b)  investments in Cash Equivalents and by Excluded Subsidiaries in
Foreign Cash Equivalents;

     (c)  Investments arising in connection with the incurrence of Indebtedness
permitted by Section 7.2(b) and (e);

     (d)  loans and advances to officers, directors and employees of Holdings,
the Borrower or any Subsidiaries of the Borrower in the ordinary course of
business (including, without limitation, for travel, entertainment and
relocation expenses) in an aggregate amount for Holdings, the Borrower and
Subsidiaries of the Borrower not to exceed $2,000,000 at any one time
outstanding;

     (e)  the Acquisition;

     (f)  Investments in assets useful in the Borrower’s business made by the
Borrower or any of its Subsidiaries with the proceeds of any Reinvestment
Deferred Amount;

 

 

73

     (g)  Investments (other than those relating to the incurrence of
Indebtedness permitted by Section 7.8(c)) by the Borrower or any of its
Subsidiaries in the Borrower or any Person that, prior to such Investment, is a
Subsidiary Guarantor;

     (h)  Permitted Acquisitions for consideration (whether in cash, Permitted
Seller Notes, Capital Stock or property) not exceeding $30,000,000 for any
single Permitted Acquisition or $50,000,000 in the aggregate for all such
Permitted Acquisitions while this Agreement is in effect;

     (i)  Investments (including debt obligations) received in the ordinary
course of business by the Borrower or any Subsidiary in connection with the
bankruptcy or reorganization of suppliers and customers and in settlement or
delinquent obligations of, and other disputes with, customers and suppliers
arising out of the ordinary course of business;

     (j)  Investments by any Excluded Subsidiary in other Excluded Subsidiaries;

     (k)  Investments by the Borrower or any Subsidiary in Joint Ventures
(including Investments consisting of Dispositions of Property to such Joint
Venture to the extent the consideration paid by such Joint Venture for such
Property is less than the fair market value thereof, as reasonably determined
by the Borrower), provided that the aggregate outstanding Permitted JV
Investment Amount at such time after giving effect thereto does not exceed the
Maximum Permitted JV Investment Amount;

     (l)  Investments by any Loan Party in Excluded Subsidiaries (including
Investments consisting of Dispositions of Property to such Excluded Subsidiary
to the extent the consideration paid by such Excluded Subsidiary for such
Property is less than the fair market value thereof, as reasonably determined
by the Borrower), provided that the aggregate outstanding Permitted Foreign
Investment Amount at such time after giving effect thereto does not exceed the
Maximum Permitted Foreign Investment Amount;

     (m)  Investments in existence on the Closing Date and listed on Schedule
7.8, without giving effect to any additions thereto or replacements thereof;

     (n)  Investments so long as the aggregate amount thereof (determined as the
amount originally advanced, loaned or otherwise invested, less any returns on
the respective investment not to exceed the original amount invested) at no
time exceeds $2,000,000;

     (o)  Subsidiaries may be established or created, if (A) to the extent such
new Subsidiary is a Domestic Subsidiary, such Subsidiary complies with the
provisions of Section 6.10(c) and (B) if such new Subsidiary is an Excluded
Subsidiary, such Subsidiary complies with the provisions of Section 6.10(d),
provided, that, in each case, to the extent such new Subsidiary is created
solely for the purpose of consummating a merger transaction pursuant to an
acquisition permitted by Section 7.8(h), and such new Subsidiary at no time
holds any assets or liabilities other than any merger consideration contributed
to it contemporaneously with the closing of such merger transactions, such new
Subsidiary shall not be required to take the actions set forth in Section
6.10(c) or Section 6.10(d), as applicable, until the respective acquisition is
consummated (at which time the surviving entity of the respective merger
transaction shall be required to so comply within ten Business Days);

 

 

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     (p)  Investments of Borrower or any Subsidiary under Hedge Agreements
permitted hereunder; and

     (q)  Investments of any Person in existence at the time such Person becomes
a Subsidiary of the Borrower; provided such Investment was not made in
connection with or anticipation of such Person becoming a Subsidiary of the
Borrower.

     7.9 Limitation on Optional Payments and Modifications of Debt Instruments,
etc. (a) Make any optional or voluntary payment, prepayment, repurchase or
redemption of, or otherwise voluntarily or optionally defease, the Senior
Subordinated Notes, or segregate funds for any such payment, prepayment,
repurchase, redemption or defeasance (except in each case in connection with
any refinancing permitted by Section 7.2(f)), or enter into any derivative or
other transaction with any Derivatives Counterparty obligating the Borrower or
any Subsidiary to make payments to such Derivatives Counterparty as a result of
any change in market value of the Senior Subordinated Notes, (b) amend, modify
or otherwise change, or consent or agree to any amendment, modification, waiver
or other change to, any of the terms of the Senior Subordinated Notes (other
than any such amendment, modification, waiver or other change which (i) would
extend the maturity or reduce the amount of any payment of principal thereof,
reduce the rate or extend the date for payment of interest thereon or relax any
covenant or other restriction applicable to the Borrower or any of its
Subsidiaries and (ii) does not involve the payment of a consent fee), (c)
designate any Indebtedness (other than the Obligations) as “Designated Senior
Indebtedness” for the purposes of the Senior Subordinated Note Indenture or (d)
amend its certificate of incorporation in any manner reasonably determined by
the Administrative Agent to be adverse to the Lenders.

     7.10 Limitation on Transactions with Affiliates. Enter into any
transaction, including, without limitation, any purchase, sale, lease or
exchange of Property, the rendering of any service or the payment of any
management, advisory or similar fees, with any Affiliate (other than the
Borrower or any Subsidiary Guarantor) unless such transaction is (a) otherwise
not prohibited by this Agreement, (b) in the ordinary course of business of the
Borrower or such Subsidiary, as the case may be, and (c) upon fair and
reasonable terms no less favorable to the Borrower or such Subsidiary, as the
case may be, than it would obtain in a comparable arm’s length transaction with
a Person that is not an Affiliate. Notwithstanding the foregoing, (i) the
Borrower and its Subsidiaries may pay fees and expenses to the Sponsor and its
Control Investment Affiliates pursuant to the Management Agreement, (ii) the
Borrower and its Subsidiaries may enter into any transaction with an Affiliate
that is expressly permitted by the terms of this Agreement to be entered into
by the Borrower or such Subsidiary with an Affiliate and (iii) the Borrower and
its Subsidiaries may without being subject to the foregoing requirements of
this Section enter into transactions with any Person, a director of which is
also a director of the Borrower, provided that such director abstains from
voting as a director of the Borrower on any matter involving such other Person.

     7.11 Limitation on Sales and Leasebacks. Enter into any arrangement with
any Person providing for the leasing by the Borrower or any Subsidiary of real
or personal property which, as a part of the same transaction, has been or is
to be sold or transferred by the Borrower or such Subsidiary to such Person or
to any other Person to whom funds have been or are to be advanced by such
Person on the security of such property or rental obligations of the Borrower

 

 

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or such Subsidiary, except for sale and leaseback transactions involving
Property having a book value not exceeding $10,000,000 while this Agreement is
in effect.

     7.12 Limitation on Changes in Fiscal Periods. Permit the fiscal year of
the Borrower to end on a day other than December 31 or change the Borrower’s
method of determining fiscal quarters.

     7.13 Limitation on Negative Pledge Clauses. Enter into or suffer to exist
or become effective any agreement that prohibits or limits the ability of the
Borrower or any of its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any of its Property or revenues, whether now owned or hereafter
acquired, to secure the Obligations or, in the case of any guarantor, its
obligations under the Guarantee and Collateral Agreement, other than:

     (a)  this Agreement and the other Loan Documents;

     (b)  the Senior Subordinated Note Indenture (and the instruments or
agreements governing any Indebtedness permitted pursuant to Section
7.2(f)(ii));

     (c)  any agreements governing any purchase money Liens or Capital Lease
Obligations otherwise permitted hereby (in which case, any prohibition or
limitation shall only be effective against the assets financed thereby);

     (d)  any agreements regarding Indebtedness of any Excluded Subsidiary (in
which case, any prohibition or limitation shall only be effective against the
assets of such Excluded Subsidiary and its Subsidiaries);

     (e)  customary provisions in joint venture agreements and similar
agreements that restrict the transfer of assets of, or equity interests in,
Joint Ventures;

     (f)  licenses or sublicenses by the Borrower and its Subsidiaries of
intellectual property in the ordinary course of business (in which case, any
prohibition or limitation shall only be effective against the intellectual
property subject thereto); and

     (g)  prohibitions and limitations in effect on the date hereof and listed
on Schedule 7.13.

     7.14 Limitation on Restrictions on Subsidiary Distributions. Enter into
or suffer to exist or become effective any consensual encumbrance or
restriction on the ability of any Subsidiary to (a) make Restricted Payments in
respect of any Capital Stock of such Subsidiary held by, or pay any
Indebtedness owed to, the Borrower or any other Subsidiary, (b) make
Investments in the Borrower or any other Subsidiary or (c) transfer any of its
assets to the Borrower or any other Subsidiary, except for such encumbrances or
restrictions existing under or by reason of:

		
	 	     (i) any restrictions existing under the Loan Documents;

 

 

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	 	     (ii) any restrictions with respect to a Subsidiary imposed pursuant
to an agreement that has been entered into in connection with the
Disposition of all or substantially all of the Capital Stock or assets of
such Subsidiary;

		
	 	     (iii) any restrictions set forth in the Senior Subordinated Note
Indenture (and the instruments or agreements governing any Indebtedness
permitted pursuant to Section 7.2(f)(ii));

		
	 	     (iv) any restrictions contained in agreements related to
Indebtedness of any Excluded Subsidiary (in which case such restriction
shall relate only to such Excluded Subsidiary and its Subsidiaries),

		
	 	     (v) customary provisions in joint venture agreements and similar
agreements that restrict the transfer of equity interests in Joint
Ventures (which are not Subsidiaries of the Borrower) (in which case such
restrictions shall relate only to assets of, or equity interests in, such
Joint Venture); and

		
	 	     (vi) any restrictions regarding licenses or sublicenses by the
Borrower and its Subsidiaries of intellectual property in the ordinary
course of business (in which case such restriction shall relate only to
such intellectual property).

     7.15 Limitation on Lines of Business. Enter into any business, either
directly or through any Subsidiary, except for those businesses in which the
Borrower and its Subsidiaries are engaged on the date of this Agreement or that
are reasonably related thereto or are reasonable extensions thereof.

     7.16 Limitation on Hedge Agreements. Enter into any Hedge Agreement other
than Hedge Agreements entered into in the ordinary course of business, and not
for speculative purposes, to protect against changes in interest rates,
currency exchange rates, commodity prices or the exchange of nominal interest
obligations.

     7.17 Limitation on Activities of Holdings. Not permit Holdings to (a)
conduct, transact or otherwise engage in any business or operations other than
those incidental to its ownership of the Capital Stock of the Borrower, (b)
incur, create, assume or suffer to exist any Indebtedness, except (i)
nonconsensual obligations imposed by operation of law, (ii) obligations in
respect of taxes imposed on Holdings as a member of a consolidated group, (iii)
indebtedness and obligations of Holdings pursuant to the Loan Documents to
which it is a party, (iv) obligations with respect to its Capital Stock, (v)
Indebtedness subordinated to the Obligations on terms reasonably satisfactory
to the Administrative Agent in an aggregate principal amount of up to
$10,000,000, (vi) guarantees, letters of credit and performance bonds in
support of the operations of the Borrower and its Subsidiaries, and (vii) up to
$5,000,000 in aggregate principal amount of other Indebtedness, or (c) own,
lease, manage or otherwise operate (other than through ownership of the
Borrower and its Subsidiaries) any properties or assets, other than (i) cash
and Cash Equivalents and deposit and securities accounts comprised of cash and
cash equivalents, (ii) the ownership of shares of Capital Stock of the
Borrower, (iii) other assets, not material in amount, incidental to the
operations of Holdings as the holding company of the Borrower and (iv) other
assets with an aggregate fair market value of not more than $5,000,000.

 

 

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SECTION 8. EVENTS OF DEFAULT

If any of the following events shall occur and be continuing:

     (a)  The Borrower shall fail to pay any principal of any Loan or
Reimbursement Obligation when due in accordance with the terms hereof; or the
Borrower shall fail to pay any interest on any Loan or Reimbursement
Obligation, or any other amount payable hereunder or under any other Loan
Document, within five days after any such interest or other amount becomes due
in accordance with the terms hereof or thereof; or

     (b)  Any representation or warranty made or deemed made by any Loan Party
herein or in any other Loan Document or that is contained in any certificate,
document or financial or other statement furnished by it at any time under or
in connection with this Agreement or any such other Loan Document shall prove
to have been inaccurate in any material respect on or as of the date made or
deemed made or furnished; or

     (c)  Any Loan Party shall default in the observance or performance of any
agreement contained in clause (i) or (ii) of Section 6.4(a) (with respect to
the Borrower only), Section 6.7(a) or Section 7; or

     (d)  Any Loan Party shall default in the observance or performance of any
other agreement contained in this Agreement or any other Loan Document (other
than as provided in paragraphs (a) through (c) of this Section), and such
default shall continue unremedied for a period of 30 days after notice thereof
to the Borrower from the Administrative Agent or any Lender; or

     (e)  The Borrower or any of its Subsidiaries shall (i) default in making
any payment of any principal of any Indebtedness for Borrowed Money (excluding
the Loans and Reimbursement Obligations) on the scheduled or original due date
with respect thereto; or (ii) default in making any payment of any interest on
any such Indebtedness for Borrowed Money beyond the period of grace, if any,
provided in the instrument or agreement under which such Indebtedness was
created; or (iii) default in the observance or performance of any other
agreement or condition relating to any such Indebtedness for Borrowed Money or
contained in any instrument or agreement evidencing, securing or relating
thereto, the effect of which default is to cause, or to permit the holder or
beneficiary of such Indebtedness (or a trustee or agent on behalf of such
holder or beneficiary) to cause, with the giving of notice if required, such
Indebtedness to become due prior to its stated maturity or to become subject to
a mandatory offer to purchase by the obligor thereunder or (in the case of any
such Indebtedness constituting a Guarantee Obligation) to become payable;
provided, that a default described in clause (i), (ii) or (iii) of this
paragraph (e) shall not at any time constitute an Event of Default unless, at
such time, one or more defaults of the type described in clauses (i), (ii) and
(iii) of this paragraph (e) shall have occurred and be continuing with respect
to Indebtedness the outstanding principal amount of which exceeds in the
aggregate $10,000,000; or

     (f)  Holdings, the Borrower or any of its Material Subsidiaries shall
commence any case, proceeding or other action (A) under any existing or future
law of any jurisdiction, domestic or foreign, relating to bankruptcy,
insolvency, reorganization or relief of

 

 

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debtors, seeking to have an order for relief entered with respect to it,
or seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (B) seeking appointment of a
receiver, trustee, custodian, conservator or other similar official for it or
for all or any substantial part of its assets, or Holdings, the Borrower or
any of its Material Subsidiaries shall make a general assignment for the
benefit of its creditors; or (ii) there shall be commenced against Holdings,
the Borrower or any of its Material Subsidiaries any case, proceeding or other
action of a nature referred to in clause (i) above that (A) results in the
entry of an order for relief or any such adjudication or appointment or (B)
remains undismissed, undischarged or unbonded for a period of 60 days; or (iii)
there shall be commenced against Holdings, the Borrower or any of its Material
Subsidiaries any case, proceeding or other action seeking issuance of a warrant
of attachment, execution, distraint or similar process against all or any
substantial part of its assets that results in the entry of an order for any
such relief that shall not have been vacated, discharged, or stayed or bonded
pending appeal within 60 days from the entry thereof; or (iv) Holdings, the
Borrower or any of its Material Subsidiaries shall take any action in
furtherance of, or indicating its consent to, approval of, or acquiescence in,
any of the acts set forth in clause (i), (ii), or (iii) above; or (v) Holdings,
the Borrower or any of its Material Subsidiaries shall generally not, or shall
be unable to, or shall admit in writing its inability to, pay its debts as they
become due; or

     (g)  (i) Any Person shall engage in any “prohibited transaction” (as defined in
Section 406 of ERISA or Section 4975 of the Code) involving any Plan, (ii) any
“accumulated funding deficiency” (as defined in Section 302 of ERISA), whether
or not waived, shall exist with respect to any Plan, or any Lien in favor of
the PBGC or a Plan shall arise on the assets of the Borrower or any Commonly
Controlled Entity, (iii) a Reportable Event shall occur with respect to, or
proceedings shall commence to have a trustee appointed, or a trustee shall be
appointed, to administer or to terminate, any Single Employer Plan, which
Reportable Event or commencement of proceedings or appointment of a trustee is,
in the reasonable opinion of the Required Lenders, likely to result in the
termination of such Plan for purposes of Title IV of ERISA, (iv) any Single
Employer Plan shall terminate for purposes of Title IV of ERISA, (v) the
Borrower or any Commonly Controlled Entity shall, or in the reasonable opinion
of the Required Lenders shall be likely to, incur any liability in connection
with a withdrawal from, or the Insolvency or Reorganization of, a Multiemployer
Plan or (vi) any other event or condition shall occur or exist with respect to
a Plan; and in each case in clauses (i) through (vi) above, such event or
condition, together with all other such events or conditions, if any, could
reasonably be expected to have a Material Adverse Effect; or

     (h)  One or more judgments or decrees shall be entered against Holdings,
the Borrower or any of its Material Subsidiaries involving for Holdings, the
Borrower and its Material Subsidiaries taken as a whole a liability (not paid
or covered by insurance or by an indemnity from a Solvent indemnitor) of
$10,000,000 or more, and all such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within 30 days from the
entry thereof; or

     (i)  Except to the extent resulting from the gross negligence or willful
misconduct of the Administrative Agent, any of the Security Documents shall
cease, for any reason (other than by reason of the express release thereof
pursuant to Section 10.15), to be in

 

 

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full force and effect in any material respect, or any Loan Party shall so
assert, or any Lien created by any of the Security Documents shall cease in any
material respect to be enforceable and of the same effect and priority
purported to be created thereby (other than by reason of the express release
thereof pursuant to Section 10.15); or

     (j)  The guarantee contained in Section 2 of the Guarantee and Collateral
Agreement shall cease, for any reason (other than by reason of the express
release thereof pursuant to Section 10.15), to be in full force and effect or
any Loan Party shall so assert; or

     (k)  Any Change of Control shall occur; or

     (l)  The Senior Subordinated Notes or the guarantees thereof shall cease,
for any reason, to be validly subordinated to the Obligations or the
obligations of the Subsidiary Guarantors under the Guarantee and Collateral
Agreement, as the case may be, as provided in the Senior Subordinated Note
Indenture, or any Loan Party shall so assert;

then, and in any such event, (A) if such event is an Event of Default specified
in clause (i) or (ii) of paragraph (f) above with respect to the Borrower,
automatically the Commitments shall immediately terminate and the Loans
hereunder (with accrued interest thereon) and all other amounts owing under
this Agreement and the other Loan Documents (including, without limitation, all
amounts of L/C Obligations, whether or not the beneficiaries of the then
outstanding Letters of Credit shall have presented the documents required
thereunder) shall immediately become due and payable, and (B) if such event is
any other Event of Default, either or both of the following actions may be
taken: (i) with the consent of the Majority Revolving Credit Facility Lenders,
the Administrative Agent may, or upon the request of the Majority Revolving
Credit Facility Lenders, the Administrative Agent shall, by notice to the
Borrower declare the Revolving Credit Commitments to be terminated forthwith,
whereupon the Revolving Credit Commitments shall immediately terminate; and
(ii) with the consent of the Required Lenders, the Administrative Agent may, or
upon the request of the Required Lenders, the Administrative Agent shall, by
notice to the Borrower, declare the Loans hereunder (with accrued interest
thereon) and all other amounts owing under this Agreement and the other Loan
Documents (including, without limitation, all amounts of L/C Obligations,
whether or not the beneficiaries of the then outstanding Letters of Credit
shall have presented the documents required thereunder) to be due and payable
forthwith, whereupon the same shall immediately become due and payable. In the
case of all Letters of Credit with respect to which presentment for honor shall
not have occurred at the time of an acceleration pursuant to this paragraph,
the Borrower shall at such time deposit in a cash collateral account opened by
the Administrative Agent an amount equal to the aggregate then undrawn and
unexpired amount of such Letters of Credit. Amounts held in such cash
collateral account shall be applied by the Administrative Agent to the payment
of drafts drawn under such Letters of Credit, and the unused portion thereof
after all such Letters of Credit shall have expired or been fully drawn upon,
if any, shall be applied to repay other obligations of the Borrower then due
and owing hereunder and under the other Loan Documents. After all such Letters
of Credit shall have expired or been fully drawn upon, all Reimbursement
Obligations shall have been satisfied and all other obligations of the Borrower
hereunder and under the other Loan Documents shall have been paid in full, the
balance, if any, in such cash collateral account shall be returned to the
Borrower (or such other Person as may be lawfully entitled thereto).

 

 

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SECTION 9. THE AGENTS

     9.1 Appointment. Each Lender hereby irrevocably designates and
appoints the Agents as
the agents of such Lender under this Agreement and the other Loan Documents,
and each Lender irrevocably authorizes each Agent, in such capacity, to take
such action on its behalf under the provisions of this Agreement and the other
Loan Documents and to exercise such powers and perform such duties as are
expressly delegated to such Agent by the terms of this Agreement and the other
Loan Documents, together with such other powers as are reasonably incidental
thereto. Notwithstanding any provision to the contrary elsewhere in this
Agreement, no Agent shall have any duties or responsibilities, except those
expressly set forth herein, or any fiduciary relationship with any Lender, and
no implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against any Agent.

     9.2 Delegation of Duties. Each Agent may execute any of its duties under
this Agreement and the other Loan Documents by or through agents or
attorneys-in-fact and shall be entitled to advice of counsel concerning all
matters pertaining to such duties. No Agent shall be responsible for the
negligence or misconduct of any agents or attorneys-in-fact selected by it with
reasonable care.

     9.3 Exculpatory Provisions. Neither any Agent nor any of its officers,
directors, employees, agents, attorneys-in-fact or affiliates shall be (i)
liable for any action lawfully taken or omitted to be taken by it or such
Person under or in connection with this Agreement or any other Loan Document
(except to the extent that any of the foregoing are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from its or such Person’s own gross negligence or willful misconduct) or (ii)
responsible in any manner to any of the Lenders for any recitals, statements,
representations or warranties made by any Loan Party or any officer thereof
contained in this Agreement or any other Loan Document or in any certificate,
report, statement or other document referred to or provided for in, or received
by the Agents under or in connection with, this Agreement or any other Loan
Document or for the value, validity, effectiveness, genuineness, enforceability
or sufficiency of this Agreement or any other Loan Document or for any failure
of any Loan Party to perform its obligations hereunder or thereunder. The
Agents shall not be under any obligation to any Lender to ascertain or to
inquire as to the observance or performance of any of the agreements contained
in, or conditions of, this Agreement or any other Loan Document, or to inspect
the properties, books or records of any Loan Party.

     9.4 Reliance by Agents. Each Agent shall be entitled to rely, and shall
be fully protected in relying, upon any instrument, writing, resolution,
notice, consent, certificate, affidavit, letter, telecopy, telex or teletype
message, statement, order or other document or conversation believed by it to
be genuine and correct and to have been signed, sent or made by the proper
Person or Persons and upon advice and statements of legal counsel (including,
without limitation, counsel to the Loan Parties), independent accountants and
other experts selected by such Agent. The Agents may deem and treat the payee
of any Note as the owner thereof for all purposes unless such Note shall
have been transferred in accordance with Section 10.6 and all actions
required by such Section in connection with such transfer shall have been
taken. Each Agent shall be fully justified in failing or refusing to take any
action under this Agreement or any

 

 

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other Loan Document unless it shall first
receive such advice or concurrence of the Required Lenders (or, if so specified
by this Agreement, all Lenders or any other instructing group of Lenders
specified by this Agreement) as it deems appropriate or it shall first be
indemnified to its satisfaction by the Lenders against any and all liability
and expense that may be incurred by it by reason of taking or continuing to
take any such action. Each Agent shall in all cases be fully protected in
acting, or in refraining from acting, under this Agreement and the other Loan
Documents in accordance with a request of the Required Lenders (or, if so
specified by this Agreement, all Lenders or any other instructing group of
Lenders specified by this Agreement), and such request and any action taken or
failure to act pursuant thereto shall be binding upon all the Lenders and all
future holders of the Loans.

     9.5 Notice of Default. No Agent shall be deemed to have knowledge or
notice of the occurrence of any Default or Event of Default hereunder unless
such Agent shall have received notice from a Lender or the Borrower referring
to this Agreement, describing such Default or Event of Default and stating that
such notice is a “notice of default”. In the event that the Administrative
Agent shall receive such a notice, the Administrative Agent shall give notice
thereof to the Lenders. The Administrative Agent shall take such action with
respect to such Default or Event of Default as shall be reasonably directed by
the Required Lenders (or, if so specified by this Agreement, all Lenders or any
other instructing group of Lenders specified by this Agreement);
provided that
unless and until the Administrative Agent shall have received such directions,
the Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interests of the Lenders.

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

 

 

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     9.7 Indemnification. The Lenders agree to indemnify each Agent in its
capacity as such (to the extent not reimbursed by the Borrower and without
limiting the obligation of the Borrower to do so), ratably according to their
respective Aggregate Exposure Percentages in effect on the date on which
indemnification is sought under this Section (or, if indemnification is sought
after the date upon which the Commitments shall have terminated and the Loans
shall have been paid in full, ratably in accordance with such Aggregate
Exposure Percentages immediately prior to such date), for, and to save each
Agent harmless from and against, any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses or disbursements
of any kind whatsoever that may at any time (including, without limitation, at
any time following the payment of the Loans) be imposed on, incurred by or
asserted against such Agent in any way relating to or arising out of, the
Commitments, this Agreement, any of the other Loan Documents or any documents
contemplated by or referred to herein or therein or the transactions
contemplated hereby or thereby or any action taken or omitted by such Agent
under or in connection with any of the foregoing; provided that no Lender shall
be liable for the payment of any portion of such liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements that are found by a final and nonappealable decision of a court
of competent jurisdiction to have resulted from such Agent’s gross negligence
or willful misconduct. The agreements in this Section shall survive the
payment of the Loans and all other amounts payable hereunder.

     9.8 Agent in Its Individual Capacity. Each Agent and its affiliates may
make loans to, accept deposits from and generally engage in any kind of
business with any Loan Party as though such Agent were not an Agent. With
respect to its Loans made or renewed by it and with respect to any Letter of
Credit issued or participated in by it, each Agent shall have the same rights
and powers under this Agreement and the other Loan Documents as any Lender and
may exercise the same as though it were not an Agent, and the terms “Lender”
and “Lenders” shall include each Agent in its individual capacity.

     9.9 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 30 days’ notice to the Lenders and the Borrower.
If the Administrative Agent shall resign as Administrative Agent under this
Agreement and the other Loan Documents, then the Required Lenders shall appoint
from among the Lenders a successor agent for the Lenders, which successor agent
shall (unless an Event of Default under Section 8(a) or Section 8(f) with
respect to the Borrower shall have occurred and be continuing) be subject to
approval by the Borrower
(which approval shall not be unreasonably withheld or delayed), whereupon
such successor agent shall succeed to the rights, powers and duties of the
Administrative Agent, and the term “Administrative Agent” shall mean such
successor agent effective upon such appointment and approval, and the former
Administrative Agent’s rights, powers and duties as Administrative Agent shall
be terminated, without any other or further act or deed on the part of such
former Administrative Agent or any of the parties to this Agreement or any
holders of the Loans. If no successor agent has accepted appointment as
Administrative Agent by the date that is 30 days following a retiring
Administrative Agent’s notice of resignation, the retiring Administrative Agent
shall, in consultation with the Borrower, appoint a successor Administrative
Agent (which successor agent shall be a financial institution of
nationally-recognized standing that, in the ordinary course of business,
performs functions equivalent to those of the Administrative Agent hereunder),
and the retiring Administrative Agent’s resignation shall become effective only
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Administrative Agent’s resignation
as Administrative Agent, the provisions of this Section 9 shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was
Administrative Agent under this Agreement and the other Loan Documents.

     9.10 Authorization to Release Liens and Guarantees. The Administrative
Agent is hereby irrevocably authorized by each of the Lenders to effect any
release of Liens or guarantee obligations contemplated by Section 10.15.

     9.11 The Joint Lead Arrangers; the Syndication Agent; the Co-Documentation
Agents. None of the Joint Lead Arrangers, the Syndication Agent, or any of the
Co-Documentation Agents, in their respective capacities as such, shall have any
duties or responsibilities, or shall incur any liability, under this Agreement
or the other Loan Documents.

SECTION 10. MISCELLANEOUS

     10.1 Amendments and Waivers. Neither this Agreement or any other Loan
Document, nor any terms hereof or thereof may be amended, supplemented or
modified except in accordance with the provisions of this Section 10.1. The
Required Lenders and each Loan Party party to the relevant Loan Document may,
or (with the written consent of the Required Lenders) the Agents and each Loan
Party party to the relevant Loan Document may, from time to time, (a) enter
into written amendments, supplements or modifications hereto and to the other
Loan Documents (including amendments and restatements hereof or thereof) for
the purpose of adding any provisions to this Agreement or the other Loan
Documents or changing in any manner the rights of the Lenders or of the Loan
Parties hereunder or thereunder or (b) waive, on such terms and conditions as
may be specified in the instrument of waiver, any of the requirements of this
Agreement or the other Loan Documents or any Default or Event of Default and
its consequences; provided, however, that no such waiver and no such amendment,
supplement or modification shall:

	 	(i)	 	forgive any principal amount or
extend or postpone the final scheduled date of maturity
of any Loan or Reimbursement
Obligation, reduce the stated rate of any interest or
fee payable hereunder (it being understood that any
amendment or modification to the financial definitions
in this Agreement shall not constitute a reduction in
fees or the rate of interest) or extend the scheduled
date of any payment thereof, or increase the amount or
extend the expiration date of any Commitment of any
Lender (it being understood that waivers or
modifications of conditions precedent, covenants,
Defaults or Events of Default or of a mandatory
reduction in the Commitments shall not constitute an
increase or extension of a Commitment), in each case
without the consent of each Lender directly and
adversely affected thereby;
	 
	 	(ii)	 	amend, modify or waive any provision
of this Section without the consent of each Lender
directly and adversely affected thereby;

 

 

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	 	(iii)	 	reduce any percentage specified in
the definition of Required Lenders, consent to the
assignment or transfer by the Borrower of any of its
rights and obligations under this Agreement and the
other Loan Documents, release all or substantially all
of the Collateral or release all or substantially all of
the Subsidiary Guarantors from their guarantee
obligations under the Guarantee and Collateral
Agreement, in each case without the consent of all
Lenders;
	 
	 	(iv)	 	reduce the percentage specified in
the definition of Majority Facility Lenders with respect
to any Facility without the written consent of all
Lenders under such Facility;
	 
	 	(v)	 	amend, modify or waive any provision
of Section 9 without the consent of any Agent directly
and adversely affected thereby;
	 
	 	(vi)	 	amend, modify or waive any provision
of Section 2.6 or 2.7 without the written consent of the
Swing Line Lender;
	 
	 	(vii)	 	amend, modify or waive any provision
of Section 2.18 without the consent of each Lender
directly and adversely affected thereby; or
	 
	 	(viii)	 	amend, modify or waive any provision of Section 3
without the consent of each Issuing Lender directly and
adversely affected thereby.

Any such waiver and any such amendment, supplement or modification shall apply
equally to each of the Lenders and shall be binding upon the Loan Parties, the
Lenders, the Agents and all future holders of the Loans. In the case of any
waiver, the Loan Parties, the Lenders and the Agents shall be restored to their
former position and rights hereunder and under the other Loan Documents, and
any Default or Event of Default waived shall be deemed to be cured and not
continuing; but no such waiver shall extend to any subsequent or other Default
or Event of Default, or impair any right consequent thereon. Any such waiver,
amendment, supplement or
modification shall be effected by a written instrument signed by the parties
required to sign pursuant to the foregoing provisions of this Section;
provided, that delivery of an executed signature page of any such instrument by
facsimile transmission shall be effective as delivery of a manually executed
counterpart thereof.

     For the avoidance of doubt, this Agreement and any other Loan Document may
be amended (or amended and restated) with the written consent of the Required
Lenders, the Administrative Agent and each Loan Party to each relevant Loan
Document (x) to add one or more additional credit facilities to this Agreement
and to permit the extensions of credit from time to time outstanding thereunder
and the accrued interest and fees in respect thereof (collectively, the
“Additional Extensions of Credit”) to share ratably in the benefits of this
Agreement and the other Loan Documents with the Term Loans and Revolving
Extensions of Credit and the accrued interest and fees in respect thereof and
(y) to include appropriately the

 

 

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Lenders holding such credit facilities in any
determination of the Required Lenders and Majority Revolving Facility Lenders.

     10.2 Notices. All notices, requests and demands to or upon the respective
parties hereto to be effective shall be in writing (including by telecopy),
and, unless otherwise expressly provided herein, shall be deemed to have been
duly given or made when delivered, or three Business Days after being deposited
in the mail, postage prepaid, or, in the case of telecopy notice, when
received, addressed (a) in the case of the Borrower and the Agents, as follows
and (b) in the case of the Lenders, as set forth in an administrative
questionnaire delivered to the Administrative Agent or on Schedule I to the
Lender Addendum to which such Lender is a party or, in the case of a Lender
which becomes a party to this Agreement pursuant to an Assignment and
Acceptance, in such Assignment and Acceptance or (c) in the case of any party,
to such other address as such party may hereafter notify to the other parties
hereto:

	 	 	 
	The Borrower:	 	
United Components, Inc.
	 	 	
301 Industrial Drive
	 	 	
Albion, Illinois 62806
	 	 	
Attention: Chief Financial Officer
	 	 	
Telecopy: (618) 456-2260
	 	 	
Telephone: (618) 445-6011

 

 

 86

	 	 	 	 	 
	 	 	
With a copy to:
	 	The Carlyle Group
	 	 	 	 	1001 Pennsylvania Avenue, N.W.
	 	 	 	 	Suite 200
	 	 	 	 	Washington, D. C. 20004
	 	 	 	 	Attention: Ms. Leslie Armitage
	 	 	 	 	Telecopy: 202-347-1818
	 	 	 	 	Telephone: 202-347-2626
	 	 	 	 	 
	 	 	
The Syndication Agent:
	 	JPMorgan Chase Bank
	 	 	 	 	Loan & Agency Services
	 	 	 	 	1111 Fannin-10th Floor
	 	 	 	 	Houston, Texas 77002
	 	 	 	 	Attention: Debbie Meche
	 	 	 	 	Telecopy: 713-750-2938
	 	 	 	 	Telephone: 713-750-7917
	 	 	 	 	 
	 	 	
with a copy to:
	 	JPMorgan Chase Bank
	 	 	 	 	270 Park Avenue – 4th Floor
	 	 	 	 	New York, New York 10017
	 	 	 	 	Attention: Richard Duker
	 	 	 	 	Telecopy: 212-270-5127
	 	 	 	 	Telephone: 212-2702-3057
	 	 	 	 	 
	 	 	
The Administrative Agent:
	 	Lehman Commercial Paper Inc.
	 	 	 	 	745 Seventh Avenue, 19th Floor
	 	 	 	 	New York, New York 10019
	 	 	 	 	Attention: Andrew Keith
	 	 	 	 	Telecopy: 646-758-4656
	 	 	 	 	Telephone: 212-526-4059
	 	 	 	 	 
	 	 	
Issuing Lender:
	 	As notified by such Issuing Lender to the
	 	 	 	 	Administrative Agent and the Borrower

provided that any notice, request or demand to or upon the any Agent, the
Issuing Lender or any Lender shall not be effective until received.

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

     10.4 Survival of Representations and Warranties. All representations and
warranties made herein, in the other Loan
Documents and in any document, certificate or

 

 

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statement delivered pursuant
hereto or in connection herewith shall survive the execution and delivery of
this Agreement and the making of the Loans and other extensions of credit
hereunder.

     10.5 Payment of Expenses. The Borrower agrees (a) to pay or reimburse the
Administrative Agent, the Syndication Agent and the Joint Lead Arrangers for
all their reasonable, documented out-of-pocket costs and expenses actually
incurred in connection with the syndication of the Facilities (other than fees
payable to syndicate members) and the development, preparation and execution
of, and any amendment, supplement or modification to, this Agreement and the
other Loan Documents and any other documents prepared in connection herewith or
therewith, and the consummation and administration of the transactions
contemplated hereby and thereby, including, without limitation, the reasonable
documented fees and disbursements and other charges of Simpson Thacher &
Bartlett LLP and, if necessary, one local counsel per relevant jurisdiction and
the portion of the out-of-pocket costs of the Administrative Agent in respect
of the charges of Intralinks that are allocated (ratably based upon the number
of transactions covered by such charges) to the Facilities, (b) to pay or
reimburse each Lender and the Agents for all their documented out-of-pocket
costs and expenses incurred in connection with the enforcement or preservation
of any rights under this Agreement, the other Loan Documents and any other
documents prepared in connection herewith or therewith, including, without
limitation, the documented fees and disbursements of counsel to each Lender and
of counsel to the Agents, (c) to pay, indemnify, or reimburse each Lender and
the Agents for, and hold each Lender and the Agents harmless from, any and all
recording and filing fees and any and all liabilities with respect to, or
resulting from any delay in paying, stamp, excise and other taxes, if any,
which may be payable or determined to be payable in connection with the
execution and delivery of, or consummation or administration of any of the
transactions contemplated by, or any amendment, supplement or modification of,
or any waiver or consent under or in respect of, this Agreement, the other Loan
Documents and any such other documents, and (d) to pay, indemnify or reimburse
each Lender, each Agent, their respective affiliates, and their respective
officers, directors, trustees, employees, advisors, agents and controlling
persons (each, an “Indemnitee”) for, and hold each Indemnitee harmless from and
against any and all other liabilities, obligations, losses, damages, penalties,
costs, expenses or disbursements arising out of any actions, judgments, suits
or other judicial or arbitral proceedings of any kind or nature whatsoever, or
any investigation relating thereto, in each case with respect to the execution,
delivery, enforcement, performance and administration of this Agreement, the
other Loan Documents and any such other documents, including, without
limitation, any of the foregoing relating to the use of proceeds of the Loans
or the violation of, noncompliance with or liability under, any Environmental
Law applicable to the operations of the Borrower any of its Subsidiaries or any
of the Properties and the fees and disbursements and other charges of legal
counsel in connection with claims, actions or proceedings by any Indemnitee
against the Borrower hereunder (all the foregoing in this clause (d),
collectively, the “Indemnified Liabilities”),
provided, that the Borrower shall
have no obligation hereunder to any Indemnitee with respect to Indemnified
Liabilities to the extent such Indemnified Liabilities are found by a final and
nonappealable decision of a court of competent jurisdiction to have resulted
from the gross negligence or willful misconduct of such Indemnitee or its
affiliates, officers, directors, trustees, employees, advisors,
agents or controlling persons. No Indemnitee shall be liable for any
damages arising from the use by unauthorized persons of Information or other
materials sent through electronic, telecommunications or other information
transmission systems that are intercepted by such persons (unless such damages
result from the gross negligence or willful

 

 

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misconduct of such Indemnitee or
its affiliates, officers, directors, trustees, employees, advisors, agents or
controlling persons) or for any special, indirect, consequential or punitive
damages in connection with the Facilities. All amounts due under this Section
shall be payable not later than 30 days after written demand therefor.
Statements payable by the Borrower pursuant to this Section shall be submitted
to United Components, Inc., Attention: Chief Financial Officer (Telephone No.
(618) 445-6011) (Fax No. (618) 456-2260), at the address of the Borrower set
forth in Section 10.2, or to such other Person or address as may be hereafter
designated by the Borrower in a notice to the Administrative Agent. The
agreements in this Section shall survive repayment of the Loans and all other
amounts payable hereunder.

     10.6 Successors and Assigns; Participations and Assignments. (a) This
Agreement shall be binding upon and inure to the benefit of the Borrower, the
Lenders, the Agents, all future holders of the Loans and their respective
successors and permitted assigns, except that the Borrower may not assign or
transfer any of its rights or obligations under this Agreement without the
prior written consent of the Agents and each Lender.

     (b)  Any Lender may, without the consent of the Borrower, in accordance
with applicable law, at any time sell to one or more banks, financial
institutions or other entities (each, a “Participant”) participating interests
in any Loan owing to such Lender, any Commitment of such Lender or any other
interest of such Lender hereunder and under the other Loan Documents; unless
consented to by the Borrower, no such participation may be sold to any
competitor of the Borrower and its Subsidiaries. In the event of any such sale
by a Lender of a participating interest to a Participant, such Lender’s
obligations under this Agreement to the other parties to this Agreement shall
remain unchanged, such Lender shall remain solely responsible for the
performance thereof, such Lender shall remain the holder of any such Loan for
all purposes under this Agreement and the other Loan Documents, and the
Borrower and the Agents shall continue to deal solely and directly with such
Lender in connection with such Lender’s rights and obligations under this
Agreement and the other Loan Documents. In no event shall any Participant
under any such participation have any right to approve any amendment or waiver
of any provision of any Loan Document, or any consent to any departure by any
Loan Party therefrom, except to the extent that such amendment, waiver or
consent would require the consent of all Lenders pursuant to Section 10.1. The
Borrower also agrees that each Participant shall be entitled to the benefits of
Sections 2.19, 2.20 and 2.21 with respect to its participation in the
Commitments and the Loans outstanding from time to time as if such Participant
were a Lender; provided that, in the case of Section 2.20, such Participant
shall have complied with the requirements of said Section, and provided,
further, that no Participant shall be entitled to receive any greater amount
pursuant to any such Section than the transferor Lender would have been
entitled to receive in respect of the amount of the participation transferred
by such transferor Lender to such Participant had no such transfer occurred.

     (c)  Any Lender (an “Assignor”) may, in accordance with applicable law and
upon written notice to the Administrative Agent, at any time and from time to
time assign to any Lender or any affiliate, Related Fund or Control Investment
Affiliate thereof or, with the consent of the Borrower and the Administrative
Agent and, in the case of any assignment of Revolving Credit Commitments, the
written consent of the Issuing Lender and the Swing Line Lender (which, in each
case, shall not be unreasonably withheld or delayed) (provided (x) that no such
consent need be obtained in connection with an assignment by any Lehman Entity
and (y) the

 

 

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consent of the Borrower need not be
obtained with respect to (1) any
assignment of Term Loans or (2) any assignment during the continuance of an Event
of Default under paragraph (a) of Section 8, paragraph (c) of Section 8 (with
respect to the Borrower’s obligations under Section 7.1 only) or paragraph (f)
of Section 8), to an additional bank, financial institution or other entity (an
“Assignee”) all or any part of its rights and obligations under this Agreement
pursuant to an Assignment and Acceptance, substantially in the form of Exhibit
E, executed by such Assignee and such Assignor (and, where the consent of the
Borrower, the Agents or the Issuing Lender or the Swing Line Lender is required
pursuant to the foregoing provisions, by the Borrower and such other Persons)
and delivered to the Administrative Agent for its acceptance and recording in
the Register; provided that (A) no such assignment to an Assignee (other than
any Lender or any affiliate, Control Investment Affiliate or Related Fund
thereof) shall be in an aggregate principal amount of less than $1,000,000, in
the case of assignments of Loans and Commitments under the Tranche B Term Loan
Facility, or $5,000,000, in the case of assignments of Loans and Commitments
under any other Facility (in each case other than in the case of an assignment
of all of a Lender’s interests under this Agreement), unless otherwise agreed
by the Borrower and the Administrative Agent and (B) unless consented to by the
Borrower, no such assignment may be made to any competitor of the Borrower and
its Subsidiaries. Any such assignment need not be ratable as among the
Facilities. Upon such execution, delivery, acceptance and recording, from and
after the effective date determined pursuant to such Assignment and Acceptance,
(x) the Assignee thereunder shall be a party hereto and, to the extent provided
in such Assignment and Acceptance, have the rights and obligations of a Lender
hereunder with Commitments and/or Loans as set forth therein, (y) the Assignor
thereunder shall, to the extent provided in such Assignment and Acceptance, be
released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all of an Assignor’s rights and obligations
under this Agreement, such Assignor shall cease to be a party hereto, except as
to Section 2.19, 2.20 and 10.5 in respect of the period prior to such effective
date) and (z) the Assignee will be treated as a Lender for purposes of Sections
2.19 and 2.20. For purposes of the minimum assignment amounts set forth in
this paragraph, multiple assignments by two or more Related Funds or Control
Investment Affiliates shall be aggregated.

     (d)  The Administrative Agent shall, on behalf of the Borrower, maintain at
its address referred to in Section 10.2 a copy of each Assignment and
Acceptance delivered to it and a register (the “Register”) for the recordation
of the names and addresses of the Lenders and the Commitment of, and principal
amount of the Loans owing to, each Lender from time to time. The entries in
the Register shall be presumptively correct, in the absence of manifest error,
and the Borrower, each Agent and the Lenders shall treat each Person whose name
is recorded in the Register as the owner of the Loans and any Notes evidencing
such Loans recorded therein for all purposes of this Agreement. Any assignment
of any Loan, whether or not evidenced by a Note, shall be effective only upon
appropriate entries with respect thereto being made in the Register (and each
Note shall expressly so provide). Any assignment or transfer of all or part of
a Loan
evidenced by a Note shall be registered on the Register only upon
surrender for registration of assignment or transfer of the Note evidencing
such Loan, accompanied by a duly executed Assignment and Acceptance; thereupon
one or more new Notes in the same aggregate principal amount shall be issued to
the designated Assignee, and the old Notes shall be returned by the
Administrative Agent to the Borrower marked “canceled”. The Register shall be
available for inspection by the Borrower or any Lender (with respect to any
entry relating to such Lender’s Loans) at any reasonable time and from time to
time upon reasonable prior notice. If any

 

 

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amendment or waiver relating to this
Agreement or any other Loan Document is pending, at the request of any Lender,
the Administrative Agent shall provide such Lender with a list of the names of
all the Lenders. The Administrative Agent shall advise the Borrower, quarterly
and otherwise upon the Borrower’s request, of all assignments recorded by the
Administrative Agent pursuant hereto.

     (e)  Upon its receipt of an Assignment and Acceptance executed by an
Assignor and an Assignee (and, in any case where the consent of any other
Person is required by Section 10.6(c), by each such other Person) together with
payment to the Administrative Agent of a registration and processing fee of
$3,500 (treating multiple, simultaneous assignments by or to two or more
Related Funds as a single assignment) (except that no such registration and
processing fee shall be payable (y) in connection with an assignment by or to a
Lehman Entity or (z) in the case of an Assignee which is already a Lender or is
an affiliate or Related Fund of a Lender or a Person under common management
with a Lender), the Administrative Agent shall (i) promptly accept such
Assignment and Acceptance and (ii) on the effective date determined pursuant
thereto record the information contained therein in the Register and give
notice of such acceptance and recordation to the Borrower. On or prior to such
effective date, the Borrower, at its own expense, upon request, shall execute
and deliver to the Administrative Agent (in exchange for the Revolving Credit
Note and/or applicable Term Notes, as the case may be, of the assigning Lender)
a new Revolving Credit Note and/or applicable Term Notes, as the case may be,
to the order of such Assignee in an amount equal to the Revolving Credit
Commitment and/or applicable Term Loans, as the case may be, assumed or
acquired by it pursuant to such Assignment and Acceptance and, if the Assignor
has retained a Revolving Credit Commitment and/or Term Loans, as the case may
be, upon request, a new Revolving Credit Note and/or Term Notes, as the case
may be, to the order of the Assignor in an amount equal to the Revolving Credit
Commitment and/or applicable Term Loans, as the case may be, retained by it
hereunder. Such new Note or Notes shall be dated the Closing Date and shall
otherwise be in the form of the Note or Notes replaced thereby.

     (f)  For avoidance of doubt, the parties to this Agreement acknowledge that
the provisions of this Section concerning assignments of Loans and Notes relate
only to absolute assignments and that such provisions do not prohibit
assignments creating security interests in Loans and Notes, including, without
limitation, any pledge or assignment by a Lender of any Loan or Note to any
Federal Reserve Bank in accordance with applicable law.

     (g)  Notwithstanding anything to the contrary contained herein, any Lender
(a “Granting Lender”) may grant to a special purpose funding vehicle (an
“SPC”), identified as such in writing from time to time by the Granting Lender
to the Administrative Agent and the Borrower, the option to provide to the
Borrower all or any part of any Loan that such Granting Lender would otherwise
be obligated to make to the Borrower pursuant to this Agreement;
provided that (i) nothing herein shall constitute a commitment by any SPC
to make any Loan, (ii) if an SPC elects not to exercise such option or
otherwise fails to provide all or any part of such Loan, the Granting Lender
shall be obligated to make such Loan pursuant to the terms hereof and (iii) the
Granting Lender’s obligations under this Agreement to the other parties to this
Agreement shall remain unchanged, the Granting Lender shall remain solely

responsible for the performance thereof, and the Borrower and the Agents shall
continue to deal solely and directly with such Granting Lender in connection
with such Lender’s rights and obligations

 

 

 91

under this Agreement and the other
Loan Documents. The making of a Loan by an SPC hereunder shall utilize the
Commitment of the Granting Lender to the same extent, and as if, such Loan were
made by such Granting Lender. Each party hereto hereby agrees that no SPC
shall be liable for any indemnity or similar payment obligation under this
Agreement (all liability for which shall remain with the Granting Lender). In
furtherance of the foregoing, each party hereto hereby agrees (which agreement
shall survive the termination of this Agreement) that, prior to the date that
is one year and one day after the payment in full of all outstanding commercial
paper or other indebtedness of any SPC, it will not institute against, or join
any other person in instituting against, such SPC any bankruptcy,
reorganization, arrangement, insolvency or liquidation proceedings under the
laws of the United States or any state thereof. In addition, notwithstanding
anything to the contrary in this Section 10.6(g), any SPC may (A) with notice
to, but without the prior written consent of, the Borrower and the
Administrative Agent and without paying any processing fee therefor, assign all
or a portion of its interests in any Loans to the Granting Lender, or with the
prior written consent of the Borrower and the Administrative Agent (which
consent shall not be unreasonably withheld) to any financial institutions
providing liquidity and/or credit support to or for the account of such SPC to
support the funding or maintenance of Loans, and (B) disclose on a confidential
basis any non-public information relating to its Loans to any rating agency,
commercial paper dealer or provider of any surety, guarantee or credit or
liquidity enhancement to such SPC; provided that non-public information with
respect to the Borrower may be disclosed only with the Borrower’s consent which
will not be unreasonably withheld. In the event that the consent of all or any
portion of the Lenders is required pursuant to any provision of any Loan
Document at a time when any Loan is held by any SPC, such SPC and the Granting
Lender that would otherwise have been obligated to make such Loan shall agree
between themselves as to which of them shall be entitled to grant or withhold
any consent applicable to such Loan, but such Granting Lender shall communicate
with the Administrative Agent and the Borrower as to the giving or withholding
of such consent, and the parties to the Loan Documents shall be entitled to
rely conclusively on the advice by such Granting Lender as to whether such
consent is being granted or withheld. This paragraph (g) may not be amended
without the written consent of any SPC with Loans outstanding at the time of
such proposed amendment.

     10.7
Adjustments; Set-off.  (a) Except to the extent that this Agreement
provides for payments to be allocated to a particular Lender or to the Lenders
under a particular Facility, if any Lender (a “Benefitted
Lender”) shall at any
time receive any payment of all or part of the Obligations owing to it, or
receive any collateral in respect thereof (whether voluntarily or
involuntarily, by set-off, pursuant to events or proceedings of the nature
referred to in Section 8(f), or otherwise), in a greater proportion than any
such payment to or collateral received by any other Lender, if any, in respect
of such other Lender’s Obligations, such Benefitted Lender shall purchase for
cash from the other Lenders a participating interest in such portion of
each such other Lender’s Obligations, or shall provide such other Lenders with
the benefits of any such collateral, as shall be necessary to cause such
Benefitted Lender to share the excess payment or benefits of such collateral
ratably with each of the Lenders; provided, however, that if all or any portion
of such excess payment or benefits is thereafter recovered from such Benefitted
Lender, such purchase shall be rescinded, and the purchase price and benefits
returned, to the extent of such recovery, but without interest.

 

 

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     (b)  In addition to any rights and remedies of the Lenders provided by law,
each Lender shall have the right, without prior notice to the Borrower, any
such notice being expressly waived by the Borrower to the extent permitted by
applicable law, upon any amount becoming due and payable by the Borrower
hereunder (whether at the stated maturity, by acceleration or otherwise after
the expiration of any applicable grace period), to set off and appropriate and
apply against such amount any and all deposits (general or special, time or
demand, provisional or final, but not trust accounts), in any currency, and any
other credits, indebtedness or claims, in any currency, in each case whether
direct or indirect, absolute or contingent, matured or unmatured, at any time
held or owing by such Lender or any branch or agency thereof to or for the
credit or the account of the Borrower. Each Lender agrees promptly to notify
the Borrower and the Administrative Agent after any such setoff and application
made by such Lender, provided that the failure to give such notice shall not
affect the validity of such setoff and application.

     10.8 Counterparts. This Agreement may be executed by one or more of the
parties to this Agreement on any number of separate counterparts, and all of
said counterparts taken together shall be deemed to constitute one and the same
instrument. Delivery of an executed signature page of this Agreement or of a
Lender Addendum by facsimile transmission shall be effective as delivery of a
manually executed counterpart hereof. A set of the copies of this Agreement
signed by all the parties shall be lodged with the Borrower and the
Administrative Agent.

     10.9 Severability. Any provision of this Agreement that 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 provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

     10.10 Integration. This Agreement and the other Loan Documents represent
the entire agreement of the Borrower, the Agents, the Joint Lead Arrangers and
the Lenders with respect to the subject matter hereof and thereof, and there
are no promises, undertakings, representations or warranties by the Joint Lead
Arrangers, any Agent or any Lender relative to subject matter hereof not
expressly set forth or referred to herein or in the other Loan Documents.

     10.11 GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES UNDER THIS
AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE
WITH, THE LAW OF THE STATE OF NEW YORK.

     10.12 Submission To Jurisdiction; Waivers. The Borrower hereby
irrevocably and unconditionally:

     (a)  submits for itself and its Property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general

 

 

 93

jurisdiction of the courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

     (b)  consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;

     (c)  agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to the Borrower at its
address set forth in Section 10.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

     (d)  agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

     (e)  waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

     10.13 Acknowledgments. The Borrower hereby acknowledges that:

     (a)  it has been advised by counsel in the negotiation, execution and
delivery of this Agreement and the other Loan Documents;

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

     (c)  no joint venture is created hereby or by the other Loan Documents or
otherwise exists by virtue of the transactions contemplated hereby among the
Joint Lead Arrangers, the Agents and the Lenders or among the Borrower and the
Lenders.

     10.14 Confidentiality. Each of the Agents and the Lenders agrees to keep
confidential all non-public information provided to it by any Loan Party
pursuant to this Agreement; provided that nothing herein shall prevent any
Agent or any Lender from disclosing any such information (a) to the Joint Lead
Arrangers, any Agent, any other Lender or any affiliate of any thereof, (b) to
any Participant or Assignee (each, a “Transferee”) or prospective Transferee
that agrees to comply with the provisions of this Section or substantially
equivalent provisions, (c) to any of its employees, directors, agents,
attorneys, accountants and other professional advisors, (d) to any financial
institution that is a direct or indirect contractual counterparty in swap
agreements or such contractual counterparty’s professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty agrees to be bound by the provisions of this Section), (e) upon
the request or demand of any Governmental Authority having jurisdiction over
it, (f) in response to any order of any court or other Governmental Authority
or as may otherwise be required pursuant to any Requirement of

 

 

 94

Law, (g) in
connection with any litigation or similar proceeding, (h) that has been
publicly disclosed other than in breach of this Section, (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender’s investment portfolio in connection with ratings issued with respect to
such Lender or (j) in connection with the exercise of any remedy hereunder or
under any other Loan Document. Notwithstanding anything herein to the
contrary, any party subject to confidentiality obligations hereunder or under
any other related document (and any employee, representative or other agent of
such party) may disclose to any and all persons, without limitation of any
kind, such party’s U.S. federal income tax treatment and the U.S. federal
income tax structure of the transactions contemplated by this Agreement
relating to such party and all materials of any kind (including opinions or
other tax analyses) that are provided to it relating to such tax treatment and
tax structure. However, no such party shall disclose any information relating
to such tax treatment or tax structure to the extent nondisclosure is
reasonably necessary in order to comply with applicable securities laws.

     10.15 Release of Collateral and Guarantee Obligations.

     (a)  Notwithstanding anything to the contrary contained herein or in any
other Loan Document, upon request of the Borrower in connection with any
Disposition of Property permitted by the Loan Documents, the Administrative
Agent shall (without notice to, or vote or consent of, any Lender, or any
affiliate of any Lender that is a party to any Specified Hedge Agreement) take
such actions as shall be required to release its security interest in any
Collateral being Disposed of in such Disposition, and to release any guarantee
obligations under any Loan Document of any Person being Disposed of in such
Disposition, to the extent necessary to permit consummation of such Disposition
in accordance with the Loan Documents.

     (b)  Notwithstanding anything to the contrary contained herein or any other
Loan Document, when all Obligations (other than obligations in respect of any
Specified Hedge Agreement) have been paid in full, all Commitments have
terminated or expired and no Letter of Credit shall be outstanding, upon
request of the Borrower, the Administrative Agent shall (without notice to, or
vote or consent of, any Lender, or any affiliate of any Lender that is a party
to any Specified Hedge Agreement) take such actions as shall be required to
release its security
interest in all Collateral, and to release all guarantee obligations under
any Loan Document, whether or not on the date of such release there may be
outstanding Obligations in respect of Specified Hedge Agreements. Any such
release of guarantee obligations shall be deemed subject to the provision that
such guarantee obligations shall be reinstated if after such release any
portion of any payment in respect of the Obligations guaranteed thereby shall
be rescinded or must otherwise be restored or returned upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payment had not been made.

     10.16 Accounting Changes. In the event that any “Accounting Change” (as
defined below) shall occur and such change results in a change in the method of
calculation of financial covenants, standards or terms in this Agreement, then
the Borrower and the Administrative Agent agree to enter into negotiations in
order to amend such provisions of this

 

 

 95

Agreement so as to equitably reflect
such Accounting Change with the desired result that the criteria for evaluating
the Borrower’s financial condition shall be the same after such Accounting
Change as if such Accounting Change had not been made. Until such time as such
an amendment shall have been executed and delivered by the Borrower, the
Administrative Agent and the Required Lenders, all financial covenants,
standards and terms in this Agreement shall continue to be calculated or
construed as if such Accounting Change had not occurred. “Accounting Change”
refers to any change in accounting principles required by the promulgation of
any rule, regulation, pronouncement or opinion by the Financial Accounting
Standards Board of the American Institute of Certified Public Accountants or,
if applicable, the SEC.

     10.17 Delivery of Lender Addenda. Each initial Lender shall become a
party to this Agreement by delivering to the Administrative Agent a Lender
Addendum duly executed by such Lender, the Borrower and the Administrative
Agent.

     10.18 WAIVERS OF JURY TRIAL. THE BORROWER, THE AGENTS AND THE LENDERS
HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVE TRIAL BY JURY IN ANY LEGAL ACTION
OR PROCEEDING RELATING TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY
COUNTERCLAIM THEREIN.

 

 

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

	 	 	 	 	 
	 	 	UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Chief
Financial Officer, Treasurer & Secretary
	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,

as Syndication Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	LEHMAN BROTHERS INC.,

as a Joint Lead Arranger
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	J.P. MORGAN SECURITIES INC.,

as a Joint Lead Arranger
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

UCI Credit Agreement

 

 

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

	 	 	 	 	 
	 	 	UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,

as Syndication Agent
	 	 	 	 	 
	 	 	
By:
	 	-s- Marian N. Schulman
	 	 	 	 	

	 	 	 	 	Name: MARIAN N. SCHULMAN
	 	 	 	 	Title: Managing Director
	 	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	LEHMAN BROTHERS INC.,

as a Joint Lead Arranger
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	J.P. MORGAN SECURITIES INC.,

as a Joint Lead Arranger
	 	 	 	 	 
	 	 	
By:
	 	-s- John Abraham
	 	 	 	 	

	 	 	 	 	Name: John Abraham
	 	 	 	 	Title: Vice President

UCI Credit Agreement

 

 

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

	 	 	 	 	 
	 	 	UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	JPMORGAN CHASE BANK,

as Syndication Agent
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent
	 	 	 	 	 
	 	 	
By:
	 	-s- G. Andrew Keith

	 	 	 	 	Name: G. Andrew Keith
	 	 	 	 	Title: Authorized Signatory
	 	 	 	 	 
	 	 	LEHMAN BROTHERS INC.,

as a Joint Lead Arranger
	 	 	 	 	 
	 	 	
By:
	 	-s- G. Andrew Keith

	 	 	 	 	Name: G. Andrew Keith
	 	 	 	 	Title: Senior Vice President
	 	 	 	 	 
	 	 	J.P. MORGAN SECURITIES INC.,

as a Joint Lead Arranger
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

UCI Credit Agreement

 

 

	 	 	 	 	 
	 	 	ABN AMRO BANK N.V.,

as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:
	 	-s- Terrence J. Ward

	 	 	 	 	Name: TERRENCE J. WARD
	 	 	 	 	Title: Senior Vice President
	 	 	 	 	 
	 	 	
By:
	 	-s- John M. Pastore

	 	 	 	 	Name: John M. Pastore
	 	 	 	 	Title: Vice President

UCI Credit Agreement

 

 

	 	 	 	 	 
	 	 	CREDIT
LYONNAIS, NEW YORK BRANCH,

as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:
	 	Authorized Person

	 	 	 	 	Name: Authorized Person
	 	 	 	 	Title: M.D.

UCI Credit Agreement

 

 

	 	 	 	 	 
	 	 	FLEET NATIONAL BANK,

as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:
	 	-s- James C. Silva

	 	 	 	 	Name: James C. Silva
	 	 	 	 	Title: Managing Director

UCI Credit Agreement

 

 

	 	 	 	 	 
	 	 	GENERAL ELECTRIC CAPITAL CORPORATION,

as Co-Documentation Agent
	 	 	 	 	 
	 	 	
By:
	 	-s- Laurent Paris, SVP

	 	 	 	 	Name: Laurent Paris, SVP
	 	 	 	 	Title: Duly Authorized Signatory

UCI Credit Agreement

 

 

	 	 	 	 	 
	
Accepted and agreed:
	 	 
	 
	LEHMAN
COMMERCIAL PAPER INC., as

Administrative Agent	 	 
	 	 	 	 	 
	
By:
	 	-s- G. Andrew Keith

	 	 
	 	 	Name: G. Andrew Keith	 	 
	 	 	Title: Authorized Signatory	 	 

Lender Addendum

 

 

Annex A

PRICING GRID FOR REVOLVING CREDIT LOANS, SWING LINE LOANS,

TRANCHE A TERM LOANS AND COMMITMENT FEES

	 	 	 	 	 	 	 	 	 	 	 	 	 
	 	 	Applicable	 	 	 	 	 	 	 	 
	 	 	Margin	 	Applicable	 	 	 	 
	 	 	for Eurodollar	 	Margin for Base	 	Commitment
	Consolidated Leverage Ratio	 	Loans	 	Rate Loans	 	Fee Rate
	
	 	
	 	
	 	

	3 4.25:1.00
	 	 	3.250	%	 	 	2.250	%	 	 	0.500	%
	3 3.75:1.00 but < 4.25:1.00
	 	 	3.000	%	 	 	2.000	%	 	 	0.500	%
	3 3.25:1.00 but < 3.75:1.00
	 	 	2.750	%	 	 	1.750	%	 	 	0.500	%
	3 2.75:1.00 but < 3.25:1.00
	 	 	2.500	%	 	 	1.500	%	 	 	0.375	%
	
< 2.75:1.00
	 	 	2.250	%	 	 	1.250	%	 	 	0.375	%

     Changes in the Applicable Margin with respect to Tranche A Loans or in the
Commitment Fee Rate resulting from changes in the Consolidated Leverage Ratio
shall become effective on the date (the “Adjustment Date”) on which financial
statements are delivered to the Lenders pursuant to Section 6.1 (but in any
event not later than the date such financial statements are required to be
delivered) and shall remain in effect until the next change to be effected
pursuant to this paragraph. If any financial statements referred to above are
not delivered within the time periods specified above, then, until such
financial statements are delivered, the Consolidated Leverage Ratio as at the
end of the fiscal period that would have been covered thereby shall for the
purposes of this definition be deemed to be greater than 4.25 to 1.

 

 

SCHEDULE 1.1

MORTGAGED PROPERTY

 

 

SCHEDULE 4.4

CONSENTS, AUTHORIZATIONS, FILINGS AND NOTICES

 

 

SCHEDULE 4.15

SUBSIDIARIES

 

 

SCHEDULE 4.19(a)-1

UCC FILING JURISDICTIONS

	 	 	 	 	 	 	 
	 	 	Loan Party	 	 	Filing Office
	 	 	
	 	 	

     [Borrower to list name of each Loan Party which is a party to any Security
Document and each filing office in which a UCC financing statement must be
filed in respect of such Loan Party and its collateral]

 

 

SCHEDULE 4.19(a)-2

UCC FINANCING STATEMENTS TO REMAIN ON FILE

 

 

SCHEDULE 4.19(a)-3

UCC FINANCING STATEMENTS TO BE TERMINATED

 

 

SCHEDULE 4.19(b)

MORTGAGE FILING JURISDICTIONS

 

 

SCHEDULE 7.2(d)

EXISTING INDEBTEDNESS

 

 

SCHEDULE 7.3(f)

EXISTING LIENSexv10w2

 

EXHIBIT 10.2

EXECUTION COPY

GUARANTEE AND COLLATERAL AGREEMENT

made by

UCI ACQUISITION HOLDINGS, INC.

UNITED COMPONENTS, INC.

and certain of its Subsidiaries

in favor of

LEHMAN COMMERCIAL PAPER INC.,

as Administrative Agent

Dated as of June 20, 2003

 

 

TABLE OF CONTENTS

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	SECTION 1. DEFINED TERMS	 	 	2	 
	 	 	
1.1
	 	Definitions
	 	 	2	 
	 	 	
1.2
	 	Other Definitional Provisions
	 	 	6	 
	SECTION 2. GUARANTEE	 	 	6	 
	 	 	
2.1
	 	Guarantee
	 	 	6	 
	 	 	
2.2
	 	Right of Contribution
	 	 	8	 
	 	 	
2.3
	 	Subrogation
	 	 	8	 
	 	 	
2.4
	 	Amendments, etc. with respect to the Borrower Obligations
	 	 	9	 
	 	 	
2.5
	 	Guarantee Absolute and Unconditional
	 	 	9	 
	 	 	
2.6
	 	Reinstatement
	 	 	11	 
	 	 	
2.7
	 	Payments
	 	 	11	 
	SECTION 3. GRANT OF SECURITY INTEREST	 	 	11	 
	SECTION 4. REPRESENTATIONS AND WARRANTIES	 	 	12	 
	 	 	
4.1
	 	Representations in Credit Agreement; Holdings’ Representations
	 	 	12	 
	 	 	
4.2
	 	Jurisdiction of Organization; Chief Executive Office
	 	 	13	 
	 	 	
4.3
	 	Inventory and Equipment
	 	 	13	 
	 	 	
4.4
	 	Farm Products
	 	 	13	 
	 	 	
4.5
	 	Investment Property
	 	 	13	 
	 	 	
4.6
	 	Receivables
	 	 	13	 
	 	 	
4.7
	 	Intellectual Property
	 	 	13	 
	SECTION 5. [INTENTIONALLY OMITTED]	 	 	13	 
	SECTION 6. REMEDIAL PROVISIONS	 	 	13	 
	 	 	
6.1
	 	Certain Matters Relating to Receivables
	 	 	13	 
	 	 	
6.2
	 	Communications with Obligors; Grantors Remain Liable
	 	 	14	 
	 	 	
6.3
	 	Pledged Stock
	 	 	14	 
	 	 	
6.4
	 	Proceeds to be Turned Over To Administrative Agent
	 	 	15	 
	 	 	
6.5
	 	Application of Proceeds
	 	 	15	 
	 	 	
6.6
	 	Code and Other Remedies
	 	 	16	 
	 	 	
6.7
	 	Registration Rights
	 	 	17	 
	 	 	
6.8
	 	Deficiency
	 	 	17	 
	SECTION 7. THE ADMINISTRATIVE AGENT	 	 	17	 
	 	 	
7.1
	 	Administrative Agent’s Appointment as Attorney-in-Fact, etc
	 	 	17	 
	 	 	
7.2
	 	Duty of Administrative Agent
	 	 	19	 
	 	 	
7.3
	 	Execution of Financing Statements
	 	 	19	 
	 	 	
7.4
	 	Authority of Administrative Agent
	 	 	19	 
	SECTION 8. MISCELLANEOUS	 	 	20	 
	 	 	
8.1
	 	Amendments in Writing
	 	 	20	 

i

 

	 	 	 	 	 	 	 	 	 
	 	 	 	 	 	 	Page
	 	 	 	 	 	 	

	 	 	
8.2
	 	Notices
	 	 	20	 
	 	 	
8.3
	 	No Waiver by Course of Conduct; Cumulative Remedies
	 	 	20	 
	 	 	
8.4
	 	Successors and Assigns
	 	 	20	 
	 	 	
8.5
	 	Set-Off
	 	 	20	 
	 	 	
8.6
	 	Counterparts
	 	 	21	 
	 	 	
8.7
	 	Severability
	 	 	21	 
	 	 	
8.8
	 	Section Headings
	 	 	21	 
	 	 	
8.9
	 	Integration
	 	 	21	 
	 	 	
8.10
	 	GOVERNING LAW
	 	 	21	 
	 	 	
8.11
	 	Submission To Jurisdiction; Waivers
	 	 	21	 
	 	 	
8.12
	 	Acknowledgements
	 	 	22	 
	 	 	
8.13
	 	Additional Grantors
	 	 	22	 
	 	 	
8.14
	 	Releases
	 	 	22	 
	 	 	
8.15
	 	WAIVER OF JURY TRIAL
	 	 	23	 

ii

 

	 	 	 
	Schedules	 	 
	Schedule 1	 	
Notice Addresses of Guarantors
	Schedule 2	 	
Description of Pledged Securities
	Schedule 3	 	
Filings and Other Actions Required to Perfect Security Interest
	Schedule 4	 	
Jurisdiction of Organization, Identification Number and Location of
Chief Executive Office
	Schedule 5	 	
Locations of Inventory and Equipment
	Schedule 6	 	
Intellectual Property
	Annexes	 	 
	Annex I	 	
Assumption Agreement
	Annex II	 	
Acknowledgment and Consent

iii

 

 

          GUARANTEE AND
COLLATERAL AGREEMENT, dated as of June 20, 2003, made by each of the
signatories hereto (together with any other entity that may become a party
hereto as provided herein, the “Grantors”), in favor of LEHMAN COMMERCIAL PAPER
INC., as Administrative Agent (in such capacity, the “Administrative Agent”)
for the banks and other financial institutions (the “Lenders”) from time to
time parties to the Credit Agreement, dated as of June 20, 2003 (as amended,
supplemented or otherwise modified from time to time, the “Credit Agreement”),
among UNITED COMPONENTS, INC., a Delaware corporation (the “Borrower”), the
several banks and other financial institutions or entities from time to time
parties to the Credit Agreement (the “Lenders”), LEHMAN BROTHERS INC. and J.P.
MORGAN SECURITIES INC., as joint advisors, joint lead arrangers and joint
bookrunners (in such capacity, the “Joint Lead Arrangers”), JPMORGAN CHASE
BANK, as syndication agent (in such capacity, the “Syndication Agent”), ABN
AMRO BANK, N.V., CREDIT LYONNAIS, NEW YORK BRANCH, FLEET NATIONAL BANK and
GENERAL ELECTRIC CAPITAL CORPORATION, as co-documentation agents, and the
Administrative Agent.

W I T N E S S E T H :

          WHEREAS, pursuant to the Credit Agreement, the Lenders have severally
agreed to make extensions of credit to the Borrower upon the terms and subject
to the conditions set forth therein;

          WHEREAS, the Borrower is a member of an affiliated group of companies that
includes each other Grantor;

          WHEREAS, the proceeds of the extensions of credit under the Credit
Agreement will be used in part to enable the Borrower to make valuable
transfers to one or more of the other Grantors in connection with the operation
of their respective businesses;

          WHEREAS, certain of the Qualified Counterparties may enter into Specified
Hedge Agreements with one or more of the Grantors;

          WHEREAS, each Grantor will derive substantial direct and indirect benefit
from the extensions of credit under the Credit Agreement and from the Specified
Hedge Agreements; and

          WHEREAS, it is a condition precedent to the obligation of the Lenders to
make their respective extensions of credit to the Borrower under the Credit
Agreement that the Grantors shall have executed and delivered this Agreement to
the Administrative Agent;

          NOW, THEREFORE, in consideration of the premises and to induce the
Administrative Agent and the Lenders to enter into the Credit Agreement and to
induce the Lenders to make their respective extensions of credit to the
Borrower thereunder, each Grantor hereby agrees with the Administrative Agent,
for the benefit of the Secured Parties, as follows:

 

 

2

SECTION 1. DEFINED TERMS

          1.1 Definitions. (a) Unless otherwise defined herein, terms defined in the
Credit Agreement and used herein shall have the meanings given to them in the
Credit Agreement and the following terms are used herein as defined in the New
York UCC: Accounts, Certificated Security, Chattel Paper, Commercial Tort
Claims, Documents, Equipment, Farm Products, General Intangibles, Goods,
Instruments, Inventory, Letter-of-Credit Rights and Supporting Obligations.

          (b) The following terms shall have the following meanings:

          “Agreement”: this Guarantee and Collateral Agreement, as the same
may be amended, supplemented or otherwise modified from time to time.

          “Borrower Credit Agreement Obligations”: the collective reference
to the unpaid principal of and interest on the Loans and Reimbursement
Obligations and all other obligations and liabilities of the Borrower
(including, without limitation, interest accruing at the then applicable
rate provided in the Credit Agreement after the maturity of the Loans and
Reimbursement Obligations and interest accruing at the then applicable
rate provided in the Credit Agreement after the filing of any petition in
bankruptcy, or the commencement of any insolvency, reorganization or like
proceeding, relating to the Borrower, whether or not a claim for
post-filing or post-petition interest is allowed in such proceeding) to
the Administrative Agent or any Lender, whether direct or indirect,
absolute or contingent, due or to become due, or now existing or
hereafter incurred, which may arise under, out of, or in connection with,
the Credit Agreement, this Agreement, the other Loan Documents, any
Letter of Credit, or any other document made, delivered or given in
connection therewith, in each case whether on account of principal,
interest, reimbursement obligations, fees, indemnities, costs, expenses
or otherwise (including, without limitation, all fees and disbursements
of counsel to the Administrative Agent or to the Lenders that are
required to be paid by the Borrower pursuant to the terms of any of the
foregoing agreements).

          “Borrower Hedge Agreement Obligations”: the collective reference to
all obligations and liabilities of the Borrower (including, without
limitation, interest accruing at the then applicable rate provided in any
Specified Hedge Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to the Borrower, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to any Qualified
Counterparty, whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, any Specified Hedge Agreement or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are

 

 

3

required to be paid by the Borrower pursuant to the terms of any
Specified Hedge Agreement).

          “Borrower Obligations”: the collective reference to (i) the
Borrower Credit Agreement Obligations, (ii) the Borrower Hedge Agreement
Obligations, but only to the extent that, and only so long as, the
Borrower Credit Agreement Obligations are secured and guaranteed pursuant
hereto, and (iii) all other obligations and liabilities of the Borrower,
whether direct or indirect, absolute or contingent, due or to become due,
or now existing or hereafter incurred, which may arise under, out of, or
in connection with, this Agreement.

          “Collateral”: as defined in Section 3.

          “Collateral Account”: any collateral account established by the
Administrative Agent as provided in Section 6.1 or 6.4.

          “Copyrights”: (i) all copyrights arising under the laws of the
United States, whether registered or unregistered and whether published
or unpublished (including, without limitation, those listed in Schedule 6), all registrations and recordings thereof, and all applications in
connection therewith, including, without limitation, all registrations,
recordings and applications in the United States Copyright Office, and
(ii) the right to obtain all renewals thereof.

          “Copyright Licenses”: any written agreement naming any Grantor as
licensor or licensee (including, without limitation, those listed in
Schedule 6), granting any right under any Copyright, including, without
limitation, the grant of rights to manufacture, distribute, exploit and
sell materials derived from any Copyright.

          “Excluded Assets”: the collective reference to (i) any contract,
General Intangible, Copyright License, Patent License or Trademark
License (“Intangible Assets”), or any Equipment subject to a purchase
money security interest permitted pursuant to the terms of the Credit
Agreement (“PMSI Assets”) in each case to the extent the grant by the
relevant Grantor of a security interest pursuant to this Agreement in
such Grantor’s right, title and interest in such Intangible Asset or PMSI
Asset (A) is prohibited by legally enforceable provisions of any
contract, agreement, instrument or indenture governing such Intangible
Asset or PMSI Asset, (B) would give any other party to such contract,
agreement, instrument or indenture a legally enforceable right to
terminate its obligations thereunder or (C) is permitted only with the
consent of another party, if the requirement to obtain such consent is
legally enforceable and such consent has not been obtained; provided,
that in any event any Receivable or any money or other amounts due or to
become due under any such contract, agreement, instrument or indenture
shall not be Excluded Assets to the extent that any of the foregoing is
(or if it contained a provision limiting the transferability or pledge
thereof would be) subject to Section 9-406 of the New York UCC, (ii)
Foreign Subsidiary Voting Stock excluded from the definition of “Pledged
Stock” set forth in this Section 1.1.

          “Foreign Subsidiary”: any Subsidiary organized under the laws of
any jurisdiction outside the United States of America.

 

 

4

          “Foreign Subsidiary Voting Stock”: the voting Capital Stock of any
Foreign Subsidiary.

          “Guarantor Hedge Agreement Obligations”: the collective reference
to all obligations and liabilities of a Guarantor (including, without
limitation, interest accruing at the then applicable rate provided in any
Specified Hedge Agreement after the filing of any petition in bankruptcy,
or the commencement of any insolvency, reorganization or like proceeding,
relating to such Guarantor, whether or not a claim for post-filing or
post-petition interest is allowed in such proceeding) to any Qualified
Counterparty, whether direct or indirect, absolute or contingent, due or
to become due, or now existing or hereafter incurred, which may arise
under, out of, or in connection with, any Specified Hedge Agreement or
any other document made, delivered or given in connection therewith, in
each case whether on account of principal, interest, reimbursement
obligations, fees, indemnities, costs, expenses or otherwise (including,
without limitation, all fees and disbursements of counsel to the relevant
Qualified Counterparty that are required to be paid by such Guarantor
pursuant to the terms of any Specified Hedge Agreement).

          “Guarantor Obligations”: with respect to any Guarantor, the
collective reference to (i) any Guarantor Hedge Agreement Obligations of
such Guarantor, but only to the extent that, and only so long as, the
other Obligations of such Guarantor are secured and guaranteed pursuant
hereto, and (ii) all obligations and liabilities of such Guarantor which
may arise under or in connection with this Agreement (including, without
limitation, Section 2) or any other Loan Document to which such Guarantor
is a party, in each case whether on account of guarantee obligations,
reimbursement obligations, fees, indemnities, costs, expenses or
otherwise.

          “Guarantors”: the collective reference to each Grantor other than
the Borrower.

          “Hedge Agreements”: as to any Person, all interest rate or currency
swaps, caps or collar agreements, foreign exchange arrangements,
commodity contracts or similar arrangements entered into by such Person
providing for protection against fluctuations in interest rates, currency
exchange rates, commodity prices or the exchange of nominal interest
obligations, either generally or under specific contingencies.

          “Intellectual Property”: the collective reference to all rights,
priorities and privileges relating to intellectual property, arising
under United States laws or the laws of any state or other political
subdivision thereof, including, without limitation, the Copyrights, the
Copyright Licenses, the Patents, the Patent Licenses, the Trademarks and
the Trademark Licenses, and all rights to sue at law or in equity for any
infringement or other impairment thereof, including the right to receive
all proceeds and damages therefrom.

          “Intercompany Note”: any promissory note evidencing loans made by
any Grantor to Holdings or any of its Subsidiaries.

          “Investment Property”: the collective reference to (i) all
“investment property” as such term is defined in Section 9-102(a)(49) of
the New York UCC (other than any

 

 

5

Foreign Subsidiary Voting Stock excluded
from the definition of “Pledged Stock” in this Section 1.1) and (ii)
whether or not constituting “investment property” as so defined, all
Pledged Notes and all Pledged Stock.

          “Issuers”: the collective reference to each issuer of any
Investment Property.

          “New York UCC”: the Uniform Commercial Code as from time to time in
effect in the State of New York.

          “Obligations”: (i) in the case of the Borrower, the Borrower
Obligations, and (ii) in the case of each Guarantor, its Guarantor
Obligations.

          “Patents”: (i) all letters patent of the United States, all
reissues and extensions thereof and all goodwill associated therewith,
including, without limitation, any of the foregoing referred to in
Schedule 6, (ii) all applications for letters patent of the United States
and all divisions, continuations and continuations-in-part thereof,
including, without limitation, any of the foregoing referred to in
Schedule 6, and (iii) all rights to obtain any reissues or extensions of
the foregoing.

          “Patent License”: all agreements, whether written or oral,
providing for the grant by or to any Grantor of any right to manufacture,
use or sell any invention covered in whole or in part by a Patent,
including, without limitation, any of the foregoing referred to in
Schedule 6.

          “Pledged Notes”: all promissory notes listed on Schedule 2, all
Intercompany Notes at any time issued to any Grantor and all other
promissory notes issued to or held by any Grantor in excess of $1,000,000
(other than promissory notes issued in connection with extensions of
trade credit by any Grantor in the ordinary course of business).

          “Pledged Securities”: the collective reference to the Pledged Notes
and the Pledged Stock.

          “Pledged Stock”: the shares of Capital Stock listed on Schedule 2,
together with any other shares, stock certificates, options or rights of
any nature whatsoever in respect of the Capital Stock of any Person that
may be issued or granted to, or held by, any Grantor while this Agreement
is in effect; provided that in no event shall more than 65% of the total
outstanding Foreign Subsidiary Voting Stock of any Foreign Subsidiary be
required to be pledged hereunder.

          “Proceeds”: all “proceeds” as such term is defined in Section
9-102(a)(64) of the Uniform Commercial Code in effect in the State of New
York on the date hereof and, in
any event, including, without limitation, all dividends or other
income from the Investment Property, collections thereon or distributions
or payments with respect thereto.

          “Qualified Counterparty”: with respect to any Specified Hedge
Agreement, any counterparty thereto that, at the time such Specified
Hedge Agreement was entered into, was a Lender or an affiliate of a
Lender.

 

 

6

          “Receivable”: any right to payment for goods sold, leased,
licensed, assigned or otherwise disposed of, or for services rendered,
whether or not such right is evidenced by an Instrument or Chattel Paper
and whether or not it has been earned by performance (including, without
limitation, any Account).

          “Secured Parties”: the collective reference to the Administrative
Agent, the Lenders (including any Issuing Lender in its capacity as
Issuing Lender) and any Qualified Counterparties.

          “Securities Act”: the Securities Act of 1933, as amended.

          “Specified Hedge Agreement”: any Hedge Agreement entered into by
(i) the Borrower or any Guarantor and (ii) any Qualified Counterparty.

          “Trademarks”: (i) all trademarks, trade names, corporate names,
company names, business names, fictitious business names, trade styles,
service marks, logos and other source or business identifiers, and all
goodwill associated therewith, now existing or hereafter adopted or
acquired, all registrations and recordings thereof, and all applications
in connection therewith, whether in the United States Patent and
Trademark Office or in any similar office or agency of the United States
or any State thereof, or otherwise, and all common-law rights related
thereto, including, without limitation, any of the foregoing referred to
in Schedule 6, and (ii) the right to obtain all renewals thereof.

          “Trademark License”: any agreement, whether written or oral,
providing for the grant by or to any Grantor of any right to use any
Trademark, including, without limitation, any of the foregoing referred
to in Schedule 6.

          1.2 Other Definitional Provisions. (a) The words “hereof,” “herein”,
“hereto” and “hereunder” and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any particular
provision of this Agreement, and Section and Schedule references are to this
Agreement unless otherwise specified.

          (b) The meanings given to terms defined herein shall be equally applicable
to both the singular and plural forms of such terms.

          (c) Where the context requires, terms relating to the Collateral or any
part thereof, when used in relation to a Grantor, shall refer to such Grantor’s
Collateral or the relevant part thereof.

SECTION 2. GUARANTEE

          2.1 Guarantee. (a) (i) The Guarantors hereby, jointly and severally,
unconditionally and irrevocably, guarantee to the Administrative Agent, for the
ratable benefit of the Secured Parties and their respective successors,
indorsees, transferees and assigns, the prompt and complete payment and
performance by the Borrower when due (whether at stated maturity, by
acceleration or otherwise) of the Borrower Obligations (other than, in the case
of each Guarantor, Borrower Obligations arising pursuant to clause (ii) of this
Section 2.1(a) in

 

 

7

respect of Guarantor Hedge Agreement Obligations in respect
of which such Guarantor is a primary obligor).

          (ii) The Borrower hereby unconditionally and irrevocably guarantees to the
Administrative Agent, for the ratable benefit of the Secured Parties and their
respective successors, endorsees, transferees and assigns, the prompt and
complete payment and performance by each Guarantor when due (whether at stated
maturity, by acceleration or otherwise) of the Guarantor Hedge Agreement
Obligations of such Guarantor.

          (b) Anything herein or in any other Loan Document to the contrary
notwithstanding, (i) the maximum liability of each Guarantor hereunder and
under the other Loan Documents shall in no event exceed the amount which can be
guaranteed by such Guarantor under applicable federal and state laws relating
to fraudulent conveyances or transfers or the insolvency of debtors (after
giving effect to the right of contribution established in Section 2.2) and (ii)
the maximum liability of the Borrower under this Section 2 shall in no event
exceed the amount which can be guaranteed by the Borrower under applicable
federal and state laws relating to fraudulent conveyances or transfers or the
insolvency of debtors (after giving effect to the right of contribution
established in Section 2.2).

          (c) (i) Each Guarantor agrees that the Borrower Obligations may at any time
and from time to time exceed the amount of the liability of such Guarantor
hereunder without impairing the guarantee of such Guarantor contained in this
Section 2 or affecting the rights and remedies of the Administrative Agent or
any Secured Party hereunder.

          (ii) The Borrower agrees that the Guarantor Hedge Agreement Obligations
may at any time and from time to time exceed the amount of the liability of the
Borrower under this Section 2 without impairing the guarantee of the Borrower
contained in this Section 2 or affecting the rights and remedies of the
Administrative Agent or any Secured Party hereunder.

          (d) Subject to Section 8.14 hereof, the guarantee contained in this
Section 2 shall remain in full force and effect until all the Borrower
Obligations (other than Borrower Obligations arising under Section 2.1(a)(ii)
hereof) and the obligations of each Guarantor under the guarantee contained in
this Section 2 (other than Guarantor Obligations in respect of Borrower
Obligations arising under Section 2.1(a)(ii) hereof) shall have been satisfied
by full and final payment in cash, no Letter of Credit shall be outstanding and
the Commitments shall be terminated, notwithstanding that from time to time
during the term of the Credit Agreement the Borrower may be free from any
Borrower Obligations.

          (e) No payment (other than payment in full) made by the Borrower, any of
the Guarantors, any other guarantor or any other Person or received or
collected by the Administrative Agent or any Secured Party from the Borrower,
any of the Guarantors, any other guarantor or any other Person by virtue of any
action or proceeding or any set-off or appropriation or application at any time
or from time to time in reduction of or in payment of the Borrower Obligations
or the Guarantor Hedge Agreement Obligations shall be deemed to modify, reduce,
release or otherwise affect the liability of the Borrower or any Guarantor
under this Section 2 which shall, notwithstanding any such payment (other than
any payment made by the Borrower or such Guarantor in respect of the Borrower
Obligations or the Guarantor Hedge Agreement Obligations or any payment
received or collected from the Borrower or such

 

 

8

Guarantor in respect of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations), remain
liable for the Borrower Obligations and the Guarantor Hedge Agreement
Obligations up to the maximum liability of the Borrower or such Guarantor
hereunder until the Borrower Obligations and the Guarantor Hedge Agreement
Obligations are fully and finally paid in cash, no Letter of Credit shall be
outstanding and the Commitments are terminated.

          2.2 Right of Contribution. (a) Each Guarantor hereby agrees that to the
extent that a Guarantor shall have paid more than its proportionate share of
any payment made hereunder or the Guarantor Hedge Agreement Obligations, such
Guarantor shall be entitled to seek and receive contribution from and against
any other Guarantor hereunder which has not paid its proportionate share of
such payment.

          (b) The Borrower and each Guarantor agrees that to the extent that the
Borrower or any Guarantor shall have paid more than its proportionate share of
any payment made hereunder in respect of any Guarantor Hedge Agreement
Obligation of any other Guarantor, the Borrower or such Guarantor, as the case
may be, shall be entitled to seek and receive contribution from and against the
Borrower and any other Guarantor which has not paid its proportionate share of
such payment.

          (c) The Borrower’s and each Guarantor’s right of contribution under this
Section 2.2 shall be subject to the terms and conditions of Section 2.3. The
provisions of this Section 2.2 shall in no respect limit the obligations and
liabilities of the Borrower or any Guarantor to the Administrative Agent and
the Secured Parties, and the Borrower and each Guarantor shall remain liable to
the Administrative Agent and the Secured Parties for the full amount guaranteed
by the Borrower or such Guarantor hereunder.

          2.3 Subrogation. Notwithstanding any payment made by the Borrower or any
Guarantor hereunder or any set-off or application of funds of the Borrower or
any Guarantor by the Administrative Agent or any Secured Party, neither the
Borrower nor any Guarantor shall be entitled to be subrogated to any of the
rights of the Administrative Agent or any Secured Party against the Borrower or
any other Guarantor or any collateral security or guarantee or right of offset
held by the Administrative Agent or any Secured Party for the payment of the
Borrower Obligations or the Guarantor Hedge Agreement Obligations, nor shall
the Borrower or any Guarantor seek or be entitled to seek any contribution or
reimbursement from the Borrower or any other Guarantor in respect of payments
made by the Borrower or such Guarantor hereunder,
until all amounts owing to the Administrative Agent and the Secured
Parties by the Borrower on account of the Borrower Obligations are fully and
finally paid in cash, no Letter of Credit shall be outstanding and the
Commitments are terminated. If any amount shall be paid to the Borrower or any
Guarantor on account of such subrogation rights at any time when all of the
Borrower Obligations shall not have been fully and finally paid in cash, such
amount shall be held by the Borrower or such Guarantor in trust for the
Administrative Agent and the Secured Parties, segregated from other funds of
the Borrower or such Guarantor, and shall, forthwith upon receipt by the
Borrower or such Guarantor, be turned over to the Administrative Agent in the
exact form received by the Borrower or such Guarantor (duly indorsed by the
Borrower or such Guarantor to the Administrative Agent, if required), to be
applied against the Borrower Obligations or the Guarantor Hedge Agreement
Obligations, whether matured or unmatured, in such order as the Administrative
Agent may determine.

 

 

9

          2.4 Amendments, etc. with respect to the Borrower Obligations. The
Borrower and each Guarantor shall remain obligated hereunder notwithstanding
that, without any reservation of rights against the Borrower or any Guarantor
and without notice to or further assent by the Borrower or any Guarantor, any
demand for payment of any of the Borrower Obligations or Guarantor Hedge
Agreement Obligations made by the Administrative Agent or any Secured Party may
be rescinded by the Administrative Agent or such Secured Party and any of the
Borrower Obligations or Guarantor Hedge Agreement Obligations continued, and
the Borrower Obligations or Guarantor Hedge Agreement Obligations, or the
liability of any other Person upon or for any part thereof, or any collateral
security or guarantee therefor or right of offset with respect thereto, may,
from time to time, in whole or in part, be renewed, extended, amended,
modified, accelerated, compromised, waived, surrendered or released by the
Administrative Agent or any Secured Party (with the consent of such of the
Borrower and the Guarantor as shall be required thereunder), and the Specified
Hedge Agreements, the Credit Agreement and the other Loan Documents and any
other documents executed and delivered in connection therewith may be amended,
modified, supplemented or terminated, in whole or in part, as the
Administrative Agent (or the Required Lenders or all Lenders, as the case may
be) may (with the consent of such of the Borrower and the Guarantor as shall be
required thereunder) deem advisable from time to time, and any collateral
security, guarantee or right of offset at any time held by the Administrative
Agent or any Secured Party for the payment of the Borrower Obligations or
Guarantor Hedge Agreement Obligations may (with the consent of such of the
Borrower and the Guarantor as shall be required thereunder) be sold, exchanged,
waived, surrendered or released. Neither the Administrative Agent nor any
Secured Party shall, except to the extent set forth in, and for the benefit of
the parties to, the agreements and instruments governing such Lien or
guarantee, have any obligation to protect, secure, perfect or insure any Lien
at any time held by it as security for the Borrower Obligations or Guarantor
Hedge Agreement Obligations or for the guarantees contained in this Section 2
or any property subject thereto.

          2.5 Guarantee Absolute and Unconditional. (a) Each Guarantor waives any and
all notice of the creation, renewal, extension or accrual of any of the
Borrower Obligations (other than any notice with respect to any Guarantor Hedge
Agreement Obligation with respect to which such Guarantor is a primary obligor
and to which it is entitled pursuant to the applicable
Specified Hedge Agreement) and notice of or proof of reliance by the
Administrative Agent or any Secured Party upon the guarantee contained in this
Section 2 or acceptance of the guarantee contained in this Section 2; the
Borrower Obligations, and any of them, shall conclusively be deemed to have
been created, contracted or incurred, or renewed, extended, amended or waived,
in reliance upon the guarantee contained in this Section 2; and all dealings
between the Borrower and any of the Guarantors, on the one hand, and the
Administrative Agent and the Secured Parties, on the other hand, with respect
to the Loan Documents likewise shall be conclusively presumed to have been had
or consummated in reliance upon the guarantee contained in this Section 2.
Each Guarantor waives diligence, presentment, protest, demand for payment and
notice of default or nonpayment to or upon the Borrower or any of the
Guarantors with respect to the Borrower Obligations (other than any diligence,
presentment, protest, demand or notice with respect to any Guarantor Hedge
Agreement Obligation with respect to which such Guarantor is a primary obligor
and to which it is entitled pursuant to the applicable Specified Hedge
Agreement). Each Guarantor understands and agrees that the guarantee of such
Guarantor contained in this Section 2 shall be construed as a continuing,
absolute and unconditional

 

 

10

guarantee of payment without regard to (a) the
validity or enforceability of the Credit Agreement or any other Loan Document,
any of the Borrower Obligations or any collateral security therefor or
guarantee or right of offset with respect thereto at any time or from time to
time held by the Administrative Agent or any Secured Party, (b) any defense,
set-off or counterclaim (other than a defense of payment or performance) which
may at any time be available to or be asserted by the Borrower or any other
Person against the Administrative Agent or any Secured Party, or (c) any other
circumstance whatsoever (with or without notice to or knowledge of the Borrower
or such Guarantor) which constitutes, or might be construed to constitute, an
equitable or legal discharge of the Borrower for the Borrower Obligations, or
of such Guarantor under the guarantee of such Guarantor contained in this
Section 2, in bankruptcy or in any other instance (other than a defense of
payment or performance). When making any demand hereunder or otherwise
pursuing its rights and remedies hereunder against any Guarantor, the
Administrative Agent or any Secured Party may, but shall be under no obligation
to, make a similar demand on or otherwise pursue such rights and remedies as it
may have against the Borrower, any other Guarantor or any other Person or
against any collateral security or guarantee for the Borrower Obligations or
any right of offset with respect thereto, and any failure by the Administrative
Agent or any Secured Party to make any such demand, to pursue such other rights
or remedies or to collect any payments from the Borrower, any other Guarantor
or any other Person or to realize upon any such collateral security or
guarantee or to exercise any such right of offset, or any release of the
Borrower, any other Guarantor or any other Person or any such collateral
security, guarantee or right of offset, shall not relieve any Guarantor of any
obligation or liability under this Section 2, and shall not impair or affect
the rights and remedies, whether express, implied or available as a matter of
law, of the Administrative Agent or any Secured Party against any Guarantor.
For the purposes hereof “demand” shall include the commencement and continuance
of any legal proceedings.

          (b) The Borrower waives any and all notice of the creation, renewal,
extension or accrual of any of the Guarantor Hedge Agreement Obligations and
notice of or proof of reliance by the Administrative Agent or any Secured Party
upon the guarantee by the Borrower contained in this Section 2 or acceptance of
the guarantee by the Borrower contained
in this Section 2; the Guarantor Hedge Agreement Obligations, and any of
them, shall conclusively be deemed to have been created, contracted or
incurred, or renewed, extended, amended or waived, in reliance upon the
guarantee by the Borrower contained in this Section 2; and all dealings between
the Borrower and any of the Guarantors, on the one hand, and the Administrative
Agent and the Secured Parties, on the other hand, with respect to any Guarantor
Hedge Agreement Obligation likewise shall be conclusively presumed to have been
had or consummated in reliance upon the guarantee by the Borrower contained in
this Section 2. The Borrower waives diligence, presentment, protest, demand
for payment and notice of default or nonpayment to or upon the Borrower with
respect to the Guarantor Hedge Agreement Obligations. The Borrower understands
and agrees that the guarantee by the Borrower contained in this Section 2 shall
be construed as a continuing, absolute and unconditional guarantee of payment
without regard to (a) the validity or enforceability of the Guarantor Hedge
Agreement Obligations or any other collateral security therefor or guarantee or
right of offset with respect thereto at any time or from time to time held by
the Administrative Agent or any Secured Party, (b) any defense, set-off or
counterclaim (other than a defense of payment or performance) which may at any
time be available to or be asserted by any Person against the Administrative
Agent or any Secured Party, or (c) any other circumstance whatsoever (with or
without notice to or

 

 

11

knowledge of the Borrower or any Guarantor) which
constitutes, or might be construed to constitute, an equitable or legal
discharge of the applicable Guarantor for the applicable Guarantor Hedge
Agreement Obligations, or of the Borrower under its guarantee contained in this
Section 2, in bankruptcy or in any other instance (other than a defense of
payment or performance). When making any demand under this Section 2 or
otherwise pursuing its rights and remedies under this Section 2 against the
Borrower, the Administrative Agent or any Secured Party may, but shall be under
no obligation to, make a similar demand on or otherwise pursue such rights and
remedies as it may have against any Guarantor or any other Person or against
any collateral security or guarantee for the Guarantor Hedge Agreement
Obligations or any right of offset with respect thereto, and any failure by the
Administrative Agent or any Secured Party to make any such demand, to pursue
such other rights or remedies or to collect any payments from any Guarantor or
any other Person or to realize upon any such collateral security or guarantee
or to exercise any such right of offset, or any release of any Guarantor or any
other Person or any such collateral security, guarantee or right of offset,
shall not relieve the Borrower of any obligation or liability under this
Section 2, and shall not impair or affect the rights and remedies, whether
express, implied or available as a matter of law, of the Administrative Agent
or any Secured Party against the Borrower under this Section 2. For the
purposes hereof “demand” shall include the commencement and continuance of any
legal proceedings.

          2.6 Reinstatement. The guarantee contained in this Section 2 shall
continue to be effective, or be reinstated, as the case may be, if at any time
payment, or any part thereof, of any of the Borrower Obligations or Guarantor
Hedge Agreement Obligations is rescinded or must otherwise be restored or
returned by the Administrative Agent or any Secured Party upon the insolvency,
bankruptcy, dissolution, liquidation or reorganization of the Borrower or any
Guarantor, or upon or as a result of the appointment of a receiver, intervenor
or conservator of, or trustee or similar officer for, the Borrower or any
Guarantor or any substantial part of its property, or otherwise, all as though
such payments had not been made.

          2.7 Payments. The Borrower and each Guarantor hereby guarantees that
payments by it hereunder will be paid to the Administrative Agent without
set-off or counterclaim (i) in the case of obligations in respect of Borrower
Obligations arising under the Credit Agreement or any other Loan Document in
Dollars at the Payment Office specified in the Credit Agreement and (ii) in the
case of obligations in respect of any Borrower Hedge Agreement Obligations or
any Guarantor Hedge Agreement Obligations, in the currency and at the place
specified in the applicable Specified Hedge Agreement.

SECTION 3. GRANT OF SECURITY INTEREST

          Each Grantor hereby grants to the Administrative Agent, for the ratable
benefit of the Secured Parties, a security interest in, all of the following
property now owned or at any time hereafter acquired by such Grantor or in
which such Grantor now has or at any time in the future may acquire any right,
title or interest (collectively, the “Collateral”), as collateral security for
the prompt and complete payment and performance when due (whether at the stated
maturity, by acceleration or otherwise) of such Grantor’s Obligations:

 

 

12

	 	(a)	 	all Accounts;
	 
	 	(b)	 	all Chattel Paper;
	 
	 	(c)	 	all Contracts;
	 
	 	(d)	 	all Documents;
	 
	 	(e)	 	all Equipment;
	 
	 	(f)	 	all General Intangibles;
	 
	 	(g)	 	all Instruments;
	 
	 	(h)	 	all Intellectual Property;
	 
	 	(i)	 	all Inventory;
	 
	 	(j)	 	all Investment Property;
	 
	 	(k)	 	all Letter-of-Credit Rights;
	 
	 	(l)	 	all Commercial Tort Claims to the extent they
have been notified to the Administrative Agent pursuant to
Section 6.13(l) of the Credit Agreement;
	 
	 	(m)	 	all Goods and other property not otherwise
described above;
	 
	 	(n)	 	all books and records pertaining to the
Collateral; and
	 
	 	(o)	 	to the extent not otherwise included, all
Proceeds and products of any and all of the foregoing, all
Supporting Obligations in respect of any of the foregoing and
all collateral security and guarantees given by any Person
with respect to any of the foregoing;

provided, that the Collateral shall not include any Excluded Assets.

SECTION 4. REPRESENTATIONS AND WARRANTIES

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

          4.1 Representations in Credit Agreement. In the case of each Guarantor,
the representations and warranties set forth in Section 4 of the Credit
Agreement as they relate to such Guarantor or to the Loan Documents to which
such Guarantor is a party, each of which is hereby incorporated herein by
reference, are true and correct on each date on which such representations are
made or deemed made pursuant to the terms of the Credit Agreement (except,

 

 

 13

to the extent that such representations and warranties expressly relate to an
earlier date, in which case such representations and warranties are true and
correct as of such earlier date), and the Administrative Agent and each Lender
shall be entitled to rely on each of such representations and warranties as if
they were fully set forth herein, provided that each reference in each such
representation and warranty to the Borrower’s knowledge shall, for the purposes
of this Section 4.1, be deemed to be a reference to such Guarantor’s knowledge.

          4.2   Jurisdiction of Organization; Chief Executive Office. On the date
hereof, such Grantor’s jurisdiction of organization, identification number from
the jurisdiction of organization (if any), and the location of such Grantor’s
chief executive office are specified on Schedule 4.

          4.3   Inventory and Equipment. On the date hereof, the Inventory and the
Equipment (other than mobile goods) are kept at the locations listed on
Schedule 5.

          4.4   Farm Products. As of the date hereof, none of the Collateral
constitutes, or is the Proceeds of, Farm Products.

          4.5   Investment Property. The shares of Pledged Stock pledged by such
Grantor hereunder constitute all the issued and outstanding shares of all
classes of the Capital Stock of each Issuer owned by such Grantor or, in the
case of Foreign Subsidiary Voting Stock, if less, 65% of the outstanding
Foreign Subsidiary Voting Stock of each relevant Issuer.

          4.6   Receivables. As of the date hereof, none of the obligors on any
Receivable is a Governmental Authority, except for Receivables constituting not
more than 5% of the face amount of all Receivables.

          4.7   Intellectual Property. (a)    Schedule 6 lists all material Intellectual
Property owned by such Grantor in its own name on the date hereof.

          (b)   Except as set forth in Schedule 6, on the date hereof, none of the
Intellectual Property is the subject of any licensing or franchise agreement
pursuant to which such Grantor is the licensor or franchisor.

SECTION 5. [INTENTIONALLY OMITTED]

SECTION 6. REMEDIAL PROVISIONS

          6.1   Certain Matters Relating to Receivables. (a) If required by the
Administrative Agent at any time after the occurrence and during the
continuance of an Event of
Default under Section 8(a) of the Credit Agreement, any payments of
Receivables, when collected by any Grantor, (i) shall be forthwith (and, in any
event, within two Business Days) deposited by such Grantor in the exact form
received, duly indorsed by such Grantor to the Administrative Agent if
required, in a Collateral Account maintained under the sole dominion and
control of the Administrative Agent, subject to withdrawal by the
Administrative Agent for the account of the Secured Parties only as provided in
Section 6.5, and (ii) until so turned over, shall be held by such Grantor in
trust for the Administrative Agent and the Secured Parties,

 

 

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segregated from
other funds of such Grantor. Each such deposit of Proceeds of Receivables
shall be accompanied by a report identifying in reasonable detail the nature
and source of the payments included in the deposit.

          (b)   If an Event of Default has occurred and is continuing, at the
Administrative Agent’s request, each Grantor shall deliver to the
Administrative Agent all documents evidencing, and relating to, the agreements
and transactions which gave rise to the Receivables, including, without
limitation, all orders, invoices and shipping receipts, including, if
reasonably required by the Administrative Agent pursuant to its exercise of
rights under this Section 6, the originals of the same.

          6.2   Communications with Obligors; Grantors Remain Liable. (a) Upon the
request of the Administrative Agent at any time after the occurrence and during
the continuance of an Event of Default under Section 8(a) of the Credit
Agreement if the Administrative Agent shall have given the Borrower notice of
its intent to exercise remedies under this Section 6, each Grantor shall notify
obligors on the Receivables that the Receivables have been assigned to the
Administrative Agent for the ratable benefit of the Secured Parties and that
payments in respect thereof shall be made directly to the Administrative Agent.

          (b)   Anything herein to the contrary notwithstanding, each Grantor shall
remain liable under each of the Receivables (or any agreement giving rise
thereto) to observe and perform all the conditions and obligations to be
observed and performed by it thereunder, all in accordance with the terms of
any agreement giving rise thereto. Neither the Administrative Agent nor any
Secured Party shall have any obligation or liability under any Receivable (or
any agreement giving rise thereto) by reason of or arising out of this
Agreement or the receipt by the Administrative Agent or any Secured Party of
any payment relating thereto, nor shall the Administrative Agent or any Secured
Party be obligated in any manner to perform any of the obligations of any
Grantor under or pursuant to any Receivable (or any agreement giving rise
thereto), to make any payment, to make any inquiry as to the nature or the
sufficiency of any payment received by it or as to the sufficiency of any
performance by any party thereunder, to present or file any claim, to take any
action to enforce any performance or to collect the payment of any amounts
which may have been assigned to it or to which it may be entitled at any time
or times.

          6.3   Pledged Stock. (a) Unless an Event of Default shall have occurred
and be continuing and the Administrative Agent shall have given notice to the
relevant Grantor of the Administrative Agent’s intent to exercise its
corresponding rights pursuant to Section 6.3(b), each Grantor shall be
permitted to receive all cash dividends paid in respect of the Pledged Stock
and all payments made in respect of the Pledged Notes, in each case paid in the
normal course of business of the relevant Issuer and consistent with past
practice and to exercise all voting and corporate rights with respect to the
Pledged Securities.

          (b)   If an Event of Default shall occur and be continuing and the
Administrative Agent shall give notice of its intent to exercise such rights to
the relevant Grantor or Grantors, (i) unless otherwise expressly provided in
the Credit Agreement, the Administrative Agent shall have the right to receive
any and all cash dividends, payments or other Proceeds paid in respect of the
Pledged Securities and make application thereof to the Obligations in the order
set forth in Section 6.5, and (ii) any or all of the Pledged Securities shall
be registered in the

 

 

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name of the Administrative Agent or its nominee, and the
Administrative Agent or its nominee may thereafter exercise (x) all voting,
corporate and other rights pertaining to such Pledged Securities at any meeting
of shareholders of the relevant Issuer or Issuers or otherwise and (y) any and
all rights of conversion, exchange and subscription and any other rights,
privileges or options pertaining to such Pledged Securities as if it were the
absolute owner thereof (including, without limitation, the right to exchange at
its discretion any and all of the Pledged Securities upon the merger,
consolidation, reorganization, recapitalization or other fundamental change in
the corporate structure of any Issuer, or upon the exercise by any Grantor or
the Administrative Agent of any right, privilege or option pertaining to such
Pledged Securities, and in connection therewith, the right to deposit and
deliver any and all of the Pledged Securities with any committee, depositary,
transfer agent, registrar or other designated agency upon such terms and
conditions as the Administrative Agent may determine), all without liability
except to account for property actually received by it, but the Administrative
Agent shall have no duty to any Grantor to exercise any such right, privilege
or option and shall not be responsible for any failure to do so or delay in so
doing.

          (c)   Each Grantor hereby authorizes and instructs each Issuer of any
Pledged Securities pledged by such Grantor hereunder to comply with any
instruction received by it from the Administrative Agent in writing that (x)
states that an Event of Default has occurred and is continuing and (y) is
otherwise in accordance with the terms of this Agreement, without any other or
further instructions from such Grantor, and each Grantor agrees that each
Issuer shall be fully protected in so complying.

          6.4   Proceeds to be Turned Over To Administrative Agent. In addition to
the rights of the Administrative Agent and the Secured Parties specified in
Section 6.1 with respect to payments of Receivables, if an Event of Default
under Section 8(a) of the Credit Agreement shall occur and be continuing, upon
the request of the Administrative Agent if the Administrative Agent shall have
given notice of its intent to exercise remedies under this Section 6, all
Proceeds received by any Grantor consisting of cash, checks and Instruments
shall be held by such Grantor in trust for the Administrative Agent and the
Secured Parties, segregated from other funds of such Grantor, and shall,
forthwith upon receipt by such Grantor, be turned over to the Administrative
Agent in the exact form received by such Grantor (duly indorsed by such Grantor
to the Administrative Agent, if required). All Proceeds received by the
Administrative Agent hereunder shall be held by the Administrative Agent in a
Collateral Account maintained under its sole dominion and control. All
Proceeds while held by the Administrative Agent in a Collateral Account (or by
such Grantor in trust for the Administrative Agent and the Secured Parties)
shall continue to be held as collateral security for all the Obligations and
shall not constitute payment thereof until applied as provided in Section 6.5.

          6.5   Application of Proceeds. If an Event of Default shall have occurred
and be continuing, at any time at the Administrative Agent’s election, the
Administrative Agent may
apply all or any part of Proceeds constituting Collateral, and any
proceeds of the guarantee set forth in Section 2, in payment of the Obligations
in the following order:

		
	 	     First, to pay incurred and unpaid fees and expenses of the
Administrative Agent owing pursuant to the Loan Documents;

 

 

 16

		
	 	     Second, to the Administrative Agent, for application by it towards
payment of amounts then due and owing and remaining unpaid in respect of
the Obligations, pro rata among the Secured Parties according to the
amounts of the Obligations then due and owing and remaining unpaid to the
Secured Parties;

		
	 	     Third, to the Administrative Agent, for application by it towards
prepayment of the Obligations, pro rata among the Secured Parties
according to the amounts of the Obligations then held by the Secured
Parties; and

		
	 	     Fourth, any balance of such Proceeds remaining after the Obligations
shall have been paid in full, any outstanding Letters of Credit shall
have been cash-collateralized and the Commitments shall have terminated
shall be paid over to the Borrower or to whomsoever may be lawfully
entitled to receive the same.

          6.6   Code and Other Remedies. If an Event of Default shall occur and be
continuing, the Administrative Agent, on behalf of the Secured Parties, may
exercise, in addition to all other rights and remedies granted to them in this
Agreement and in any other instrument or agreement securing, evidencing or
relating to the Obligations, all rights and remedies of a secured party under
the New York UCC or any other applicable law. Without limiting the generality
of the foregoing, the Administrative Agent, without demand of performance or
other demand, presentment, protest, advertisement or notice of any kind (except
any notice required by law referred to below or notices otherwise expressly
required by the Loan Documents) to or upon any Grantor or any other Person (all
and each of which demands, defenses, advertisements and notices are hereby
waived unless otherwise expressly required by the Loan Documents), may in such
circumstances forthwith collect, receive, appropriate and realize upon the
Collateral, or any part thereof, and/or may forthwith sell, lease, assign, give
option or options to purchase, or otherwise dispose of and deliver the
Collateral or any part thereof (or contract to do any of the foregoing), in one
or more parcels at public or private sale or sales, at any exchange, broker’s
board or office of the Administrative Agent or any Secured Party or elsewhere
upon such terms and conditions as it may deem advisable and at such prices as
it may deem best, for cash or on credit or for future delivery without
assumption of any credit risk. The Administrative Agent or any Secured Party
shall have the right upon any such public sale or sales, and, to the extent
permitted by law, upon any such private sale or sales, to purchase the whole or
any part of the Collateral so sold, free of any right or equity of redemption
in any Grantor, which right or equity is hereby waived and released. Each
Grantor further agrees, at the Administrative Agent’s request, to assemble the
Collateral and make it available to the Administrative Agent at places which
the Administrative Agent shall reasonably select, whether at such Grantor’s
premises or elsewhere. The Administrative Agent shall apply the net proceeds
of any action taken by it pursuant to this Section 6.6 with respect to any
Grantor’s Collateral, after deducting all reasonable out-of-pocket costs
actually incurred and expenses of every kind incurred in connection therewith
or incidental to the care or safekeeping of any of the Collateral of such
Grantor or in any way relating to the Collateral of such Grantor or the rights
of the
Administrative Agent and the Secured Parties hereunder with respect
thereto, including, without limitation, reasonable attorneys’ fees and
disbursements, to the payment in whole or in part of the Obligations of such
Grantor, in the order specified in Section 6.5, and only after such application
and after the payment by the Administrative Agent of any other amount required
by any provision of law, including, without limitation, Section 9-615(a)(3) of
the New York UCC,

 

 

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need the Administrative Agent account for the surplus, if
any, to any Grantor. To the extent permitted by applicable law, each Grantor
waives all claims, damages and demands it may acquire against the
Administrative Agent (except as otherwise expressly provided in the Loan
Documents) or any Secured Party arising out of the exercise by them of any
rights hereunder. If any notice of a proposed sale or other disposition of
Collateral shall be required by law, such notice shall be deemed reasonable and
proper if given at least 10 days before such sale or other disposition.

          6.7   Registration Rights. Each Grantor recognizes that the Administrative
Agent may be unable to effect a public sale of any or all the Pledged Stock, by
reason of certain prohibitions contained in the Securities Act and applicable
state securities laws or otherwise, and may be compelled to resort to one or
more private sales thereof to a restricted group of purchasers which will be
obliged to agree, among other things, to acquire such securities for their own
account for investment and not with a view to the distribution or resale
thereof. Each Grantor acknowledges and agrees that any such private sale may
result in prices and other terms less favorable than if such sale were a public
sale and, notwithstanding such circumstances, agrees that any such private sale
shall be deemed to have been made in a commercially reasonable manner. The
Administrative Agent shall be under no obligation to delay a sale of any of the
Pledged Stock for the period of time necessary to permit the Issuer thereof to
register such securities for public sale under the Securities Act, or under
applicable state securities laws, even if such Issuer would agree to do so.

          6.8   Deficiency. Each Grantor shall remain liable for any deficiency if
the proceeds of any sale or other disposition of the Collateral are
insufficient to pay its Obligations and the fees and disbursements of any
attorneys employed by the Administrative Agent or any Secured Party to collect
such deficiency.

SECTION 7.  THE ADMINISTRATIVE AGENT

          7.1   Administrative Agent’s Appointment as Attorney-in-Fact, etc. (a) Each
Grantor hereby irrevocably constitutes and appoints the Administrative Agent
and any officer or agent thereof, with full power of substitution, as its true
and lawful attorney-in-fact with full irrevocable power and authority in the
place and stead of such Grantor and in the name of such Grantor or in its own
name, for the purpose of carrying out the terms of this Agreement, to take any
and all appropriate action and to execute any and all documents and instruments
which may be necessary, in the Administrative Agent’s reasonable judgment, to
accomplish the purposes of this Agreement, and, without limiting the generality
of the foregoing, each Grantor hereby gives the Administrative Agent the power
and right, on behalf of such Grantor, without notice to or assent by such
Grantor, to do any or all of the following:

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

 

 

 18

		
	 	     (ii)   in the case of any Intellectual Property, execute and deliver,
and have recorded, any and all agreements, instruments, documents and
papers as the Administrative Agent may request to evidence the
Administrative Agent’s and the Secured Parties’ security interest in such
Intellectual Property and the goodwill and general intangibles of such
Grantor relating thereto or represented thereby;

		
	 	     (iii)   pay or discharge taxes and Liens levied or placed on or
threatened against the Collateral, effect any repairs or any insurance
called for by the terms of this Agreement and pay all or any part of the
premiums therefor and the costs thereof;

		
	 	     (iv)   execute, in connection with any sale provided for in Section
6.6 or 6.7, any indorsements, assignments or other instruments of
conveyance or transfer with respect to the Collateral;

		
	 	     (v)   (1) direct any party liable for any payment under any of the
Collateral to make payment of any and all moneys due or to become due
thereunder directly to the Administrative Agent or as the Administrative
Agent shall direct; (2) ask or demand for, collect, and receive payment
of and receipt for, any and all moneys, claims and other amounts due or
to become due at any time in respect of or arising out of any Collateral;
(3) sign and indorse any invoices, freight or express bills, bills of
lading, storage or warehouse receipts, drafts against debtors,
assignments, verifications, notices and other documents in connection
with any of the Collateral;(4) commence and prosecute any suits, actions
or proceedings at law or in equity in any court of competent jurisdiction
to collect the Collateral or any portion thereof and to enforce any other
right in respect of any Collateral; (5) defend any suit, action or
proceeding brought against such Grantor with respect to any
Collateral;(6) settle, compromise or adjust any such suit, action or
proceeding and, in connection therewith, give such discharges or releases
as the Administrative Agent may deem appropriate; (7) assign any
Copyright, Patent or Trademark (along with the goodwill of the business
to which any such Copyright, Patent or Trademark pertains), throughout
the world for such term or terms, on such conditions, and in such manner,
as the Administrative Agent shall in its sole discretion determine; and
(8) generally, sell, transfer, pledge and make any agreement with respect
to or otherwise deal with any of the Collateral as fully and completely
as though the Administrative Agent were the absolute owner thereof for
all purposes, and do, at the Administrative Agent’s option and such
Grantor’s expense, at any time, or from time to time, all acts and things
which the Administrative Agent deems necessary to protect, preserve or
realize upon the Collateral and the Administrative Agent’s and the
Secured Parties’ security interests therein and to effect the intent of
this Agreement, all as fully and effectively as such Grantor might do;
and

		
	 	     (vi)   license or sublicense whether on an exclusive or non-exclusive
basis, any Intellectual Property for such term and on such conditions and
in such manner as the
Administrative Agent shall in its sole judgment determine and, in
connection therewith, such Grantor hereby grants to the Administrative
Agent for the benefit of the Secured Parties a royalty-free, world-wide
irrevocable license of its Intellectual Property.

 

 

 19

          Anything in this Section 7.1(a) to the contrary notwithstanding, the
Administrative Agent agrees that it will not exercise any rights under the
power of attorney provided for in this Section 7.1(a) unless an Event of
Default shall have occurred and be continuing.

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

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

          7.3   Execution of Financing Statements. Pursuant to any applicable law,
each Grantor authorizes the Administrative Agent to file or record financing
statements and other filing or recording documents or instruments with respect
to the Collateral without the signature of such Grantor in such form and in
such offices as the Administrative Agent determines appropriate to perfect the
security interests of the Administrative Agent under this Agreement. Each
Grantor authorizes the Administrative Agent to use the collateral description
“all personal property” or “all assets” in any such financing statements.

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

 

 

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Agreement is the duty to remit to such Qualified
Counterparty any amounts to which it is entitled pursuant to Section 6.5.

SECTION 8. MISCELLANEOUS

          8.1   Amendments in Writing. None of the terms or provisions of this
Agreement may be waived, amended, supplemented or otherwise modified except in
accordance with Section 10.1 of the Credit Agreement. No consent of any
Qualified Counterparty shall be required for any waiver, amendment, supplement
or other modification to this Agreement.

          8.2   Notices. All notices, requests and demands to or upon the
Administrative Agent or any Grantor hereunder shall be effected in the manner
provided for in Section 10.2 of the Credit Agreement (except as otherwise
expressly provided herein); provided that any such notice, request or demand to
or upon any Guarantor shall be addressed to such Guarantor at its notice
address set forth on Schedule 1.

          8.3   No Waiver by Course of Conduct; Cumulative Remedies. Neither the
Administrative Agent nor any Secured Party shall by any act (except by a
written instrument pursuant to Section 8.1), delay, indulgence, omission or
otherwise be deemed to have waived any right or remedy hereunder or to have
acquiesced in any Default or Event of Default. No failure to exercise, nor any
delay in exercising, on the part of the Administrative Agent or any Secured
Party, any right, power or privilege hereunder shall operate as a waiver
thereof. No single or partial exercise of any right, power or privilege
hereunder shall preclude any other or further exercise thereof or the exercise
of any other right, power or privilege. A waiver by the Administrative Agent
or any Secured Party of any right or remedy hereunder on any one occasion shall
not be construed as a bar to any right or remedy which the Administrative Agent
or such Secured Party would otherwise have on any future occasion. The rights
and remedies herein provided are cumulative, may be exercised singly or
concurrently and are not exclusive of any other rights or remedies provided by
law.

          8.4   Successors and Assigns. This Agreement shall be binding upon the
successors and assigns of each Grantor and shall inure to the benefit of the
Administrative Agent and the Secured Parties and their successors and assigns;
provided that no Grantor may assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of the
Administrative Agent except in connection with a transaction expressly
permitted by Section 7.4(a) or (b) of the Credit Agreement.

          8.5   Set-Off. Each Grantor hereby irrevocably authorizes the
Administrative Agent and each Secured Party at any time and from time to time
while an Event of Default pursuant to Section 8(a) of the Credit Agreement
shall have occurred and be continuing, without notice to such Grantor or any
other Grantor, any such notice being expressly waived by each Grantor to the
extent permitted by applicable law, upon any amount becoming due and payable
by each Grantor (whether at the stated maturity, by acceleration or
otherwise after the expiration of any applicable grace period) to set-off and
appropriate and apply against such amount any and all deposits (general or
special, time or demand, provisional or final), in any currency, and any other
credits, indebtedness or claims, in any currency, in each case whether direct
or indirect, absolute or contingent, matured or unmatured, at any time held or
owing by the Administrative

 

 

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Agent or such Secured Party to or for the credit or
the account of such Grantor. The Administrative Agent and each Secured Party
shall notify such Grantor promptly of any such set-off and the application made
by the Administrative Agent or such Secured Party of the proceeds thereof,
provided that the failure to give such notice shall not affect the validity of
such set-off and application.

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

          8.7   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 provisions hereof, and any such prohibition or
unenforceability in any jurisdiction shall not invalidate or render
unenforceable such provision in any other jurisdiction.

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

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

          8.10   GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED
AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          8.11   Submission To Jurisdiction; Waivers. Each Grantor hereby irrevocably
and unconditionally:

          (a)   submits for itself and its property in any legal action or proceeding
relating to this Agreement and the other Loan Documents to which it is a party,
or for recognition and enforcement of any judgment in respect thereof, to the
non-exclusive general jurisdiction of the Courts of the State of New York, the
courts of the United States of America for the Southern District of New York,
and appellate courts from any thereof;

          (b)   consents that any such action or proceeding may be brought in such
courts and waives any objection that it may now or hereafter have to the venue
of any such action or proceeding in any such court or that such action or
proceeding was brought in an inconvenient court and agrees not to plead or
claim the same;

          (c)   agrees that service of process in any such action or proceeding may be
effected by mailing a copy thereof by registered or certified mail (or any
substantially similar form of mail), postage prepaid, to such Grantor at its
address referred to in Section 8.2 or at such other address of which the
Administrative Agent shall have been notified pursuant thereto;

 

 

 22

          (d)   agrees that nothing herein shall affect the right to effect service of
process in any other manner permitted by law or shall limit the right to sue in
any other jurisdiction; and

          (e)   waives, to the maximum extent not prohibited by law, any right it may
have to claim or recover in any legal action or proceeding referred to in this
Section any special, exemplary, punitive or consequential damages.

          8.12   Acknowledgements. Each Grantor hereby acknowledges that:

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

          (b)   neither the Administrative Agent nor any Secured Party has any
fiduciary relationship with or duty to any Grantor arising out of or in
connection with this Agreement or any of the other Loan Documents, and the
relationship between the Grantors, on the one hand, and the Administrative
Agent and Secured Parties, on the other hand, in connection herewith or
therewith is solely that of debtor and creditor; and

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

          8.13   Additional Grantors. Each Subsidiary of the Borrower that is
required to become a party to this Agreement pursuant to Section 6.10 of the
Credit Agreement shall become a Grantor for all purposes of this Agreement upon
execution and delivery by such Subsidiary of an Assumption Agreement in the
form of Annex 1 hereto (it being understood, for the avoidance of doubt, that
the other Grantors will not be required to execute such Assumption Agreement).

          8.14   Releases. (a) At such time as the Loans, the Reimbursement
Obligations and the other Obligations (other than Borrower Hedge Agreement
Obligations and Guarantor Hedge Agreement Obligations) shall have been paid in
full, the Commitments have been terminated and no Letters of Credit shall be
outstanding, the Collateral shall be released from the Liens created hereby,
and this Agreement and all obligations (other than those expressly stated to
survive such termination) of the Administrative Agent and each Grantor
hereunder shall terminate, all without delivery of any instrument or
performance of any act by any party, and all rights to the Collateral shall
revert to the Grantors. At the request and sole expense of any Grantor
following any such termination, the Administrative Agent shall deliver to such
Grantor any Collateral held by the Administrative Agent hereunder, and execute
and deliver to such Grantor such documents as such Grantor shall reasonably
request to evidence such termination.

          (b)   If any of the Collateral shall be sold, transferred or otherwise
disposed of by any Grantor in a transaction permitted by the Credit Agreement,
then the Administrative Agent, at the request and sole expense of such Grantor,
shall execute and deliver to such Grantor all
releases or other documents reasonably necessary or desirable for the
release of the Liens created hereby on such Collateral. At the request and
sole expense of the Borrower, a Subsidiary Guarantor shall be released from its
obligations hereunder in the event that all the Capital Stock of such
Subsidiary Guarantor shall be sold, transferred or otherwise disposed of, or
such Grantor

 

 

 23

shall otherwise cease to be a Subsidiary, in each case pursuant to
a transaction expressly permitted by the Credit Agreement.

          (c)   No consent of any Qualified Counterparty shall be required for any
release of Collateral or Guarantors pursuant to this Section.

          8.15   WAIVER OF JURY TRIAL. EACH GRANTOR AND, BY ACCEPTANCE OF THE
BENEFITS HEREOF, EACH AGENT AND EACH SECURED PARTY, HEREBY IRREVOCABLY AND
UNCONDITIONALLY WAIVES TRIAL BY JURY IN ANY LEGAL ACTION OR PROCEEDING RELATING
TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT AND FOR ANY COUNTERCLAIM THEREIN.

 

 

          IN WITNESS WHEREOF, each of the undersigned has caused this Guarantee and
Collateral Agreement to be duly executed and delivered as of the date first
above written.

	 	 	 	 	 
	 	 	UCI ACQUISITION HOLDINGS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	UNITED COMPONENTS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Chief Financial Officer, Treasurer and Secretary
	 	 	 	 	 
	 	 	CHAMPION LABORATORIES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	NEAPCO INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	WELLS MANUFACTURING CORP.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary

UCI Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	MID-SOUTH MFG., INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	PIONEER, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	AIRTEX PRODUCTS, LLC
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	AIRTEX PRODUCTS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	PEE CEE MANUFACTURING CO. INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	CHEFFORD MASTER MANUFACTURING CO., INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary

UCI Guarantee and Collateral Agreement

 

 

	 	 	 	 	 
	 	 	 	 	 
	 	 	FUEL FILTER TECHNOLOGIES, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	UCI-AIRTEX HOLDINGS, INC.
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary
	 	 	 	 	 
	 	 	UCI INVESTMENTS, L.L.C
	 	 	 	 	 
	 	 	
By:
	 	/s/ John Ritter
	 	 	 	 	

	 	 	 	 	Name: John Ritter
	 	 	 	 	Title: Vice President, Treasurer and Secretary

UCI Guarantee and Collateral Agreement

 

 

Annex I

to

Guarantee and Collateral Agreement

          ASSUMPTION AGREEMENT, dated as of                 , 200    , made by
                  , a              corporation (the “Additional
Grantor”), in favor of LEHMAN COMMERCIAL PAPER INC., as administrative agent
(in such capacity, the “Administrative Agent”) for the banks and other
financial institutions (the “Lenders”) parties to the Credit Agreement referred
to below. All capitalized terms not defined herein shall have the meaning
ascribed to them in such Credit Agreement.

W I T N E S S E T H :

          WHEREAS, United Components, Inc. (the “Borrower”), the Lenders and the
Administrative Agent have entered into a Credit Agreement, dated as of June 20,
2003 (as amended, supplemented or otherwise modified from time to time, the
“Credit Agreement”);

          WHEREAS, in connection with the Credit Agreement, the Borrower and certain
of its Affiliates (other than the Additional Grantor) have entered
into the Guarantee and Collateral Agreement, dated as of
June 20, 2003 (as amended, supplemented or otherwise modified from time to time, the “Guarantee and
Collateral Agreement”) in favor of the Administrative Agent for the benefit of
the Lenders;

          WHEREAS, the Credit Agreement requires the Additional Grantor to become a
party to the Guarantee and Collateral Agreement; and

          WHEREAS, the Additional Grantor has agreed to execute and deliver this
Assumption Agreement in order to become a party to the Guarantee and Collateral
Agreement;

          NOW, THEREFORE, IT IS AGREED:

          1.   Guarantee and Collateral Agreement. By executing and delivering this
Assumption Agreement, the Additional Grantor, as provided in Section 8.15 of
the Guarantee and Collateral Agreement, hereby becomes a party to the Guarantee
and Collateral Agreement as a Grantor thereunder with the same force and effect
as if originally named therein as a Grantor and, without limiting the
generality of the foregoing, hereby expressly assumes all obligations and
liabilities of a Grantor thereunder. The information set forth in Annex 1-A
hereto is hereby added to the information set forth in Schedules              * to
the Guarantee and Collateral Agreement. The Additional Grantor hereby
represents and warrants that each of the representations and warranties
contained in Section 4 of the Guarantee and Collateral Agreement is true and
correct on and as the date hereof (after giving effect to this Assumption
Agreement) as if made on and as of such date.

* Refer to each Schedule which needs to be supplemented.
 

 

Annex I-2

          2.   GOVERNING LAW. THIS ASSUMPTION AGREEMENT SHALL BE GOVERNED BY, AND
CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAW OF THE STATE OF NEW YORK.

          IN WITNESS WHEREOF, the undersigned has caused this Assumption Agreement
to be duly executed and delivered as of the date first above written.

	 	 	 	 	 
	 	 	[ADDITIONAL GRANTOR]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:

 

 

Annex II

to

 Guarantee and Collateral Agreement

ACKNOWLEDGEMENT AND CONSENT

     The undersigned hereby acknowledges receipt of a copy of the Guarantee and
Collateral Agreement dated as of June 20, 2003 (the “Agreement”), made by the
Grantors parties thereto for the benefit of LEHMAN COMMERCIAL PAPER, INC., as
Administrative Agent. Capitalized terms not otherwise defined herein shall
have the meaning given to them in the Agreement. The undersigned acknowledges
that a security interest in its Capital Stock (subject to the exclusions and
limitations set forth in the Agreement) has been granted to the Administrative
Agent for the benefit of the Secured Parties pursuant to the Agreement, and
hereby consents to such security interest.

	 	 	 	 	 
	 	 	[NAME OF ISSUER]
	 	 	 	 	 
	 	 	
By:	 	 
	 	 	 	 	

	 	 	 	 	Name:
	 	 	 	 	Title:
	 	 	 	 	 
	 	 	Address for Notices:
	 	 	 	 	 
	 	 	

	 	 	

	 	 	

	 	 	 	 	 
	 	 	
Fax:

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